AN UNDERGROUND RIVER RUNS THROUGH IT

Posted on November 8, 2017 by Andrew Goddard

Environmental groups have for years sought greater regulation of coal ash waste from coal-fired power plants.  It turns out an old-fashioned Clean Water Act (CWA) citizen suit is sometimes a more effective tool.

In August, Judge Waverly Crenshaw, of the U.S. District Court for the Middle District of Tennessee, ordered the Tennessee Valley Authority to “wholly excavate the ash waste disposal areas” at the Gallatin Steam Plant and “relocate the excavated coal ash to a lined impoundment with no significant risk of discharge to waters of the United States.”  TVA estimates that this will take 24 years at a cost of $2 billion.  The least surprising aspect of this case: TVA has filed a notice of appeal.

How?  In 2015, the Tennessee Clean Water Network and the Tennessee Scenic Rivers Association filed a CWA citizen suit claiming that groundwater flowed through two ash pond areas and then to the nearby Cumberland River was an unpermitted point source.  Judge Crenshaw’s 125-page opinion in support of the Order includes this diagram showing one zone of earth penetrated only vertically (by storm water) and one penetrated both vertically and laterally (by storm water and groundwater):

 

This pretty much sums up the central issue in the case:  Is the groundwater flow through the lower part of coal ash landfill, picking up contaminants and transmitting them laterally to the Cumberland River, regulated by the CWA?

In his lengthy opinion, Judge Crenshaw found that the CWA does regulate groundwater where there is a direct and immediate hydrologic connection if plaintiffs are able to “prove a link between contaminated groundwaters and navigable waters.”  TVA argued that the CWA cannot reach discharges enabled by infiltration of rainwater that was not channeled by human act because they are not point sources, but Judge Crenshaw found that the ultimate question regarding point source is whether the pollutants were discharged from a discernable, combined, and discreet conveyance by any means.  He found that the entire ash dewatering complex was a discernible, combined and discreet manmade concentration of waste and that it was a “conveyance” because it is “unlined and leaking pollutants,” and thus is by definition “conveying pollutants.”

It takes a lot for a judge to impose $2 billion of costs on a public utility.  His displeasure with how the problem had been addressed over the past several decades was palpable.  He wrote that the older of the two coal ash sites

“…offers a grim preview of what it means to leave an abandoned unlined coal ash waste pond in place next to a river.  [It] has not been a waste treatment facility for over forty-five years. It has been ‘closed’ for almost twenty years.  Still, water infiltrates it.  Still, it leaks pollutants.  Still, counsel for TVA and counsel for environmental groups are locked in conflict about what can and should be done about it. … As long as the ash remains where it is in either site, there is every reason to think that the dangers, uncertainties and conflicts giving rise to this case will survive another 20 years, 45 years or more.  While the process of closure by removal would not be swift, it would, at least, end.” 

With that, he ordered that TVA remove the coal ash to an appropriate lined site that will not discharge into waters of the United States.

There was one bit of good news for TVA: because of the cost of the chosen remedy, Judge Crenshaw decided not to assess penalties. 

Not every argument was about such large costs.  TVA’s objection to the plaintiffs’ request for attorney’s fees and costs included an objection to caviar included in a claim for $200 for food and snack items purchased from Kroger before and during the trial.  The plaintiff’s response included a receipt showing the “caviar” purchase was $16.24 of “Texas Caviar,” and attached Kroger’s recipe therefor.  It is devoid of fish eggs but does include chopped cilantro.  The recipe is available through PACER here.

Court Rejects BLM’s Efforts to Unbalance the Scales of Justice

Posted on November 6, 2017 by Seth Jaffe

Last month, Magistrate Judge Elizabeth Laporte granted summary judgment to plaintiffs and vacated the Bureau of Land Management’s notice that it was postponing certain compliance dates contained in the Obama BLM rule governing methane emissions on federal lands.  If you’re a DOJ lawyer, it’s pretty clear your case is a dog when the Court enters summary judgment against you before you’ve even answered the complaint.

The case is pretty simple and the outcome should not be a surprise.  BLM based its postponement of the compliance deadlines on § 705 of the APA, which authorizes agencies to “postpone the effective date” of regulations “when justice so requires.”  However, every court that has looked at the issue has concluded that the plain words of the APA apply only to the “effective date” of a regulation and not to any “compliance date” contained within the regulation.

It seems clearly right to me.  For Chevron geeks out there, I’ll note that the Court stated that, because the APA is a procedural statute as to which BLM has no particular expertise, its interpretation of the APA is not entitled to Chevron deference – a conclusion which also seems right to me.

What particularly caught my eye about the decision was the Court’s discussion of the phrase, “when justice so requires.”  In a belt and suspenders bit of analysis, the Court also made findings that justice did not require postponement.  BLM’s argument was that justice required the postponement because otherwise the regulated community would have to incur compliance costs.  However, as the Court noted, “the Bureau entirely failed to consider the benefits of the Rule, such as decreased resource waste, air pollution, and enhanced public revenues.”  Indeed:  

If the words “justice so requires” are to mean anything, they must satisfy the fundamental understanding of justice: that it requires an impartial look at the balance struck between the two sides of the scale, as the iconic statue of the blindfolded goddess of justice holding the scales aloft depicts. Merely to look at only one side of the scales, whether solely the costs or solely the benefits, flunks this basic requirement. As the Supreme Court squarely held, an agency cannot ignore “an important aspect of the problem.” Without considering both the costs and the benefits of postponement of the compliance dates, the Bureau’s decision failed to take this “important aspect” of the problem into account and was therefore arbitrary.

I think I detect a theme here.  Some of you will remember that Foley Hoag filed an amicus brief on behalf of the Union of Concerned Scientists, supporting the challenge to President Trump’s “2-for-1” Executive Order.  We made pretty much the same arguments in that case that Magistrate Judge Laporte made here – minus the reference to the scales of justice.

Unless SCOTUS gets rid of all agency deference, the Trump Administration is going to get some deference as it tries to eliminate environmental regulations wherever it can find them.  However, if it continues to do so while looking solely at the costs of the regulations to the business community, while ignoring the benefits of the regulations, it’s still going to have an uphill battle on its hands.

Cooperative Federalism – 1; State Defendants in the Flint Water Crisis – 0

Posted on September 26, 2017 by Jeffrey Haynes

In a case of first impression, a divided Sixth Circuit held that the state agency defendants in the Flint water crisis cannot remove state-law tort claims against them under the federal officer removal statute.  Mays v. City of Flint, No. 16-2484 (Sixth Cir., Sept.11, 2017).  The ruling affirmed a remand to the Genesee County Circuit Court, where, the court acknowledged—emphasizing the obvious—the Michigan Department of Environmental Quality staffers are likely to be “unpopular figures.”

Residents of Flint sued, among others, several present and former MDEQ staff members for gross negligence, fraud, assault and battery, and intentional infliction of emotional distress, based upon MDEQ’s failure to control corrosion of aging water pipes, which caused lead to leach into Flint’s water supply.  The MDEQ defendants removed the action under the federal officer removal statute, 42 U.S.C. §1442(a)(1), which allows “any officer (or person acting under that officer) of the United States” to remove a state-law action to federal court.  The purpose of the statute is to insulate federal officers from local bias against unpopular federal laws.  Examples of customs agents in the War of 1812, revenue agents during Prohibition, and border agents come to mind.  The MDEQ defendants argued they were enforcing the Safe Drinking Water Act for USEPA, and therefore were acting under federal officers.

The court held that the MDEQ was enforcing Michigan law under a delegation of federal authority voluntarily accepted by the state.  The state officers were not contractors, employees, or agents of federal officers.  The cooperative federalism of the SDWA was more like a partnership than a principal-agent relationship.  EPA oversight, reporting requirements, and federal funding were not enough to bring the MDEQ defendants within the removal statute.  The dissent believed, on the other hand, that the state agency defendants’ removal petition satisfied their burden of demonstrating that their actions brought them under the statute’s protection. 

