Posted on October 18, 2013
The long awaited and highly controversial California Department of Toxic Substances Control (DTSC) Safer Consumer Products Regulations (SCPR) took effect October 1, 2013. These are not your garden variety regulations. They are intended to promote the inclusion in consumer products of chemicals deemed safer than the chemicals they are replacing and, by reverse logic, encourage the deselection of chemicals for inclusion in consumer products believed to pose risk to human health and the environment.
The regulations establish a four-step process whereby DTSC develops a list of candidate chemicals of concern, develops a list of “Priority Products” containing candidate chemicals, requires manufactures and other responsible entities to notify DTSC and assess potential product component alternatives, and implements regulatory responses that could result in mandated product reformulation or even product cancellation. Certain “trade secret” provisions in the regulations are still being developed, important provisions considering the context of the regulations.
DTSC has created a Safer Consumer Products Web Portal and has posted, and will continue to add, information pertinent to the regulations and various guidance materials. Litigation challenging the regulations is almost certain, arising under the California Environmental Protection Act, Administrative Procedure Act, and Commerce Clause, among other authorities. Relying on a favorable outcome in any such challenge and doing nothing now is unwise, as success is at best speculative and more likely optimistic.
These are game-changing new rules. They are certain to have a global impact on, and influence profoundly and forever, the supply chains of consumer product manufacturers, suppliers, and distributors. Because the regulations are likely to become the new global standard against which prudent business practices regarding the manufacture, distribution, and marketing of consumer products will be measured, careful review is needed regardless of whether or not you are marketing consumer products in California.
Posted on October 17, 2013
The Federal Rules of Civil Procedure are 75 years old—they went into effect on September 16, 1938. The Advisory Committee on Civil Rules has just published for public comment very significant changes to the FRCP. Every environmental litigator—indeed, every litigator—should read them. The changes are too numerous to outline completely in this blog posting, but let me highlight the proposed changes to the discovery rules.
Rule 26(b)(1), which addresses the “scope” of discovery, would be changed in three important ways. First, discovery would be limited solely to matters relevant to a party’s “claim or defense” and the former text also permitting for good cause discovery of matters “relevant to the subject matter involved in the action” will be deleted. Second, the word “proportionality” will be included in the scope of discovery. The proportionality factors that were in Rule 26(b)(2)(C) will be included specifically in the scope of discovery in Rule 26(b)(1). With the proposed change, discovery must be “proportional to the needs of the case considering the amount in controversy, the importance of the issues at stake in the action, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Finally, the text “calculated to lead to the discovery of admissible evidence” has been deleted. The goal of this text originally was to make it clear that information like hearsay could be discovered since it might lead to discoverable admissible evidence. But this language has been used by many courts to expand the scope of discovery beyond its original purpose. In its place, the proposed rule will read: “Information within this scope of discovery need not be admissible in evidence to be discoverable.”
Rules 30 and 31 will be amended so that the presumptive limit of 10 depositions per side or for third parties and a duration limit of 7 hours for each deposition are reduced to 5 depositions per side with a maximum duration of 6 hours. Rules 30 and 31 still would require the district court to grant leave to take more depositions as long as that outcome is consistent with Rules 26(b)(1) and (2) (currently the reference is just to Rule 26(b)(2)). Parties can stipulate to have more depositions; there is no change there. And parties can still stipulate to longer depositions and the court “must” still allow additional time “consistent with Rules 26(b)(1) and (b)(2)” (again Rule 26(b)(1) has now been added to this phrase) if needed to fairly examine the deponent, or if the deponent, another person, or any other circumstance impedes or delays the examination.
Interrogatories would be limited to 15 instead of 25 under a change to Rule 33 and for the first time requests for admissions under Rule 36 would be limited to 25 requests except as to the genuineness of documents.
With respect to responses to Rule 34 requests for production, Rule 34(b)(2)(B) would require that the grounds for objecting to a request be stated with specificity. Rule 34(b)(2)(C) would then require that an objection state whether any responsive materials are being withheld on the basis of that objection. But an objection can state that documents are not being searched if that is the case (e.g., that a search was limited to documents created after a specific date). Where a party states that it will produce documents or electronically stored information instead of permitting inspection, the production must be completed no later than the time for inspection in the request or a later reasonable time stated in the response. A corresponding change will be made to Rule 37(a)(3)(B)(iv) to provide that a party seeking discovery may move for an order compelling production if a party “fails to produce documents.”
There are other changes to Rule 26 and 37 as well as proposed changes to Rules 1, 4, and 16. You can read them all on the website of the Administrative Office of the U.S. Courts.
As a member of the Advisory Committee on Civil Rules, let me also encourage readers to submit comments on the proposed rules if you believe the proposals can be improved upon or should not be implemented. Commenting is easy. Go to the link above and follow the instructions to “Comment Now!” The comment period ends February 15, 2014.
Posted on October 16, 2013
The UN’s Intergovernmental Panel on Climate Change (“IPCC”) has more bad news for us. Its long range forecast still looks hot, and the IPCC is more confident than ever that humans are largely the cause. On Friday, September 27, the IPCC issued a Summary for Policymakers on the “physical science basis” of climate change. This is the first part of the IPCC’s Fifth Assessment Report to be published. The summary report contains numerous findings, but you may want to begin by thinking about five aspects of them.
1. It is “extremely likely” that we’re the culprit. The IPCC observes that warming in the climate system is unequivocal. But there has been debate about its cause. Based on growing evidence, the report finds it is “extremely likely” that human influence has been the dominant cause of observed global warming since the 1950s. In the IPCC’s previous report, issued in 2007, the IPCC was 90% certain of this conclusion. Now it is 95% certain.
2. We need a carbon budget. For the first time, the IPCC takes a stab at calculating essentially a global limit on anthropogenic CO2 emissions. Science has long estimated that a temperature rise of 2 degrees Celsius above the temperature of preindustrial times is the point after which the most damaging effects of global warming would happen. The report estimates the level of total CO2 emissions since the industrial revolution that would trigger a temperature rise of this magnitude. That number is subject to variation of course, but the report projects it is likely that no more than about one trillion tons of CO2 could be released without triggering this rise in temperatures. We have released about one half of that amount so far, and projections are that at current rates, the other half trillion tons could be released from anthropogenic sources in the next several decades.
3. Temperatures of the last fifteen years are not that comforting. Climate change skeptics have focused on the fact that the rise of global surface temperatures leveled out in the last fifteen years. The IPCC report explains that this recent trend may be due to natural variability. It observes that trends based on records of short duration are very sensitive to beginning and end dates and may not reflect long term climate trends. Nonetheless, in identifying possible explanations for the fifteen year hiatus in warming, IPCC recognizes that the possible explanations for it are not proven. It also recognizes the possibility that in some models, there may be an overestimate of the response to increasing greenhouse gas.
4. There is much we do not know. We don’t know the cause of the fifteen year leveling of global warming. We don’t know how quickly the oceans will rise. We don’t know the likelihood and rate of extinctions. We cannot accurately predict the localized effects of warming temperatures. Much of the report is a detailed exercise in characterizing probabilities and confidence levels of predicted global climate trends over time. The report characterizes the likelihoods of trends it identifies, and they range from the virtually certain to low confidence levels, depending on the trend and timeframe.
5. We will hear more from the UN. The Summary Report for Policymakers focuses on the physical science basis of climate change, and the full version of this part is expected soon. This physical science part is only the first of three that will together comprise the IPCC Fifth Assessment Report. The Fifth Assessment Report follows the Fourth Assessment Report which was published in 2007. In 2014, the two additional parts of this Fifth Assessment Report will be issued concerning (1) likely impacts and (2) steps to limit climate change. As the report is issued, it likely will prompt renewed efforts for a global climate treaty. The UN Secretary General, Ban Ki-moon, urged world leaders to work toward a new global agreement to cap greenhouse gas emissions and declared his intention to call a meeting of world leaders next year.
Posted on October 15, 2013
The Supreme Court agreed today to review the EPA’s authority to regulate emissions of greenhouse gases from stationary sources. The Justices accepted six petitions for review of the D.C. Circuit’s decision in Coalition for Responsible Regulation v. EPA (No., 12-1146 et al.), consolidated them for argument, and limited review to a single question:
“Whether EPA permissibly determined that its regulation of greenhouse gas (GHG) emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”
The six petitions granted were filed by the Utility Air Regulatory Group, the American Chemistry Council, the Energy-Intensive Manufacturers, the Southeastern Legal Foundation, the U.S. Chamber of Commerce, and a number of states.
