H.R. 23: A VERY BAD FEDERAL WATER LAW BILL—AND A WORSE PRECEDENT

Posted on August 24, 2017 by Richard M. Frank

H.R. 23 is an important and most unfortunate environmental bill currently working its way through the U.S. Congress.  Sponsored by California Republican Congressman David Valadeo—with a strong assist from House Republican Majority Leader Kevin McCarthy—H.R. 23 passed the House of Representatives last month on what was largely a party-line vote, 230-190.  It has now moved to the U.S. Senate.

This California-specific legislation would “reform” federal and California state water and environmental laws in order to provide more water from federal and state water projects in California to state agricultural interests in the state’s Central Valley.  H.R. 23 would do so at the expense of environmental values.  (That’s not mere interpretation or speculation on the part of this observer—it’s the express intent of the bill.)

Why, exactly, is H.R. 23--which has largely evaded public and media attention to date--such a flawed legislative proposal?  Let me count the ways:

First, it would reverse an over century-long tradition of federal deference to state water law regarding the construction and operation of federal water projects.  Congress made that commitment in the Reclamation Act of 1902, which transformed the settlement and economy of the American West.  Congress has reiterated this commitment to cooperative federalism in numerous subsequent federal statutes.  But H.R. 23 reneges on that promise, expressly preventing California state water regulators from imposing any restrictions on the federal Central Valley Project that would protect environmental values.

Doubling down on its preemptive effect, H.R. 23 expressly exempts the CVP (and those who obtain water from it) from application of California’s public trust doctrine, which—as is true of many other states—operates as a longstanding, cornerstone principle of California natural resources law.

Additionally, H.R. 23 brazenly exempts operation of the CVP and other California water projects from the federal Endangered Species Act “or any other law” pertaining to those operations.

H.R. 23 thus is terrible news for California’s environment.  But why should environmental attorneys from other states be concerned about the bill?

The answer is again multifaceted.  H.R. 23 represents the first serious Congressional effort of 2017 to weaken application of the Endangered Species Act.  The broad ESA exemption contained in H.R. 23 could easily be replicated in future federal legislation affecting federal, state or local projects in other parts of the country.

Similarly, if the longstanding tradition of federal deference to application of state water law is breached by passage of H.R. 23, rest assured that similar attempts will be made concerning similar projects in other states as well.

H.R. 23 is opposed by both of California’s U.S. Senators, along with California Governor Jerry Brown.  Even more notably, California’s largest water district—the Metropolitan Water District of Southern California—has signaled its opposition to the bill, declaring that it “goes too far” in elevating agricultural water interests over California’s environment.

H.R. 23: an awful bill for California, and a terrible precedent for the nation as a whole.

The Cuyahoga River Makes News Again

Posted on May 11, 2017 by Michael Hardy

To many environmental law veterans, the name of the Cuyahoga River triggers memories.   The 1969 fire on that River galvanized major reforms to the water pollution laws of the United States.

As I sit in my 36th floor office and look out the windows in several directions, I can see most of the upper Cuyahoga River course through the “Industrial Flats” as it winds from the Cleveland Harbor north on Lake Erie to the large Arcelor Mittal steel plant nearly six miles downriver.  Known as the “crooked river” by Indian lore, it has many oxbows and switchbacks with colorful names like “Collision Bend” and “Irishtown Flats”.  Home to rowing teams, large tugs, iron ore freighters, and sand and gravel barges, it is a busy river requiring constant upkeep through dredging.

The Cuyahoga River has made remarkable progress since the 1969 fire, with many targeting the fifty-year anniversary of the fire for the removal of its “impaired” classification.  But the River still suffers from years of industrial and municipal sewage disposal.  Although a variety of fish have returned, it should not be surprising to know that slightly elevated PCBs remain in the sediments, a fact that complicates the dredging and disposal of the spoils.  Therein lies the newest chapter in the River’s history.

Congress has funded the dredging of the Cuyahoga River for nearly 40 years and, in 2015, allocated resources to the Army Corps of Engineers (Corps) for that year.  Accordingly, the Corps filed an application with the Ohio Environmental Protection Agency (OEPA) for a water quality certification under Section 401 of the Clean Water Act before commencement of the dredging project.  The OEPA, concerned over elevated levels of PCBs in some of the dredging spoils, authorized the dredging to proceed, provided the Corps disposed of all the dredged material in on-site “confined disposal facilities” (CDFs).  Based on sampling and analysis it conducted, the Corps agreed to utilize a CDF for the sediments dredged from the Cleveland Harbor, but objected to the required use of a CDF for the spoils coming from the “Upper Channel” of the River.  Calculating what it called a “Federal Standard” to identify less costly alternatives, the Corps proposed instead to use “open lake disposal” for those materials, which immediately drew the opposition of the OEPA and Ohio Department of Natural Resources.  The Corps argued that the use of a CDF for those spoils would add nearly $1,300,000 to the cost of the project.  The Court wanted the “Federal Standard” to override Ohio’s anti-degradation water quality rules and other initiatives designed to improve the health of Lake Erie.  Instead of an administrative appeal of the OEPA conditional certification, the Corps gave the State an ultimatum – either find a “non-federal source” for the added costs or forfeit the Congressionally authorized dredging.  Because of the potential dire economic consequences to the steel mill and other businesses, the State sued the Corps and obtained a preliminary injunction.  The District Court sided with the State and ordered the dredging to commence, with the responsibility for the incremental costs to be determined in subsequent proceedings.

On May 5, 2017, the District Court issued a 52-page Opinion finding that the Corps’ actions were “arbitrary and capricious” under the Administrative Procedure Act. State of Ohio v. The United States Army Corps of Engineers, U.S.D.C. N.D.Ohio Case No. 1:15 – CV 629.  Among other things, the Court found that the Corps’ elevation of its so-called “Federal Standard” to supersede duly promulgated water quality standards of Ohio exceeded the Corps’ authority. The Corps could not make up its own rules to evade its obligations to comply with properly adopted environmental standards or to fulfill Congressional mandates to dredge the entirety of the Cuyahoga navigation channel and use a CDF to manage the spoils.  Accordingly, the District Court ruled that the Corps must absorb the added costs of the on-land CDF disposal.

Jordan Cove LNG Project Scores Legal Victory

Posted on April 10, 2017 by Rick Glick

The Jordan Cove LNG project in Coos Bay, Oregon, prevailed in a legal challenge to a key permit.  The permit, issued by the Oregon Department of State Lands, allows dredge and fill work for a deep water ship channel.  In Coos Waterkeeper v. Port of Coos Bay, the Court of Appeals rejected that challenge and upheld the permit.

