Posted on June 9, 2016
Justice Scalia’s jurisprudence had a huge impact on environmental law. Part I focuses on standing. Part II (a forthcoming post) then turns to takings and Administrative Law.
Justice Scalia’s most lasting legacy on environmental law is how his jurisprudence makes it more difficult for environmental plaintiffs to demonstrate constitutional standing under Article III of the Constitution. Since at least Sierra Club v. Morton, plaintiffs needed to show that they possessed an “injury in fact,” which could be commercial, economic, aesthetic, or environmental. Raising the bar, Scalia stated that plaintiffs must demonstrate at an “irreducible minimum”: (1) imminent and concrete “injury-in-fact” that is (2) fairly “traceable” to the defendant’s actions, and (3) “redressible” by the court. Applying this standard, Scalia found standing lacking in Lujan v. National Wildlife Federation, because using land “in the vicinity of” affected federal land wasn’t sufficient, and in Lujan v. Defenders of Wildlife, due to the absence of what has come to be known as “tickets in hand” to return to the places of alleged injury. Dissenting in Defenders of Wildlife, Justice Blackmun, bemoaned Scalia’s new requirements as “a slash-and-burn expedition through the law of environmental standing.”
Justice Scalia then dissented in Friends of the Earth v. Laidlaw Environmental Services v. EPA, when the majority held that it is injury to the person, and not the environment, that matters in standing analysis. There, he complained that the majority had proceeded “to marry private wrong with public remedy in a union that violates traditional principles of federal standing—thereby permitting law enforcement to be placed in the hands of private individuals. I dissent from all of this.”
Justice Scalia was skeptical that the effects of climate change could ever support standing, even for states. Speaking from his dissent in Massachusetts v. EPA, Scalia would have found that petitioning states lacked standing to challenge the U.S. Environmental Protection Agency’s (EPA’s) failure to institute rulemaking to regulate greenhouse gas emissions from stationary sources, thereby rejecting that states are entitled to “special solicitude” in standing analysis.
Justice Scalia was more inclined to find standing when litigants challenged environmentally-protective agency action. For example, writing for a plurality, he found that alleged injury to economic interests to water districts and to corporate ranching and agricultural interests was sufficient injury in Bennett v. Spear. Moreover, he held that homeowners possessed both standing and a cause of action to challenge an EPA-issued but not enforced administrative compliance order in Sackett v. EPA.
Concur or not, Justice Scalia’s standing test took hold and stands firm. For further reading on this subject, please see Principles of Constitutional Environmental Law.
Posted on June 7, 2016
Clean Power Plan (CPP) groupies are beside themselves over the D.C. Circuit’s surprise “straight-to-en banc” move for CPP judicial review. The buzz is mostly over the survivability of the CPP’s interpretations of Clean Air Act (CAA) §111(d) in light of the nine judges’ dispositions.
I won’t weigh in on that issue here. My target is another issue, one that has been lurking in the background and has bugged me greatly for the last couple of years. Now that the issue is before an en banc panel, I am fervently hoping the Court will do what only en banc panels can do: declare that a few recent D.C. Circuit rulings are wrong.
The issue involves garden variety adlaw: should the CPP be vacated because EPA failed to propose or adequately foreshadow key elements of the final rule? Parties attacking the CPP have advanced this argument, and EPA has defended on numerous grounds that its notice was adequate.
I won’t opine here on whether EPA’s notice was adequate. My beef is with EPA’s fall-back defense: EPA’s argument that even if there were wholly insufficient notice of the CPP’s final provisions, the Court has no authority to vacate the CPP on those grounds.
EPA’s theory is that since CAA §307(d)(7)(B) provides that only an issue raised in public comments can be raised on judicial review, a final rule that was never proposed cannot be challenged on judicial review because there were no public comments on that provision. Yep, read on.
EPA argues that parties claiming a final rule was never proposed must instead file administrative petitions for review under CAA §307(d)(7)(B) and wait (usually for a few years, if ever) for EPA to act on those petitions. In the meantime, under EPA’s position, regulatory provisions that were never proposed or foreshadowed must go into full force and effect.
This means that EPA can get away with murder, at least in the adlaw context. Just forget the bedrock principle that an agency can impose and enforce only those rules that have first been proposed. Under EPA’s position, the bedrock is blown away by a Richter 8.8 otherwise known as CAA §307(d)(7)(B).
In the last two years, EPA has managed to convince D.C. Circuit panels to accede to this unfair and baseless approach. See my 2015 ACOEL post discussing these opinions. In a piece I published in Bloomberg BNA in 2014, I showed how the D.C. Circuit had never previously interpreted CAA §307(d)(7)(B) in this fashion , and had on many occasions vacated final rule provisions that had never been proposed.
As explained in the above-cited pieces, the absurdity of EPA’s position is that final rules will go into full force and effect against parties because they failed to object to something they could not object to. This just can’t be right. The en banc CPP panel should do the right thing and declare the three most recent decisions to be wrong.
[Mr. Stoll is not representing any party in the pending D.C. Circuit CPP judicial review proceedings.]
Posted on June 6, 2016
Who knew? On May 19 those wild eyed environmentalists on the Senate Appropriations Committee unanimously (no misprint) passed a FY 2017 agriculture and rural development bill that includes significant funding for conservation work. The bill now goes to the full Senate for a vote and, if it passes, back to the House for reconciliation.
Of particular interest, the bill breathes new life into the moribund Watershed and Flood Prevention Operations Program. This little known program is supposed to fund land and water conservation efforts at the watershed level, but has long gone unfunded and unloved. The new bill would appropriate $150 million, which would be the first appropriation since 2010. Less than the Administration proposed—and not nearly adequate, of course—but nevertheless, new money that could serve important purposes.
Oregon Sen. Jeff Merkley, a member of the Appropriations Committee, sees an opportunity for addressing habitat needs for fish and wildlife, particularly the spotted frog, as well as aiding rural communities. The U. S. Fish and Wildlife Service listed the spotted frog and designated critical habitat in Central Oregon. Indeed, irrigation districts in the area are making plans to compete for the funding to help with irrigation equipment upgrades and replacement of open canals with pipes. Such efficiency and conservation efforts reduce pressure on habitat for the spotted frog and other species.
It will be interesting to see if a sister program, the Land and Water Conservation Fund, established by Congress in 1965, can find a receptive ear as well. As described by the LWCF Coalition:
It was a simple idea: use revenues from the depletion of one natural resource - offshore oil and gas - to support the conservation of another precious resource - our land and water. Every year, $900 million in royalties paid by energy companies drilling for oil and gas on the Outer Continental Shelf (OCS) are put into this fund. The money is intended to create and protect national parks, areas around rivers and lakes, national forests, and national wildlife refuges from development, and to provide matching grants for state and local parks and recreation projects.
Unfortunately, for many years Congress has diverted the funds for other purposes, leaving a multi-billion dollar backlog in maintenance and enhancement projects. There’s no direct connection between the LWCF and the Watershed and Flood Prevention Operations Program, and no particular reason why funding of one would lead to funding the other. Still, Sen. Merkley, if you are reading, this one might be added to your to-do list!
Posted on June 2, 2016
The Pacific Legal Foundation (PLF) fairly boasts that it lived up to its tag line “Rescuing Liberty from Coast to Coast” by following its 2012 Supreme Court victory in Sackett v. EPA with its May 31, 2016 victory in United States Corps of Engineers v. Hawkes Co., Inc. In both Clean Water Act cases the PLF represented the property owners on appeal, arguing that the particular agency action was final, subject to judicial review. The Supreme Court agreed both times. Some boasting is due.
The particulars of each case flow from disputes about the scope of “navigable waters” under the Clean Water Act. Neither case resolved the merits issue. Both cases considered only whether the dispute may be brought to court by challenging a pre-enforcement agency action.
The Sacketts filled in a half acre of their 2/3-acre residential lot near Priest Lake, Idaho with dirt and rock in preparation for building a home. EPA served a compliance order advising the Sacketts that they violated the Clean Water Act by filling in waters of the United States without a Section 404 dredge and fill permit. The Order unilaterally prevented further construction and required the Sacketts to remove the fill material then restore the wetland pursuant to an EPA Restoration Work Plan.
The Sacketts tried to challenge EPA’s order, but were told by EPA, then by the District Court, that they had no right to challenge the order until EPA attempted to enforce it. The Ninth Circuit Court of Appeals affirmed, setting the Sacketts squarely on the horns of their dilemma. Disregarding the unilateral compliance order subjected the Sacketts to potential fines of up to $75,000 per day. Complying with the order meant spending hundreds of thousands of dollars to carry out the EPA’s Restoration Work Plan, and never getting to build on their property.