The court kept the floodgates closed.  It noted that many other environmental statutes come within the cooperative federalism model, and that allowing removal would cause garden-variety state-law tort claims against state officers for enforcing state law to be litigated in federal courts.

So, states’ rights advocates, take heart.  Even though your state enforces federal environmental standards with federal funds and oversight, you are on your own.  Regardless of citizen anger with the distant federal government, your state officials can still be tried by local jurors angry with your state government.

Trump’s 2-For-1 Order: Still Arbitrary and Capricious After All These Months

Posted on September 15, 2017 by Seth Jaffe

In June, I posted about Foley Hoag's brief in support of those challenging Executive Order 13771, the so-called “2 for 1” EO.  By ignoring the benefits of existing and proposed regulations, the Order ignores the purposes behind the legislation pursuant to which regulations are promulgated.  The Order is thus the definition of arbitrary and capricious.

Late last week, OMB issued a memorandum to executive agencies, requiring them to develop “Regulatory Cost Allowances” for FY 2018.  The memorandum is only one page.  In that one page, it uses the word “cost” 11 times.  The word “benefit” does not appear.

The memorandum notes that the purpose of the Order is to “lower regulatory burdens” and “to be prudent and financially responsible in the expenditure of funds, from both public and private sources.”

I hate to beat a dead horse, but one would have thought that the absolute size of the “regulatory burden” is not what’s relevant; what’s relevant is whether that regulatory burden is exceeded by the benefits of proposed regulations.  One would also have thought that requiring expenditures of private funds for regulatory compliance would be seen as “prudent” if those compliance costs are exceeded by the benefits.

Indeed, one would have thought – and I do still think – that seeking to lower regulatory compliance costs without regard to the benefits provided by government regulations is just plain crazy.

Silly me.

A Win for Appropriative Water Rights

Posted on August 25, 2017 by Rick Glick

In an unpublished opinion released August 24th, the Ninth Circuit rejected a long waged effort to upend the City of Bend’s water planning by forcing it to abandon its vested surface water rights in favor of an all-groundwater supply.  As is often the case, plaintiffs chose a somewhat oblique attack on the City’s water planning, relying on NEPA and forest planning laws to force a change of direction.

Central Oregon LandWatch v. Connaughton was a challenge to a Special Use Permit issued by the U. S. Forest Service to the City to construct a new pipeline and to upgrade water diversion facilities on Tumalo Creek, within the Deschutes National Forest.  The existing pipeline also was previously constructed within the national forest under a SUP, but needs replacement.  The project drew controversy. 

Plaintiffs contended that cessation of water withdrawals by the City is necessary to preserve Tumalo Falls, whereas the City argued that the project would enhance Tumalo Creek.  To maintain pressure, the old pipeline needed to be kept full, resulting in constant diversions and discharge of surplus water downstream.  The new pipeline allows the City to withdraw water on demand, which will keep more water in the stream.  In addition, the City is working closely with the Tumalo Irrigation District to further protect the creek.

An amici group comprised of municipal and agricultural water users, intervened on behalf of the Forest Service and the City.  (Disclosure:  Our firm represents the amici, and serves as water counsel to the City, though we did not represent the City in this case).  The Oregon Water Resources Department separately intervened as an amicus.

The central concern for amici was the integrity of Oregon’s appropriative water rights law, which follows the first in time, first in right principle of other Western states.  Plaintiffs sought to upend that principle by elevating federal minimum flows in the forest planning context over state water law.  Oregon law allows the Oregon Department of Fish and Wildlife to apply for instream water rights, which would have priority from the date of application and would be treated like any other water right.  The purpose of the instream right is to prevent future appropriations, and so the “minimum” flows in the water right usually comprise or exceed the entire flow of the stream.

Plaintiffs argued that the Forest Service should have imposed minimum flows for the creek in the SUP, which they contended should be derived from the instream water established for Tumalo Creek.  The problem is that the instream water right is junior in priority to the City’s water rights.  Imposing the instream water right flows as a condition of the SUP would effectively turn appropriative water rights law on its head.  The instream right—with its aspirational flow regime—would then take precedent over the City’s right.

The court below rejected that outcome, as did the Ninth Circuit but on the basis that establishment of minimum flows are not required by rule or case law.  Further, doing so would not benefit Tumalo Creek because the City’s project would “positively impact stream flows” in one reach of the creek and “have no or minimal impact” in two other reaches, one of which is subject to Tumalo Irrigation District diversions that are not subject to the SUP.

The court also found that the Forest Service did not violate NEPA by limiting the alternatives analysis in the Environmental Assessment to just two: (1) implementation of the project and (2) a “no action” alternative based on the existing SUP.  In other words, the court was not troubled by the Forest Service assuming that continuing exercise of the City’s surface water rights represents the status quo.   The court rejected plaintiffs’ argument that the Forest Service needed to additionally evaluate an alternative scenario where the City reduces or ceases withdrawals from Tumalo Creek.  The court found that the discussion in the Environmental Assessment was adequate, and relied on language in the EA that fully supports the City’s water planning:

The Forest Service determined that the surface water formed a “critical component of the City’s dual-source [water] supply.” . . . The EA explained that groundwater-only options would “compromise the City’s ability to provide a safe and reliable water supply,” reduce water flows in other parts of the Deschutes River, be costly, and be less reliable than a dual-source system. The EA also flagged possible environmental concerns posed by the groundwater-only option, including reduced surface stream flows (which are fed by groundwater) and increased energy consumption caused by pumping groundwater. This discussion was sufficient.

A dual source water system is the dream of every municipal water planner.  That redundancy is insurance against natural or human-caused catastrophes that could disable one source.  And all water users need to be able to rely on the priority of water rights under the law.  That the Forest Service and the Ninth Circuit declined to upset the City’s long-term water planning is a victory for municipal water planners everywhere.

Reports of the Death of the SEP Have Not Been Greatly Exaggerated

Posted on July 21, 2017 by Seth Jaffe

Last month, Attorney General Sessions barred DOJ from entering into settlements that provide for payments to non-governmental persons not a party to the dispute.  At the time, I peered into my crystal ball and proclaimed that the practice of incorporating supplemental environmental projects into environmental settlements was “hanging by a thread.” For once, my speculation was accurate.

Yesterday, DOJ notified the District Court for the District of Columbia that the United States and Harley-Davidson had jointly agreed to modify a consent decree that had already been lodged with the Court.  The original decree provided for a $3 million SEP, to replace old woodstoves.  Notwithstanding that SEPs have traditionally been used to mitigate penalty amounts, the modified decree did not increase the penalty to Harley-Davidson; it merely eliminated the SEP.  Well done, Harley-Davidson lawyers!

In modifying the decree, DOJ explicitly cited to the Sessions memorandum, noting simply that:

Questions exist as to whether this mitigation project is consistent with the new policy.

Ya’ think?

The only question remaining at this point is whether other defendants will be able, like Harley-Davidson, simply to pay smaller penalties or whether, going forward, penalties will increase where SEPs are unavailable as mitigation.  I know where this administration’s proclivities lie, but I’m going to stop speculating while I’m ahead of the game.

NGOs 1, Trump EPA 0: The First Skirmish in the Great Environmental Rollback War Goes to the Greens

Posted on July 11, 2017 by Seth Jaffe

Last week, the D.C. Circuit Court of Appeals handed environmentalists at least a temporary win in what I think was the first case to reach judicial decision in Scott Pruitt’s great environmental roll-back tour of 2017.  The Court rejected EPA’s effort to stay the effective date of the New Source Performance Standards for fugitive emissions from oil and natural gas operations, pending EPA’s reconsideration of certain aspects of the Obama-era rule.