Petitioners’ main argument on appeal was that DSL’s permitting decision should have applied statutory environmental standards not only to the dredge and fill work, but also terminal operations after construction.  The court found this argument to lack merit, finding that DSL’s authority is limited to the “project,” defined in the statute and its legislative history as the dredge and fill work only. 

Petitioners also argued that DSL should have asserted permitting jurisdiction over complementary uplands excavation.  This work would initially be separated from the bay by a 40-foot berm, and then the berm would be removed to create the channel.  The court concluded that DSL jurisdiction would not apply to uplands work (i.e. above the high tide line), and that removal of the berm and flooding the affected uplands are within scope of the permit.

The politics of LNG development in Oregon are highly charged.  The Oregon LNG project was abandoned following election of a new county board of commissioners made up of project opponents.  Local opposition slowed down state regulatory review and the project never was tested against objective legal standards.  It is heartening to see that for the Jordan Cove project, which also is controversial, both the state agency and the court assessed the project as they would any other.  The politics are still there, but the rule of law in this instance rose above.

The outcome of this case highlights an anomaly in green Oregon.  Unlike our neighbors to the north and south, we have no mini-NEPA law.  If we did, the environmental effects of the Jordan Cove project taken as a whole would certainly have been part of the state permitting calculus.  Many bills to create a comprehensive environmental impact review process have been proposed, but none have taken hold.  With a Democratic controlled legislature and state house, it seems only a matter of 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 Latest Executive Order: Any Kind of Consistency Is the Hobgoblin of Little Minds

Posted on March 31, 2017 by Seth Jaffe

Make no mistake, the Executive Order signed by President Trump at EPA yesterday is a big deal.  Time will tell whether the Administration’s U-turn on the Obama rules currently in litigation, such as the Clean Power Plan and the rule on fracking on federal lands will make any difference to judicial review of those rules.  There are plenty of states and NGOs ready to step into EPA’s and BLM’s shoes to defend those rules.

Regardless, though, it’s important.  Social cost of carbon?  Poof.  Gone.  Climate Action Plan?  Gone.  Consideration of climate change in environmental impact reviews?  Gone.

We already know all this, though.  I’d like to focus on a few details concerning the EO that might have gone unnoticed.

  • The order states that development of domestic natural resources “is essential to ensuring the Nation’s geopolitical security.”  I found this statement interesting in light of the recent statements by Secretary of Defense Mattis, who very clearly stated that climate change is real and is itself an important security risk.
  • The order states that environmental regulations should provide “greater benefit than cost.”  I found this statement somewhat odd, given that the President’s prior EO known as the 2-for-1 order, essentially requires agencies to ignore the benefits of regulations and focus solely on the costs that they impose.
  • Similarly, the Order requires agencies, in “monetizing the value of changes in greenhouse gas emissions resulting from regulations,” ensure that their analyses are consistent with OMB Circular A-4, issued in 2003.  The Order states that Circular A-4 embodies “best practices for conducting regulatory cost-benefit analysis.”

I’d be interested in knowing if a single one of the authors or peer reviewers of Circular A-4 have anything nice to say about the 2-for-1 Order?

Public Parks in Massachusetts – Here Today, Gone Tomorrow?

Posted on March 10, 2017 by Mary Ryan

The Massachusetts Supreme Judicial Court (SJC) will soon decide how hard or easy it is to sell or change the use of public parks. Article 97 of the Massachusetts Constitution provides that the “people shall have the right to clean air and water . . . and the natural, scenic, historic, and esthetic qualities of the environment” and protects “the people in their right to the conservation, development and utilization of the agricultural, mineral, forest, water, air and other natural resources  . . . .” Under Article 97, any change in use or disposal of lands taken or acquired to protect such rights requires a two-thirds vote of the state legislature.

In its most recent pronouncement on Article 97, the SJC held that it did not apply to block the Boston Redevelopment Authority (BRA) from building a waterview restaurant and bar at the end of Long Wharf in Boston Harbor. Project opponents argued that the land was subject to Article 97 and that issuance of a key development permit was a use or disposition requiring a two-thirds legislative vote.

The BRA took the land by eminent domain in 1970 pursuant to an urban renewal plan which had, as one of fifteen goals, providing “public ways, parks and plaza which encourage the pedestrian to enjoy the harbor and its activities.” While this goal is consistent with Article 97, it is also incidental to the overall goal of urban renewal; thus, the land was not taken for Article 97 purposes. Nor did the SJC find any subsequent evidence that the land was later designated for those purposes, with the SJC strongly suggesting that only a recorded restriction would be sufficient to do so. That would have put everyone on notice that Article 97 applied and legislative action was necessary for a change of use. The SJC did note in dicta that in some cases, “the ultimate use to which the land is put may provide the best evidence of the purposes of the taking. . . .”

Fast-forwarding to 2016, the City of Westfield so far has prevailed in its efforts to use a playground as the site for a new school building, without a legislative vote approving the change in use. This is a fairly typical example of how the issue often arises in cities and towns strapped for cash or available land. The City acquired the land by tax forfeiture in 1939 and dedicated it for use as a playground through a City ordinance in 1957. And in 2010, the City endorsed an open space and recreation plan that included the playground as open space. But no formal Article 97 designation or restriction was ever recorded. The Massachusetts Appeals Court ruled in favor of the City, but there was a concurring opinion from one of the members of the three judge panel (coincidentally the former head of the Environmental Protection Division of the Office of the Massachusetts Attorney General). While constrained to follow SJC precedent, Justice Milkey noted that often there is a murky past on how public land came to be used for parks or other recreational use and that requiring an instrument of record “threatens to reduce art. 97 to near irrelevancy. . . .”

The SJC granted further appellate review and will hear the case in April. Amicus briefs were requested and many are expected. There is considerable interest in the outcome of the case, including from the Attorney General’s Office, municipalities and conservation groups. 

PS:  As it happens, there won’t be a restaurant and bar at the end of Long Wharf anytime soon, at least according to the latest word from the courts. As part of the urban renewal development in the 1960s and 1970s, the BRA used federal funding from the Land and Water Conservation Fund (LWCF) to acquire a certain portion of Long Wharf. Land acquired or developed with LWCF money may not be converted from public outdoor recreational use without National Park Service (NPS) permission. After the SJC decision, with the help of a tip from two former employees, NPS found a map showing the restaurant would be on the parcel acquired with LWCF money. The First Circuit Court of Appeals recently ruled against the BRA, hoping to end the “long war for Long Wharf.”

Coincidentally, LWCF money, channeled through a state program which provided that use of LWCF money triggers Article 97, was used to improve the Westfield playground in 1979. But the Massachusetts Appeals Court held that the state agency restriction was trumped by the SJC interpretation of the Massachusetts constitution. This is yet another issue in the pending appeal.

ATSDR...A New Role under the Clean Air Act?