The U.S. Supreme Court granted cert, and Justice Scalia, authoring the decision concluded that the compliance order met the Bennett two-prong test for reviewability: (1) no adequate remedy other than review under the Administrative Procedures Act, and (2) no statute, in this case the Clean Water Act, precluded that review. Justice Alito, concurring, declared: “The position taken in this case by the Federal Government -- a position that the Court now squarely rejects -- would have put the property rights of ordinary Americans entirely at the mercy of Environmental Protection Agency (EPA) employees.” And later: “In a nation that values due process, not to mention private property, such treatment is unthinkable.”
The Hawkes case, four years later, is the same song, second verse. This time the U.S. Army Corps of Engineers (USACE) issued the offending decision -- a jurisdictional determination (JD) that waters of the United States existed on 530 acres from which Hawkes Co., Inc. (Hawkes) and its affiliated companies planned to mine for peat. Hawkes provides peat for golf courses and sports fields, and mining peat on the 530 acres would extend the life of its peat mining business by ten to fifteen years. The USACE concluded that the property was connected by a “relatively permanent water” (a series of culverts and unnamed streams) that flowed into the Middle River and then into the Red River of the North, a “traditional navigable waterway” about 120 miles away. With the USACE determination, Hawkes needed a permit to harvest peat. Moreover, USACE advised that before it issued a permit, it would require additional hydrological and functional resource assessments and an evaluation of upstream potential impacts, the cost of which would exceed $100,000.
Using an analysis, discussed in my colleague’s post Sending a Message on WOTUS, the Court concluded that a JD satisfied both prongs of Bennett, and affirmed the Eighth Circuit, remanding the Hawkes companies to District Court of Minnesota - Minneapolis with the right to litigate the jurisdictional determination, same as the Sacketts. When the Supreme Court ruled favorably on their case the Sacketts were remanded to the Idaho District Court, where their court battle continues. Presumably, the battle will continue with the Hawkes’ companies as well.
At the heart of each battle is whether or not the property actually contains “Waters of the United States.” Following the procedural “yellow brick road” won’t get anyone out of Oz -- not until a clear definition of waters of the United States emerges.
Posted on June 2, 2016
The May 31 decision in Hawkes may be less important for what it says about the reviewability of jurisdictional determinations (JDs) under the Clean Water Act than for what is says about the far more consequential stakes in the pending challenges to EPA’s Clean Water Rule (aka WOTUS), which will undoubtedly find its way to the Court following a decision by the Sixth Circuit which is expected before the end of the year.
Contrary to my prediction the Court did rule (unanimously) that JDs are final agency actions subject to review under the APA. In an opinion penned by Chief Justice Roberts the Court upheld the conclusion of the Eighth Circuit but substituted a different test for finality, one that emerged during oral argument and one that introduces a novel and perhaps questionable rationale. The key question was whether JDs have legal consequences. In roundabout fashion, Roberts concluded they did because a positive finding of jurisdiction meant that the applicant was denied the advantage of a negative determination (or NJD). That had the effect of denying the applicant the benefit of what Roberts called a “safe harbor” provision contained, not in the statute or implementing regulations, but in a 2015 Memorandum of Agreement between by EPA and the Corps. Roberts read the MOA as creating a legal right – similar to a covenant not to sue – binding the government to a five year commitment not to revisit the NJD, an interpretation the government vigorously disputed as pointed out by Justice Ginsburg in her concurrence.
This ruling could have significant practical effects. Since 2008 the Corps and EPA have issued over 400,000 JDs of which approximately 40% were approved JD’s. Under the MOA, the process has become more formal, giving it at least the appearance if not the reality of adjudication. The formality of the process convinced a number of the Justices, particularly Justices Breyer, Ginsburg and Kagan, that JDs should be considered final actions under the Abbott Labs test. They emphasized the fact that under the MOA the agencies were not simply giving advice to the public. This raises the question whether the agencies may want to rethink the MOA and consider revising the safe harbor provision to make clear it is not binding. The Solicitor raised this possibility during the oral argument (transcript at p 16 lines 16-25).
Pursuing that route, however, runs the risk of further alienating Justice Kennedy and the government can ill afford to lose his potentially crucial vote if and when the Clean Water Rule reaches the Court. In his concurring opinion, joined not surprisingly by Justices Alito and Thomas, Kennedy went out of his way to take several pot shots at the Clean Water Act and the agencies implementation of it. Referring to “the Act’s ominous reach” Kennedy said it “continues to raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property throughout the Nation.” During oral argument Kennedy offered the view that the CWA is “arguably unconstitutionally vague, and certainly harsh in the civil and criminal penalties it puts into practice.”
It is too soon to write the obituary for the Clean Water Rule. But Kennedy’s vote is more in doubt now than when he authored the concurring opinion in Rapanos showing a more sophisticated and nuanced understanding of both the values enshrined in the CWA and the constitutional issues it raises. Kennedy’s “significant nexus” test, widely accepted as controlling by the lower courts, was the blueprint EPA and the Corps used to write the rule. Given these more recent statements, that may not be enough to win his approval. The fate of the rule may well depend on how soon and by whom the vacancy on the Court is filled.
Posted on June 1, 2016
Since 2010, EPA and other federal agencies have used the Federal Social Cost of Carbon (“FSCC”) to estimate the climate benefits of federal rulemakings. The FSCC is an estimate of the monetized damages associated with an incremental increase in carbon dioxide (“CO2”), conventionally one metric ton, in a given year. The FSCC was developed by a group of federal agency representatives known as the Interagency Working Group on Social Cost of Carbon (“IWG”). In developing the FSCC, the IWG relied on three Integrated Assessments Models – the DICE model (“Dynamic Integrated Climate and Economy”) developed in 1990 by William Nordhaus, the PAGE model (“Policy Analysis of Greenhouse Effect”) developed in 1992 by Chris Hope, and the FUND model (“Climate Framework for Uncertainty, Negotiation and Distribution) developed by Richard Tol in the early 1990s. The primary virtue of the DICE, PAGE, and FUND integrated assessment models is that all contain simplified representations of economic models, climate models, and impact models that allow integration of climate processes, economic growth, and interaction between climate and economy.
The IWG has described the purpose of the FSCC as allowing federal agencies to incorporate the social benefits of reducing CO2 emission into cost-benefit analyses of regulatory actions that have small or marginal impacts on cumulative global emissions. The purpose of the FSCC process is to ensure that federal agencies are using the best available information and to promote consistency in the way agencies quantify the benefits of reducing CO2 emissions, or costs from increasing emissions, in federal regulatory impact analyses. The issue that is now coming up before some regulatory agencies is whether the FSCC can be employed in site-specific policy decision-making, such as state utility integrated resource planning.
In Responses to Comments issued in 2015, the IWG stated that it has not addressed the use of FSCC outside the federal regulatory context, such as in NEPA analysis, state-leveling resource planning, or “pricing” carbon in the marketplace. The IWG itself has acknowledged the large degree of uncertainty and imprecision in the estimates derived from the use of the integrated assessment models, especially as the time horizon for damage estimates reaches out to the year 2300. The IWG has observed that any such assessment will suffer from uncertainty, speculation, and lack of information about (1) future emissions of greenhouse gases, (2) the effects of past and future emissions on the climate system, (3) the impact of changes in climate on the physical and biological environment, and (4) the translation of these environmental impacts into economic damages. As a result, the IWG has stressed that decision makers should be very cautious in their reliance on the integrated assessment models. The proponents of the FSCC do not dispute the uncertainty and imprecision of the integrated assessment model process but they contend that there is no viable alternative.
Regardless of whether the FSCC is appropriate for federal regulatory impact analysis, it is simply too uncertain and speculative to be used in site-specific resource planning, including in NEPA analysis or utility resource planning. The values generated by the FSCC are highly uncertain and have serious weaknesses. These weaknesses are likely to be more significant in site-specific resource planning where the use of damage estimates demands greater precision than in regulatory impact analysis. This issue has been raised before the Minnesota Public Utilities Commission (“MPUC”) in a proceeding to establish environmental cost values for carbon dioxide emissions from electric generating units. As Nicholas F. Martin, environmental policy manager for the public utility Xcel Energy, testified, “whether the ‘correct’ value is $12 or $120 matters a great deal in integrated resource planning[, because] these two values could point to dramatically different resource mixes ….”
The Administrative Law Judge hearing the Minnesota case recently recommended the MPUC adopt a modified version of the FSCC. The two modifications involved (1) re-calculating the FSCC to reflect a shortened time horizon extending to the year 2200 (rather than 2300, as set by the IWG), and (2) excluding the value derived from the 95th percentile at a 3 percent discount rate (a value intended by the IWG to account for the high-end of the potential damage range). Both of these modifications were intended to reduce the level of uncertainty and speculation associated with the FSCC estimates. The MPUC is expected hold a hearing to address the ALJ’s report later this year.