Notwithstanding Judge Brown’s dissent, EPA’s position on the merits seemed barely credible.  I understand the argument that the stay was not final agency action and thus not judiciable.  It just doesn’t seem compelling to me.  If EPA had amended to rule to extend the compliance deadlines, that clearly would have been subject to judicial review.  Why should the answer be different because EPA styles its action as a stay, rather than a revision to the regulations?  The impact is exactly the same.

As to EPA’s position that the four issues which it was reconsidering could not have been addressed during the original rulemaking by the industry groups now seeking reconsideration, EPA’s position was almost embarrassing.  As the Court repeatedly demonstrated, not only could the industry groups have addressed the issues during the original rulemaking, but they actually did so.  Moreover, EPA did consider those comments and, at least in parts, adopted them in the final rule.  My favorite example is the court’s discussion regarding the criteria for exemption for well-site pneumatic pumps.  As the Court noted:

[The American Petroleum Institute] … proposed precisely the technical infeasibility language EPA adopted in the final rule, suggested that an engineer certify technical infeasibility, and justified its proposed exemption based on a lengthy description of why existing sites were not designed to “handle” EPA’s proposal.

The record thus belies EPA’s claim that no industry group had an opportunity to comment on the “scope and parameters” of the pneumatic pump exemption.

The real question at this point is whether this decision is any kind of harbinger.  Practitioners know that the record of the Bush EPA in rolling back Clinton rules was shockingly poor, given Chevron deference.  Are we going to see the same again?  The Court threw EPA what could prove to be a rather large fig leaf by noting that the decision does not prevent EPA from reconsidering the methane rule.  The Court also quoted FCC v. Fox Television Stations – the same case on which EPA is relying in its rollback of the WOTUS rule:

[EPA] is free to [reconsider the rule] as long as “the new policy is permissible under the statute.., there are good reasons for it, and … the agency believes it to be better.”

This is where the battles are going to be fought over the next several years.

Trump's "2 for 1" EO: Can You Say "Arbitrary and Capricious"?

Posted on June 6, 2017 by Seth Jaffe

Last month, Mark Walker posted about Executive Order 13771.  Mark’s post was generally favorable, noting that a number of other countries have implemented some version of what is known as a “regulatory budget.”  This post provides something of a counterpoint to Mark’s. 

Put simply, I think that the Order is indefensible.  It’s not about regulatory reform.  It’s a transparent attempt to halt environmental regulation in its tracks, without regard to the benefit those regulations provide.

This week, on behalf of our client, the Union of Concerned Scientists, Foley Hoag filed an amicus brief in support of the plaintiffs in the case challenging the EO.  One paragraph from the brief pretty much summarizes the argument:

It is important to note, as Executive Order 13771 acknowledges, that agencies are already required, where not prohibited by law, to ensure that the benefits of regulations exceed their costs. Thus, the only impact of the Executive Order is to prohibit agencies from promulgating regulations whose benefits exceed their costs, unless they eliminate two other regulations whose benefits also exceed their costs. This is the definition of unreasoned decisionmaking. It is also a thumb in the eye of Congress, which enacted public health and environmental statutes in order to benefit the public.

It is a bitter irony that the government is defending the EO in part on the basis that it is just another in a long line of regulatory reform EOs, even though the EO is in fact a repudiation of those prior orders, not an extension of them.  This order is not about cost-benefit analysis; it is about cost-only analysis.  By definition this approach ignores the public benefits that the underlying statutes are intended to provide.  Thus, the “savings clause” cannot save the EO, because there is nothing left to save.

Perhaps It Should Be Renamed the “Really, Really, Endangered Species Act”

Posted on May 1, 2017 by Seth Jaffe

Last Friday, the 9th Circuit Court of Appeals affirmed a District Court decision ruling that the Fish & Wildlife Service decision that listing of the whitebark pine as endangered or threatened was “warranted, but precluded” was not arbitrary and capricious.  The decision seems correct, but as the frustration of the Court reflects, it’s only because the ESA is designed to fail.

The procedural history is lengthy and not really necessary to repeat here.  Suffice it to say that the whitebark pine is both an important species and in significant distress, if not dire straits.  In response to a listing petition, the FWS issued a finding that listing the whitebark pine is “warranted, but precluded.”  Thus, the FWS instead added the whitebark pine to the list of “candidate species.”

A candidate species is one for which [FWS has] on file sufficient information on biological vulnerability and threats to support a proposal for listing as endangered or threatened, but for which preparation and publication of a proposal is precluded by higher priority listing actions.

The particular issue here was whether the FWS has any authority to base listing decisions on anything other than the Listing Priority Number assigned to the species.  As the Court noted, however, the ESA provides only that the ranking system is intended to “assist” in the identification of species for listing.  There is nothing that makes the LPN determinative.

That’s all well and good, but it does nothing for the whitebark pine.  As the Court stated:

When pending actions outstrip available resources, the Secretary must make its choices and live with its priorities, even though that means leaving factually (if not listed) threatened or endangered species without the protections of the ESA.

In other words, to paraphrase Eddie Cochran, “I’d like to help you tree, but you’re too inanimate to vote."

Does Chevron Ever Permit EPA to Rewrite a Statute? EPA’s Release Reporting Exemptions Are Struck Down

Posted on April 13, 2017 by Seth Jaffe

On Tuesday, the Court of Appeals for the District of Columbia vacated EPA’s final rule governing reporting of air releases from animal feeding operations.  The Court found that EPA had no statutory authority to exempt AFOs from the reporting regulations.

The decision is also important because it is another in a recent line of cases regarding the extent of agency authority to interpret statutes.  The issue was whether EPA had authority to exempt smaller AFOs from reporting requirements, on the ground that it could not:

foresee a situation where [it] would take any future response action as a result of such notification[s].

Although EPA did not explicitly justify its rule on de minimis grounds, the Court understood EPA to be making a de minimis argument and analyzed the rule in that context.  The Court concluded that EPA had not justified a de minimis exception, because:

an agency can’t use it to create an exception where application of the literal terms would “provide benefits, in the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged benefits are exceeded by the costs.”

Here, the Court found that there were benefits to requiring reporting without a de minimis exception.  That was enough to vacate the rule.

It is worth noting the concurrence from Judge Janice Rogers Brown, who agreed that EPA had overstepped, but was concerned about the panel opinion’s summary of Chevron as being focused on whether the agency’s interpretation is “reasonable.”  Stoking the anti-Chevron flames, Judge Brown wrote to make clear that the “reasonableness” inquiry does not apply at step one of Chevron.  Ever-vigilant, she wants to be certain that courts do not abdicate their duty to state what the unambiguous language of a statute means.

I don’t have any problem with that.  Phase I of Chevron is an important bedrock principle.  If there’s no ambiguity, there’s no deference.  However, it’s worth noting that Judge Brown also stated that:

an Article III renaissance is emerging against the judicial abdication performed in Chevron’s name.

Notwithstanding the congressional discussion of this issue, I remain skeptical that any such “Article III renaissance” is occurring.  One concurrence from one appellate judge who happens to be named Gorsuch does not a renaissance make.

Of course, the really important part of Judge Brown’s concurrence was her citation to Luck Be a Lady, from Guys and Dolls, the greatest musical of all time.

Should Courts Defer to EPA’s Scientific Expertise if EPA Gets Rid of Its Expertise?

Posted on April 6, 2017 by Seth Jaffe

Earlier this week, the 9th Circuit Court of Appeals rejected challenges to the Federal Implementation Plan EPA promulgated after finding that Arizona’s regional haze State Implementation Plan was inadequate.  I think that the result is both correct and unsurprising.

However, one part of the opinion – a recitation of black-letter law – caught my eye.  In discussing the standard of review, the court noted that the arbitrary and capricious standard is “highly deferential.”  No surprise there.  It also noted that courts are particularly deferential when reviewing agency scientific determinations.  Also no surprise.