Posted on February 6, 2017 by Todd E. Palmer

In recent months, the Agency for Toxic Substances and Disease Registry (ATSDR) and the “minimal risk levels” (MRLs) established by ATSDR have played a direct role in EPA’s efforts to regulate stationary sources under the Clean Air Act. The ATSDR is an advisory agency created by CERCLA in 1980 to help EPA assess health hazards associated with Superfund Sites. ATSDR’s role was expanded by the 1984 RCRA Amendments to assess risks from hazardous substance releases at landfills and surface impoundments. In 1986 SARA further expanded ATSDR’s responsibilities under CERCLA to assess the health impacts of hazardous substance releases. 

In response to its CERCLA mandate, ATSDR has developed MRLs which define the level of daily human exposure to a hazardous substance release that is likely to result in no appreciable risk of an adverse non-cancer health effect.  MRLs are designed to be a screening tool and are not intended to identify levels that would trigger cleanup or other action.  As a result, exposure to a hazardous substance above an MRL does not necessarily mean that adverse health effects will occur. Rather, MRLs “are set below levels that, based on current information, might cause adverse health effects in the people most sensitive to such substance-induced effect.” 

In comparison to the MRLs developed under CERCLA, there are two sets of standards established by EPA under the federal Clean Air Act to address health impacts from air emissions.  One of these is the National Ambient Air Quality Standards (“NAAQS”) which define the concentration of a criteria pollutant in ambient air deemed to be protective of human health.  State implementation plans are designed to achieve compliance with NAAQS.  Likewise, the air emissions from permitted stationary sources are analyzed to ensure consistency with NAAQS.  NAAQS are developed through a rigorous process that solicits input from the scientific community and public at large, and are promulgated as rules which are invariably subject to legal challenge and judicial review.  

EPA also establishes emission limitations under Section 112 of the Clean Air Act to control toxic air emissions.  These standards limit the emissions of hazardous air pollutants from specified categories of stationary sources.  EPA assesses the risk to public health and the environment that remains after implementation of these limitations and must promulgate new health based standards to mitigate those residual risks.

In recent months EPA has moved beyond the NAAQS and toxic air pollutant standards to rely upon the ATSDR and its MRLs in identifying the allowable, and ostensibly enforceable, concentration of pollutants in ambient air under the Clean Air Act. 

In one case, EPA asked ATSDR to evaluate the ambient air quality surrounding a stationary source.  ATSDR concluded that the monitored concentrations of manganese from that source exceeded the pollutant’s MRL.  Based on this finding, US DOJ filed a civil complaint against the facility.  One of the claims alleged that the monitored manganese concentrations presented an imminent and substantial endangerment to public health and that injunctive action was necessary under Section 303 of the Clean Air Act. The complaint requested a judicial order requiring installation of fence-line air monitors and implementation by the source of all measures necessary to prevent exceedance of the MRL for manganese at those monitors. In effect, EPA identified the MRL as the allowable concentration of manganese to be emitted under the Clean Air Act.  The case has settled.

In other matters, EPA Region 5 utilized the information from an ATSDR health consultation to justify issuance of a Section 114 order under the Clean Air Act which required installation of fence-line PM10 monitors around a facility with outdoor storage piles where manganese emissions were also an issue.  The company refused to install the monitors and EPA filed a civil complaint seeking to enforce the Section 114 order. EPA sought summary judgment, relying in part upon an ATSDR finding that manganese concentrations in the ambient air surrounding a nearby facility exceeded the MRL.  The underlying ATSDR assessment also used PM10 Air Quality Guidelines (AQG) from the World Health Organization (WHO) to conclude that ambient PM10 concentrations might cause respiratory problems for sensitive individuals.  Notably, the WHO AQG are more conservative than the NAAQS (the WHO AQG for PM10 is 50 μg/m3 as a 24-hour mean, whereas the NAAQS for PM10 is 150 μg/m3 averaged over that same time period).  The case settled.

It’s worth noting that ATSDR has finalized approximately 150 inhalation based MRLs covering pollutants emitted by a broad range of industrial facilities.  However, I think it is safe to assume that stationary sources do not view MRLs as imposing any additional Clean Air Act strictures on their operations since the MRLs are not listed as applicable requirements in air permits.  Moreover, the Title I and V permitting programs do not require sources to perform dispersion modeling to ensure compliance with MRLs. 

It remains to be seen whether EPA under the new administration will continue to reach out to ATSDR and utilize the MRLs in addressing air pollutant emissions, particularly where such limits have never been vetted through a rulemaking process.   I wouldn’t bet on it.

It’s Getting Hot in Hells Canyon

Posted on February 2, 2017 by Martha Pagel

The state of Oregon has turned up the heat in Hells Canyon.  The burning question, so to speak, is whether a state can require passage and reintroduction of anadromous fish as a condition of certification under Section 401 of the Clean Water Act for relicensing of an existing hydroelectric project.  The issue gets hotter because the particular project involved  -- the Hells Canyon Complex (“HCC”), owned by Idaho Power Company (“IPC”) -- is located on the Snake River, which forms the border between Oregon and Idaho.  The State of Oregon has issued a draft 401 certification with detailed conditions for passage and reintroduction of anadromous fish into a tributary on the “Oregon side” of the river.  Idaho is opposed to reintroduction of any fish species above Hells Canyon Dam, leaving IPC in the middle.

Making a very long and complicated story short, for more than 13 years IPC has been working with state and federal agencies and stakeholders toward relicensing of the HCC.  The project consists of three developments, each with a dam, reservoir, and powerhouse.  In 1955, FERC issued a 50-year license with recognition that construction of the project would block fish passage and eventually lead to extirpation of anadromous fish above the dams.  As a result, the initial FERC license included mitigation conditions to offset fish impacts, and additional mitigation was provided under a subsequent settlement agreement. 

After more than a decade of studies, meetings, and negotiations, it looked like IPC and the states were on track for general agreement as to the terms and conditions of compatible, but separate 401 certifications to be issued by Oregon and Idaho – except as to the issue of fish passage and reintroduction. Despite Idaho’s objections, the Oregon Department of Environmental Quality (ODEQ) issued its draft 401 certification for public comment on December 13, 2016.  The draft relies on a number of existing state water quality standards as the legal basis for requiring fish passage and reintroduction, though none of the standards is directly on point. ‎

Public comments on the proposed 401 certification are due February 13.  Objections relating to the fish passage and reintroduction conditions are likely to focus on whether such conditions are generally within the scope of 401 certification for FERC-licensed hydroelectric projects, and, if so, whether Oregon’s specific water quality standards provide a sufficient regulatory basis for the proposed ODEQ action.  ‎The comments may also raise questions about the baseline for mitigation and whether impacts to fish due to construction of the project – as opposed to on-going operations -- have already been fully mitigated.  And then there’s the question of Idaho’s opposition. 