EPA’s position, as presented in the DC Circuit and in its opposition to certiorari, is that regulation of greenhouse gas emissions under Title II triggered permitting requirements under the PSD program and Title V of the Act, which apply to stationary sources emitting “any air pollutant” above the statutory threshold. EPA has interpreted “any air pollutant” to mean “any air pollutant regulated under the Clean Air Act,” and thus when the EPA’s regulation of emissions from new motor vehicles took effect in January 2011, the permitting requirements under the PSD program and Title V automatically applied to stationary GHG sources above the statutory threshold.
In its petition, the US Chamber of Commerce noted that EPA acknowledged that its tailoring rule would create a result “so contrary to what Congress had in mind — and that in fact so undermines what Congress attempted to accomplish with the [statute’s] requirements — that it should be avoided under the ‘absurd results’ doctrine.” With respect to the issue upon which cert was granted, the Chamber argued that EPA incorrectly determined that all “air pollutants” regulated by the agency under the Clean Air Act’s motor vehicle emissions provision, 42 U.S.C. § 7421(a)(1), must also be regulated under the Act’s Prevention of Significant Deterioration of Air Quality and Title V programs when emitted from stationary sources.
The Utility Air Regulatory Group petition expressly did not ask the Supreme Court to revisit its holding in Massachusetts v. EPA. However, the UARG petition did ask the Court to consider whether its decision in Massachusetts v. EPA compelled EPA to include GHGs in the PSD and Title V programs when inclusion of GHGs would expand the PSD program to cover a substance that does not deteriorate the quality of the air that people breathe. UARG emphasized EPA’s admission that regulation of GHGs under the Title I and Title V permit programs subjects “an extraordinarily large number of sources” to the Act for the first time, “result[ing] in a program that would have been unrecognizable to the Congress that designed PSD.”
A coalition of environmental groups opposed certiorari, emphasizing that EPA’s endangerment and contribution findings and emissions standards for motor vehicles simply implement the Supreme Court’s mandate in Massachusetts v. EPA. They emphasize that the Petitioners’ arguments ignore the “air pollutant” definition that the Court in Massachusetts v. EPA held “unambiguous[ly]” (549 U.S. at 529) covers greenhouse gases.
It is worth noting that four justices dissented in Massachusetts v. EPA, and the successful petitioners in Coalition for Responsible Regulation argue that Massachusetts does not compel the regulations at issue here. The granting of the petitions for certiorari is sobering news for EPA. Stay tuned.
Posted on October 14, 2013
One basic premise of the Clean Water Act is that EPA sets minimum standards but allows the States some latitude, in some areas, to design their own programs to meet their own needs. One area where the States have traditionally been allowed flexibility is the antidegradation analysis required for any new or expanded discharge, to assure that high quality waters are not degraded. However, in a notice published September 4, EPA is proposing to amend the federal antidegradation rule to require a review of alternative treatment levels for every permit and to require selection of the “least degrading alternative” in each case. The proposed rule would have a dramatic effect in Georgia, and perhaps in some other states.
The current antidegradation rule--both the federal rule and the Georgia rule--provides that the quality of high quality waters shall be maintained unless “allowing water quality is necessary to accommodate important economic or social development in the area….” In Georgia the longstanding process, approved by EPA, is that the state Environmental Protection Division determines whether the proposed discharge is “necessary” by considering any no-discharge alternatives, such as land application. If the no-discharge alternative is not feasible and the agency concludes, after public input, that the proposed discharge has significant positive economic or social value, then EPD considers the antidegradation analysis complete. The agency then proceeds to apply the water quality regulations to determine effluent limitations and other permit conditions.
Under EPA’s proposal, the antidegradation analysis would mandate a consideration of a full range of alternatives that could prevent or minimize the degradation that would result with the proposed activity, so long as they are “practicable.” As proposed, this would apply not only to industrial dischargers but also to POTWs, even though the Clean Water Act clearly provides for less stringent technology for public facilities. The result would be to require substantial expenditures on additional controls even if they are not needed and even if they will produce negligible water quality benefits.
This very issue has been the subject of debate and litigation in Georgia for the past ten years. It has enormous implications, because Georgia has declared that all its waters are “high quality” and subject to the Tier 2 requirements. The environmental community in Georgia has long argued that the determination that a proposed discharge is “necessary” must be supported by a demonstration that the facility, even a POTW, has employed the highest level of treatment that is technologically and economically feasible. In their view, if a facility can implement better controls, it must, without regard to a cost-benefit analysis and whether or not the lower standard would have any impact on water quality. The Georgia experience counsels against EPA’s proposal to impose a “one-size-fits-all” antidegradation analysis on all 50 states.
Posted on October 4, 2013
EPA is still working the kinks out of its New Source Performance Standards (NSPS) for the Oil and Natural Gas Sector, i.e., 40 C.F.R. 60 Subpart OOOO, referred to by many as the “Oil and Gas NSPS” and by some as simply “Quad O”. EPA first published the proposed Oil and Gas NSPS on August 23, 2011, in conjunction with proposed revisions to three other air regulations affecting various segments of oil and natural gas operations. The proposal prompted more than 150,000 public comments and kindled a national discussion on emissions at natural gas well sites. The final Oil and Gas NSPS rule was published in August 2012. Although the rule is most famous for establishing the first federal air standards for hydraulically-fractured natural gas wells, the rule also set significant volatile organic compound (VOC) standards for “storage vessels” used by the oil and natural gas industries.
Several stakeholders responded to the August 2012 rulemaking by filing petitions for administrative reconsideration of the Oil and Gas NSPS. On April 12, 2013, EPA published a notice granting reconsideration for a number of issues and proposing revisions to the storage vessel standards, in particular. Evidently, EPA significantly underestimated the number of storage vessels coming online in the field when it developed the August 2012 final rule, which required individual storage tanks with VOC emissions of 6 tons or more per year to achieve at least 95% reduction in VOC emissions. Tanks are commonly used at natural gas well sites, for example, to store condensate, crude oil, and produced water. In light of an updated tank estimate, EPA recognized that additional time would be needed for manufacturers to produce a sufficient number of VOC control devices.
Most recently, on September 23, 2013, EPA published final revisions to the storage vessel requirements in the 2012 Oil and Gas NSPS. Per the revised rule, which was immediately effective, an individual tank may be considered an affected facility if its construction, modification or reconstruction commenced after August 23, 2011; it has potential VOC emissions of 6 tons or more per year; and it contains crude oil, condensate, intermediate hydrocarbon liquids, or produced water. EPA made a number of important adjustments in the revised rule, chief among them an extension of the compliance date to give tank owners and operators more time to purchase and install controls. For the so-called “Group 1” storage vessels (which were constructed, modified or reconstructed between the August 2011 original proposal and the April 2013 proposal), the deadline to control VOC emissions is now April 15, 2015. For “Group 2” storage vessels (i.e., vessels that come online after April 12, 2013), the compliance deadline is April 15, 2014. Notably, pursuant to the revised Oil and Gas NSPS, operators only have until October 15, 2013 to estimate potential VOC emissions of Group 1 storage vessels for purposes of determining whether the rule applies.
Meanwhile, the agency is continuing to evaluate other issues raised in the reconsideration petitions that were submitted in response to the August 2012 rulemaking. EPA has stated in the past that it intends to address the remaining issues by the end of 2014.
Posted on October 1, 2013
On September 25, 2013 the South Carolina Department of Health and Environmental Control (SCDHEC) filed an emergency regulation in response to multiple occurrences of illegal dumping of substances containing polychlorinated biphenyls (PCBs) into multiple sewer systems across the State. The Emergency Regulation took effect immediately upon filing and remains in effect for ninety (90) days. SCDHEC acknowledged the existence of an ongoing investigation into the origin of the materials, including state and federal authorities. SCDHEC noted that there was currently no known impact to public health or any confirmed discharge to surface water bodies. It is also believed that publicly-owned treatment works (POTWs) in states bordering South Carolina have recently detected PCBs in their systems.
In August, SCDHEC had acknowledged that PCBs had been detected in several POTWs in the Greenville-Spartanburg area of the State. Concurrent with the filing of the Emergency Regulation, the agency announced that PCBs had now been detected in a POTW in the Columbia, SC area.
Some South Carolina wastewater treatment systems are permitted for the land application of their sludge. Based on the suspected criminal activity, DHEC has determined the need for specific regulations limiting the land application of sludge containing detectable levels of PCBs. The Emergency Regulation addresses the land application of sludge from wastewater treatment systems and specifically limits land application to sludge containing no detectable levels of PCBs and requires increased testing of sludge, regardless of disposal method, to aid in identifying illegal dumping suspects. SCDHEC has also informed all of the state’s class III landfill operators and waste water treatment plants of the matter, and provided them guidance regarding proper disposal and reporting any suspicious activity.
