Category: Environmental Law

US Supreme Court Accepts Certiorari in Koontz v. St. Johns River Water Management District — Confiscatory Takings Case

The National Law Review recently featured an article by Kerri L. Barsh of Greenberg Traurig, LLP regarding US Supreme Court Accepts Certiorari in Koontz v. St. Johns River Water Management District — Confiscatory Takings Case:

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On Friday, October 5, 2012, the U.S. Supreme Court granted certiorari in Koontz v. St. Johns River Water Management District, an appeal from the Florida Supreme Court.  The questions presented in Koontz are twofold : (1) whether the government can be held liable for a taking when it refuses to issue a land-use permit on the sole basis that the permit applicant did not accede to a permit condition that, if applied, would violate the essential nexus and rough proportionality tests set out in Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994), and (2) whether the nexus and proportionality tests set out inNollan and Dolan apply to a land-use exaction that takes the form of a government demand that a permit applicant dedicate money, services, labor, or any other type of personal property to a public use. Petitioner Koontz argues in his Petition for Certiorari (a copy of which is attached) that the demands imposed by the St. Johns River Water Management District on the Koontz family as a condition of issuance of the permit were confiscatory and violated the 5th and 14th Amendments of the US. Constitution.

©2012 Greenberg Traurig, LLP

Another Hurdle for GHG Suits as Ninth Circuit Affirms District Court Ruling in Kivalina v. ExxonMobil

The National Law Review recently featured an article by Xiaorong Jajah Wu and Jane E. Montgomery of Schiff Hardin LLP regarding GHG Suits:

 

In a unanimous decision last week, the Ninth Circuit Court of Appeals ruled that federal common law public nuisance claims regarding domestic greenhouse gas emissions have been displaced by the Clean Air Act (“CAA”) and the United States Environmental Protection Agency (“USEPA”) action the CAA authorizes. Native Vill. of Kivalina v. ExxonMobil Corp., 09-17490, 2012 WL 4215921 (9th Cir. Sept. 21, 2012).

On February 28, 2008, the Village sued ExxonMobil Corporation in federal court along with eight other oil companies, fourteen power companies, and one coal company. The suit was based on, among other things, the federal common law theory of public nuisance. The Village alleged that the companies named in the suit are substantial contributors to global warming because of their high volume of greenhouse gas emissions, and that the Village was directly harmed by global warming because the melting of sea ice exposed the Village to erosive coastal storms. The Village sought monetary damages for the defendants’ contributions to global warming. The district court dismissed the case, holding that (1) the political question doctrine precluded judicial consideration of the Village’s federal public nuisance claims and (2) the Village lacked standing under Article III. Native Vill. of Kivalina v. ExxonMobil Corp., 663 F. Supp. 2d 863, 868 (N.D. Cal. 2009).

The Ninth Circuit affirmed the dismissal on the grounds that the Village had failed to satisfy the threshold question of whether or not legislative action has displaced the theory of public nuisance under federal common law. The court stated that “[i]f Congress has addressed a federal issue by statute, then there is no gap for federal common law to fill.” Relying heavily on the recent Supreme Court ruling in American Electric Power Co., Inc. v. Connecticut, 131 S. Ct. 2527 (2011), the court held that, because the CAA already “provides a means to seek limits on emissions of carbon dioxide from domestic power plants . . . [the CAA and] the EPA actions it authorizes displace any federal common law right” the Village might have to seek damages based on federal common law nuisance. The Ninth Circuit also refused to allow the absence of a damages remedy under the CAA in this case to revive the federal common law damages action. In its decision, the appeals court declined to discuss the issues of political question or standing. The ruling poses another hurdle for greenhouse gas suits based on the theory of public nuisance. At least in the Ninth Circuit, federal common law suits based on transboundary pollution claims against greenhouse gas emitters are now foreclosed. Further, the decision provides additional backing to USEPA to implement the suite of rules regulating GHG emissions pursuant to the CAA.

While the Ninth Circuit backed USEPA’s authority to address global warming through the CAA, the Republican-controlled House passed a deregulatory bill on the same day titled “Stop the War on Coal Act of 2012” (H.R. 3409). The proposed bill would prevent USEPA from enforcing its recent GHG regulations and require the agency to consider the costs and economic impacts of certain regulations. However, the future of the bill is uncertain because the Obama administration has issued a veto threat (182 DEN A-11, 9/20/12), and it is unlikely to move through the Democratic-controlled Senate. Future actions to address these issues are unlikely until after the November elections. Text of the Stop the War on Coal Act of 2012 (H.R. 3409) is available here

Details on each of the amendments to the bill are available here and by clicking on “Amendments” tab.

© 2012 Schiff Hardin LLP

Coast Guard Proposes New Rule on Discharges in the Great Lakes

Varnum LLP‘s Timothy J. Lundgren recently had an article, Coast Guard Proposes New Rule on Discharges in the Great Lakes, published in The National Law Review:

Varnum LLP

 

The Coast Guard is proposing to replace its interim rule with a new rule to regulate the operation of U.S. and foreign vessels carrying bulk dry cargo (e.g., limestone, iron ore, coal) on U.S. waters of the Great Lakes, and the operation of U.S. bulk dry cargo vessels anywhere on the Great Lakes. The new requirements address the discharge of bulk dry cargo residue (“DCR”). The proposed rule would continue to allow non-hazardous and non-toxic discharges of bulk DCR in limited areas of the Great Lakes. However, vessel owners and operators would need to minimize DCR discharges and document their methods for doing so in DCR management plans. Certain additional DCR discharges currently allowed would be restricted.

The potential for DCR discharges to encourage non-native species, the interaction of this regulation with EPA’s Vessel General Permit and the states’ coastal zone management plans as well as various other laws and treaties, and a variety of other topics are covered in the Federal Register Notice. Comments on the proposed rule can be submitted to the online docket on or before October 29, 2012.