ODEQ will consider the comments before issuing a final 401 certification decision.  If the states are unable to resolve their differences over the passage and reintroduction issue, it’s likely to get a lot hotter in Hells Canyon. 

And finally, a disclosure that the HCC relicensing issues hit close to home for ACOEL:  I am part of a team representing IPC, and other College members are very much involved on both sides of the issue.  There’s a lot we won’t be able to talk about at the next annual meeting! 

“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 New Administration’s Initial Executive Order and Memoranda On Energy and Environmental Issues

Posted on January 26, 2017 by Theodore Garrett

The Trump administration has issued a key Executive Order and several memoranda relating to energy and the environment.  The goal of the Executive Order -- Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects – is to expedite environmental reviews and approvals.  It provides that action by the Chair of the Counsel of Environmental Quality to designate an infrastructure project as high priority would trigger an expedited review and approval process, as described in the memorandum Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing.

Two other memoranda – those addressing the construction of the Keystone Pipeline and construction of the Dakota Access Pipeline – are intended to clear the way for approval of these two controversial pipelines.  The President also stated that he wants pipe for U.S. pipelines to be made with American steel.     

Finally, the White House issued a memorandum providing for a regulatory freeze of regulations that have not taken effect and withdrawal of regulations that have not yet been published in the Federal Register. In accordance with this directive, EPA has issued a notice postponing to March 21, 2017 the effective date of 30 regulations that were published by EPA after October 28, 2016.  The delay is intended to provide further review of these regulations by the new Administration.

The Order and memoranda do not change the requirements of relevant environmental statutes.  It remains to be seen to what extent these policies will affect future permitting or regulatory decisions.  Interested parties will wish to carefully monitor how these developments unfold. 

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.

WHO YA GONNA CALL?

Posted on October 25, 2016 by Keith Hopson

(Best read while humming the theme song from Ghostbusters)

In an unprecedented move (to my knowledge) the Industrial and Hazardous Waste Permits Section of the Texas Commission on Environmental Quality (TCEQ) recently requested permit holders provide the agency with their facility’s primary and secondary emergency response points of contact.  Specifically, they ask for the names and office and cell and/or pager numbers.

The information is typically included in a facility’s permit, but my personal experience is a change of phone numbers or even personnel may or may not result in a timely permit modification.  The fact the agency intends to keep this information in a spread sheet format should make the data more readily available in an emergency than having to extract the information from one or more permits.

The inspiration for this somewhat unusual request was the recent proliferation of earthquakes in our neighboring state to the north although any other natural (floods, hurricanes, or tornados) or manmade disasters could well result in the same need. 

A simple action?  Yes.  Could it be very beneficial?  Certainly; because, as we all know, in an emergency it’s important to know who ya gonna call …

A Lumber Mill Biomass CoGen Need Not Consider Other Fuels In Its BACT Analysis. Other Sources Should Be So Lucky.

Posted on September 8, 2016 by Seth Jaffe

Ever since EPA began considering how BACT analysis would be applied to greenhouse gas emissions, there has been concern that EPA would use its BACT authority to “redefine the source” – with the particular concern that BACT for a coal plant would now be to burn natural gas instead.  In Helping Hands Tools v. EPA, the 9th Circuit Court of Appeals this week gave some protection to biomass plants biomassfrom such redefinition of the source.  However, other types of facilities will get no comfort from the decision.

Helping Hands Tools involved a challenge to a PSD permit issued to Sierra Pacific for a cogeneration plant to be located at one of its existing lumber mills.  Under EPA’s BACT Guidance, Sierra Pacific stated that the purpose of the CoGen plant was to use wood waste from the mill and nearby facilities to generate electricity and heat. Relying in part on the 7th Circuit decision in Sierra Club v. EPA, which held that it would impermissibly redefine the source to require a mine-mouth coal generating plant to consider different fuels in its BACT analysis, the 9th Circuit found that EPA was reasonable in determining that, because a fundamental purpose of the CoGen plant was to burn wood waste, it would impermissibly redefine the source to require Sierra Pacific to consider solar power as part of its BACT analysis.

Importantly, the Court also rejected the plaintiffs’ request that Sierra Pacific consider greater use of natural gas.  The Court concluded that very limited use of natural gas for the purposes of startup, shutdown, and flame stabilization did not undermine the fundamental purpose to burn wood waste.  This is critical to source-located biomass facilities, because EPA’s GHG Permitting Guidance specifically says that greater use of an existing fuel should be considered in the BACT analysis:

"unless it can be demonstrated that such an option would disrupt the applicant’s basic business purpose for the proposed facility."

Unfortunately, the language of the decision appears to me to give EPA substantial leeway in future BACT analyses to redefine the source in other cases.  It seems to me that, building on the 7th Circuit decision, the Court has simply created an exception to potential source redefinition in circumstances where the location of the facility justifies a very narrow fuel selection.  If a coal plant intends to burn coal from the mine next door, ok.  If a lumber mill intends to burn its own wood waste, ok.  Otherwise, however, all bets are off.

What is particularly troubling was the Court’s acknowledgement that the GHG BACT guidance is vague, and its deference to EPA’s application of its own vague guidance. This is precisely the concern I noted when the Guidance was first issued.  Time will tell, but I foresee some fairly extreme BACT determinations being blessed by some very deferential courts.

Cape Wind Project Suffers Another Blow: Is This The Knock-Out?

Posted on July 13, 2016 by Jeff Thaler

The U.S. Court of Appeals for the District of Columbia Circuit on July 5 issued a ruling that the federal government violated the Endangered Species Act and the Administrative Procedure Act in approving the long-running, oft-litigated Cape Wind offshore wind project proposed to be built off the Massachusetts coast.  Senior Judge Randolph, writing for an unanimous panel, confirmed the District Court’s rejections of a number of the claims advanced by Plaintiffs (who included the Public Employees for Environmental Responsibility, the Town of Barnstable, and the Alliance to Protect Nantucket Sound), but reversed the District Court on two key points.

The proposed Cape Wind project, which has been the subject of voluminous news coverage and many court cases for well over a decade, sought to construct 130 3.6 MW turbines in shallow waters near Nantucket.  Challenges have included scenic impacts; Native American concerns that the project would will block their sunrise views across the sound, disturb ancestral burial grounds, and perhaps disturb cultural relics; and issuance of submerged land leases required by the project. Financial hurdles seemed to put the project into a death spiral two years ago, but quietly the project developers have continued legal fights to defend the permits and approvals previously issued. They have largely been successful—until this month.

