On November 3, 2011, the Wisconsin Legislature completed its final regular session of the year without enacting a delay in the phosphorus rules adopted by the Wisconsin Department of Natural Resources (WDNR) that went into effect just short of one year ago.  This is news?  Well, yes.

Last June 23, 2010, the WDNR citizen advisory board approved significant revisions to three rules to regulate the discharge of phosphorus to Wisconsin’s waterways.  The result of several years’ work with outside interest groups, these revisions establish numerical standards for point sources and performance standards for non-point sources.  Following legislative review, on January 1 and December 1, 2010 the rules relating to non-point and point sources respectively went into effect. For additional background and information about the rule content, click here. 

On January 3, 2011, Wisconsin’s newly-elected Governor, Scott Walker, expressed his concerns for the financial impact on industries and municipalities of compliance with the new phosphorus rules for point sources.  After initially proposing that the rules be substantively rewritten, the Governor instead proposed a two-year delay in the effective date to be enacted as part of the Biennial Budget bill.

Bit it didn’t happen.

Environmental advocacy groups swung into action, urging the Legislature to assure that the rules would remain in effect.  Industrial and municipal groups voiced concerns over the economic consequences of rule implementation.  In May 2011, two Democratic Wisconsin legislators wrote EPA seeking EPA’s perspective on the proposed suspension or effective date delay; EPA responded that Wisconsin’s rules would remain applicable standards unless or until EPA promulgated a more stringent standard or approved a revision made by Wisconsin. 

And the Senate and Assembly Republicans couldn’t agree on any of the options for delaying the rules’ effectiveness.  So, they deleted the Governor’s delay proposal.  When the Biennial Budget was signed on June 26, 2011, there was no language implementing a delay.  The Budget bill did require WDNR to prepare an economic impact analysis on the new rules.  Interestingly, while that requirement remained in place, the Governor vetoed the deadline of December 31, 2011, on the grounds that setting a date certain “may compromise the quality” of the fiscal analysis.

Talk then turned to a separate piece of legislation, to be considered during the regular legislative floor periods in September, October and November.

That didn’t happen either.

Meanwhile, in August 2011, WDNR circulated draft “Guidance for Implementing Wisconsin’s Phosphorus Water Quality Standards for Point Source Discharges” for review and comment: a document of nearly 150 pages on how to implement some 20 pages of rules.  As it appears these rules are in effect and likely to remain so, attention is now focused on figuring out what they mean. 

There’s lots of talk among environmental lawyers these days about how to litigate Natural Resource Damage (NRD) claims, but relatively little discussion of  how those claims can be settled through restoration projects. The latter approach deserves more attention.

Last year the Department of Interior (DOI) issued amendments to its NRD assessment regulations to focus on resource restoration through the use of cost/benefit methodologies.  Those methodologies compare losses from resource injury to the gains expected from restoration actions. Under the amended regulations they have been expanded to include habitat and resource equivalency analyses for measuring resource losses used in determining the value of project benefits, which value is in turn needed to compensate for the damaged resource. See 73 Fed. Reg. 57259-57268 (Oct.2, 2008). 

A project restoration approach can be very attractive from a monetary standpoint. Past experience has shown that the benefits to be achieved from restoration projects can be significantly greater than their cost, with the cost/benefit ratio often being 1:5 and sometimes even greater. 

A good example of this favorable cost/benefit ratio is the NRD settlement reached with some of the Potentially Responsible Parties (PRPs) at the Hylebos Waterway portion of the Commencement Bay Superfund site in Tacoma, Washington. As noted in an article appearing in the Summer 2009 issue of the ABA’s Natural Resources & Environment publication authored by Suzanne Lacampagne and Jeffrey Miller, the NRD trustees determined that those PRPs could settle their NRD liability for a cash payment of $13.5 million. Alternatively, they could underwrite restoration projects that provide an equivalent monetary benefit. The PRPs chose the latter route, expending about one sixth of the amount required for a cash settlement.

Of course, before the restoration projects were completed, the Hylebos PRPs faced the prospect of potential cost overruns. If concern about additional expenditures in the future is of paramount importance, or if there is a need to close out all liabilities in the near term, then an NRD credit strategy may make the most sense. Such an approach involves the purchase, or a commitment to purchase, NRD credits equivalent to the value of the damaged resource once the NRD trustees have certified the validity and transferability of those credits.

This approach is being implemented at the Duwamish River Superfund site in Seattle, Washington, where the city is leasing out parcels of its property along the river that are in need of restoration to a company that will carry out the restoration work and sell NRD credits to PRPs interested in settling their NRD liability. The Seattle mayor’s announcement of the restoration project and credit approach can be found here.  

A link to the protocol entered into by the NRD trustees and the company carrying out the restoration projects can be found here as well.

One interesting feature of the Duwamish River restoration effort is the willingness of NRD trustees to consider settlement of a PRP’s NRD liability prior to completion of the remediation effort. See, e.g., discussion at p. 7 of the inventory of properties for the Lower Duwamish River Habitat Restoration Plan prepared by the Port of Seattle.  