SCDHEC issued a Be On the Lookout (BOLO) alert through the State Law Enforcement Division to heighten awareness among law enforcement of illegal dumping and solicit the help of local law enforcement agencies.
Posted on September 27, 2013
Last spring, my colleague Robby Sanoff complained on our firm’s blog about the problem resulting from appellate courts’ refusal to give appropriate discretion to district judges in performing their gatekeeping function under Daubert. As Robby put it:
"The difference between “shaky but admissible” and unreliable and inadmissible evidence would seem to be entirely in the eye of the beholder."
Robby will not be pleased by last’s week’s decision by the 11th Circuit Court of Appeals in United States v. Alabama Power, reversing a district court order excluding EPA’s expert testimony in support of its NSR enforcement action against Alabama Power. The Court majority performed an extensive review of the testimony provided in the Daubert hearing below, and concluded that the district court’s decision was clearly erroneous. (For those of you concerned with the merits of these cases, the question was whether EPA’s model, which clearly applied to determinations of emissions increases for baseload plants, could be applied as well to cycling plants generally and the plants at issue in the case in particular.)
The case is particularly interesting because Judge Hodges, taking Robby’s view, dissented. As Judge Hodges noted, prior to the Supreme Court decision in General Electric v. Joiner, appellate courts did not grant significant discretion to district courts in exclusion rulings. However, Joiner made clear that the abuse of discretion standard applies even in outcome-determinative exclusion rulings.
Next, Judge Hodges noted that, in Daubert rulings, there should be a “heavy thumb – really a thumb and a finger or two – that is put on the district court’s side of the scale.” He then rehearsed the actual statistics on Daubert reversals in the 11th Circuit: 3 reversals out of 54 cases.
Finally, Judge Hodges conducted a brief review of evidence tending to support the district court’s conclusion and determined that its decision was not “a clear error in judgment.” Concluding that a different result might be appropriate if review were de novo, Judge Hodges quoted Daubert itself:
"We recognize that, in practice, a gatekeeping role for the judge, no matter how flexible, inevitably on occasion will prevent the jury from learning of authentic insights and innovations. That, nevertheless, is the balance that is struck by Rules of Evidence designed not for the exhaustive search for cosmic understanding but for the particularized resolution of legal disputes."
Decisions such as this have to be discouraging to district court judges, as Robby noted. It’s worth pointing at that Judge Hodges is actually a district court judge, sitting on the court of appeals by designation. It seems fitting that the district judge on the panel would be the judge vainly trying to protect the discretion of district judges in Daubert matters.
Posted on September 26, 2013
“Shoot first, ask questions later” is how Congressman Chris Stewart described EPA’s efforts to link groundwater contamination to hydraulic fracturing. Stewart is the Chair of the Environmental Subcommittee of the House Committee on Science, Space and Technology, chairing the July 24 hearing on “Lessons Learned: EPA’s Investigations of Hydraulic Fracturing.” Specifically at issue was the EPA’s investigation in Pavillion, Wyoming.
In December, 2011, the EPA issued a “draft” report which concluded that hydraulic fracturing in the Pavillion, Wyoming gas field had caused pollution of the deep drinking water aquifer. The draft report was based upon sample results from two EPA monitor wells and was issued without peer review or stakeholder input.
There were serious flaws with EPA’s work. For starters, EPA failed to complete the monitor wells according to its own guidelines. Annular sealants were not properly installed, allowing cement to impact the water quality. A landowner’s complaint that EPA had an anti-freeze leak during drilling operations was not disclosed in the draft report. EPA exposed the wellbores to painted low-carbon steel casing and welding materials, which are known to contain various organic and metal compounds, yet the report inaccurately stated that stainless steel casing had been used. Moreover, several of the constituents which the EPA attributed to hydraulic fracturing fluids (e.g. glycols, 2-butoxyethanol and phenols) are known to be associated with the high pH cement that the EPA used to complete the wells. The bottom line is that the EPA’s own operations introduced the contaminants that it blamed on hydraulic fracturing fluids.
Subsequent testing by the USGS was unable to verify the EPA’s results. The USGS was unable to find some of the compounds that EPA claimed were present, and other constituents were found at significantly lower levels. The USGS was unable to sample one of the two wells due to improper well construction.
The EPA has now walked away from its flawed study, turning the entire investigation over to the State of Wyoming. The EPA has stated that the draft report will not be peer reviewed or finalized, and that the results will not be used in its national hydraulic fracturing study. Nevertheless, the EPA’s handling of Pavillion has cast doubt over the EPA’s national investigation of hydraulic fracturing intended to develop regulatory policy for unconventional reserves, causing Chairman Stewart to conclude, “given EPA’s rush to judgment in Wyoming…we should question whether the Agency’s ongoing study is a genuine, fact-finding, scientific exercise, or a witch-hunt to find a pretext to regulate.”
Posted on September 25, 2013
On September 13, in a 99 page decision, the U.S. District Court for the Middle District of Pennsylvania upheld EPA’s multi-state Clean Water Act Total Maximum Daily Load (“TMDL”) for the Chesapeake Bay and its tributaries against a broad range of challenges brought by the American Farm Bureau Federation and six other farm industry trade associations. Six environmental organizations led by the Chesapeake Bay Foundation, plus four municipal water associations led by the National Association of Clean Water Agencies, intervened in support of EPA.
The Chesapeake Bay TMDL is not the first to cover multiple states, but it is by far the largest, covering 64,000 square miles in Maryland, Virginia, Delaware, Pennsylvania, West Virginia, New York and the District of Columbia. It requires substantial reductions of nitrogen (25%), phosphorus (24%) and sediment (20%) by 2025 to meet water quality standards. Because of the interstate nature of the long-standing pollution problems, after more than two decades of collaborative but unsuccessful efforts, the states agreed in 2007 that EPA should develop the TMDL. It was issued in 2010 and included allocations for each of 92 tidal segments which, after consultation with the states, were further allocated among states, watersheds and sectors (such as agriculture, wastewater, stormwater, etc). During the process, each state developed its own Watershed Implementation Plan (“WIP”), specifying wasteload allocations (“WLA’s”) for point sources, load allocations (“LAs”) for nonpoint sources, and identifying the regulations, programs and resources that would be used to achieve the required reductions. For more on this TMDL see "EPA Issues Biggest TMDL Ever for Chesapeake Bay Watershed" and ELI Environmental Forum “The Chesapeake Bay TMDL” (May/June 2011).
The plaintiffs alleged that (1) the TMDL was an unauthorized “implementation” of allocations by EPA, (2) requiring WIPs exceeded EPA’s authority, (3) EPA’s use of watershed and related models in setting the allocations was an abuse of discretion, and (4) there was insufficient public notice. In addressing these challenges, the court first held (as several others have) that a TMDL is not self-implementing, but is an “informational tool”, developed collaboratively by EPA and the states under CWA Section 303(d), and implemented primarily by the states.
Turning to the merits, the court upheld EPA’s definition of a TMDL for a waterbody or segment as the sum of all WLAs and LAs plus natural background. It also upheld EPA’s authority to establish a multi-state TMDL, when the affected states either fail to do so or ask EPA to do it (both occurred here), including limitations on sources in upstream states to achieve compliance with water quality standards in downstream states. It held that EPA’s “holistic” or “watershed-wide approach” was consistent with the broad national goals of the CWA to “restore … our Nation’s waters.” In reaching this result the court emphasized the collaborative efforts of the Bay states and EPA starting in 1983 to address the problems of interstate pollution, transported by rivers and tides, and their consensus that an EPA-led multistate effort was needed.
The court further held that the WIPs – new tools in the TMDL context – were authorized as part of the “continuing planning process” under CWA Section 303(e). This process is initiated by the states to achieve water quality goals, and is subject to review and approval by EPA. Because EPA had advised the states in letters what it expected in terms of general content and specificity in the WIPs, but left the details to the states, the court held EPA did not exceed its authority. The court also relied on CWA Section 117(g) - a Chesapeake Bay-specific provision - requiring EPA to “ensure that management plans are developed and implementation is begun by [all the affected states] to achieve and maintain…” the applicable water quality goals.