Early on, biologists with the U.S. Fish and Wildlife Service (“FWS”) had recommended that the wind turbines be shut off during limited periods of highest risk to two birds listed under the Endangered Species Act-- the piping plover and roseate tern.  However, the FWS ultimately rejected that conservation measure on the grounds that it would impair the financial feasibility of the project. The Court of Appeals held that the FWS’s action was arbitrary and capricious.  The Court further held that the project cannot proceed without compliance with the Migratory Bird Treaty Act and without further analysis of environmental impacts pursuant to the National Environmental Policy Act. 

In conclusion, the Court stated:   “We reverse the district court’s judgment that the Bureau’s environmental impact statement complied with NEPA and that the Service’s incidental take statement complied with the Endangered Species Act, and we vacate both statements.” A copy of the ruling is here.

Would You Like Some Regulatory Inaction With Your Tea?

Posted on June 22, 2016 by Linda Benfield

Wisconsin continues to be the playground of Tea-Party efforts to minimize the power of government, particularly in the environmental arena. On May 10, 2016, the Wisconsin Attorney General opined that the Department of Natural Resources (“WDNR”) does not have the authority under state law to impose monitoring wells or cumulative impact conditions on high capacity well permits. Insert A.PDF

In 2011, Governor Scott Walker and the Republican legislature passed “Act 21,” which contains a “limited government” provision prohibiting agencies from implementing or enforcing “any standard, requirement, or threshold” in a permit, unless the language “is explicitly required or explicitly permitted by statute or by a rule…”  Wis. Stat. § 227.10 (2m) Insert B.PDF

The Attorney General’s Opinion carefully argues that a contrary state Supreme Court opinion issued shortly after the passage of Act 21 is distinguishable. In Lake Beulah Management District v. State of Wisconsin, the Wisconsin Supreme Court found in 2011 that the WDNR had the statutory authority under state law and a general duty to consider the impacts of a high capacity well on the nearby Lake Beulah. The Court also held that the applicable statute constituted a broad legislative grant of the public trust duty to the agency in the context of high capacity well regulation, and upheld the WDNR’s permit.

The Attorney General’s Opinion asserts that Lake Beulah is “no longer controlling.” After the oral argument in the case but before the opinion was released, the parties brought Act 21 to the Court’s attention.  The Court noted in a footnote that Act 21 did not change the underlying environmental statute and stated that none of the parties argued that the new law impacted the WDNR’s authority in the Lake Beulah case. The Attorney General has seized on the footnote.

The Attorney General’s Opinion relies on the timing of Act 21’s passage, the footnote, and a difference of opinion. The Attorney General argues that the state Supreme Court relied on implicit statutory authority to allow the WDNR to condition high capacity well permits, and Act 21 now requires explicit authority.  Where the underlying environmental statute allows the agency to place conditions on high capacity wells, including “location, depth, pumping capacity, rate of flow, and ultimate use,” it does not state that “monitoring” is an “explicitly permitted condition.” The Attorney General further notes that the legislature has not delegated its public trust duty to the WDNR. The Opinion has been called “a huge step backward for groundwater protection” by environmentalists and “the demise of implied agency authority” by industry.

The expanding application of Act 21 provides a developing opportunity to challenge air and water permitting decisions in Wisconsin. Although the Attorney General’s Opinion is non-binding, it reflects the administration’s push toward limited environmental regulation. It is likely to become increasingly difficult for the agency to resolve complex environmental issues that previously were addressed in negotiated permit decisions, raising the issue of whether it is always in industry’s interest for an environmental agency to be prohibited from making technical and nuanced decisions.

Ninth Circuit to federal land trespassers: Fuggedaboutit

Posted on February 2, 2016 by Theodore Garrett

Tensions ran high in eastern Oregon in early January 2016 as an armed group seized the headquarters of a national wildlife refuge. The occupation began as a protest of the sentencing of ranchers who were convicted of arson on federal lands in Oregon. The occupation subsequently became a rally for opening federal public lands to all. Entering the fray, albeit indirectly, the Ninth Circuit in its January 15, 2016 decision in United States v. Hage, held that defendants’ unauthorized grazing of cattle on federal lands in Nevada was unlawful. Contrary to the views of the Oregon occupiers that they are defending the Constitution, the Ninth Circuit held that grazing cattle without a grazing permit violated federal statutes as well as the state law of trespass, noting that a grazing permit is “a revocable privilege” and is not a “property right.” The Ninth Circuit rejected the district court’s ruling that the government cannot claim trespass if the cattle stayed within a reasonable distance of a source to which defendants had water rights. Concluding that the district judge “harbored animus toward the federal agencies,” the Ninth Circuit requested the Chief Judge of the Northern District of Nevada to assign the case to a different judge on remand. Meanwhile, back in Oregon, several of the protesters have been arrested. One was killed. 

You Say Yes, I Say No, You Say Stop…

Posted on January 11, 2016 by Robert M Olian

Seth Jaffe’s recent post about the tension between Colorado’s governor and attorney general over who has the right to speak on behalf of Colorado in the Clean Power Plan litigation brought to mind the very first piece of environmental litigation I ever worked on, Village of Wilsonville v. SCA Services. In the late 1970s, SCA (which later became part of Chemical Waste Management) began operating a large hazardous waste landfill, fully permitted by Illinois EPA, in Wilsonville, Illinois, and the residents were predictably displeased. (Hint to those of you who operate similar NIMBY-ish facilities – don’t do as SCA did and disseminate marketing materials displaying the site as the “bullseye target” on a regional map showing concentric circles of distances to the facility.)

Not satisfied with some pretty effective self-help efforts (e.g. the Village dug a three-foot wide trench for “sewer repairs” across the only road into the site, thereby halting all truck traffic into and out of the facility), the Village sued SCA and Illinois EPA (the permitting agency) seeking permit revocation and a halt to operation of the facility. The case got off to an unusual start in the trial court (our firm was not retained until the unsuccessful appeal to the Illinois Supreme Court) when then-Attorney General William Scott, who had appeared in the case on behalf of Illinois EPA, stuck his finger in the air, felt which way the wind was blowing, and abandoned the defense of Illinois EPA to file his own complaint and join with the Village against the defendants, including the State agency. Perhaps unlike Colorado, Illinois law is pretty clear that the Attorney General has independent enforcement powers when it comes to environmental matters, so Scott’s volte-face didn’t cause much of a stir other than at Illinois EPA, which had never before been left hanging in the wind like this.

Bill Scott probably remains the Illinois Attorney General best known for environmental enforcement; the first line in his obituary correctly notes that he “achieved an international reputation for his battle on behalf of the environment during his four terms” as Attorney General. Scott tried but never made it to the Governor’s chair, though he clearly had what it takes. Like Otto Kerner, Dan Walker, George Ryan, and Rod Blagojevich - Illinois governors #33, 36, 39 and 40 respectively - Scott later served time in federal prison.