Posted on May 31, 2016
In an 85-page decision filled with rebuke, Defenders of Wildlife v. Sally Jewell, the U.S. District Court for the District of Montana found in April that the U.S. Fish and Wildlife Service’s decision to withdraw its proposeda listing of the wolverine as “threatened” under the Endangered Species Act was arbitrary, capricious, and contrary to the ESA’s requirement that decisions be based on the “best available science.”
The court criticized the Service for mischaracterizing scientific consensus as “substantial disagreement,” and for employing an inappropriately high standard of absolute certainty. The court suspected the Service’s sudden loss of confidence in its listing decision resulted not from scientific diligence but, instead, from “immense political pressure” exerted by a handful of western states.
Although the decision is replete with references to wolverine denning statistics, sophisticated snow cover assessments based on satellite imagery, and emerging climate models, the court made clear that the Service changed its decision based on policy considerations, not science. That the wolverine depends on persistent snow cover to reproduce, and “relies on snow for its existence at the most fundamental level,” the court said, was not disputed. That climate change is occurring, and will in the future result in reduced snowpack and loss of denning habitat, within the wolverine’s U.S. range also was not disputed. The western states, however, questioned how reliably the Service could predict either the pace or the foreseeable impacts of climate effects far into the future. The states, and many senior staff within the Service, also questioned whether the ESA is an appropriate or workable tool to address the large-scale effects of climate change on North American ecosystems.
Alaska, for example, linked the wolverine listing decision to what it claimed were equally flawed decisions to list the polar bear and various species of ice seals, based on what it said were dubious models and speculative future climate effects. Idaho questioned whether the Service’s use of models and projections would eventually lead it to list every species in the U.S., based on predictions of widespread and pervasive climate impacts throughout the country. Two of the Service’s own Regional Directors echoed the refrain, saying that demands for listing particular species based on predicted effects of climate change “will become a common source of petitioned actions and threaten the Service’s resources to address priority issues.”
The court dismissed these concerns without hesitation: “It is the undersigned’s view that if there is one thing required of the Service under the ESA, it is to take action at the earliest possible, defensible point in time to protect against the loss of biodiversity within our reach as a nation.”
If the Service reinstates its prior listing decision, the wolverine will join the polar bear, ringed and bearded seals, and other species listed because they rely on snow and ice “for existence at the most fundamental level.” The policy challenges at the core of the Service’s listing decision, however, remain unresolved. Species affected by climate change are not limited to those dependent on snow and ice. If climate trends continue, the list of species affected will grow and grow. The ESA can do nothing to reverse or decelerate those impacts. The Service cannot build an ark to save every species ultimately displaced or threatened. Any realistic hope for slowing the loss of biodiversity in the U.S. must depend, therefore, on comprehensive and lasting reforms to address the underlying causes of climate change, and not the predicted effects of climate change at the species level.
Posted on May 27, 2016
In 1991, Iowa passed a law prohibiting the delivery of yard waste to landfills. It was during a time when there was a general panic that landfills were filling up too fast. Twenty-two states have passed similar laws. They all saw it as a win-win: compost could be created and sold by the city and the landfills would last longer. A couple short decades later, several states have had second thoughts. In 2015, Iowa passed a law that allows certain landfills to start accepting delivery of yard waste. The reasoning is instructive.
Landfills contain a staggering amount of potential energy. The tires, paper products and plastic wastes, when burned for energy recovery, could light up a town. But the cost of getting the BTUs out of the waste doesn’t make economic sense – yet. There are exciting, new processes on the horizon that will have us mining that garbage for the energy sink it actually is, but that is still a ways off. One form of energy recovery that is economically viable, however, is methane recovery. As the garbage breaks down, it gives off methane gas that can be captured and burned. Many landfills across the country do this type of recovery and find it simple and profitable.
To effectively produce methane, however, garbage must degrade. The recycling push of the 80s and 90s took away the really good degradables from the waste stream – boxes, newspapers and yard waste were targeted as prime recyclables. The effect was that the best fuel for garbage degradation (and thus methane creation) was banned. Sure, it went towards the worthy goals of paper recycling and creation of high quality compost, but at what cost?
Iowa decided to look into that question. They considered the cost of producing compost from yard waste and compared it to the cost of recovering additional methane that would be made possible by returning the green gold of yard waste to the landfill degradation process. As it turns out, recycling loses.
The analysis turned on a number of factors:
· The cost of buying, maintaining and fueling the trucks, machinery and facility needed for composting would be eliminated resulting in a yearly savings of $2 million;
· Methane recovery would increase from the equivalent of powering 11,000 homes to powering 18,000 homes;
· According to a study commissioned by the city of Des Moines, annual greenhouse gas emission would be reduced by 11% and the landfilling option would provide more than three times the greenhouse gas benefit presented by composting.
Sierra Club is on record as opposing the trend (Georgia, Arkansas, Florida and Nebraska also now allow landfilling of yard waste) because it will result in landfills reaching capacity sooner. In the case of one Iowa landfill, its estimated life would be reduced from 2054 to 2052. Also, Sierra Club argues that more uncaptured greenhouse gases will be produced, but this seems to ignore the net savings from the other GHG reductions identified in the study.
I don’t have any idea whether returning yard waste to landfills is a net positive for the environment. As counterintuitive as it seems, it appears to hold promise. And if it does, where else might full cost accounting be used to guide environmental legislation? At least some states are asking the question - and I suspect more will follow.
Posted on May 26, 2016
Until recently I thought state water quality agencies with oversight from EPA were in charge of setting water quality standards, establishing mixing zones and similar activities. However, the National Marine Fisheries Service (NMFS) and the United States Fish and Wildlife Service (USFWS) has recently served notice that they are the new water quality sheriffs in the Northwest.
It is well known that the Endangered Species Act (ESA) is a comprehensive statute designed to protect and recover species that are listed as threatened or endangered by the USFWS and the NMFS (collectively referred to as "Services"). One of the key provisions in the ESA is 16 USC § 1636 (or Section 7) which requires federal agencies to utilize their authority to conserve endangered species and "consult" with the Services whenever any discretionary action by the acting federal agency has the potential to negatively affect listed species. Many no doubt recall the decision in TVA v. Hill, 437 U.S. 153 (1978), in which the Court determined that Section 7 required the acting federal agency to halt construction of an almost completed major federal dam in Tennessee (Tellico Dam) because it would undisputedly eradicate the listed species ("snail darter" or perch), destroy its critical habitat and therefore completion of the dam would clearly violate Section 7.
What constitutes "jeopardy" and destruction of critical habitat under the ESA has come a long way since TVA v. Hill. The ESA gets a lot of play in the Northwest principally because there are large tracts of undeveloped federal land, human population is relatively sparse and pristine waters combine to provide habitat for many listed aquatic species such as various species of salmon. In one of the latest iterations of what constitutes "jeopardy" the Services recently determined in lengthy biological opinions that EPA's approval (some twenty years ago) of Idaho's Water Quality Standards for certain toxic metals would jeopardize the continued existence of listed species and destroy or adversely modify critical habitat.
There is a question whether EPA approval of state water quality standards pursuant to § 303 of the CWA is the type of discretionary action that even triggers ESA consultation. See National Association of Homebuilders v. Defenders of Wildlife, 551 U.S. 644 (2007) (Section 7 consultation not required when EPA authorizes state to take over the NPDES permit program under § 402 of the CWA). Assuming consultation is required, certainly there had been a lengthy delay in EPA and the Services completing consultation on Idaho Water Quality Standards (over twenty years). This delay gave rise to a lawsuit brought by regional environmental groups to force completion of the consultation. See Northwest Environmental Advocates v. The National Marine Fisheries Service, USDC Idaho, Case No. 1:13-cv-00263-EJL.
But, how can a water quality criteria jeopardize the existence of an endangered species? Water quality standards under the CWA are goals set by each state for state surface waters. NPDES Permits must meet state water quality standards and if a waterbody is not meeting standards then states must adopt pollution control plans (known as "TMDLs") to bring a waterbody into compliance also subject to EPA approval. Adoption of criteria itself cannot jeopardize endangered species or for that matter save a species.
If one has the fortitude to power through the Services lengthy biological opinions, which were not subject to public comment, there is no finding that state standards at or below the current criteria are actually harming any fish in the thousands of miles of streams and rivers affected by the opinions. Rather the Services take exception to the somewhat esoteric process by which EPA develops national recommended water quality criteria (which most states ultimately follow). The Services found EPA should have relied on different laboratory studies in developing and approving criteria. Many of the laboratory studies the Services relied upon do not even involve listed species.