And yet….

What happens if EPA eliminates all of its climate science expertise, and then eliminates the Endangerment Finding?  Certainly, a court could still recite the traditional level of deference, but then note that “deference is not abdication” and rule that EPA’s decision must be reversed even under the deferential threshold.

And yet….

What happens if the Trump administration repeatedly makes regulatory decisions based on a “scientific” viewpoint that is so broadly rejected by the scientific community that “scientific” must be put in quotation marks?  Might courts at some point conclude that EPA has forfeited the deference normally given to agency scientific decisions?

Just asking.  It’s purely a hypothetical, of course.

The Conservative Case for Chevron Deference: Chapter 2

Posted on March 22, 2017 by Seth Jaffe

In January, I argued that conservative opposition to the Chevron doctrine seemed inconsistent with conservative ideology and I noted, at a practical level, that opposition to Chevron does not always yield the results conservative want.

gray wolf, Canis lupus, Gary Kramer, USFWS

Earlier this month, the Court of Appeals for the District of Columbia provided more evidence supporting my thesis.  The Court affirmed the decision of the Fish and Wildlife Service to delist the gray wolf as endangered in Wyoming, reversing a district court decision in so doing.  Part of the case turned on whether the FWS service could approve Wyoming’s management plan, even though the plan relied on non-regulatory provisions.  The Court of Appeals noted that the:

ESA provides no definition of “regulatory mechanisms,” and neither the district court nor appellees suggests why the Secretary’s interpretation is unreasonable.

Sounds like a case for Chevron deference to me – and it sounded that way to the Court as well.  When the Court combined Chevron deference to agency interpretation of the statutory language with traditional arbitrary and capricious review regarding the FWS’s scientific judgment – another area where deference to the agency is obviously not a left-wing plot – affirmance of the FWS delisting decision was the result.

Maybe I’ll make this a regular feature of this blog.  If I miss other cases making the conservative argument for Chevron, let me know.

POTUS, SCOTUS & WOTUS: What Do They Have in Common With Michael Stipe and Jack Black?

Posted on March 15, 2017 by Jeff Thaler

Then-candidate Donald Trump’s unauthorized use of REM’s 1987 song, “It’s the End of the World as We Know It (And I Feel Fine)”, during a 2015 campaign rally sparked a sharp objection by the band’s Michael Stipe. Flash forward to 2017 and now-President Trump has been flexing his executive powers in a number of legal fields; for many environmental, energy or immigration lawyers it’s the end of the regulatory world as we knew it for decades, and they are not feeling so fine.

Executive Orders (EOs) raise classic constitutional law issues of the separation of powers, in that they often are used for “executive legislating” even though there is no explicit constitutional authority for them. EOs also blur traditional regulating lines, because they are not issued with public notice or comment, and usually state that they do not “create any right or benefit enforceable at law or in equity by any party against the United States.”

An EO can have the force of law, however, if the EO is based on either the Constitution or a statute, per the Supreme Court’s 1954 Youngstown decision. That is why one must carefully read each EO to determine the grounds of its authority, and then whether it is possibly contrary to a) existing laws or b) constitutional provisions such as due process or equal protection.

Facing an uncooperative Congress, POTUS Obama came to rely on EOs in his last two years in office (see this prophetic 2015 School House Rock episode). POTUS Trump took to EOs right out of the gate. The two Trump EOs that have garnered the most publicity and outcry deal with immigration restrictions The first EO was challenged in numerous courts, and the 9th Circuit issued on February 9 the first appellate decision on a Trump EO. Interestingly, and instructive for future litigants and legal counsel, the first issue addressed by the 9th Circuit, and the one they discussed the most, was . . . standing. The court then moved on to reviewability, and only briefly due process and equal protection. The complaint’s count on violating the Administrative Procedure Act for not following proper rulemaking proceedings was not even discussed in the ruling.

Trump issued two EOs of more relevance to environmental and energy lawyers. First was the January 30, 2017 EO entitled “Reducing Regulation and Controlling Regulatory Costs”, aka the add-one-subtract-two, no-increase-in-incremental-costs [undefined]- of-regulations EO. That was followed by the February 2, 2017 Interim Guidance of the OMB implementing (and implicitly amending) the EO by limiting it to “significant regulatory actions”—i.e. those of $100 million or more of annual effect on the economy. A week later the EO and IG were both challenged in federal court in D.C. as violating the APA, separation of powers, the Constitution’s “Take Care Clause”, and as being ultra vires. Plaintiffs referenced in part OSHA, TSCA, the ESA and CAA, and other energy/environmental laws as being inconsistent with the EO’s requirement that a new rule can only be promulgated if its cost is offset by the elimination of two existing rules. The EO ironically signals the possible demise of cost-benefit analysis —first mandated by then POTUS Ronald Reagan by an EO in 1981—by disallowing consideration of the economic benefits of a regulation when weighing its costs.

Many more EOs are promised in the coming weeks concerning a variety of environmental and energy laws and regulations. Early in the wave was the February 28, 2017 EO with the majestic name of “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ [aka WOTUS] Rule”. This EO directs the EPA to review the WOTUS Rule while keeping in mind the national interest of “promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the States under the Constitution.” Since WOTUS was a final rule published in the Federal Register, it can only be repealed and replaced by a new rule that goes through full notice-and-comment rulemaking, not simply by a non-legislative guidance or policy statement.

One who lives by the EO sword can slowly die from it too. POTUS Obama did not submit for approval to Congress the Paris Climate Change Agreement of 2016, calling it an “executive agreement”, thus POTUS Trump does not need Congressional approval to undo it. The Agreement terms do not allow withdrawal by a party before November 2019. However, the U.S. could withdraw from the overarching United Nations Framework on Climate Change with one year notice, if the Senate approves, and that in effect would undo our Paris “commitments”. And as a practical matter, the current Administration could also just choose not to implement the Paris obligations, because there is no binding duty to hit the emission reduction targets.

In sum, we live in interesting times.   Although Jack Black has said of this Administration that “It’s the end of the world”, for College members and their clients it’s the start of some fascinating new adventures in regulation and litigation. Stay tuned. 

Rifle Shots – Unleashing the Power of the Tweak

Posted on February 24, 2017 by JB Ruhl

Here’s a thought exercise: I’ll give you a budget of 25 words (including conjunctions, articles, and all the other little ones). You use up a word by either deleting, adding, or replacing one in an existing federal environmental or natural resources statute. How much could you transform the field of practice with just those 25 word edits? The answer is, quite a lot.

When we think of statutory reform, we usually think big, right on up to “repeal and replace.” But after more than 25 years of very little legislative action on federal environmental and natural resources statutes—the National Wildlife Refuge Improvement Act, Sustainable Fishing Act, and the recent Toxic Substances Control Act reforms are a few exceptions since the 1990 Clean Air Act amendments—much rides on the accumulations of judicial and agency interpretations of the meaning of a word here and a phrase there. As we enter a period of potential legislative volatility in this field, therefore, the rifle shot may be just as much in play as the nuclear bomb.

Like any statutory reform, rifle shots can make regulatory statutes either more or less regulatory. For example, one could add “including carbon dioxide” or “excluding carbon dioxide” in just the right place in the Clean Air Act and with those three words put an end to a lot of debate and litigation. Given the current political climate, however, it’s reasonable to assume any rifle shot would be aimed at reducing regulatory impacts. But even with just 25 words in the clip, one could transform the impact of several regulatory programs before running out.