Over the years, notable cases of tension between disparate agencies of the same sovereign have spread from Wilsonville to Colorado to China. A recent news article notes, “Prosecutors in eastern China have filed a lawsuit against a county-level environmental protection department, accusing it of ‘failing to fulfil its regulatory duties’ in its supervision of a local sewage firm.” Apparently the United States is a successful exporter of something; I’m not sure what to call it, but it isn’t as desirable as the Fab Four or iPhones.

Sackett Redux?

Posted on December 17, 2015 by Patrick A. Parenteau

As Annette Kovar recently predicted in her blog, the Supreme Court granted cert in United States Army Corps of Engineers v. Hawkes Construction., Inc. (15-290) to resolve a split in the circuit courts on the question whether a jurisdictional determination (JD) under the Clean Water Act constitutes “final agency action for which there is no other adequate remedy in a court" and is therefore subject to judicial review under the Administrative Procedure Act.

In Hawkes , the Eighth Circuit held that the JD was a final agency action subject to the APA. The case arose after a company sought to mine peat from wetland property owned by two affiliated companies in northwestern Minnesota. The Corps’ JD found that the wetlands onsite were "waters of the United States" and were therefore subject to the permit requirements of section 404 of the CWA. This decision runs counter to the Fifth Circuit decision in Belle Co., LLC v. U.S. Army Corps of Eng’rs.

Both courts evaluated the reviewability of JD’s in light of Sackett v. EPA, which held that property owners may bring a civil action under the APA to challenge EPA's issuance of a CWA §309 compliance order directing them to restore their property immediately pursuant to an EPA work plan and assessing penalties of $37, 500 per day for failure to comply. The Fifth Circuit in Belle declined to apply Sackett on the ground that a JD does not have the same legal consequences as a 309 compliance order. The Eighth Circuit disagreed and held that a JD presents landowners with a Hobson’s choice requiring them “either to incur substantial compliance costs (the permitting process), forego what they assert is lawful use of their property, or risk substantial enforcement penalties.”  

In my view the Fifth Circuit has the better reading of Sackett and the governing law on what constitutes final agency action. The Supreme Court uses a two prong test to determine finality:  first the action must “mark the consummation of the agency’s decision making process;” and second “the action “must be one by which rights or obligations have been determined, or from which legal consequences will flow.” Bennett v. Spear There is no question that a JD satisfies the first prong. But a JD does not meet the second prong for at least three reasons. First, a JD does not determine the rights and obligations of the landowner for the simple reason that the statute has already done that. Section 301 of the CWA prohibits any discharge by any person to a water of the US without a permit.   The landowner’s legal obligations are exactly the same with or without the JD. 

Second, unlike the compliance order in Sackett, a JD does not compel the landowner to take any action at all. Nor does it expose the landowner to penalties, let alone the double penalties at issue in Sackett. The JD notifies the landowner that a permit may be required for discharging dredge or fill material into the wetland unless one of the statutory exclusions such as prior converted cropland apply.  However as the Fifth Circuit said, “even if Belle had never requested the JD and instead had begun to fill, it would not have been immune to enforcement action by the Corps or EPA.” 

Third, the Eighth Circuit was simply wrong to equate the practical consequences of a JD putting the landowner on notice that a permit was required with Bennett’s requirement that the action must have legal consequences. In Bennett the action at issue was a biological opinion issued under section 7 of the Endangered Species Act. The Court found that under the ESA “the Biological Opinion at issue here has direct and appreciable legal consequences;” namely, that it curtailed the authority of the Bureau of Reclamation to provide water for irrigators from federal reservoirs in order to protect endangered fish. Nothing remotely similar to that follows from the issuance of a JD.

Finally the Court ought to be leery of broadening the reach of the APA to include actions having practical effects but not actual legal consequences. That could sweep in a large number of federal actions that have never been thought of as justiciable controversies—for example notices of violations which arguably trigger even more immediate and serious consequences than JD’s. Regulated entities are not the only ones who might benefit from a relaxation of the APA’s finality requirement. Environmental plaintiffs would gain increased access to the courts as well.   

DUE PROCESS TRUMPS DEFERENCE? JURIDICTIONAL QUIBBLING?

Posted on December 10, 2015 by Annette Kovar

The U.S. Supreme Court will likely agree to review the decision of the Eighth Circuit Court of Appeals in Hawkes Co. v. U.S. Army Corps of Engineers. So said John Cruden, Assistant Attorney General for Environment and Natural Resources and College Fellow, to the 2015 National Clean Water Law Seminar. He described the Hawkes case as the second generation of the U.S. Supreme Court’s Sackett v. EPA decision in 2012.

As noted here, the Hawkes case is another wetlands case, this time about a Minnesota peat farming company that applied for a permit from the U.S. Army Corps of Engineers under the Clean Water Act to expand its peat mining operation. The Corps advised Hawkes that it had made a preliminary jurisdictional determination (JD) that the property on which the expansion was planned included regulated wetlands requiring a more extensive environmental assessment. Despite Corps staff attempts to dissuade continuing with the permitting process, Hawkes challenged the preliminary JD. The Corps subsequently prepared an Approved JD and ultimately issued a Revised JD after its own internal review raised issues of concern. The Eighth Circuit Court of Appeals held that the Corps JD was a judicially reviewable final agency action under the Administrative Procedure Act (APA). Previously, the Fifth and Ninth Circuit Courts of Appeal had ruled that a Corps JD was not a judicially reviewable final agency action. The Hawkes case sets up a split in the Circuit Courts making Supreme Court review more likely.

One might recall that the Supreme Court’s unanimous Sackett v. EPA decision held an EPA compliance order, alleging the Sacketts had violated the Clean Water Act by placing fill material on their property without a permit and requiring restoration of the property, was a final agency action and subject to judicial review under the APA. The Supreme Court concluded the Sacketts had no other adequate remedy at law and further stated that the APA creates a “presumption favoring judicial review of administrative action.” Justice Scalia, writing for the Court, said this “presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all.” He continued that nothing in the CWA can be read to enable or condone “the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review—even judicial review of the question whether the regulated party is within EPA’s jurisdiction.” Clearly, principles of fundamental fairness and due process underlie the Sackett decision.

If one goes back to the Hawkes case, note that the Corps describes its preliminary and Approved JDs as tools-- i.e. guidance, to help implement the Clean Water Act, and not orders. JDs probably do streamline the permitting process because an applicant will know what the Corps’ position is before investing heavily in a permit process and may decide to abandon the project. But, there is a hint of “strong-arming” tactics in the Hawkes case that does not bode well for a deferential decision by the Supreme Court to the Corps. However, even if Corps’ JDs become subject to judicial review in the future, won’t a reviewing court still ascribe a certain amount of deference to the Corps’ expertise under APA standard of review precedents? Wouldn’t the Corps have to defend its JD at some point if challenged? Will the Corps really lose much by defending its JD sooner rather than later?