The plaintiffs also challenged EPA’s requirement that each WIP contain “reasonable assurances” of timely and effective implementation, and EPA’s use of “backstop” allocations where EPA determined that a WIP provision was deficient. “Backstops” involved requiring NPDES permits from previously unregulated sources. The court held that EPA could properly require “reasonable assurance” under CWA 303(d)(1), which requires a TMDL must be “established at a level necessary to implement the applicable water quality standards.” The court upheld “backstops”, which were only used in 3 instances, as a reasonable exercise of EPA’s authority under CWA 303(d)(2) to ensure that the contents of the TMDL are designed to achieve the applicable water quality goals.
The court upheld EPA’s use of models as scientifically supported and within EPA’s discretion. It rejected the challenge to adequate notice and opportunity for public participation since (1) a 45 day public comment period had been provided, (2) there had been hundreds of public meetings during the more than 10 year development of the TMDL, and (3) plaintiffs showed no prejudice from the fact that some details of the modeling were not available until after the comment period.
The court held that TMDL establishment and implementation involves “cooperative federalism” between the states and EPA, and that the Chesapeake Bay TMDL properly reflects the shared responsibilities and necessary interactions, despite some bumps along the road. While EPA exerted strong leadership, the court held that it did not unlawfully usurp the states’ implementation functions. The court noted the preserved authority of the states to implement nutrient trading and offsets, and to set or revise source-specific loading allocations. In conclusion, there is a lot of thoughtful analysis, as well as precedent, in this decision, which makes it an excellent resource for CWA practitioners.
Posted on September 23, 2013
The legal profession lost a giant earlier this month when Ronald H. Coase passed away Sept. 2nd. You may know Coase as the economist who framed the Coase Theorem and won the 1991 Nobel Prize in Economic Science. But you may not know that Coase spent his career at a law school, not in an economics department. Or that several of his key economic insights have as much relevance for the law as they do for economics.
Coase wrote his first influential paper, The Nature of the Firm, in 1937. In it, he announced the concept of transaction costs, the notion that people must incur costs simply to participate in supposedly free market. After he recognized that it takes time and resources for someone to gather information to make a deal in the marketplace, and even more to bargain for the deal and to police and enforce it, Coase hit on the then-radical idea that people will organize themselves into firms or corporations only if it will reduce their individual transaction costs. The firm, in other words, exists because it incurs lower transaction costs to handle certain kinds of dealings. This explains why companies grow into large, complicated behemoths, and also why they outsource functions when the external market begins to do the same job with lower transaction costs.
Transaction costs are important for all lawyers to consider, but Coase’s next big work is particularly significant to environmental lawyers. His 1960 The Problem of Social Costs introduced the idea that relatively free markets could allocate resources more efficiently than any regulatory system. Even more boldly, Coase showed that, if you assume no transaction costs, a free market reaches the most efficient result no matter how society’s property rights may be distributed initially. A polluter given the complete right to do so will pollute only as much as is socially useful, because otherwise his neighbors will pool their money to buy him out.
Interestingly, Coase never liked his idea as applied to the real world. He knew that assuming no transaction costs was big and unrealistic. In real life, there are transaction costs everywhere, as his 1960 paper noted:
This would seem particularly likely when, as is normally the case with the smoke nuisance, a large number of people are involved and in which therefore the costs of handling the problem through the market or the firm may be high.
When there are transaction costs, the market will not find the most efficient result, and it will end up imposing externalities on others. Coase felt that government regulation or taxation would often be needed to fix this problem.
So in the end, Coase was an empiricist: look carefully at each situation and decide based on the facts, not ideology, whether market forces or government action will work better. We should all raise a toast in his memory.
NB: To see more of Coase’s delightful way of thinking about the world, read this 1997 interview of him at The Ronald Coase Institute’s website.
Posted on September 18, 2013
On July 10, 2013, several different consortia of environmental organizations simultaneously filed petitions with three EPA Regional Offices asking the respective Regional Administrators to make determinations under the Clean Water Act (“CWA”) that unpermitted stormwater discharges from impervious surfaces at existing commercial, industrial, and institutional sites be required to obtain stormwater permits and to conduct remedial actions. The three petitions (Region 1, Region 3, Region 9), jointly filed by American Rivers, Conservation Law Foundation (“CLF”) and Natural Resources Defense Council (along with different regional NGOs on each petition), ask EPA to use its CWA Residual Designation Authority (“RDA”) to require property owners in EPA Regions 1, 3 and 9 to capture and treat their stormwater runoff, which the petitioners allege is impairing waterbodies in those parts of the U.S.
Currently, in the absence of residual designation, only new construction projects, industrial sites falling within certain limited categories, and municipal stormwater sewer systems are required to obtain stormwater permits and manage stormwater runoff. The Petitioners allege that stormwater discharged from impervious surfaces on commercial, industrial, and institutional sites are significant sources of pollutants – specifically, metals (lead, copper and zinc), sediments, phosphorus, nitrogen, and oxygen-demanding compounds that cause water body impairments – and therefore should be regulated.
In 2008, CLF successfully petitioned EPA to use RDA to require stormwater discharge permits for existing impervious surfaces in an urban/mall area near Portland, Maine. Property owners with an acre of more of impervious surface in that watershed are now required to control their stormwater runoff either on an individual basis (by retrofitting their property to control pollutants in runoff) or by obtaining coverage under a general permit and paying an annual fee per acre of impervious cover. A similar NGO petition was granted by EPA Region I with regard to limited areas within the Charles River watershed near Boston.
The current petitions represent an effort to force expansion of EPA stormwater runoff control regulation in New England, the Mid-Atlantic States and California/Nevada/Arizona. The petitioners recommend remedial actions such as conservation of natural areas, reducing hard surface cover, and retrofitting urban areas with features that detain stormwater runoff and treat pollutants in stormwater.
EPA has 90 days to act on the petition, although action within this time frame is doubtful given the scope of the requests and the pace at which EPA has acted upon other much more limited RDA petitions. With the very recent U.S. District Court decision in American Farm Bureau v. EPA upholding the Agency’s Chesapeake Bay TMDL for nitrogen, phosphorus and sediment, however, EPA may feel somewhat more emboldened to embrace these broad-reaching petitions. To date, however, the Agency has been mum regarding the petitions.
Posted on September 13, 2013
The world’s largest source of surface fresh water is surrounded by a number of nuclear plants that have been generating power and waste for well over 30 years. Although the region has had the benefit of the power, it also has the legacy of low, medium, and high level waste that has been accumulating at these plants over the years. There is great concern over this situation because the lakes are the source of drinking water for over 30 million people.
Currently, Ontario Power Generation (OPG) has a proposal for a deep geologic repository (DGR) for low and intermediate level radioactive waste at their Bruce Nuclear facility near Kincardine, Ontario. The waste comes from the Bruce facility, as well as OPG’s Darlington and Pickering plants. It is currently stored above ground The DGR would be 680 meters below the surface of the ground and about one kilometer from the shores of Lake Huron. Kincardine offered to serve as a host community for the DGR, and no other potential sites have been considered. There has been extensive outreach in the Kincardine area over the past 10 years about the proposal, and some limited amount in Michigan. Only recently has the broader Great Lakes community become aware of the proposal and some significant concerns have been raised, primarily the proximity to Lake Huron and the lack of consideration of other sites. In addition, there is concern that this would be a precedent for more disposal sites for not only low and medium level waste, but also the high level waste from spent fuel. The proposal is under review by a Joint Review Panel formed by the Canadian Nuclear Safety Commission and the Canadian Environmental Assessment Agency.
Although OPG has done extensive engineering and geological work, the fundamental question is whether a disposal site should be located so close to one of the Great Lakes, the source of drinking water for over 30 million people. Also, should just one site be considered for something as significant as this? Some have argued that there should be no more nuclear plants on the Great Lakes until an acceptable disposal solution has been found. The reason the nuclear plants are there in the first place is the abundance of available cooling water. It seems ironic that the convenience of locating the disposal site next to the plant to limit transportation of the waste, also results in the waste staying close to Lake Huron. We should be able to do much better than this in the 21st Century.
Posted on September 11, 2013
A federal court in Washington, D.C. gave some encouragement to transmission line developers—not to mention sponsors of other linear projects, like gas or water pipelines. In National Parks Conservation Assn. (NPCA) v. Jewell, the court rejected a challenge to the National Parks Service’s grant of special use permits and extended rights-of-way for the Susquehanna to Roseland Transmission Line (S-R Line), a replacement and upgrade project.