For example, delete the words “harm” and “harass” from the statutory definition of “take” in the Endangered Species Act (ESA) (16 U.S.C. 1532(19)) [LINK 1] and you have a very different regulatory program. Much if not most of the land use regulation impact under the ESA stems from the inclusion of those two words; without them, the ESA’s prohibition of unpermitted take would restrict actions like hunting, killing, shooting, and wounding, but could not reach indirect “harming” from habitat modification.   Of course, the interagency consultation program under Section 7 (16 U.S.C. 1536(a)(2)) [LINK 2] would still be in place, prohibiting federal agencies from taking actions that “jeopardize” the continued existence of species. But just add “substantially” before “jeopardize” and the practical effect of that prohibition is greatly reduced.

I’ve managed to transform the ESA, vastly reducing its regulatory impact, with just three word tweaks. Twenty-two to go. Here are some more examples.  I’ll let readers evaluate the impacts.

·         Speaking of evaluating impacts, the environmental impact review process of the National Environmental Policy Act (NEPA) can really slow things down (42 U.S.C. 4332(B)). [LINK 3] To “streamline” the process, add the word “direct” before “environmental impact” in subpart (C)(1), which would eliminate the current practice of requiring analysis of indirect and cumulative impacts, and delete subpart (C)(iii), which requires agencies to evaluate “alternatives to the proposed action,” to remove a factor that bogs down much NEPA litigation. (Six more words down, sixteen to go.)

·         Heard all the commotion about which “waters” are subject to the Clean Water Act? Clear that up by changing the statutory definition of “navigable waters” (33 U.S.C. 1362(7)) [LINK 4] to read “waters of the United States subject to navigation.” That would be pretty extreme—it would remove most wetlands from jurisdiction—so one could control how far jurisdiction extends over wetlands by adding and their adjacent wetlands.” This would draw the line much closer to navigable water bodies than current interpretations reflected in Supreme Court opinions and agency regulations—Rapanos and the Water of the United States Rule become history. (Seven more words down, nine to go.)

·         And if you also want to put to rest the question whether the Clean Water Act applies to groundwater, edit the front end of the definition to read “surface waters.” (Another word down, eight to go.)

·         The Circuits are split over whether the Migratory Bird Treaty Act’s list of prohibited activities (16 U.S.C. 703(a)), [LINK 5] which includes to “take” or “kill,” sweeps within the statute’s reach any “incidental” taking or killing—injury or mortality that is not the direct purpose of the activity, such as strikes by wind turbines. Easy to solve! Add the word “purposeful” before the list of prohibited activities. (Another word down, seven to go.)

·         And, while we’re at it, let’s go ahead and add “excluding carbon dioxide” to the Clean Air Act definition of “air pollutant” (42 U.S.C. 7602(g)). [LINK 6] Adios, Clean Power Plan. (Three more words down, leaving just four to go.)

I’ll leave it to readers to think about how to use the last four words. The point here is that the system of environmental and natural resources law has become quite fragile. With Congress out of the picture for so long, courts and agencies have built up an interpretation infrastructure under which a single word or phrase often carries a tremendous burden of substantive and procedural program implementation. As a consequence, a mere tweak here and there can have dramatic effects on the program.

Granted, anyone who closely follows the statutes tweaked above will quickly appreciate the impact of any of the tweaks, and I’ve chosen some powerful examples unlikely to slip by any such experts. But subtler tweaks buried deep in a larger bill could more easily fly below the radar.

It remains to be seen whether Congress takes this rifle shot approach or goes bigger.  Rifle shots don’t eliminate or “gut” entire programs, which may be the current congressional appetite, but the above examples show the potency of this approach. I for one will be keeping my eyes out for rifle shots in bills every bit as much as I will be following the big bomb reform efforts. Do not underestimate the power of the tweak!

The Conservative Case For Chevron Deference

Posted on January 30, 2017 by Seth Jaffe

With GOP control of Congress and the White House, conservatives appear to have Chevron deference in their crosshairs.  Put simply, I don’t get it.  There are at least two good reasons why conservatives should prefer Chevron deference to no deference.

First, the alternative is for courts to decide all questions of agency authority.  But haven’t conservatives railed against unelected judges for years?  Bureaucrats are unelected, but at least they work for the elected President.  Isn’t EPA more likely to be responsive to President Trump than federal judges would be?

Second, the EDFs and NRDCs of this world would laugh hysterically at the notion that they have more sway with EPA than the regulated community.  Anyone ever heard of “Regulatory Capture”?

The argument in support of Chevron was made cogently by Ed McTiernan in a recent blog post, but the strength of the argument was really brought home by the decision this past week in Catskill Mountains Chapter of Trout Unlimited v. EPA, in which the 2nd Circuit Court of Appeals – to fairly wide surprise – reversed a district court decision that had struck down EPA’s “water transfer” rule.  

The rule was much favored by the regulated community, but there were very good jurisprudential reasons to affirm the District Court.  Indeed, the decision was 2-1 and even the majority opinion repeatedly noted that, were it writing on a blank slate, it might well prefer an interpretation that would strike down the rule.

Why, then, did the Appeals Court reverse the District Court and affirm the rule?  Chevron deference, of course.

Conservatives, be careful what you wish for.

“Reports of My Death Are Greatly Exaggerated”

Posted on January 27, 2017 by Robert M Olian

So said Mark Twain (actually, he didn’t), and now the same can be said for EPA’s rule exempting water transfers from NPDES permitting requirements. When I last addressed this topic nearly three years ago in “Ashes to Ashes; Waters to Waters – The Death of EPA’s Water Transfer Rule”, a federal district court had just vacated the rule seeking to clarify EPA’s position that transfers of water between navigable bodies of water do not require NPDES permits. See Catskill Mountains Chapter of Trout Unlimited, Inc. v. United States Environmental Protection Agency (SDNY, 3/28/2014)

Displaying a prescience that would make Carnac the Magnificent proud, I closed that earlier post with the assertion that “the only certainty is that litigation over the Water Transfer Rule will continue to flow.” I am therefore personally pleased to report that flow it has, the Second Circuit having now overturned the district court decision in a 2-1 opinion issued on January 18, 2017. The majority opinion upheld EPA's interpretation of the Clean Water Act to exempt water transfers, finding it was a “reasonable construction of the Clean Water Act supported by a reasoned explanation” and was entitled to deferential review under the Supreme Court’s Chevron doctrine.

 Not content to rest on my laurels, I’m going to make another prediction. The Second Circuit won’t agree to rehear en banc and, if certiorari is sought, the Supreme Court won’t take the case. All of which means that, except perhaps for one last post to gloat yet again about my ability to see into the future, this is the last you’ll hear about litigation over the water transfer rule.

The DOJ Environment Division and State Joint Enforcement

Posted on January 25, 2017 by John Cruden

As I reflect on my tenure as Assistant Attorney General, I have been especially proud of the Division’s cooperation with state and local governments in matters encompassing all aspects of the Division’s work – affirmative and defensive, civil and criminal. When we combine forces with our state and local partners, we leverage the resources of multiple sovereigns and, ultimately, achieve more comprehensive results for the American people.

In 2016, we had unprecedented success in civil enforcement with states, due primarily to the record‐breaking settlement with BP in the Deepwater Horizon Oil Spill litigation. In April 2016, the trial court entered the final consent decree in the litigation, thereby resolving civil claims of the United States and the five Gulf Coast states against BP. The claims arose from the 2010 blowout of the Macondo well and the resulting massive oil spill in the Gulf of Mexico. BP will pay the U.S. and the five Gulf States more than $20 billion under the consent decree, including: 1) a $5.5 billion civil penalty; 2) more than $8.1 billion in natural resource damages; 3) $600 million in further reimbursement of clean‐up costs and some royalty payments; and 4) up to $6 billion in economic damage payments for the Gulf States or their local units of government. This resolution is the largest settlement with a single entity in Department of Justice history; it includes the largest civil penalty ever awarded under the Clean Water Act, the largest ever natural resources damages settlement and massive economic damages payments to our state partners.