The Services then suggested that EPA must adopt replacement criteria (or force the state to do so) over the next few years via reasonable and prudent alternatives (or RPAs) to avoid the alleged jeopardy. An RPA are measures "suggested" by the Services under Section 7 to the action agency (EPA) to avoid jeopardy which are within the discretion of the action agency and are economically and technically feasible. In the meantime the Services suggested as an interim measure how EPA should regulate point source dischargers into waters containing listed species by meeting certain prescribed mixing zones.
While the Services’ jeopardy determinations on Idaho's standards are a far cry from jeopardy to the snail darter caused by the construction to the Tellico Dam many years ago, the Services’ findings may go unchallenged. It is likely EPA will follow the RPA's (or force the state to do so) for fear of another lawsuit that EPA is violating its obligations under Section 7. Likely the only remedy to question the Services’ jeopardy determinations may be a judicial challenge to the Biological Opinions. However in such a challenge a court would be forced to evaluate the "science" behind the Services’ jeopardy determinations which is an area the courts generally will defer to the expertise of the agency. One would think that EPA or state water quality agencies would be the experts on setting water quality standards and establishing mixing zones, but the Services will no doubt claim they are now the experts. Sometimes it is difficult to figure out who is in charge.
Posted on May 25, 2016
As divisive as Congress is, Members miraculously seem to agree that our chemical management law, the Toxic Substances Control Act (TSCA), needs modernizing. On May 6, the key Members of the Senate announced that they had reached agreement on draft TSCA reform legislation; the House is expected also to act soon, perhaps before Memorial Day. This means that TSCA, our chemical control law enacted almost 40 years ago, could be significantly modernized this year -- a goal that has proven to be uniquely elusive. Many believe that TSCA’s greatest failing, and the deficit that most undermined the public’s confidence in the U.S. Environmental Protection Agency’s (EPA) ability to assure chemical safety, is EPA’s limited authority under TSCA to regulate “existing” chemical substances believed to pose risks. Pending TSCA reform legislation that is supported by an unusually broad group of stakeholders would strengthen EPA’s authority and address this failing. Consensus on the contentious issue of preemption has proven especially challenging as many states are aggressively enacting chemical-specific measures, have been for years, and do not wish to cede authority to EPA. Now that the Senate has reached agreement, the hope is the House can also agree quickly as time is running out. TSCA reform is urgently needed. Congress has never been this close to making it happen, and while we are not there yet, Congress seems poised uncharacteristically to make the right choice. Tobacco products will still not be subject to TSCA jurisdiction, but celebrations will be in order if this elusive milestone is finally reached.
Posted on May 24, 2016
The American College of Environmental Lawyers is pleased to announce its first collaboration with the American Law Institute Continuing Legal Education Group (ALI CLE). On June 28, 2016, from 2:00 pm to 3:30 pm EDT, the College and ALI CLE will be presenting an MCLE-accredited telephone seminar: The Clean Power Plan: Issues and Challenges.
The seminar panel will feature ACOEL Fellows Mike Gerrard (Columbia Law School/Sabin Center for Climate Change Law), Pam Giblin (Baker Botts) and Bob Martineau (Tennessee Department of Environment and Conservation).
The College has provided the planning, faculty and content of the program; ALI CLE is providing the administrative end, including production and CLE accreditation for the 1.5 hour program. (CLE credits range from 1 to 2 depending on state; most are 1.5.) The planning chairs are ACOEL Fellows Ted Garrett (Covington & Burling LLP) and me (Greenbaum, Rowe, Smith & Davis LLP).
The ALI CLE web brochure, including details on registration, is posted at: www.ali-cle.org/tsxx04
The seminar topic is an outgrowth of the August 2015 announcement by President Obama and EPA of promulgation of the final Clean Power Plan regulations, the subsequent challenges to the Plan pending before the D.C Circuit Court of Appeals (scheduled for June but now pushed back to September before the full D.C. panel), and the U.S. Supreme Court’s stay of the regulations pending judicial review on whether EPA exceeded its authority under the Clean Air Act.
The ACOEL panelists will provide diverse and thoughtful perspectives on key issues concerning the CPP, including:
• Pending judicial challenges to the regulations
• Compliance issues
• State implementation issues
• Implications for the Paris Agreement
We hope that you will register for this timely and informative seminar.
Thanks much to Mike Gerrard, Pam Giblin and Bob Martineau for agreeing to participate, and to Ted Garrett for his involvement in planning the phone seminar.
Posted on May 23, 2016
On Tuesday, the Supreme Judicial Court of Massachusetts (SJC) ruled that MassDEP had violated the Global Warming Solutions Act by failing
"To promulgate regulations that address multiple sources or categories of sources of greenhouse gas emissions, impose a limit on emissions that may be released, limit the aggregate emissions released from each group of regulated sources or categories of sources, set emissions limits for each year, and set limits that decline on an annual basis."
The SJC gets the final word, so I won’t spend much time explaining why the SJC got it wrong, though I will note that to suggest that the legislature’s use of the phrase “desired level” of GHG emissions unambiguously requires MassDEP to establish hard targets was at best overenthusiastic.
The bigger question at this point is what the decision means. First, it’s clear that MassDEP must establish hard declining emissions limits for more than one, but less than all, categories of GHG emitting sources.
Second, MassDEP must promulgate regulations that limit total emissions – not emission rates.
Third, the regulations must truly control Massachusetts sources. The SJC specifically found that RGGI doesn’t satisfy the GWSA requirement, in part because Massachusetts sources can purchase allowances from out of state facilities.
But where does this leave MassDEP? In a deep hole, for sure. Unless it wants to ditch RGGI, it can’t regulate power generation, because the type of program that the SJC said is required would simply be incompatible with RGGI.
How about mobile sources? They are the largest growing source of GHG emissions. Unfortunately, we come back to the SJC’s injunction that MassDEP must regulate total emissions, not emission rates. You tell me how MassDEP is going to issue regulations setting a cap on mobile source emissions.
The only obvious candidates I see are buildings and industrial sources other than power generation.
I don’t envy MassDEP – and the nature of the task only emphasizes the extent of the SJC’s overreach here – but I said I wouldn’t get into that.
Posted on May 20, 2016
August 25, 2016 is the 100th anniversary of the National Park Service. The many planned celebrations and observances provide an opportunity for everyone to become reacquainted with these great outdoor spaces and reflect on the world around us. As your summer plans take shape, be sure to visit FindYourPark.com and try to visit at least one national park. I invite you to share photos of your travels in the comments section of this post, and perhaps ACOEL can find a place for the collection of images of its members enjoying these national treasures.
As I reflect on the Park Service’s anniversary, I observe that it presents a chance for me – and for all environmental lawyers – to take stock of where we have been as a profession. Why – and how – we do what we do? What challenges will the next 100 years hold?
I issue this charge, in part, to carry on the conservation legacy of Henry L. Diamond. Henry was a founder of my firm, Beveridge & Diamond, and a great environmental lawyer and mentor to many (including myself). Sadly, we lost Henry earlier this year.
Henry and many others like him paved the way for our generation to be stewards of the planet and the environmental laws that govern our interactions with it. We have made progress, but new challenges have emerged. Easy answers, if they ever existed, are fewer and farther between. So what, then, does the future hold for the next generation of environmental lawyers?
Future generations of lawyers would do well to focus on the funding mechanisms that are critical but often overlooked components to achieving our most important environmental and sustainability goals. As an example, we can look to the past. Early in his career, Henry Diamond assisted the Chairman of the Outdoor Recreation Resources Review Commission, Laurance Rockefeller, in editing the Commission’s seminal report, Outdoor Recreation for America, that was delivered to President John F. Kennedy in 1962. Among the Commission’s more significant recommendations was the idea to use revenues from oil and gas leasing to pay for the acquisition and conservation of public lands. Congress took action on this recommendation, creating the Land & Water Conservation Fund in 1965 as the primary funding vehicle for acquiring land for parks and national wildlife refuges. While the fund has been by all accounts a success in achieving its goals, much work remains to be done and the fund is regularly the target of budgetary battles and attempts to reallocate its resources to other priorities. Today, the four federal land management agencies estimate the accumulated backlog of deferred federal acquisition needs is around $30 billion.
I expect climate change will dominate the agenda for the young lawyers of our current era. They will need to tackle challenges not only relating to controlling emissions of greenhouse gases, but also adaptation resulting from climate change. Sea level rise, altered agricultural growing seasons, drought and water management, and other issues will increase in prominence for this next generation.