The focus of Appellant NPCA’s attack was the National Environmental Policy Act (NEPA), a potent weapon in years past. Under NEPA, a federal agency considering a “major” action must evaluate the environmental effects of the project. After an initial Environmental Assessment, the agency either conducts a full blown Environmental Impact Statement (EIS) or issues a Finding of No Significant Impact. NEPA’s purpose is to ensure that the agency takes a “hard look” at the environmental tradeoffs of its intended action, but once having done that, it can decide to move forward regardless. In other words, NEPA is a procedural statute, but lacks teeth to prevent the agency from acting.
Still, NEPA has proved effective in stopping projects in their tracks. The usual avenues of attack have been whether the agency should have written an EIS, whether it considered all reasonable alternatives, whether the EIS needs updating, and whether the project should be seen in a larger context of other similar developments or as part of a broad program. In recent years, however, the agencies have learned how to beat back such challenges.
The NPCA made allegations on similar bases here, but this time to no avail. The Parks Service’s EIS took an adaptive management approach to mitigation, anticipating that the mitigation plan would evolve. The NPCA argued that the EIS must analyze the mitigation ultimately decided on, but the court was satisfied the agency had taken the requisite “hard look.” Nor did the court find a supplemental EIS necessary because the “new information” adduced by the NPCA concerned environmental effects that were already within the scope of the EIS.
The NPCA also argued that the alternatives analysis in the EIS was lacking because it didn’t adequately consider the no-action alternative. In this case, the no-action alternative would be to pursue a non-transmission approach, such as distributed energy. The court deferred to the Parks Service’s analysis that this alternative would not meet the objective of improving the reliability of the applicants’ existing line. The court found that the Parks Service rationally considered and rejected the no-action alternative.
The court also rejected the argument that the Parks Service should have analyzed the environmental effects of the entire S-R Line, and agreed the agency could look just at the consequences of extending the right-of-way. The judge took note of the fact that the project sponsors could have reconstructed the line on their existing right-of-way, and therefore there was no functional difference between the reconstructed line on the proposed right-of-way and the existing one.
The court’s approach in this case is consistent with NEPA case law in recent years. Agencies will be given some deference in their decision making, so long as their NEPA documents indicate a good faith effort to look at environmental impacts. Project opponents can no longer rely on NEPA as a reliable weapon to block development.
Posted on September 9, 2013
For those of you who interact now with, or may in the future interact with, the Alabama Department of Environmental Management (ADEM), whether its staff or the lawyers who make up ADEM’s Office of General Counsel (OGC), meet ADEM’s General Counsel, Tom Johnston:
Q: Tell me a little bit about your background, how long you've been at ADEM, how long as General Counsel, and the make-up of the OGC.
A: I attended the University of California, Berkeley, earning a B.S. in Resource Economics, and came back home to Alabama to get my law degree from the University of Alabama School of Law, receiving my J.D. in 1983. I have been with the OGC for 25 years, representing ADEM in civil enforcement actions, in defensive litigation before the Alabama Environmental Management Commission (AEMC), and in state and federal courts, both at the trial and the appellate levels. I was appointed as the agency’s General Counsel in 2010, following the retirement of long-time General Counsel Olivia Rowell. Currently, there are nine attorneys on staff with the OGC, including myself. While an effort is made to allow staff attorneys to develop expertise by working closely with an assigned ADEM program, our attorneys are also encouraged to provide assistance outside their assigned area, which allows them to expand their individual experiences and remain current in the broad array of environmental law.
Q: What has been one of the more interesting or challenging legal issues you or the OGC has handled, and how did it turn out?
A: The case that comes to my mind is one that presented significant issues of public health and safety, combined with the complexity of the underlying subject matter and the science and technology involved. I refer to the permit appeal and legal challenges lodged against the Chemical Weapons Incinerator built at the Anniston Army Depot in Calhoun County, Alabama to destroy the stockpile of chemical agent and munitions that had been stored at the depot since World War II. The potential impact on the surrounding communities from an accidental release of aging chemical agent was down-right frightening, regardless of whether the release was the result of continued storage, an operational accident, sabotage, or terrorism. From beginning to end, the permits issued by ADEM for the incinerator underwent the most detailed processing and review in the Department’s history, a process that extended beyond ten years. As the attorney in the Office of General Counsel assigned to the case, I provided assistance along the way, from the public hearings during the notice and comment permitting, to the administrative permit appeals initiated before the AEMC, to collateral challenges lodged in trial court and pursued through appellate review. The administrative hearing in the permit appeal was the longest in ADEM history and, at over 700 pages, generated the most extensive recommendation to date from an AEMC hearing officer.
In the end, 12 years after the Army’s initial application to ADEM, the Supreme Court of Alabama upheld all permits issued by ADEM, without modification. For myself (and the Army, DOD, and private attorneys also involved), the joy and professional satisfaction of obtaining that legal victory will be long remembered. Even so, that joy was surpassed in December, 2011, with the announcement that the incinerator had destroyed the last remaining munition, and had forever removed from the consciousness of that community the specter of an agent-related accident. Over the life of the incinerator project, more than 4.5 million pounds of chemical agent – including over 600,000 rockets, projectiles, mines and mortars – were successfully and safely destroyed without major incident.
Q: ADEM has changed over the years, and I know the OGC has changed, too. What are some of the more significant changes you’ve seen in your time at ADEM?
A: The more significant changes I have witnessed during my twenty-five years with ADEM result from advancements in information technology. From advances in word-processing and database management to electronic filings and use of the internet, these developments have fundamentally changed not only how we handle the Department’s business, but also the public’s ability to interact with ADEM. Utilizing the tools now available through advancements in information technology and the internet, ADEM is now one of the most transparent agencies in Alabama state government, and a leader in transparency among the state environmental agencies in EPA Region IV. With the development of the ADEM website, citizens now have access to a wide range of electronic data and may tailor search queries by facility name, permit number, or location and community. Through our website, citizens may now file complaints and research information. The Department has engaged in a concerted effort through workshops and community outreach to provide “how-to” instructions on using the ADEM website. Regulated entities also have benefited through the ability to file reports electronically, such as discharge monitoring reports, thereby avoiding potential mistakes and errors from manual entry of data.
Q: Is funding still a big problem for ADEM and the OGC? What are some other significant issues?
A: Funding and budgetary constraints at the state and federal level continue to present some of the most significant challenges to ADEM I have observed since joining the staff in 1988. As a result, ADEM has had to take steps to cut back and streamline. Last summer our director announced the sale of the Department’s surveillance airplane. A hiring freeze was implemented and staffing levels have decreased through attrition. In the Office of General Counsel, we have not filled two attorney slots and one of our support positions. Employees have not received merit raises in five years, cost of living adjustments have been stayed, and promotional opportunities are limited. Yet, even with these constraints, environmental management by ADEM has performed in the upper percentile in national rankings. I give credit for these rankings to the dedicated men and women who staff ADEM, and the guidance and leadership from the front office.
Q: Are there particular legal or substantive issues the OGC or ADEM is working on that you can share; or perhaps issues you see coming down the road with which ADEM or the OGC will have to deal?
A: One issue we are seeing on a recurring basis arises from activities conducted by business organizations that enjoy limited liability under state law, i.e. limited liability companies or “LLCs.” What was once a form of business organization little noticed by ADEM, the use of LLCs appears to have skyrocketed in areas of activity subject to ADEM regulation. Whether the activity involves development of a residential subdivision, or the operation of a private wastewater treatment facility, when a LLC engages in activities that result in significant environmental impact and damages, the assertion of limited liability by those responsible stymies enforcement efforts and limits the ability of courts to grant relief. When construction activities undertaken by a LLC result in impacts to streams and tributaries, or damages the property of adjoining land-owners, courts are looking at ADEM and private plaintiffs and asking: “What can I do if there are no assets in the company?” We are aware of cases now where the limited liability form of organization has resulted in either no remediation of impacted property, or emergency response remediation conducted on the public dime. In this respect, the LLC business organization has allowed the de facto shifting of financial responsibility from the LLC investors to others.
Posted on September 4, 2013
There has been a flood (no pun of course) of new stories this month about rising sea levels, acidifying oceans, drought-driven wildfires, and extreme weather events in the U.S. and globally. At the same time, with the official release of the eagerly-awaited Fifth Assessment Report of the Intergovernmental Panel on Climate Change due in several weeks, leaks of a draft portion of the Report are coming out in the media, indicating increasing confidence in the underlying science and in a substantial human role in warming, primarily as a result of burning fossil fuels. Additionally, as reported in the N.Y. Times, it appears that the draft projects that sea level could rise by only about 10 inches by 2100 under the “most “optimistic” scenario. But “at the other extreme,” with emissions continuing to swiftly increase, “sea-level rise could be expected to rise at least 21 inches and might increase a bit more than three feet” by the end of this century—which “would endanger many of the world’s great cities — among them New York, London, Shanghai, Venice, Sydney, Australia, Miami, and New Orleans.” Some believe that the FAR will still understate the likely forthcoming climate disruptions.