A related feature of that willingness to consider settlement is that restoration activities will begin earlier in the process, while cleanup is still underway. This in turn can lead to more cost effective cleanup and restoration activities, as both categories of actions can be formulated and coordinated contemporaneously for maximum benefit.

Another example of a comprehensive settlement approach encompassing both remediation and restoration activities is set forth in the consent decree for the West Site/Hows Corner Superfund site in Plymouth, Maine. As memorialized in Appendix H of that decree, the settling PRPs have addressed their NRD liability through a restoration project, i.e., acquisition of property to be held and maintained by the state government as wildlife habitat. The consent decree with its appendices and the November 19, 2009 Federal Register notice of the settlement at pp. 59991-59992 can be found here.

In addition to the cost/benefit and related timing issues just mentioned, two other favorable aspects of the restoration project approach are the positive publicity that can be generated in the local community upon implementation of such a project and the cost savings associated with earlier resolution of NRD liability. With all these attributes in its favor, and with increasing experience in using the new equivalency methodologies and implementing projects based on their numbers, the restoration project approach may yet achieve the attention it deserves.

As the debate regarding the contribution of anthropogenic greenhouse gases to global warming continues, some parties are taking their concerns directly to the courts. Perhaps the latest in the growing number of global warming lawsuits is the Native Village of Kivalina, Alaska v. ExxonMobil, et al., Case No. CV-08-1138, in the United States District Court for the Northern District of California, San Francisco Division.

THE VILLAGE OF KIVALINA

The Village of Kivalina is located in northwest Alaska about 120 miles from the Arctic circle. The Village is comprised of roughly 1.9 square miles of land which lies on the tip of a barrier island which separates the Chukchi Sea and a lagoon on the mainland side. There are 399 residents of Kivalina, 97% of whom are Native Alaskans referred to as "Inupiat" Eskimos, meaning "the people."

THE PROBLEM

With claims presaged by Al Gore's "An Inconvenient Truth", Kivalina claims that global warming has caused the melting of Arctic sea ice which formerly protected the Village from winter storms. Without the protective ice, the Village claims that storms have caused massive erosion, leaving "houses and buildings in imminent danger of falling into the sea." The Village contends that, "if the entire village is not relocated soon, the village will be destroyed." Governmental estimates of the cost to relocate run as high as $400 million –roughly $1 million per resident.

THE DEFENDANTS

The defendants are 9 oil and gas companies, 14 electric generation companies and 1 coal company. Kivalina contends that the defendants are among the largest emitters of greenhouse gases in the United States, and that the defendants "are responsible for a substantial portion of the greenhouse gases in the atmosphere that have caused global warming." The Village is pursuing a public nuisance theory.

CONSPIRACY CLAIMS

With allegations that are indeed carbon copied from the "Science Fraud" chapter in "An Inconvenient Truth", Kivalina claims that eight of the defendants have engaged in a civil conspiracy to generate misinformation and propaganda to create doubt as to whether global warming is occurring and, if so, whether man-made emissions are to blame. The Village claims that the alleged co-conspirators have used "front groups, fake citizens organizations, and bogus scientific bodies" to generate the alleged misinformation and doubt.

MOTIONS TO DISMISS

The Kivalina lawsuit is in its early stages, however, the defendants have filed motions to dismiss claiming, inter alia, that (1) the plaintiffs cannot pursue a federal common law nuisance claim because such claim is available only to States seeking injunctive relief and because the Clean Air Act displaces the authority of the courts to regulate nationwide greenhouse gas emissions and global warming; and (2) the plaintiffs' conspiracy claims are not independent torts, but are derivative of their underlying nuisance claims and should fail along with the nuisance claims. 

POLITICAL QUESTION DOCTRINE

Similar lawsuits have previously been dismissed on the grounds of lack of standing and non-justiciability under the political question doctrine. See Comer, et al. v. Murphy Oil, et al., Case No. 1:05-cv-00436-LTS-RHW, in the United States District Court for the Southern District of Mississippi, dismissal currently on appeal to the Fifth Circuit Court of Appeals (Appeal No. 07-60756); State of California v. General Motors, et al., Case No. C-06-05755-MJJ, in the United States District Court for the Northern District of California, dismissal currently on appeal to the Ninth Circuit Court of Appeals (Appeal No. 07-16908). In Comer the plaintiffs blamed Hurricane Katrina on global warming and on 8 oil companies, 31 coal companies and 4 chemical companies that allegedly contributed to global warming. 

So far, the courts appear to be of the view that the responsibility for developing a comprehensive global warming policy which balances the interests of reducing air pollution and its social costs with the corresponding harm to economic development and its attendant social costs is a political question which is reserved for the political branches of government, and that such policies should not be developed on an ad hoc basis by the courts. Kivalina is once again testing the resolve of the courts to stay out of the global warming debate until Congress and/or the EPA establish clear policies regarding man-made greenhouse gas emissions.

To view a copy of the Kivalina Complaint, click here.

For more information on the author, click here.