We can expect our infrastructure needs to continue to evolve – not only replacing aging roads, bridges, tunnels, railroads, ports, and airports, but also the move to urban centers and the redevelopment of former industrial properties. Autonomous vehicles and drones also pose novel environmental and land use issues. These trends will require us to apply “old” environmental tools in new ways, and certainly to innovate. As my colleague Fred Wagner recently observed on his EnviroStructure blog, laws often lag developments, with benefits and detractions. Hopefully the environmental lawyers of the future will not see – or be seen – as a discrete area of practice so much as an integrated resource for planners and other professions. Only in this way can the environmental bar forge new solutions to emerging challenges.
The global production and movement of products creates issues throughout the supply chain, some of which are just coming to the fore. From raw material sourcing through product end-of-life considerations, environmental, natural resource, human rights, and cultural issues necessitate an environmental bar that can nimbly balance progress with protection. As sustainability continues its evolution from an abstract ideal to something that is ever more firmly imbedded in every aspect of business, products, services, construction, policymaking and more, environmental lawyers need to stay with their counterparts in other sectors that are setting new standards and definitions. This area in particular is one in which non-governmental organizations and industry leaders often “set the market,” with major consequences for individuals, businesses, and the planet.
Finally, as technology moves ever faster, so do the tools with which to observe our environment, to share information about potential environmental risks, and to mobilize in response. With limited resources, government enforcers are already taking a page from the playbooks of environmental activists, who themselves are bringing new pressures for disclosures and changes to companies worldwide. With every trend noted above, companies must not underestimate the power of individual consumers in the age of instantaneous global communication, when even one or two individuals can alter the plans and policies of government and industry.
Before Henry Diamond passed away, he penned an eloquent call to action that appeared in the March/April edition of the Environmental Law Institute’s Environmental Forum (“Lessons Learned for Today”). I commend that article to you. It shares the story of the 1965 White House Conference on Natural Beauty and how a diverse and committed group of businesspeople, policymakers, and conservationists (some of whom were all of those things) at that event influenced the evolution of environmental law and regulation for the decades to come. Laws such as the National Environmental Policy Act, the Clean Air Act, the Clean Water Act, and others have their roots in that Conference. In recognition of his lifetime of leadership, Henry received the ELI Environmental Achievement Award in October 2015. The tribute video shown during the award ceremony underscores Henry’s vision and commitment to advancing environmental law. I hope it may inspire ACOEL members and others to follow Henry’s lead.
These are just a few things I think the future holds for environmental lawyers. What trends do you predict? How should the environmental bar and ACOEL respond?
Posted on May 19, 2016
Three companion decisions in Atlantic Richfield Co. v. U.S. et. al., Case No. 1:15-cv-00056, in the U.S. District Court for the District of New Mexico, provide insight on the CERCLA statute of limitations, potential pitfalls in pleading CERCLA claims, and the defense of sovereign immunity by an Indian Pueblo in the context of CERCLA and contract claims. The case remains pending.
In the 1940s, when the war was over, the federal government was in the market for uranium concentrate for bombs, and it encouraged private entities to mine and mill uranium for sale to the government at prices set by the government. Much of the country’s uranium reserves were in the Grants Uranium Belt in western New Mexico, an area that includes the Laguna Pueblo.
Uranium was discovered on Laguna Pueblo lands in 1952, and Anaconda Copper Mining Company entered into mining leases with Laguna, which were approved by the Bureau of Indian Affairs, acting pursuant to its trust responsibility to the Pueblo. Much uranium was mined there from the Jackpile Paguate mine beginning in 1952, and operations continued until 1982. In 1986, the Pueblo and Anaconda’s successor, Atlantic Richfield Co. (“ARCO”), entered into an agreement to terminate the leases and perform remediation. ARCO agreed to pay the Pueblo to perform remediation, and the Pueblo agreed to assume all liability and release ARCO regarding it. The Department of the Interior approved the agreement and, following the preparation of an EIS, BLM and BIA issued a ROD that established requirements for the remediation. ARCO paid $43.6 million to the Pueblo to perform the remediation and release ARCO.
All defendants were involved in varying degrees with the remediation. BIA had responsibility to determine the extent of remediation required and approve key remediation decisions according to a cooperative agreement with the Pueblo. But BIA and the Pueblo saw in ARCO’s $43.6 million payment an economic development opportunity. The Pueblo formed Laguna Construction Company (“LCC”) to conduct the remediation, and BIA ceded certain oversight to the relatively inexperienced LCC as well. Work on the initial remediation ended in 1985. Beginning in 2007 the Pueblo, and then EPA, investigated the adequacy of mine reclamation at the mine site and found problems. In 2012 EPA proposed listing on the NPL, and in 2014 it asserted that ARCO should fund the RI/FS, but EPA has brought no litigation.
ARCO claims that the remediation was mishandled and brought CERCLA claims against the United States, the Pueblo and LCC, seeking cost recovery, contribution, and declaratory relief. The United States moved to dismiss. In detailed decision by Senior United States District Judge, James A. Parker, all of ARCO’s claims against the United States were dismissed. In companion decisions, some claims against the Pueblo and LCC were dismissed and some survived motions to dismiss. Dismissals were based in part on the CERCLA statute of limitations, the court’s determination that the ARCO pleadings were deficient and sovereign immunity.
ARCO sought to recover two categories of response costs: (1) the $43.6 million it paid to the Pueblo in 1986 in exchange for the Pueblo’s agreeing to be responsible for the remediation and to release ARCO from all responsibility for it; and (2) the significant costs ARCO incurred in responding to EPA’s more recent efforts to shift responsibility to ARCO. The Court dismissed ARCO’s claims for cost recovery and contribution for the 1986 settlement payment as time barred. The Court dismissed ARCO’s claim to recover the costs in responding to EPA and associated investigation as inadequately pled to establish that the expenditure constitutes “necessary costs of response.” Claims for contribution under 113(f)(1) (referenced by the court as “post judgment contribution claim”) were dismissed as premature because ARCO had not been sued. Finally, the claims against the United States for declaratory judgement were dismissed; the court ruled that ARCO cannot bring a claim for declaratory relief because it has failed to establish a valid underlying contribution or cost recovery claim.
Claims against the Pueblo and LCC are somewhat more complicated as a result of sovereign immunity defenses they raised. The court considered the sovereign immunity defense asserted by both Laguna Pueblo and LLC, its federally-chartered Tribal Corporation. The Court concluded that both the Pueblo and LCC are entitled to assert sovereign immunity as a bar to ARCO’s CERCLA claims because the language of existing waivers of sovereign immunity was not unequivocal enough to cover CERCLA claims. The Court therefore dismissed those CERCLA claims. However, the court found that the Pueblo and LCC waived sovereign immunity with regard to ARCO’s breach of contract claims. The source of this waiver for the Pueblo is in the 1986 Agreement to Terminate Leases. The court found that this agreement served to waive sovereign immunity from claims brought under that contract. Regarding LCC, the source of the waiver of sovereign immunity for breach of contract claims was in the Articles of Merger associated with the merger of LCC from a New Mexico corporation to a federal LCC formed under 25 USC §477, which may assert sovereign immunity. A motion for reconsideration by LCC is pending.
Although the facts of Atlantic Richfield are unique, its lessons are broader. First, in pleading a CERCLA claim for cost recovery, care should be taken to allege in some detail facts which support all elements of the claim, including facts showing that necessary response costs within CERCLA were incurred. Second, without adequate waiver of sovereign immunity, the settlement and payment in exchange for a release and commitment by a tribe or tribal corporation to assume full responsibility for clean-up may leave the door open for CERCLA liability in the future without recourse through CERCLA-based contribution and cost recovery claims. Finally, although the court’s decision confirmed that the defense of sovereign immunity applies to CERCLA contribution and cost recovery claims brought by private parties against sovereign Indian tribes and their federally chartered corporations, the court’s analysis confirms that under the right circumstances, a tribe may waive its sovereign immunity protections.
Posted on May 17, 2016
On April 20, 2016, the U.S. Senate passed S.2012, the Energy Policy Modernization Act of 2015, by a vote of 85-12. If enacted, S.2012 would be the first comprehensive energy legislation since the Energy Independence and Security Act of 2007. This bipartisan bill is intended to expand domestic energy systems, facilitate investment into critical infrastructure and improve the performance of federal agencies while protecting the environment.