And, just this month we announced our plea agreement and civil consent decree with Volkswagen.  In addition to the combined $4.3 billion penalty, corporate felony plea, and individual prosecutions, the previous civil consent decrees also provide $2.7 billion to all states for projects they select from the CD options to offset NOx pollution caused by the illegal car emissions.  When the various settlements with VW are combined, and their value estimated, it approaches $20 billion. 

Our state connections were vital to our criminal work. Cooperation ranged from providing training to state partners to close coordination in wildlife and pollution investigations.  Prosecutors from ENRD’s Environmental Crimes Section presented at several events where state investigators learned of opportunities and methods for developing wildlife and environmental crimes cases, either in concert with federal counterparts or independently. Our prosecutors also trained their counterparts on the Division’s recently acquired authority over worker safety matters.

But environmental enforcement is not where ENRD’s work with state and local partners ends. We also are working with our counterparts at the state and local level in a relatively new area of responsibility for the Division – civil and criminal enforcement of federal laws that provide for humane treatment of captive, farmed, and companion animals across the United States. In July 2016, ENRD and the Office of Justice Programs co-hosted a roundtable discussion on Animal Welfare Enforcement. We were joined by more than 100 leaders in the area, including representatives of federal agencies, states and local governments, as well as researchers, scientists and others in the animal welfare field. The roundtable allowed us to focus collectively on information sharing, organizational strategies and cooperation in animal welfare enforcement.

Finally, ENRD continued to develop and enhance relationships with our state counterparts by participating in several forums designed to share experiences and expertise. In the spring of 2016, for example, I had the honor of being the first ENRD Assistant Attorney General invited to speak to the annual meeting of the Environmental Council of the States, the national association of state and territorial environmental agency leaders. I joined colleagues from EPA, New Mexico and academia to discuss innovative ways to measure the success of environmental enforcement. ENRD attorneys also partnered with the National Association of Attorneys General to present webinars on topics of mutual interest, such as e‐discovery, and share expertise regarding federal bankruptcy law in the context of environmental cases. Finally, just this week we collaborated with the National Association of Attorneys General to publish Guidelines for Joint State/Federal Civil Environmental Enforcement Litigation, which is now available on the DOJ website.

As I depart from the Division, we are in good shape. In December, the Division accepted an award by the Partnership for Federal Service, which ranked the ENRD as the #2 best place to work in all of the federal government, as well as the best place to work in the Department of Justice. With more than 300 Federal agency subcomponents competing, our new rank places us well into the top 1% of all Federal workplaces.

The NSR Regulations Still Make No Sense: The 6th Circuit Reverses the DTE Decision Based on a 1-Judge Minority Opinion

Posted on January 17, 2017 by Seth Jaffe

Last week, the 6th Circuit Court of Appeals reversed – for the second time – a District Court decision granting summary judgment to DTE Energy in the United States’ case alleging that DTE Energy had violated EPA’s NSR regulations.  According to the 6th Circuit, EPA has authority to bring an enforcement action against DTE Energy, notwithstanding that the regulations don’t provide for EPA review of DTE Energy’s emissions projections prior to construction and also notwithstanding that the project did not in fact result in a significant net emissions increase.

One might well be surprised by the result, but the result itself is not the most surprising part of the case at this point.  What’s really surprising is that the United States won the case even though only one of the three judges on the panel agreed with EPA’s position.

How could such a thing happen, you might ask?  Here’s the best I can do.  Judge Daughtrey, author of the panel opinion, believes that EPA has the authority to second-guess DTE’s estimates if they are not adequately explained.  Judge Rogers disagreed and dissented.  Judge Batchelder also disagreed with Judge Daughtrey’s views, pretty much in their entirety.  However, Judge Batchelder concluded that she had already been outvoted once, in the first 6th Circuit review of this case and she felt bound to follow the decision in DTE 1.  The law remains an ass.  

Even were Donald Trump not about to nominate a Supreme Court justice, I’d say that this case is ripe for an appeal to the Supreme Court and, if I were DTE, I’d pursue that appeal vigorously and with a fairly optimistic view of my chances.

And once again, I’ll suggest that the very fact that the NSR program can repeatedly thrust such incomprehensible cases upon us is itself reason to conclude that the entire program is ripe for a thorough overhaul – or perhaps elimination.

Doin’ the Dunes – I Thought It Was Over

Posted on December 20, 2016 by Joseph Manko

In July I wrote what I thought surely would be my last blog on the more than three years of legal challenges by the City of Margate, New Jersey Commissioners with their decision not to appeal the state and federal courts’ upholding the State’s and Army Corps’ authority to build dunes in Atlantic County, New Jersey.  I titled the blog “Signing Off” – concluding that the fat lady had in fact sung. 

Well I was wrong. 

Six residents have now paraded into U.S. District Court with their expert, Chuck Dutill, a civil engineer and hydrologist, to testify before Judge Renee Marie Bumb, who had decided the earlier case.  Judge Bumb called the testimony “pretty fantastic,” but confirmed that this was the gist of the testimony:

“It sounds like from your testimony the Army Corps is turning the beach into a junkyard,” she said. “You’ve described a big parade of horribles: animal feces, oils, adults being hurt. It sounds pretty fantastic. Is that in some way hyperbole if you don’t mind? Is that your testimony?”

“That is absolutely my testimony,” Dutill replied.

“What I’m hearing is what the defendant proposes to do is turn the beach of Margate into the junkyard of Margate,” the judge said. “That is what I’m hearing.”

And until she rules – and as expected rules against the residents – and they decide to appeal, the fat lady continues to stand by for yet another reprise.

FWS Goes Back to Square One On Listing the Wolverine. It’s Not Going to Be Any Easier This Time Around.

Posted on October 27, 2016 by Seth Jaffe

In April, Judge Dana Christensen vacated the Fish and Wildlife Service’s decision to withdraw its proposed listing of a distinct population segment of the North American wolverine WolverineSnowas threatened under the Endangered Species Act (“ESA”).  Bowing to the inevitable, the Fish and Wildlife Service ("FWS") has published in the Federal Register a formal acknowledgement that the Court’s vacatur of the withdrawal of the proposed listing returns the situation to the status quo.

In other words, the proposed rule that would have listed the wolverine distinct population segment ("DPS") is back in play.  Specifically, the FWS announced that

"we will be initiating an entirely new status review of the North American wolverine,hugh-jackman-wolverineto determine whether this DPS meets the definition of an endangered or threatened species under the Act, or whether the species is not warranted for listing.

FWS also reopened the comment period on the proposed listing and invited the public to provide comment, identifying nine specific areas in which it sought comments, including

"Information on the projected and reasonably likely impacts of climate change on the wolverine and its habitat, including the loss of snowpack and impacts to wolverine denning habitat.

This is all well and good and certainly required under Judge Christensen’s order, but neither Judge Christensen nor FWS has the tools necessary to address the core issue here, i.e., the unwieldy nature of the ESA.  It simply wasn’t designed to solve all of the ecological problems resulting from climate change.

It would be nice if Congress weren’t completely dysfunctional.

Flint litigation: an interim update

Posted on October 13, 2016 by Jeffrey Haynes

Along with the flood of news coverage of the Flint water crisis comes the flood of litigation.  So far, early indications show a wrong in search of a remedy, and for criminal defendants, just the expected plea deals.  Here are some highlights.

In April, a federal district judge dismissed for lack of subject matter jurisdiction a §1983 claim for “safe and portable water” as preempted by the Safe Drinking Water Act.  The case is on appeal.

Class actions have been filed against state and municipal officials in federal court, the Michigan Court of Claims, and Genesee County Circuit Court, seeking damages for personal injuries, property damages, and relief from water bills.  Along with the usual governmental immunity defense, defendants assert a statute of limitations defense, with a fair likelihood of success.  The governmental immunity defense is complicated by Governor Snyder admitting fault.  That admission strengthens plaintiffs’ gross negligence exception to governmental immunity.