Coincidentally (or not?), those of you who still subscribe to the National Geographic Magazine would have seen in August a cover story entitled “Rising Seas”, which leads off with questions a panel of ACOEL members will (coincidentally?) in part be addressing at our Annual Meeting in Boston: “As the planet warms, the sea rises. Coastlines flood. What will we protect? What will we abandon? How will we face the danger of rising seas?” . And rising sea levels are especially of relevance to any ACOEL member living in a state on the Atlantic coast, because sea levels have been rising three to four times more rapidly off the Atlantic Coast than the global average, according to a recent study. For those of you living between the coasts, the San Francisco water supply and Yosemite National Park are both threatened by an out-of-control wildfire, while the western United States are experiencing significant drought.
And while forests burn and seas warm, acidify, and rise, one good news story was the recent launching in Maine of the first grid-connected floating wind turbine outside of Europe.
It also is the first concrete-composite floating wind turbine in the world, using advanced material systems with a unique floating hull and tower design. The 65 ft tall turbine prototype is a one-eight-scale version of a 6 MW, 423 ft rotor diameter design. Currently being developed by the University of Maine and beginning preliminary environmental and permitting work, Maine Aqua Ventus I had been selected by the Department of Energy early this year out of 70 competing proposals as one of 7 winners of $4 million in initial funding. The project is now a finalist for an additional $46.6 million in funding. This project is critical, because floating offshore wind energy projects have the potential to generate large quantities of pollutant-free electricity near many of the world’s major population centers (but far enough away, in water depths up to 400’, to not be visible from shore), and thus to help reduce the ongoing and projected economic, health, and environmental damages from climate change. Wind speeds over water also are stronger and more consistent than over land, and have a gross potential generating capacity four times greater than the nation’s present electric capacity.
(Full disclosure: I am legal counsel for the project)
Posted on August 29, 2013
My prior post about the impacts of Storms Irene and Sandy on Connecticut noted some of the policy challenges presented in the storms’ aftermath for state government in Connecticut and elsewhere in the Northeast. The tremendous destruction of property resulting from these events brought home to many coastal property owners a previously unappreciated but significant conflict between property owners’ rights and state coastal policy.
Many property owners seeking to protect their property from future storm events learned to their consternation that regulatory policies adopted in the Connecticut Coastal Management Act (“CCMA”) more than 30 years ago largely precluded those activities. During the past year, the legislature has taken some small steps to address this conflict and armor the shorefront where developed property is at risk of flooding.
Property rights advocates were successful in substantially modifying the CCMA’s strong policy bias against the use of structural solutions to prevent damage to property from coastal flooding. Prior to this session’s amendments, the CCMA provided that structural solutions were to be avoided in order to maintain the natural relationship between eroding and depositional coastal landforms.
The only exceptions previously allowed were for those structural solutions which were “necessary and unavoidable” for the protection of infrastructure facilities (undefined but generally construed to mean roads, bridges and other public infrastructure), cemetery or burial grounds, water-dependent uses, or inhabited structures constructed as of January 1, 1995.
These narrow exceptions provided no avenue for protection of commercial property, unless it met the “water-dependent use” definition. Moreover, the exceptions provided only very narrow relief for residential property, because residential use is not defined as a “water dependent use.” In addition, the Department of Energy and Environmental Protection generally interpreted the term “inhabited structure” as applying only to the house, not accessory buildings, landscaping, etc. As a result, homeowners were left with no ability to protect their property unless and until the house itself was in jeopardy, which in a storm scenario like Sandy came too late.
The General Assembly addressed these concerns in part by expanding the exceptions to include “commercial and residential structures and substantial appurtenances that are attached or integral thereto,” constructed as of January 1, 1995. Structures built after the cut-off date presently have no options other than to elevate the structure.
How the DEEP will interpret these new provisions remains to be seen, but if the past is any indication, I would expect that the agency will construe them narrowly.
Posted on August 28, 2013
A recent post from Mary Ellen Ternes characterized the August 23, 2013 decision in EME Homer City Generation as another blow to EPA’s ability to enforce against long ago violations of the requirement to obtain New Source Review.
The Third Circuit’s decision certainly is a blow to EPA’s NSR enforcement initiative, but not nearly a knock-out.
First, the decision depended on the fact that neither the Clean Air Act or Pennsylvania’s EPA-enforceable State Implementation Plan expressly requires a major source to operate in compliance with the results of a New Source Review. But some states do have that requirement in their EPA-enforceable SIPs, as the Third Circuit recognized in distinguishing other cases. In such states, major sources that did not go through NSR as allegedly required at the time of construction or modification should still anticipate potential EPA enforcement via the SIP.
Second, even where it is not illegal to operate in compliance with NSR, the question is still open whether the government may obtain injunctive relief anyway. In United States v. United States Steel Company (N.D. Indiana), the Court held on August 21, 2013 that no penalties could be imposed at law because there is no federally enforceable requirement in Indiana to operate in accordance with the results of an NSR. Yet the Court went on to hold that the United States still can seek injunctive relief against a plant that allegedly violated the NSR requirement. The Court reasoned that because the sovereign is not subject to laches, the government remains able to invoke the Court’s equitable powers and to seek an injunction to correct the violation.
On to the Seventh Circuit?
Posted on August 27, 2013
Followers of this Blog will not be at all surprised with the Third Circuit’s August 22, 2013 ruling denying EPA’s requested CAA New Source Review enforcement relief against former and current owners of the grandfathered and allegedly subsequently modified power plant that has been called “one of the largest air pollution sources in the nation.” Former and current owners of such aging power plants caught in EPA’s NSR national enforcement initiative are reassured with the Third Circuit’s finding that text of the Clean Air Act does not authorize injunctive relief for wholly past PSD violations, even if that violation causes ongoing harm.
Having lost its battle for the Cross-State Air Pollution Rule (CSAPR, or the Transport Rule) in August 2012, EPA was dealt another blow with United States v. EME Homer City Generation, in which the Third Circuit upheld the District Court’s 2011 dismissal of the government’s claims.
In 2011, the District Court for the Western District of Pennsylvania agreed with the current and former owners of the power plant that EPA had no authority to hold either party liable for alleged PSD violations arising from purported modifications to their grandfathered power plant. In reaching defendants’ bases for dismissal, the District Court reviewed the permit actions approved by air permitting authorities in 1991, 1994, 1995 and 1996, which EPA alleged with Notices of Violation in 2008 (against the current owner) and 2010 (against current and former owners), to have triggered PSD, and which caused the current Title V permit to be incomplete. The Court’s holding that the PSD violations constituted singular, separate failures by the former owner rather than ongoing failures meant that EPA was outside the five year statute of limitations, allowing no civil penalties against the former and current owners. Moreover, the District Court held EPA was left with no injunctive relief against the current owner because they were in no position to apply for a PSD permit prior to their acquisition of the plant in 1998, and thus could not have violated PSD.
The District Court separately addressed EPA’s claims of injunctive relief against the former owner, recognizing the ongoing higher SO2 emissions that occurred without the benefit of an historic PSD permit. The District Court was unwilling to reach a broad conclusion regarding its authority to award injunctive relief under the PSD program, but given that the former owners no longer owned or operated the plant, and therefore no longer violate PSD, held that there was no plausible basis for granting the rare and extraordinary remedy of injunctive relief, despite the higher emissions occurring the absence of BACT, which the court characterized as a present consequence of a one-time violation.
Upon review, the Third Circuit rejected EPA’s arguments that the current owners violated PSD by operating the plant without BACT with a simple, “no,” pursuant to the plain text of 42 USC 7475(a) which references merely “construction” and “modification,” not “operation, ” relying on U.S. v. Midwest Generation and Sierra Club v. Otter Tail Power Co., adopting the positions of the Seventh and Eighth Circuits that “even though the preconstruction permitting process may establish obligations which continue to govern a facility’s operation after construction, that does not necessarily mean that such parameters are enforceable independent of the permitting process,” and thoroughly refuting EPA’s arguments that PSD could somehow result in ongoing operational requirements outside the PSD permitting process.