S.2012 contains two notable provisions that would impact domestic oil and natural gas production and infrastructure development. First, the Act would designate the Federal Energy Regulatory Commission (“FERC”) as the lead agency responsible for coordinating all applicable federal authorizations and National Environmental Policy Act (“NEPA”) review for proposed natural gas projects and facilities. According to the Act, once FERC determines that an application for a project or facility is complete, all required federal authorizations must be issued within the timeframe specified by FERC, which “should” not exceed 90 days. The provision would likely speed the federal approval of interstate pipeline and liquefied natural gas (“LNG”) projects.
Second, the Act creates a Bureau of Land Management (“BLM”) pilot program that would allow operators to lease and develop certain mineral interests owned by the federal government without a federal drilling permit. Specifically, the pilot program would include 2,000 spacing units in which the federal government owns 25% or less of the mineral interests and none of the surface estate. BLM would be authorized to waive the requirement that operators obtain a federal drilling permit for the spacing units if BLM determines that the mineral interests are adequately protected by the lease terms or other laws and regulations. The proposed pilot program may lead to permanent programs that ease the restrictions on exploration and production activities affecting mineral interests in which the federal government owns only a minority share.
The White House has previously threatened to veto legislation aimed at speeding the federal authorizations necessary to construct LNG facilities and pipelines. However, no such veto statement has been issued with respect to S.2012. This legislation may not face opposition from the White House because it was developed after numerous listening sessions were held with stakeholders across the country and after weeks of negotiations by many senators seeking common ground for modernizing energy policy. Senator Murkowski (R-Alaska), Chairman of the U.S. Senate Committee on Energy and Natural Resources, stated that she expects a formal conference with the U.S. House Energy and Commerce Committee to merge the Senate and House bills, but no timeline for a meeting has been established.
Posted on May 16, 2016
The Tata Mundra “Ultra-Mega” coal-fired power plant on the coast of India north of Mumbai is a behemoth by any measure. Capable of producing over 4,000 megawatts of electricity from five huge boilers, it can consume over 12 million tons of coal per year and requires millions of gallons of seawater a day for its once-through cooling system. Indeed, the plant is so large it requires its own coal port, its own water intake channel (nearly 150 meters wide) and its own outfall that discharges warm water equal to almost half the mean flow of the Potomac River.
For generations, the area where the plant is now located supported a system of small fishing villages where fishing families move from inland locations to the coast for several months each year following the monsoon to catch and dry fish which they sell to traders. This income has supplemented income from agriculture and provided the villages and families with a subsistence living.
The arrival of the Tata Mundra Plant changed all that: construction disrupted access to fishing locations; dredging altered the natural systems and the fish disappeared as water salinity and temperature changed; fresh water supplies dwindled as the plant’s water use led to increased saltwater intrusions into groundwater; and a way of life that had sustained families and villages disappeared.
So what does this story of displacement and disruption half way around the world have to do with environmental law in the U.S.? In today’s world, where it’s clearer day-by-day that everything is connected to everything else, the answer is “more than you might think.”
The Tata Mundra Plant would not have been built without financing from the International Finance Corporation (IFC) based in Washington. The IFC is an organization of member states and part of the World Bank Group. To its credit, the IFC recognized the environmental risks of the project from the outset noting that it had the potential to have “significant adverse social and/or environmental impacts that are diverse, irreversible, or unprecedented.” And, consistent with its lending policies, it put in place as part of its loan agreement social and environmental performance standards and requirements to mitigate these impacts.
It all looked good on paper. But then the plant was built and the IFC looked the other way. We know this because individual villagers who depended on the resources the Tata Mundra Plant destroyed complained through a local fishing union and village government to the IFC’s ombudsman office. That office issued a scathing report criticizing the IFC for its multiple failures to ensure implementation of the protective measures in its loan agreement. The IFC shrugged; the ombudsman’s office has no enforcement powers.
Frustrated with their inability to achieve any meaningful accountability through the IFC, a handful of individual fishers and villagers, a local fishing union, and a village governmental entity filed a complaint against the IFC in the U.S. District Court for the District of Columbia, Budha Ismail Jam et al v. IFC, No 15-cv-00612 (JDB), in April of 2015. The IFC moved to dismiss the complaint on sovereign immunity grounds. The IFC is covered by the International Organizations Immunities Act (“IOIA”), which Congress passed in 1945, and is entitled to the “same immunity” in U.S. courts as foreign nations. While the immunity enjoyed by foreign nations has changed significantly since 1945, the IFC asserted that its had not -- and remained near-absolute.
The District Court concluded, in light of longstanding D.C. Circuit precedent dealing with immunity from wage garnishment proceedings for an employee of one of the IFC’s sister international organizations, the Inter-American Development Bank, that it was bound to dismiss the complaint against the IFC on sovereign immunity grounds. Budha Ismail Jam et al v. IFC, No 15-cv-00612 (JDB), Memorandum Opinion (Mar. 24, 2016 D.D.C.).
This outcome raises serious questions about the accountability of international lending organizations like the IFC that finance potentially environmentally destructive project around the world while professing to follow the most stringent lending practices for protecting people and the environment. If we are “all in this together,” a serious failure of accountability on the other side of the world is not something we can just shrug off as someone else’s problem. We live in a global commons – industrial projects built anywhere can affect us all. The most obvious example is the effects on the climate from the dramatic expansion of fossil fuel-based power generation around the world, much of it built with international financial support, often originating in the U.S.
Nor is the law of sovereign immunity as clear or unfavorable to the plaintiffs as the District Court’s decision suggests. First, since 1945, sovereign immunity for foreign states has developed a well-recognized exception for commercial activities, activities that do not enjoy immunity. IFC lending decisions – on which the IFC makes a profit – are nothing if not commercial activity. Second, and maybe more significantly, sticking with an out-dated, circa-1945 version of sovereign immunity actually undermines the credibility of the IFC itself. For the IFC to continue enjoying the financial support of its member states, its commitment to responsible lending must be real and reliable, not illusory. If it continues to finance projects without real environmental accountability, its members may become inclined to withdraw their support because they will not want it lending to their neighbors: environmental harms don’t recognize geo-political boundaries and irresponsible financing for a polluting facility in one country may well harm another.
Because the facts of Budha Ismail Jam et al v. IFC are so stark, because accountability in international finance for major industrial projects is increasingly important both here and abroad in a world facing rapid climate change and its effects, and because the plaintiffs are appealing the District Court’s order of dismissal, this is a case worth watching. It could be the first whisper of a new breeze in accountability for the environmental effects of international lending decisions -- or the last sigh from beneath a suffocating blanket of sovereign immunity.
Posted on May 4, 2016
You do not have to be a football fan to be aware of the legal battles between NFL Commissioner Roger Goodell and the star quarterback, and perpetual winner, Tom Brady arising out of Brady’s use of deflated footballs at a playoff game. Brady won the round in district court where the judge focused on the merits of the factual case. Goodell recently won on appeal where the court of appeals focused on the fact that the NFL Players Association bargained away the right to challenge Goodell’s decisions on the merits. On appeal, it did not matter whether Brady did anything wrong. All that mattered was that Goodell thought Brady did something wrong.
In recent dealings with EPA on its model Administrative Order on Consent (“AOC”) for Remedial Investigations and Feasibility Studies (“RI/FS”), it seems EPA wants PRPs to make the same mistake the Players Association made: let EPA be judge and jury over any dispute that arises under the AOC. The most troubling language in the model is that EPA’s final decision on the dispute “becomes part of the Order.” While the vast majority of EPA folk I have met are more reasonable than Roger Goodell, RI/FS projects can involve millions of dollars, which sets the table for expensive disputes.
What is a Brady fan to do? First, the model should be changed to allow pre-enforcement review, as pointed out in a recent ACOEL post by Mark Schneider. Second, if the AOC process is otherwise desirable, there are ways to minimize the effect of the model language on at least one category of dispute: work expansion disputes, often the most serious and expensive variety of disputes. A very specific Scope of Work attached to the AOC would minimize the risk of work expansion by EPA through dispute resolution. If a dispute arises that could expand the work, do not invoke dispute resolution. Take the position that the AOC does not apply to EPA’s demand because the demand is beyond the scope of the AOC. If EPA enforces the AOC on this point you can defend without EPA’s position becoming part of the AOC beforehand. Thus, you avoid Brady’s fate—having a good argument and nowhere to go.
Posted on April 29, 2016
In January TransCanada sued the Obama Administration over its denial of a permit for the Keystone XL pipeline to cross the US-Canada border. In its lawsuit TransCanada asserts that the President exceeded his executive authority and usurped Congress’ constitutional power to regulate commerce.
The lawsuit, filed in federal court in Houston, Texas, comes after TransCanada spent seven years mired in the administrative process. TransCanada’s complaint recounts the key events of those seven years as follows.