Two Days, Three Decisions, One Big Mess: Welcome to Judicial Review of the Waters of the United States Rule

Posted on August 28, 2015 by Seth Jaffe

On Wednesday, Judge Irene Keeley of the Northern District of West Virginia held that district courts do not have jurisdiction to hear challenges to EPA’s rule defining waters of the United States, because courts of appeal have original jurisdiction over “any effluent limitation or other limitation.”  Yesterday, Judge Lisa Wood of the Southern District of Georgia agreed.

Later yesterday, Judge Ralph Erickson of the District of North Dakota disagreed.  Finding that a definitional rule is not an effluent limitation and is not any “other limitation”, because it “places no new burden or requirements on the States”, Judge Erickson concluded that the district courts do have jurisdiction.  Addressing the merits, Judge Erickson concluded the states were likely to prevail, and would suffer irreparable harm in the absence of an injunction.  He thus enjoined enforcement of the rule in the 13 states involved in the case before him.

I’ll go out on a limb and assert that Judge Erickson’s decision is not likely to survive.  Why not?

  • Both the Georgia and West Virginia opinions cogently explain why the WOTUS rule is an “other limitation under existing CWA cases.
  • Judge Erickson was clearly trying to have his cake and eat it, too. It is, to put it mildly, internally inconsistent for Judge Erickson to conclude that he had jurisdiction to hear the case, because the “rule places no new burden or requirements on the States”, while ruling on the merits that the States will suffer irreparable harm if the rule goes into effect.  If they will suffer harm, it is precisely because the rule will limit them in new ways – which is pretty much what his own opinion says. 
  • As Judge Keeley noted, providing consolidated jurisdiction over all challenges to the rule in one court of appeals furthers

“the congressional goal of ensuring prompt resolution of challenges to EPA’s actions.”  That scheme would be undermined by … a “patchwork quilt” of district court rulings.

Based on these three decisions in just the last two days, it would seem that truer words were never spoken.

 

Wisconsin’s Multi-Discharger Variance for Phosphorus – A Progress Report

Posted on June 8, 2015 by Linda Bochert

On May 5, 2015, the Wisconsin Department of Administration (WDOA) released its Preliminary Determination that compliance with the Wisconsin water quality-based effluent limitations (WQBEL) for phosphorus will cause “substantial and widespread adverse social and economic impacts on a statewide basis”, thus providing the foundation for availability of a statewide multi-discharger variance (MDV).

What brought this on?

In posts in 2011 and 2013, I described Wisconsin’s phosphorus reduction rule, including its compliance options of water quality trading and adaptive management. Recognizing that these innovative compliance alternatives to traditional construction are not viable for all dischargers, in 2014 Wisconsin enacted legislation to authorize a statewide MDV for those dischargers that cannot meet the WQBEL for phosphorus without a major facility upgrade.  Under the MDV, a point source will have more time to meet its phosphorus limitations.  However, during the extended period, they will be obligated to either implement nonpoint source reductions or to provide funding to counties to implement existing, but seriously underfunded, nonpoint source reduction programs.  The expectation is that most permittees will choose to fund their local county.  At $50/pound for the difference between the actual pounds of phosphorus discharged and the target value of 0.2 mg/L, we are talking about real money.

The MDV legislation required the WDOA, in consultation with the Wisconsin Department of Natural Resources (WDNR), to conduct a study to:

“determine whether attaining the water quality standard for phosphorus . . . through compliance with water quality based effluent limitations by point sources that cannot achieve compliance without major facility upgrades is not feasible because it would cause substantial and widespread adverse social and economic impacts on a statewide basis.”

Based on work conducted by ARCADIS, The University of Massachusetts Donohue Institute, and Sycamore Advisors, consultants to WDOA and WDNR, the Preliminary Determination concludes that, without this variance:

·         “almost 600 Wisconsin businesses will be impacted as they continue to work their way out of the recession”

·         Wisconsin communities will experience a minimum cost of “$3.4 billion in capital expenditures which will rise to nearly $7 billion when accounting for interest” to meet increased capital costs

·         Annual operations and maintenance (O&M) cost of $405 million along with debt service will “equate to $708 million annually”

·         In 2025 when the full impact of the costs will be felt, statewide impacts will result in:

o   4,517 fewer jobs

o   $283.3 million in foregone wages

o   $616.6 million reduction in gross state product

o   11,000 fewer Wisconsin residents

A hearing on the Preliminary Determination was held on May 12, and written comments are due by June 11.  The next step is for WDNR to submit a request to the United States Environmental Protection Agency (USEPA) to approve the MDV for phosphorus for Wisconsin.   Once implementation of the MDV begins, much-needed nonpoint source funding can begin to flow.

Additional relevant documents are accessible via the WDNR website

Perhaps a Corps Jurisdictional Interpretation is Final Agency Action After All

Posted on April 16, 2015 by Seth Jaffe

After Sackett, the question on everyone’s mind was “How far does it go?”  The first test of that question was the decision by the 5th Circuit Court of Appeals – not known as a bastion of liberalism – in Belle Company v. Corps of Engineers, holding that a Corps jurisdictional determination is not final agency action subject to judicial review.  Late last week, however, in Hawkes Co. v. Corps of Engineers, the 8th Circuit disagreed, creating a circuit split.

As we noted at the time, the 5th Circuit decision in Belle focused on the differences between the Sacketts’ position facing an enforcement order and that of Belle Company facing a Corps JD.  As the 5th Circuit emphasized, the JD did not require Belle Company to do anything.  Nor did the JD expose Belle Company to penalties.  Nor did it prejudice Belle Company’s ability to obtain a permit.  Nor did it include a finding of a CWA violation.

The 8th Circuit took a different tack, focusing instead on the one great, glaring similarity between the enforcement order in Sackett and the JD in Hawkes Co. – in both cases, the Corps’ decision, as a practical matter, defined the property owner’s rights and ended the proceeding.

It’s not obvious to me that the Supreme Court will take the case, even with the circuit split.  I don’t think that the Court likes these cases.  On the other hand, it is obvious that the conservative wing of the court sees Sackett as a very important decision and there could well be four votes to decide the issue at this point.

If the Court does take the case, all bets are off.  I think that the 5th Circuit still has the better of the legal argument, and I expect that will be sufficient for all but the most ardent property rights advocates on the Court.  Whether there are five ardent property rights advocates on the Court is what remains to be seen.

Oklahoma Federal Court Says It Lacks Jurisdiction to Award Declaratory Relief to EPA in Clean Air Act Case

Posted on March 23, 2015 by Donald Shandy

On January 15, 2015, Oklahoma Western District Judge Timothy DeGiusti dismissed a declaratory judgment action brought by the United States Environmental Protection Agency (EPA) against Oklahoma Gas and Electric Company (OG&E) under the Clean Air Act.  In United States v. Okla. Gas & Elec. Co. , the Court found that it lacked subject matter jurisdiction over EPA’s claims.