Likewise, the Third Circuit rejected EPA’s proposed injunctive relief, which would have required the former owners to install BACT or purchase emission credits and retire them, affirming the District Court’s decision on narrower grounds. Specifically, the Third Circuit held that the text of the Clean Air Act does not authorize an injunction against former owners and operators for a wholly past PSD violation, even if that violation causes ongoing harm.
Hopefully, this Third Circuit decision, along with the Seventh and Eighth Circuit decisions relied upon therein, will signal a substantive end to EPA’s NSR/PSD Enforcement Initiative for similarly situated historic grandfathered power plants and their former and current owners. But, we may have to wait out EPA’s hard headed circuit by circuit enforcement approach. See e.g., EPA’s December 21, 2013 enforcement memorandum, “Applicability of the Summit Decision to EPA Title V and NSR Source Determinations,” following the Sixth Circuit’s Summit Petroleum Corp. v. EPA et al.
Posted on August 26, 2013
On August 20, 2013, the U.S. Court of Appeals for the 3rd Circuit in Bell et al. v. Cheswick Generating Station, GenOn Power Midwest, L.P. answered a question of first impression: “whether the Clean Air Act preempts state law tort claims brought by private property owners against a source of pollution located within the state?” In this case, Plaintiffs filed claims under state tort law against the GenOn’s Cheswick Generating Station, a 570-megawatt coal-fired electrical generation facility in Springdale, Pennsylvania for allegations of ash and contaminants settling on their residential property (located within a mile of the plant). The Appeals Court held that “(b)ased on the plain language of the Clean Air Act and controlling Supreme Court precedent, we conclude that such source state common law actions are not preempted.”
This decision was based upon the U.S. Supreme Court precedent found in Intl. Paper Co. v. Ouellette. The question presented by Intl. Paper Co. v. Ouellette was “whether the [Clean Water] Act pre-empts a common-law nuisance suit filed in a Vermont court under Vermont law, when the source of the alleged injury is located in New York.” The U.S. Supreme Court held that: (1) Clean Water Act preempted Vermont nuisance law to extent that that law sought to impose liability on New York point source, but (2) Act did not bar aggrieved individuals from bringing nuisance claim pursuant to law of source state.
The Supreme Court of Appeals of West Virginia has previously applied the Intl. Paper Co. v. Ouellette decision to the Clean Air Act in Ashland Oil, Inc. v. Kaufman. In the Ashland Oil case The Supreme Court of Appeals of West Virginia held that Intl. Paper Co. v. Ouellette “requires the application of the statutory or common law of the source state to an interstate pollution dispute when the pollutants in question are regulated by the Clean Air Act. However, the procedural law of West Virginia shall be followed when the issues are being litigated in this State's courts.”
Thus, it appears, at least in the 3rd Circuit, that while interstate common law disputes are preempted by the Clean Air Act, intrastate disputes are not.
Posted on August 23, 2013
The Columbia and Snake River federal network of dams, and the abundance of low cost electricity it produces, has long been the cornerstone of the Pacific Northwest manufacturing economy. It has also supported another industry—the legions of lawyers fighting over the environmental effects. The latest iteration is an attack brought by Columbia Riverkeepers against the Army Corps of Engineers for oily discharges from the dams.
Riverkeepers filed lawsuits in U. S. District Courts in both Oregon and Washington alleging that oils released from the dams are discharges of pollutants for which a National Pollutant Discharge Elimination System (NPDES) permit is required under the Clean Water Act (CWA). The oils are used for lubricating turbine equipment, which Riverkeepers allege are released every day through spillways and penstocks at Bonneville, John Day, McNary, Ice Harbor and other federal dams. The suits seek declaratory and injunctive relief, mandating that the Corps secure NPDES permits.
Oily discharges are common among hydroelectric facilities. For the most part these are minor releases, though the complaint does allege a spill of 1,500 gallons of transformer oil containing PCBs from the Ice Harbor Dam on the Snake. Most privately owned dams in the region operate under general permits encompassing the small-volume releases. A few have NPDES permits.
As I have noted in prior blogs, courts have held that dams are “nonpoint” sources of pollution, which do not require a NPDES permit. These holdings were in the context of dams merely passing through pollution flowing into reservoirs from upstream sources, as opposed to adding pollutants. However, there have been cases where the discharge below the dam was not simply a pass through, and the court found a permit was required.
In relation to the ongoing litigation over the dams’ effect on salmon spawning, rearing and, migration, the Riverkeepers case will not likely have a significant effect on Corps operations. Even if the suit is successful, oily discharges can be managed, if not wholly eliminated. These cases should settle.
Posted on August 21, 2013
Since one of the objectives of the ACOEL blog is to promote thought and discussion, I have decided to plunge in with abandon. Hopefully the objective of promoting discourse will be met.
We all have reconciled ourselves to the fact that environmental advocacy has become very politicized on all portions of the political spectrum—so much so, that environmental advocacy oftentimes morphs into political/partisan advocacy. In the last several years we have seen environmental advocacy reach a new level. I leave it to the reader to decide whether that level is high or low. I have my point of view, and I suspect the reader will see that soon enough.
Two projects, one proposed, and one still only in the realm of “contemplation” serve as lightning rods for this new form of environmental advocacy: the Keystone XL Pipeline project and the potential Pebble Mine. Keystone XL formally has been proposed. The Pebble Mine has yet to have a permit application submitted but nonetheless is the subject of protracted and unique opposition.
It is becoming increasingly common to witness the advocacy relating to the Keystone XL Pipeline project—unprecedented in both its breadth and emotional intensity--from proponents and opponents alike. Proponents have tended to follow the more traditional advocacy approach of published opinion pieces and structured meetings and association support. The opposition has been much less traditional. Certainly there has been a history of focused opposition to some projects viewed by some as adversely impacting the environment, but those have been very focused locally or at most regionally. We all recall “tree sitters” opposing harvesting of redwood timber. Street theatre is not uncommon. Here in Michigan I have seen an individual dressed up as a skeleton in opposition to use of a school built on an abandoned municipal landfill, or dressed up as a fish in opposition to a proposed hard rock mine. The call for civil disobedience in opposition to Keystone XL goes well beyond street theatre, however. It is something that has not been seen, at least in my memory, since the days of the Civil Rights and Vietnam War protests. Lost in all of the demonizing of the development of hydrocarbons in Alberta, Canada’s northern reaches (called “oil sands” by proponents and “tar sands” by opponents) is the fundamental impact that a denial of the Presidential Permit necessary to construct the pipeline will have on the diplomatic relationship between Canada and the United States. The failure to issue a permit thus far has contributed substantially to a reconsideration of Canadian policy goals and economic development. No longer is the Canadian policy as focused and U.S.-centric as it once was. Canada is reevaluating the degree to which it can continue to trust its southern neighbor. It is not a stretch of the imagination to read the tone and tenor of the “policy” discussion and advocacy antics as being officious. An offer to “help” with the evaluation of the climate change risk of the bitumen production and methods of amelioration, while perhaps well-intentioned, certainly is capable of being seen as sanctimonious, or even arrogant. The old images of the “ugly capitalist”, and the “ugly American” are being supplemented by images of the “ugly environmentalist.” The increasingly strident nature of the anti-Keystone advocacy ignores or dismisses broader foreign policy considerations.
Now, if that is not enough to get discussion going, I don’t know what is. But, on the off chance that there is need for more encouragement, let me raise one other advocacy project: the contemplated Pebble Mine located in the Bristol Bay, Alaska, watershed. Pebble Mine may not be as well-known nationally as Keystone XL, but some NGOs are trying to make certain that it does become known—and opposed. If Pebble is known for anything, it is that it is the subject of an environmental assessment being undertaken by U.S. EPA, in advance of any permit application having been filed and without any proposed mining plan having been developed. Now Pebble has a major mail order retailer using its customer-based mailing list vigorously and bluntly to oppose the Pebble project. Within the last several weeks I received a “fly fishing” catalogue from this company, a company from which I have purchased products for well over 30 years. I started seeing full-page advertisements opposed to Pebble in the interior of its catalogues within the last year. This most recent mailing is the first time I received a catalogue whose cover was emblazoned with the words “Pebble Mine” inside a red circle with a slash through it and the admonition to “JOIN THE FIGHT” at the company’s website.
In an age where social issues are increasingly being highlighted in commercial advertisements, perhaps I have been lulled into thinking that subtlety makes such advertising acceptable. There is nothing subtle about this fly fishing catalogue’s assault on a mining project. Opposition to mining in sulfide ore bodies appears to have become a focal point for the leadership of this company.