In 2008 TransCanada was granted a border crossing permit for Keystone I, so there is already a Keystone pipeline that crosses the US-Canada border in North Dakota. The State Department raised no objections regarding GHG emissions in connection with that permit. In 2009, then Secretary of State Clinton granted a cross-border permit to Enbridge for its Alberta Clipper pipeline, concluding that GHG emissions were not a basis for denying a border crossing permit.
In 2008, seeking to expand capacity, TransCanada applied for a second US-Canada border crossing permit for the Keystone XL project. The permit application covered a 1.2 mile section of pipe that was part of a broader 1,700-mile pipeline project, most of which was to be located in the United States.
Following this application, the State Department issued a series of draft and final environmental impact statements that found minimal GHG impacts. Nevertheless, in November 2011 the State Department announced it could not make a final determination until an alternative route through Nebraska was selected.
In December 2011 Congress passed an act that required the President to grant the permit to TransCanada within 60 days or report to Congress why the President did not believe the pipeline crossing served the national interest. In January 2012 President Obama directed the Secretary of State to deny the permit on the ground that 60 days was insufficient time. Secretary Clinton denied the permit but indicated that a renewed application would be considered. In May 2012 TransCanada submitted a renewed application.
Following this second application the State Department issued another series of EISs which found that the project would not substantially increase GHG emissions. In early 2015, Congress passed the Keystone Pipeline Approval Act, which authorized the Keystone XL project without any further action or approval by the President. President Obama vetoed the Act and Congress was unable to override the veto.
In November 2015, Secretary Kerry denied the renewed application. The Record of Decision found that the pipeline would advance the national interest by providing added energy security and economic benefits, and furthering the United States’ relationship with Canada. The ROD also found that GHG emissions might actually increase without the pipeline because the crude oil would otherwise be transported by rail and tankers. Nevertheless, the Secretary concluded that the pipeline did not serve the national interest because it “would undermine U.S. climate leadership and thereby have an adverse impact on encouraging other States to combat climate change” in advance of the December 2015 Paris climate negotiations.
It is with the backdrop of these events that TransCanada challenged the President’s authority to regulate international pipeline border crossings.
Where does the President derive the authority to regulate international pipeline crossings, and particularly on the basis of the United States’ symbolic leadership role on climate change? The President relies upon Executive Order 13337, under which the President delegated authority to the Secretary of State to deny border crossings that do not “serve the national interest”. But because the Constitution gives Congress the power to regulate commerce, where does the President derive the power to delegate to the Secretary of State in the first place, particularly since Congress has never delegated the authority to regulate such border crossings to the President?
TransCanada’s complaint discusses the various U.S. Supreme Court decisions which address the President’s power to act in areas otherwise reserved to Congress but where Congress has not yet acted. These cases hold that the President does have power to act in such circumstances, but also hold that the President’s authority can be revoked at any time by Congress by simply expressing its contrary will. TransCanada argues that Congress expressed such contrary will when it passed the Keystone Pipeline Approval Act, thereby depriving the President of authority to take further action.
On April 1 the Obama Administration filed a Motion to Dismiss, arguing that the President’s powers over foreign affairs and as Commander-in-Chief provide sufficient independent constitutional authority to regulate pipeline border crossings. In addition, the Administration argues that, because the Keystone Pipeline Approval Act never became law, it provides no basis to challenge the President’s decision. The Natural Resources Defense Council, Friends of the Earth, Texas Environmental Advocacy Services, Community In-Power and Development Association and Center for Biological Diversity recently filed an Amicus Brief.
The outcome of this environmental controversy will depend not on statutory interpretation or common law but on fundamental concepts of separation of powers. The sometimes murky line between Presidential and Congressional authority will be tested here.
Posted on April 28, 2016
In auto racing, the black flag is the ultimate sanction, signaling that a competitor has been disqualified and has to leave the race. That’s what happened to EPA recently, when it withdrew a controversial proposed rule to “clarify” that the Clean Air Act prohibits converting a certified vehicle for racing.
Merits aside, EPA’s start-and-stop performance is an excellent example of notice-and-comment rulemaking gone wrong. The original proposal appeared last July, a brief passage buried in the middle of a 629-page proposed rule on greenhouse gas emissions for medium- and heavy-duty engines and vehicles – hardly the place where one would look for a rule directed at race cars. See 80 Fed.Reg. 40137, 40527, 40552 (July 13, 2016). As should have been expected, EPA’s pronouncement that the Clean Air Act flatly prohibits converting emission-certified vehicles for competition went unnoticed for months. It wasn’t until late December, nearly three months after the close of the comment period, that SEMA (the Specialty Equipment Market Association, the trade group representing the motor vehicle aftermarket industry) discovered the proposed rule.
That’s when the yellow flag came out. SEMA and its members blasted EPA’s interpretation as reversing a decades-old policy that allowed the race-conversion market to flourish, and for hiding the proposal in an inapplicable rule. EPA’s response was to hold to its interpretation and to post SEMA’s comment letter in a “notice of data availability” so that others could comment – not on EPA’s proposal, but on SEMA’s letter. 81 Fed.Reg. 10822 (March 2, 2016).
SEMA stepped up the pressure with a White House petition that quickly garnered more than 150,000 signatures. Then came a letter to EPA from seven state attorneys general, and bills in both the House and Senate (brilliantly named the Recognizing the Protection of Motorsports Act, or “RPM”) to reverse EPA’s interpretation and codify the race exemption in the Clean Air Act.
On April 15, EPA hit the brakes, announcing that it was withdrawing its proposal. www.epa.gov/otaq/climate/regs-heavy-duty.htm. EPA stated that it never meant to change its policy towards “dedicated competition vehicles,” but admitted that its “attempt to clarify led to confusion.” EPA voiced its support for “motorsports and its contributions to the American economy and communities all across the country.
The checkered flag came out, but EPA had already pulled into the pits.
Posted on April 27, 2016
This week, the Federal Highway Administration issued a Noticed of Proposed Rulemaking to promulgate performance measures to be used in evaluating federal funding of transportation projects. The requirement for performance measures stems from the Moving Ahead for Progress in the 21st Century Act, aka MAP-21. MAP-21 requires the FHWA to establish performance standards in 12 categories, one of which is “on-road mobile source emissions.”
The NPRM addresses this criterion, focusing largely on emissions of criteria pollutants. However, buried in the 423-page NPRM is a six-page section labeled “Consideration of a Greenhouse Gas Emissions Measure.”
And thus the FHWA drops a bomb that could revolutionize federal funding of transportation projects. It’s important to note that this may not happen. If the next President is Republican, it certainly won’t. Even if the FHWA goes forward, there would be legal challenges to its authority to use GHG as part of the performance measures.
If it does go forward though, it really would be revolutionary. As the NPRM states, transportation sources are rapidly increasing as a source of GHG emissions:
GHG emissions from on-road sources represent approximately 23 percent of economy-wide GHGs, but have accounted for more than two-thirds of the net increase in total U.S. GHGs since 1990.
The enormity of both the challenges facing the FHWA in attempting to establish a performance measure for GHG emissions and the potential impact implementation of a GHG performance measure would have is reflected in some of the 13 questions that FHWA posed for comment:
- Should the measure be limited to emissions coming from the tailpipe, or should it consider emissions generated upstream in the life cycle of the vehicle operations?
- Should CO2 emissions performance be estimated based on gasoline and diesel fuel sales, system use (vehicle miles traveled), or other surrogates?
- Would a performance measure on CO2 emissions help to improve transparency and to realign incentives such that State DOTs and MPOs are better positioned to meet national climate change goals?
- How long would it take for transportation agencies to implement such a measure?
Welcome to the brave new world of integrated planning to manage GHG emissions in a critical sector of our economy.
Posted on April 26, 2016
Two legal rules frequently come into play in environmental tort cases that are difficult to reconcile: the rule allowing recovery for emotional distress damages without physical injury if someone is found to be in the “zone of danger,” and the rule not allowing recovery for mere fear of a future injury.
Normally, recovery for emotional distress (sometimes called mental anguish) requires the plaintiff to suffer some actual physical injury, however slight. But one exception allows someone who is in the “zone of danger” to recover despite the lack of any physical injury. Usually, the danger must be an immediate physical injury. For example, one case allowed recovery for emotional distress under a “zone of danger” theory for the driver at whom a gun was pointed, but not for the passenger in the same car. Another case allowed recovery to someone who had to escape his burning home, and then watched it burn to the ground, but not for someone who merely saw his house burning when he returned from work. Yet another case allowed recovery for floodwaters entering a home because the floodwaters were infested with snakes. Presumably, without the snakes, there could have been no recovery for emotional distress for the flood.