So far, the Attorney General’s criminal charges have resulted in the usual plea deals by underlings.  The Flint water quality supervisor whom I lauded in a previous post as the only principled public servant in this mess (a position with which the Attorney General agrees) pled no contest to willful neglect of duty; the plea is essentially nothing, because the court took the plea under advisement with dismissal in one year if the supervisor cooperates with the investigation.  A state official reached a second plea deal, pleading no contest to willful neglect of duty regarding an outbreak of legionnaire’s disease with the usual cooperation clause.

Politics saturates the Flint legal landscape.  Attorney General Bill Schuette is widely expected to run for governor in 2018 and must therefore appear to be doing something, such as filing an unusual professional negligence and public nuisance claim against the Flint outside engineering firms.  And when the Flint mayor notified Michigan of intent to sue the state, the state receivership board with continuing jurisdiction over Flint removed the city’s authority to sue.

Stay tuned.

Is You Is Or Is You Ain’t Transformative?

Posted on October 4, 2016 by Andrea Field

More about that title later, but first let me set the stage.  On September 27, 2016, the D.C. Circuit, sitting en banc, heard argument in West Virginia v. EPA, in which state, industry, and labor petitioners challenge EPA’s Clean Power Plan (CPP, the Plan, or the Rule).  The Plan regulates carbon dioxide emissions from existing power plants under Clean Air Act (CAA) §111(d).  I will refrain from addressing issues on which the trade and mainstream press have opined at length (e.g., the judges’ frustration at being asked to make policy decisions because Congress has failed to act and that participants – judges, lawyers, parties, reporters, the public – had to sit through almost 7 hours of argument in one day, in addition to the hours many spent waiting in line).  Instead, I offer an ACOEL-centric tour, in non-chronological order, of the five “segments” of the September 27 argument. 

Argument Segment #2:  The Battle Between CAA §§112 and 111(d).  Aficionados of the College’s 2014 white paper on EPA’s §111(d) regulatory authority will recall the difference of opinion over whether – under the 1990 Amendments to the CAA – EPA is prohibited from regulating power plants under CAA §111(d) if EPA already regulates power plants under CAA §112.  Plan challengers point to the plain meaning of §111(d)(1)(A) as it appears in the U.S. Code.  Plan supporters point to the existence of a “conforming amendment” to §111(d)(1)(A) found in the Statutes at Large but omitted from the U.S. Code, and they argue that EPA’s approach is a valid attempt to reconcile that amendment with the U.S. Code.  After listening to the judges express frustration at not being able to satisfyingly reconcile the two versions, I recalled D.C. Circuit Judge Leventhal’s concurring opinion in Citizens to Save Spencer County v. EPA, in which he concluded that contradictory CAA provisions should be viewed as “countermanding.”  Quoting from Eugene Field’s poem “The Duel” – about the fight between the gingham dog and the calico cat – he summed up the irreconcilable differences as follows:  “The tension between the two animals culminates in these final lines of doggerel:  ‘The truth about the cat and pup is this, They ate each other up.’ ”

Argument Segment #3:  Constitutional Issues.  If forced at knife-point to articulate the first portion of this argument, which began at 2:35 p.m., right after the lunch break, I would be unable to do so, other than to say that the word “commandeering” cropped up a lot.  More interesting was how the second advocate for petitioners on this point – Professor Laurence Tribe of Constitutional law fame – was able to expand his separation-of-powers argument into a further analysis of issues argued during the morning session. 

Argument Segments #4 and #5:  Notice and Record-Based Issues.  At the end of a very long day, the panel heard arguments on (a) whether EPA’s standards are “achievable” and whether parts of the Plan’s approach have been “adequately demonstrated” under §111; and (b) whether the final rule is so different from what was proposed that the public lacked notice and an opportunity to comment.  Petitioners arguing the former point (the unachievability of program requirements) faced a weary panel, which pondered what the options for state and source relief would be if the Rule is upheld but later turns out to be a train wreck.

A colleague describes as follows the situation that gives rise to parties complaining that they had no notice of what a final rule would require because EPA’s proposal was so different:  “EPA may propose an apple and finalize an orange.  That’s OK; they’re both fruits.  What EPA may not do (and what petitioners argue EPA has done here) is to propose an apple and finalize a pork chop.”  Dick Stoll passionately argued – in his June 7, 2016 post for ACOEL – that previous 3-judge panels in the D.C. Circuit have not properly dealt with this lack-of-notice issue.   Those panels refused challengers’ attempts to overturn pork chops, saying challengers of pork chops must first file administrative petitions for review under CAA §307(d)(7)(B) and then wait (for what could be years, if ever) for EPA to act on those petitions.  Dick argued that the only way the previous 3-judge panel decisions would ever be overturned was by action of the entire court, sitting en banc.  I cannot promise Dick the entire court will overturn the previous panels’ reading of §307(d)(7)(B), but I can say that Tom Lorenzen teed up the issue.  When asked by Judge Griffith whether this argument appeared in petitioners’ briefs, Lorenzen said it did not because when petitioners wrote their briefs, the case was going to be heard by a 3-judge panel.  But said Lorenzen, looking up at Judge Griffith, “Now we are here.”  To which Judge Griffith replied, “And who else to ask but an en banc court?”  “Exactly,” said Lorenzen. 

Argument Segment #1:  Core Legal Issues.  Although I visit Argument Segment #1 last, the fate of the Clean Power Plan may well rest on how the panel addresses the issue raised at the very beginning of the day:  whether or not the Plan is “transformative.”  The Supreme Court, in UARG v. EPA, held that EPA cannot engage in a “transformative expansion” of its regulatory authority absent “clear congressional authorization” to do so.  Petitioners argue that EPA’s Clean Power Plan amounts to a transformative expansion of EPA’s explicit regulatory authority and thus is illegal.  EPA argues the program is not “transformative”; indeed, says EPA, the Rule is very similar to other CAA programs that the D.C. Circuit has upheld.  So, is the Rule “business as usual” or is it “transformative”?

And so we return to the title of this post.  I cannot predict what the D.C. Circuit will decide, but I think its determination will revolve around how the en banc panel answers the following question about the Clean Power Plan:  Is You Is or Is You Ain’t Transformative?  And that question prompts me to offer these final lines of doggerel in memory (and honor) of Judge Leventhal:

 

To predict the end here, it’s informative

To know if C-P-P is transformative.

To prevail in this Court,

One must prove that the sort

Of change caused by that Rule is enormative.

New Mexico Supreme Court to Determine if Copper Rule Prevents, Rather Than Encourages, Ground Water Pollution

Posted on September 23, 2016 by Thomas Hnasko

The New Mexico Water Quality Control Commission enacted what is arguably the most comprehensive copper mine remediation rule in the country.  The Copper Rule requires copper mines to uniformly implement prescriptive measures of pollution control and to protect ground water at “foreseeable places of withdrawal.”  But does the Copper Rule really prevent pollution, as required by the New Mexico Water Quality Act?  Not so, say the Attorney General and various NGOs, who appealed the case to the New Mexico Court of Appeals.  They claimed that the Copper Rule’s uniform monitoring criteria, which require the placement of a monitoring well network as close as practicable around the perimeter of mine units, does not sufficiently protect ground water and therefore fails to satisfy the Water Quality Act’s mandate that contaminant concentrations not exceed permissible standards at places of withdrawal.  The Court of Appeals affirmed the Commission’s rule-making in Gila Resources Information Project v. N.M. Water Quality Control Comm’n, holding that the determination of a “place of withdrawal” has always been and remains a matter committed to the Commission’s discretion. [Link to Case.] 