This is a free country and we all enjoy freedom of speech. The ultimate power, of course, is to take one’s business elsewhere, but I just found this to be a rather unique “in your face” form of environmental advocacy. If I want to receive environmental advocacy—from any quarter, I will ask for it. If I wish to purchase goods and get on a mailing list for that purpose, I expect to get future mailings about similar products. I do not expect—or authorize—use of my name and address to receive decidedly political advertising nor biased social commentary. I know how and where to get plenty of that in a setting where it is both thoughtful and analytical. Combining a commercial catalogue with a political advertisement, or rather turning a catalogue into a political advertisement, crosses the line. Perhaps it is a line that we as a society are willing to tolerate in this age of political intolerance. We will see.
Now, let the discussion begin.
Posted on August 19, 2013
For years the nuclear power industry, which could serve as a climate neutral bridge to a more carbon neutral energy policy, has been hampered by the high cost of electricity production and difficulty in securing new licenses and license renewals. A not insignificant contributor to the cost of nuclear power, and one of the arguments raised against relicensing of older nuclear power plants, has been the necessity for the operators of nuclear power plants to store spent nuclear fuel onsite for an indefinite period of time. This was not supposed to be the case. Years ago Congress passed and the President signed into the law the Nuclear Waste Policy Act, which mandated the Department of Energy to develop a permanent repository for spent reactor fuel.
On August 13, a panel of the United States Court of Appeals for the District of Columbia Circuit, in In Re Aiken County issued a rare order, a writ of mandamus, compelling the Nuclear Regulatory Commission to resume the licensing proceeding on the Department of Energy’s application for a permit to construct a permanent repository for nuclear waste at Yucca Mountain in Nevada. That process was to have been completed in June of 2011 under the Nuclear Waste Policy Act, but the DOE, acting on the President’s direct order, tried to withdraw its license application in 2010 and, though the NRC Licensing Board rejected DOE’s efforts, the Chairman of the NRC, also acting at the President’s request, shut the process down anyway.
The case was brought by two states, two counties, three individuals residing near current temporary nuclear waste storage sites, and the association of regulatory commissioners. The Yucca Mountain project has been controversial for years, having been opposed by environmentalists and local politicians in Nevada. DOE’s failure to find a central long-term repository for nuclear waste has forced the nuclear power industry to continue to store spent nuclear fuel in on-site casks or water filled pools, creating what is perceived by critics as enhanced risk of release of radionuclides to the environment. The decision contains a detailed, lengthy and fascinating discussion of the Executive Branch’s authority to exercise prosecutorial discretion and how that discretion is far different than its discretion to ignore clear statutory mandates.
The majority of the panel held that the Executive Branch, including the President (and by extension executive and independent agencies like the NRC), has no authority to disregard congressional mandates based on policy disagreements with the law in question. The panel concluded that the Nuclear Waste Policy Act and Congressional funding of the NRC’s permit review process created a clear mandate to the NRC to make a decision on the permit application pending since 2011. Finding that the NRC is “simply flouting the law, ” and has “no current intention of complying with the law,” the majority opinion by Judge Kavenaugh (joined by Judge Randolph), flatly rejected the defenses offered by the NRC. The court rejected the argument that Congress had appropriated insufficient funds to complete the project, finding that annual congressional appropriations never provide enough money to finish a multi year project, and that over $11 million exists to continue it. The court also rejected the argument that the NRC’s decision to ignore the law was justified because Congress might not provide funding in the future, concluding that allowing an agency to ignore a clear mandate would “gravely upset the balance of powers between the Branches and represent a major unwarranted expansion of the Executive’s power at the expense of Congress.”
The court also rejected the argument that the failure of Congress to provide future appropriations for the Yucca project demonstrates congressional intent to shut down the process. The Court opined that the measure of congressional intent is in the laws it passes, not what it debates, and that repeal by implication is inappropriate where previously appropriated funds are not taken back and remain available to advance the project. The court accordingly concluded that there is “no justification” for ignoring the clear statutory mandate. Finally, the court rejected the suggestion that an agency’s policy dispute with Congress’s decision is “not a lawful ground” for the NRC or the President to decline to follow the law.
In a dissent, Chief Judge Garland argued that all the NRC did was suspend the proceeding because there were not “sufficient funds to finish the licensing process and that the court should defer to the agency on this judgment, and therefore mandamus should be denied. The majority rejected this, noting that the NRC’s continued repeated and unjustified disregard for the law despite the repeated warnings given by the court rendered mandamus appropriate.
The D.C. Circuit mandamus order will in all likelihood be appealed, and it is certain that the Yucca Mountain project will remain the subject of intense controversy. The stakes for the nuclear energy industry in having the spent fuel storage problem resolved are large. Stay tuned.
Posted on August 16, 2013
Ever since the shock of the oil embargo in 1973 we have been a nation in search of a comprehensive, sound energy policy. It was only a year later, in response to the proposal by Aristotle Onassis to locate an oil refinery on the coast of New Hampshire, that the New Hampshire Legislature adopted the first version of the State’s energy facility siting law.
Today, New Hampshire’s siting law, representing a balance of the need to develop new energy facilities with appropriate protection of the environment, preempts local authority and requires each project to undergo a rigorous comprehensive, consolidated evaluation before a panel of high-ranking State officials from the several different departments having jurisdiction over all the relevant permits. To obtain all State permits and a Certificate from the siting committee, the applicant must be prepared to present the project in a consolidated process, subject to formal discovery, at an adjudicative hearing before the committee. Interested parties and municipalities may intervene and the Attorney General appoints Public Counsel for the case to represent the broad public interest. To take positions in the broad public interest, Public Counsel is charged with the responsibility to represent the interests of the public as a whole, and not simply the narrower positions adopted by intervening parties. To discharge this responsibility, which derives directly from that of the Attorney General in all other cases, the Public Counsel must take positions that balance the public interest in developing new, diversified energy facilities and the need to take into account environmental regulation.
This highly structured, energy facility permitting process is significant regionally and nationally because its standards tend to drive the design of interstate facilities. Current energy policy and its direction may be discerned from trends reflected in the written decisions of the siting committee over time. Other states may be developing approaches to these issues.
Beginning in the late 1990s, a steady stream of energy projects have been presented to the committee. Until the mid-2000s, the majority of those projects involved fossil fuel generation, and in particular natural gas generating stations and transmission lines. As public policy, driven by concerns for global warming, has put increasing emphasis on renewable energy sources, there has been a significant increase in proposals to construct wind energy facilities. What is most striking from this perspective is that no energy project was rejected until 2013, although some facilities were subject to hundreds of conditions in their certificate.
This year, a proposed 30 megawatt wind farm in Antrim was rejected on its “aesthetics”, an indisputably highly subjective standard in search of criteria that will avoid arbitrary and capricious adjudications. Three previous wind power projects have all been approved with essentially the same characteristics, but for the first time the committee, at the urging of public counsel, has declined to approve the project rather than setting forth criteria and conditions that would bring essential predictability to this important technological advance in energy production.
The region and the nation will be well served by a steady expansion in the number of renewable energy projects, and this opportunity has the attention of large, even international, experienced and capable developers. Does the rejection of the Antrim project, despite public support, on the basis of the objections of special interests actively supported by public counsel risk a slowing down or abandonment by developers to the detriment of the region’s public interest in a diversified energy portfolio? Is it coincidence that a wind energy project was rejected recently in Maine, also on highly subjective grounds of aesthetics, a case that was referenced in the New Hampshire proceedings? And shouldn’t we ask whether advancing wind turbine technology is something we find in most places attractive, when it represents a great benefit to the environment and the public interest?
These cases bear watching. The New Hampshire case appears to be headed to the State Supreme Court. Will it turn out that these developments represent a turning away from favorable conditions promoting wind energy, so that wind energy development will decline in the years ahead? For environmentally sound economic development in this region and elsewhere we should hope not.
Posted on August 15, 2013
The business climate in Rhode Island is viewed by many observers as unpromising at best and dismal at worst. The reasons are too numerous to articulate here, but at least there is an effort now being made that may contribute to an improvement in such climate.
The administration of Governor Chafee is undertaking a significant effort not only to review and revise the myriad of environmental regulations that burden the regulated business community, but also to make efforts to revise the state environmental regulatory scheme to pre-empt conflicting local regulations and ordinances that inhibit the permitting and licensing process and otherwise discourage the growth of businesses of varying sizes. The initial report includes findings and recommendations across the bureaucracy, but specifically addresses the Department of Environmental Management.
While budgetary constraints may impact the speed with which such reform is undertaken and implemented, desperate times call for desperate measures. Hopefully, we will see some improvement in the relatively near future.