How does this “zone of danger” rule square with claims in environmental tort cases? Many courts do not allow recovery for a mere fear of an injury in the future, or so-called “cancerphobia” cases. Despite this rule, can one recover for emotional distress in, for example, an air pollution case, arguing that the plaintiff is in the “zone of danger” despite no present physical injury?
Plaintiffs in environmental tort cases, such as flooding, air pollution, and others, have indeed been asserting “zone of danger” theories to avoid the physical injury rule, and are asking juries to award them emotional distress or mental anguish damages. These claims must walk a fine line, since most courts do not allow recovery for mere fear of future injury. Where is that line drawn in an environmental tort case? For example, since presumably any amount of air pollution is bad for one’s lungs, is mere exposure to air pollution enough to recover for mental anguish for worrying about one’s self or one’s children? Or is this argument simply an end run around the ban on recovery for fear of future injury? Courts will have to draw lines in these environmental tort cases, and the lines they draw may not all be bright or easy to see.
Posted on April 20, 2016
Last month when the Ocean County, NJ challenge to the New Jersey Department of Environmental Protection’s (“NJDEP”) authority to implement dunes for shore protection was dismissed, I wrote that the decision could very well be precedential for similar challenges in other New Jersey counties.
And so it was. In a 65-page opinion, Superior Court Judge Julio Mendez also upheld the DEP’s authority to construct dunes in the City of Margate (Atlantic County) as being neither “arbitrary or capricious” nor an “abuse of power.” The opinion recognized the US Army Corps of Engineers’ (“Corps”) 6-year study and the need to be better prepared for coastal storms such as Hurricane Sandy in 2012. With this ruling – absent an appeal – the DEP will proceed to obtain the necessary easements through the eminent domain process (a prior attempt to do so via an administrative order having failed) with the appropriate compensation paid to the affected beachfront owners.
Judge Mendez acknowledged that the dunes on the oceanfront would not resolve flooding concerns to the bayfront properties nor obviate some protection afforded by seawalls and bulkheads. Interestingly, he found that the dunes in the adjacent City of Ventnor had not only protected Ventnor’s beaches but also expanded the beaches in Margate, and that the dunes in Margate would be protective of its coastal properties and was therefore not arbitrary or capricious.
Posted on April 19, 2016
Last month, while New Jersey Superior Court Judge Julio Mendez was considering Margate’s challenge to the authority of the New Jersey Department of Environmental Protection (“DEP”) to condemn City-owned lots on which to build dunes, New Jersey Superior Court Judge Marlene Lynch Ford dismissed a similar challenge by 28 oceanfront property owners in Ocean County, NJ.
In her decision, she ruled that (1) DEP’s condemnation activities were authorized to “protect the state’s fragile coastal system and [afford] public access” and (2) the taking of the requisite coastal acreage to do so was as a lawful use of that authority, provided that the eminent domain process of compensating affected property owner was followed, which she found to be the case in this instance.
Although it would appear likely that this decision should have significant precedential effect on the other pending challenges, it should be pointed out that the theory in other cases includes not only a challenge to DEP’s authority, but the reasonableness of constructing dunes on the beachfront as opposed to other “shore protection projects.” In fact, although she dismissed the challenge to DEP’s authority to condemn, Judge Ford granted a hearing to other homeowners who claim that DEP acted arbitrarily because their sea walls eliminated the need for dunes.
And so, although the authority of DEP to use eminent domain for shore protection would appear to be judicially blessed, the manner in which it is does so remains subject to challenge.
So, as always, stay tuned.
Posted on April 18, 2016
As reported by Seth Jaffe in this space, a federal magistrate judge in Oregon has kept alive the dreams of a group of young plaintiffs—aided by environmental advocacy groups—to compel government action against climate change. Like a similar case brought by the same plaintiffs a few years ago in state court, discussed below, the federal case seeks a declaration that government inaction violates the public trust. But in the federal case, plaintiffs added claims that their constitutional rights to life, liberty and property also are being violated.
The judge denied the government’s motion to dismiss on the basis that the matter is a political question better left to Congress. Magistrate Judge Thomas M. Coffin reasoned that the pleadings were adequate on their face and that the substantive issues raised by the defendants should await motions for summary judgment or trial. Still, the judge gave hope to the plaintiffs, which, I think will be short lived. Climate change is simply too big, diffuse and complex an issue for the courts to try to fashion a remedy around.
This same group of plaintiffs has had mixed success in pursuing its objectives at the state level. In June 2014 I posted about the Oregon Court of Appeals reversing and remanding a trial court’s dismissal of a similar claim against the state. The appellate court concluded that the plaintiffs were entitled to a determination whether the atmosphere is a public trust resource and whether Oregon state government had breached its fiduciary responsibility by not adequately protecting it. On remand, Lane County Circuit Court Judge Karsten H. Rasmussen granted the state summary judgment and dismissed the suit with prejudice. The case is now again pending before the Court of Appeals.
In his 19-page opinion, Judge Rasmussen concluded that the public trust does not extend to the atmosphere. The contours of the public trust are a matter of state common law, and Oregon law ties the public trust to title and restraints on alienation. The court concluded that there could be no title in the atmosphere and therefore public trust fiduciary obligations do not exist. The court also noted that traditional public trust resources, such as submerged lands, are exhaustible, which under Oregon law confers a fiduciary responsibility on the state. While the atmosphere may be altered or even damaged, the court found that it is not exhaustible.
The court added the following thought, which I think will guide the U.S. District Court when it hears the current case:
The Plaintiffs effectively ask the Court to do away with the Legislature entirely on the issue of GHG emissions on the theory that the Legislature is not doing enough. If "not doing enough" were the standard for judicial action, individual judges would regularly be asked to substitute their individual judgment for the collective judgment of the Legislature, which strikes this Court as a singularly bad and undemocratic idea.
Watch this space for further developments in Oregon state and federal courts.
Posted on April 14, 2016
In the CERCLA world, the low hanging fruit has largely been picked. Long gone are the days of the run-of-the-mill $3M RI/FS leading up to a $30M RD/RA. We are getting to the tough stuff now – the megasites – and all the difficult issues related to PRP involvement in RD/RA (whether via consent decree settlement or compliance with a UAO) are on steroids.
One of those more difficult issues in the context of multi-party megasites relates to financial assurance (“FA”) requirements in RD/RA UAOs and consent decrees. The 29-page April 2015 EPA FA Guidance, while helpful on some levels, is remarkably thin (2 paragraphs) when it comes to dealing with multi-party sites. And in a breathtaking understatement, especially with regard to big-ticket sites, EPA notes in the guidance that “FA matters can get complicated with multi-PRP-led cleanups….”
Recently, added pressure has been placed on the Agency in this area as a result of a March 31, 2016 EPA Inspector General report stating that “[d]ata quality deficiencies and a lack of internal controls prevent the EPA from properly overseeing and managing its financial assurance program for RCRA and CERCLA.” In particular, EPA’s OIG analysis indicates (among other things) that there are 128 CERCLA sites with no (or expired) financial assurance in place and the estimated cleanup costs for those sites is over $3.7B.
As Proposed Plans and RODs continue to roll out from the Agency with billion-dollar-plus price tags – typically related to multi-party contaminated sediment sites – the difficulty of up-front funding of these hugely expensive remedies becomes obvious. PRPs at multi-party sites will have varying abilities and business desires to up-front fund liquid FA mechanisms, and while some entities will prefer (and be able) to provide assurance by a financial test or corporate guarantee, many will not.
And EPA’s willingness to deal with multiple mechanisms (either different mechanisms from multiple parties or multiple mechanisms from a PRP group) is limited. In fact, the use of multiple financial assurance mechanisms is discouraged under the 2015 FA Guidance. Further, the September 2014 Model Remedial Design / Remedial Action Consent Decree along with the September 2015 Model Unilateral Order for Remedial Design / Remedial Action specifically state that while PRPs may use multiple mechanisms, this can only occur with liquid mechanisms – trust funds, surety bonds guaranteeing payment or letters of credit. Interestingly, the 2014 Model CD also allows the use of insurance policies, indicating that the Agency’s thinking about the liquidity of insurance policies has evolved.
The viability of financial assurances is not simply an EPA-driven issue. Given the multi-decade cleanup process and huge stakes involved at CERCLA megasites, and with the overlay of joint and several liability, PRPs need to be thinking carefully about the financial viability of their co-PRPs when entering into CDs or PRP agreements to perform under a UAO. And regardless of how EPA ultimately decides to deal with this issue at megasites, PRPs no doubt will be pushing each other to ensure long-term equitable responsibility for meeting their FA obligations at this new breed of Superfund sites.