The New Mexico Supreme Court will now consider whether the New Mexico Water Quality Control Commission has the authority, under the Water Quality Act, to adopt the regulations imposing prescriptive pollution controls and defining by rule, rather than on a case-by-case basis, the type of monitoring controls which essentially define protectable ground water as that existing on the exterior of active mine units.  After a number of swings of the bat, the petitioners in the Supreme Court have refined their arguments. They now claim that the Water Quality Act requires a case-by-case determination of a place of withdrawal, based on particular aquifer characteristics, rather than a definition derived by rule.  To succeed with this challenge, the petitioners must overcome the legislature’s mandate, in the 2009 amendments to the Water Quality Act, that the Commission adopt uniform monitoring requirements for the entire copper industry.  The battle seems to be whether the Copper Rule is sufficiently flexible to protect all places of withdrawal – regardless of where located – or whether the rule imposes a de facto definition of a place of withdrawal based on criteria that may not be tailored specifically to the aquifer characteristics at a particular site.  Oral argument is set for September 28, 2016.

The Drama of the Massachusetts Power Wars

Posted on September 20, 2016 by Lisa C. Goodheart

Sometimes the most extraordinary things in the world of law and government get served up in the most undramatic way.  If you aren’t paying attention to the back story, and you don’t know the context, you might almost miss the action.  And future generations, seeking to decipher history, might all too easily overlook the most crucial and delicate tipping points.  This fact of life has been emphatically proven by the Pulitzer Prize-winning cultural juggernaut that is the Broadway musical Hamilton, by Lin-Manuel Miranda.  In addition to telling the very personal story of one of our nation’s founding fathers, Hamilton shows, in brilliant style, that even seemingly dry and technical matters such as the origins of our nation’s financial system, and the logic underlying the complex apparatus of modern administrative agencies, are actually fueled by passion, dripping with drama, and world-changing in consequence.  You just need to know whose story to tell, and how to read between the lines.

A recent case in point:  On August 17, 2016, the Massachusetts Supreme Judicial Court issued its decision in Engie Gas & LNG LLC v. Department of Public Utilities (Docket SJC-12051/SJC-12052).  Environmental and energy lawyers readily recognized the decision as an important one, but it’s easy to see how future generations, far from the current action, might miss the excitement here.  The question in Engie was whether the state utility department could approve ratepayer-backed, long-term contracts by electric distribution companies for the purchase and resale of interstate natural gas pipeline transportation capacity. 

To answer that question, the Engie court addressed, among other things, (1) the propriety of the appeal in the absence of a final adjudicatory order; (2) the pertinent standard of review, (3) the canon of statutory construction reddenda singula singulis, a.k.a. the rule of the last antecedent (which might also be merely a grammar rule), (4) whether ambiguity should or could be found in statutory language that neither expressly forbids nor clearly permits the proposed departmental action, (5) the parties’ competing interpretations of the legislative history, (6) the overall statutory framework, (7) the necessity of a “distributive reading” of the terms “gas or electric,” (8) the limitations of the deference to be afforded to an agency’s reasonable interpretation of a statute it is charged with enforcing, where the interpretation represents a significant departure from the agency’s own record of administering the pertinent statute, (9) the importance of ensuring consistency with the fundamental policy embodied in the legislation at issue, and (10) the interpretive pertinence of subsequent, separate legislation. Phew! 

Ultimately, the SJC rejected the utility department’s determination of the scope of its authority, and concluded that the pertinent statute forbade the imposition on electricity ratepayers of the costs of new natural gas supply infrastructure.  Like many judicial opinions concerning complex environmental and energy issues, the Engie decision has a sober logic that makes it seem unsurprising, correct, and even almost easy.  But wait – what just happened here? 

Ladies and gentlemen, we have an affair of honor!  One dueling party and its seconds, the state’s public utility department and electric distribution companies, contend that the policy choice by our state government’s executive branch to expand natural gas pipeline capacity is a sensible way of meeting our very real need for reliable electrical power.  Even as we move toward a more sustainable future of renewable energy, they say, we still depend urgently on new supplies of natural gas, obtained by means of fracking, to provide the essential “bridge” fuel, and we can all get ready for price spikes and power blackouts each winter if we ignore that reality.  It’s an emergency, and our future is at stake!  

The other dueling party and its seconds, who include the Massachusetts Attorney General and a coalition of environmentalists, land conservationists, and consumer and taxpayer advocates, insist that we don’t need any new natural gas infrastructure at all.  And if we don’t push much faster and harder for a larger-scale shift to more environmentally sustainable ways to support our energy consumption, they say, we are fiddling while Rome burns. It’s an emergency, and our future is at stake!

Grappling with the fine points of utility infrastructure regulation and financing may make some people’s eyes glaze over.  To which I say, are you kidding?  I can’t think of another moment when our courts were faced with environmental and energy law disputes more laden with tension and drama.  This is the high-stakes, heroic, dueling-on-the-ledge stuff on which our future history depends.  It could practically be a Broadway musical.

Section 101(f) of the Clean Water Act: Common Sense to Further a Common Purpose

Posted on September 9, 2016 by William Green

Section 101(f) of the Clean Water Act (CWA) creates a “national policy” that “to the maximum extent possible” the Act “shall” be implemented in a manner that “prevent[s] needless duplication and unnecessary delays at all levels of government.”  (33 U.S.C. § 1251(f))  Although this and the other overarching goals in § 101 of the Act were “no exercise in boilerplate rhetoric,” (William Harsha, Jr. (Ohio), Congressional Record 16520 (Jun. 3, 1976)) they are typically ignored.  Instead of ignoring § 101 of the CWA, however, a strong argument can be made that courts should remand or even vacate an agency’s action if it can be shown that such an action needlessly duplicates or unnecessarily delays efforts to “restore and maintain the chemical, physical, [or] biological integrity of the Nation’s waters. (33 U.S.C. § 1251(a)) This would further Congress’s intent as codified in §§ 101(a) & (f) of the CWA.

Consider the ongoing controversy about the recent “Waters of the United States” rule (Rule).  (80 Fed. Reg. 37,054 (Jun. 29, 2015)) Many have said much about this Rule, focusing on lofty constitutional arguments, erudite discussions of which and when Supreme Court opinions control, and the finer points of APA jurisprudence.  But few have argued that the automatic implementation of its increased jurisdictional scope would contravene § 101(f).  Because the Rule seeks to increase the federal government’s jurisdiction under the CWA, without more, coverage of the Act’s regulatory requirements would immediately attach to previously non-jurisdictional waters.  This inextricable link of new jurisdiction and implementation could lead to disruptive delays and associated problems. 

When, for example, the hundreds of ditches that form a sprawling municipal separate storm sewer system become jurisdictional, various implementation requirements would be triggered – noncompliance with which could lead to administrative and civil penalties and criminal liability.  In this and many other instances, the sudden applicability of CWA requirements could have the unintended consequence of actually impeding ongoing efforts to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.”  

The shift of focus from traditional waters of the United States to stormwater conveyances could divert and dilute scarce local government resources.  This could delay meaningful water quality improvements for the lakes and rivers people actually use to swim and fish, and use for potable water could become more difficult to attain and then sustain. Such delays would serve no environmental benefit and would be especially unjustified where local governments only use those stormwater conveyances for stormwater management or for treating discharges from them into traditional waters of the United States.  Indeed, until promulgation of the Waters of the United States Rule, stormwater conveyances have historically been excluded from the CWA’s jurisdictional reach.        

It thus seems that the directives of §101(f) should be taken into account in litigation judging the appropriateness of the Waters of the United States Rule.  This would ensure that the Rule is implementable in a fashion that satisfies §101(f)’s common sense mandate to “prevent needless duplication and unnecessary delays” in furtherance of the fundamental goal of “restor[ing] and maintain[ing] the chemical, physical, and biological integrity of the Nation’s waters.”

William H. Green thanks Mohammad O. Jazil for his contributions to this post.