The litigation involved certain modifications made by OG&E at its Muskogee and Sooner plants.  These modifications occurred more than five (5) years prior to EPA’s suit.  Before commencing each of the projects, OG&E submitted “Project Notifications” to the Oklahoma Department of Environmental Quality (DEQ) that: (1) stated that each of the modifications would not result in a significant emissions increase; and (2) committed to submitting annual reports supporting this conclusion.  OG&E did not submit detailed emissions calculations.  However, five years of data subsequent to the modifications confirmed that significant emissions increases did not occur. 

Although the underlying dispute revolves around whether OG&E was required to obtain a Prevention of Significant Deterioration (PSD) permit before commencing each of the modifications, EPA did not allege that the projects were “major modifications” or that the projects resulted in “significant emissions increases” from the Sooner or Muskogee plants.  Nor did the government seek penalties for violations of the PSD permit requirements or injunctive relief requiring OG&E to obtain permits, likely seeking to avoid the application of the five year general statute of limitations applicable to government claims for fines, 28 U.S.C. § 2462. Instead, the government only sought a declaration that OG&E did not properly project whether the modifications to the Sooner and Muskogee plants would result in a significant increase in emissions.

Given that the government did not allege a “major modification” or a “significant emissions increase” for any of the projects, the Court found that the government had not presented an actual case or controversy sufficient for the Court's exercise of jurisdiction. 

Even if OG & E failed as a matter of law to evaluate whether the modifications would result in a significant increase in post-modification emissions of regulated pollutants at each facility, that failure to project is not, without more, determinative of whether a PSD permit is required. Unmoored from a claim that the modifications at issue are major modifications, Plaintiffs ask this Court to make a declaration as to a collateral legal issue governing aspects of a future potential suit. EPA's attempt at piecemeal litigation, therefore, cannot withstand the Court's jurisdictional limitations.

The Court also rejected EPA’s novel claim for injunctive relief seeking to require OG&E to properly calculate whether the projects were likely to result in a significant emissions increase prior to construction.

The Court is not aware of any decision in which the injunctive relief requested by EPA has been granted, or for that matter, ever requested. As the parties concede, there is no statutory or regulatory requirement that projections be submitted to EPA or any other regulatory authority in the first instance. And, as the Sixth Circuit addressed in DTE Energy, there is no prior approval required by the agency. Thus, if the Court were to grant the injunctive relief requested by EPA it would be directing OG & E to submit projections where no statutory or regulatory authority for such action exists. The availability of relief of the nature requested by EPA is a matter to be addressed by Congress, not this Court.

This is an important decision limiting EPA’s ability to “second-guess” a facility’s pre-construction permitting calculations in the absence of data demonstrating a significant emissions increase.  

No Competitors In My Backyard?

Posted on March 2, 2015 by Seth Jaffe

In Paradise Lost, John Milton wrote that “easy is the descent into Hell, for it is paved with good intentions.”  

road to hell

A modern environmental lawyer might say that the road to waste, inefficiency, and obstruction is paved with good intentions.  Nowhere is that more apparent than with citizen suit provisions, as was demonstrated in the decision earlier this week in Nucor Steel-Arkansas v. Big River Steel.

Big River Steel obtained a permit from the Arkansas Department of Environmental Quality to construct a steel mill in Mississippi County, Arkansas.  Nucor owns an existing steel mill in – you guessed it – Mississippi County, Arkansas.  Nucor brought a host of claims in various forums (Sorry; I’m not a Latin scholar and cannot bring myself to say “fora”) in an effort to derail the Big River Steel project.  It appealed the permit in Arkansas courts.  It also petitioned EPA to object to the permit.

Finally – the subject of this case – it brought a citizens’ suit under the Clean Air Act alleging that the permit did not comport with various CAA provisions addressing permitting.  The Court rightly dismissed the complaint, basically on the ground that the suit was simply an improper collateral attack on the air permit.  The 5th and 9th Circuits have reached similar conclusions in similar circumstances.

The point here, however, is that clients don’t want to win law suits; they want to build projects.  Even unsuccessful litigation can tie projects up in knots, jeopardizing project financing or causing a project to miss a development window.

The road to hell is paved with the pleadings of bogus citizen suits.

You Can’t Estop the Government — Even When It Wants to Be Estopped

Posted on August 25, 2014 by Seth Jaffe

On August 12th, the 9th Circuit Court of Appeals issued a decision that arguably explains everything from why the Tea Party exists to why otherwise calm and sane executives suddenly lose all their hair. Perhaps most astounding, the decision is clearly correct. Perhaps the law is an ass.

In 2008, Avenal Power submitted an application to EPA for a PSD permit to construct a new 600 MW natural gas-fired power plant in Avenal, California. Although section 165(c) of the Clean Air Act requires EPA to act on such applications within one year, EPA failed to do so.

Subsequently, and before EPA ever did issue a permit, EPA revised the National Ambient Air Quality Standard for NOx. Avenal Power apparently could demonstrate that emissions from the new plant would comply with the old NAAQS, but could not demonstrate that it would not cause an exceedance of the new NAAQS. After some waffling, EPA took the position that it could grandfather the permit application and review it under the prior NAAQS. Citizen groups appealed and the Court of Appeals held that EPA had no authority to grandfather the application.

To the Court, this was a simple application of Step 1 of Chevron. The Court concluded that sections 165(a)(3) and (4) and 110(j) of the CAA unambiguously require EPA to apply the NAAQS in effect at the time a permit is issued. Thus, EPA has no discretion to grandfather permit applications, even though EPA was required by law to issue a permit decision at a time when more lenient requirements were in effect.

I think that the Court’s decision is clearly right on the law. The statutory language seems unambiguous.  But what did the Court have to say to those who feel that the result is inequitable, because Avenal was legally entitled to a decision in one year, and would have obtained its permit if EPA had acted timely? Pretty much, tough luck:

Finally, EPA relies heavily on the argument that the equities weigh in favor of Avenal Power. In short, we agree. Avenal Power filed its application over six years ago, and endeavored to work with EPA for years, even after filing suit, to obtain a final decision. But however regrettable EPA’s treatment of Avenal Power has been, we simply cannot disregard the plain language of the Clean Air Act, or overlook the reason why an applicant must comply with revised and newly stringent standards —that is, “to protect and enhance the quality of the Nation’s air resources so as to promote the public health and welfare and the productive capacity of its population.” Honoring the statute’s plain language and overriding purpose, we must send EPA and Avenal Power back to the drawing board. (Emphasis added.)

In other words, EPA screwed up, and Avenal Power got screwed. Imagine having to explain that to your client.

 

law is an ass