© 2012 Varnum LLP

Court Strikes Down EPA Overreaching – Again

An article by Robert M. Stonestreet of Dinsmore & Shohl LLP regarding the EPA recently appeared in The National Law Review:

 

For the third time in the past 10 months, a federal court has declared that the Environmental Protection Agency (EPA) has violated the law through its efforts to impose additional restrictions on coal operations in the Appalachian States. On July 31, 2012, the federal District Court for the District of Columbia struck down EPA’s “guidance memorandum” for coal-related water permitting actions. The guidance purports to establish a number of “recommendations” and “suggestions” for the Corps of Engineers and State agencies like the West Virginia Department of Environmental Protection (WVDEP) to “consider” when processing applications for mining related permits. One of the recommendations is that permits should place limitations on conductivity levels in discharges from mining operations to ensure compliance with “narrative water quality standards,” such as the requirement that discharges into State waters do not cause a “significant adverse impact” to aquatic ecosystems. Conductivity is a measurement of how well water conducts electricity and is considered to be a rough surrogate for the concentration of total dissolved solids (TDS) present in water. Neither EPA nor the Appalachian States have adopted a water quality standard for conductivity. Nonetheless, for more than two years the State agencies have been effectively prevented from issuing new water discharge permits for mining-related projects unless they included conditions that implemented the views expressed in EPA’s “guidance.”

The National Mining Association and the States of West Virginia and Kentucky sued EPA on the grounds that EPA’s “suggestions” and “recommendations” were effectively binding obligations, and therefore constituted a rulemaking action that EPA undertook without following the procedures required by law for issuing new regulations. U. S. District Court Judge Reggie Walton agreed. “Review of the Final Guidance itself and of the post-implementation evidence before the Court makes clear that the Final Guidance, whether intentionally or not, has caused EPA field offices and the State permitting authorities to believe that permits should and will be denied if its ‘suggestions’ and ‘recommendations’ are not satisfied.” Judge Walton further found that the guidance improperly interjected EPA into the permitting process for “dredge and fill” permits issued by the Army Corps of Engineers under Section 404 of the Clean Water Act, as well as the mining-related permits issued by State agencies like WVDEP, which have obtained federal approval to administer those permitting programs.

Judge Walton’s decision invalidating EPA’s guidance is only the latest in a string of court defeats for the EPA. In October 2011, as part of the same lawsuit, Judge Walton declared that EPA’s efforts to develop a new procedure for processing and evaluating “dredge and fill” permit applications for coal mining projects in Appalachia exceeded EPA’s authority under the Clean Water Act. Following that decision, federal Judge Amy Berman Jackson, an Obama appointee, ruled on March 23, 2012 that EPA violated the Clean Water Act in January 2011 by attempting to retroactively “veto” a permit that was granted to Mingo Logan Coal Company in January 2007.

What does this latest decision mean for the coal industry in West Virginia?

The upshot is an affirmation that the Corps of Engineers and WVDEP are the lead regulatory agencies responsible for determining the terms of mining-related permits. More importantly, Judge Walton’s decision invalidating EPA’s guidance should mean that WVDEP is free to interpret and apply West Virginia law to determine the appropriate terms to include in mining-related permits, including what requirements are necessary to ensure compliance with West Virginia’s narrative water quality standards. Earlier this year, the West Virginia Legislature passed a bill making clear that WVDEP has the authority to interpret and apply those standards, and established a number of specific factors for WVDEP to consider. Through its guidance, EPA had effectively arrogated to itself the role of interpreting and applying the narrative water quality standards in West Virginia and the other Appalachian States.

The practical effect of the decision may be negligible, or at least short-lived. EPA has a right to review and comment on all proposed water discharge permits issued by WVDEP. EPA can formally object to those permits, and if the grounds for those objections are not resolved to its satisfaction, EPA can prevent WVDEP from issuing the permits. EPA could undertake the required rulemaking process to formally implement the invalidated guidance. EPA is also in the process of developing a water quality standard for conductivity that could potentially be forced on the States. That would present a substantial regulatory burden on all West Virginia businesses because virtually all industrial discharges, particularly from publicly owned water treatment plants and any activity entailing even temporary earth disturbance, have conductivity levels in excess of background levels, and treatment is very expensive. Right now, EPA’s focus is on the coal industry. But other industries beware. You could be next.

© 2012 Dinsmore & Shohl LLP

D.C. Circuit Court Vacates EPA’s Cross-State Emissions Rule

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In a 2-1 decision issued today, the U.S. Court of Appeals for the District of Columbia Circuit ruled in EME Homer City Generation, L.P v. EPA, that the U.S. Environmental Protection Agency exceeded its statutory authority in adopting the Cross State Air Pollution Rule (CSAPR or Transport Rule).  The D.C. Circuit found that EPA’s Transport Rule exceeded the agency’s authority on 2 separate grounds, both of which violated the Clean Air Act and required that the Rule be vacated.

Led by Texas, various States, local governments, industry groups and labor organizations had challenged the Rule, which was a significant air policy regulation of the Obama administration.  Acknowledging the complexity of the facts,  Judge Brett Kavanaugh, writing for the majority, noted that “the legal principles that govern this case are straightforward : Absent a claim of constitutional authority (and there is none here), executive agencies may exercise only the authority conferred by statute, and agencies may not transgress statutory limits on that authority.” The Court went on to note that its decision should not be viewed as a comment on the Rule’s wisdom or underlying merits but rather “to ensure that the agency stays within the boundaries Congress has set.”

©2012 Greenberg Traurig, LLP

D.C. Circuit Vacates CSAPR, Instructs USEPA to Continue Administering CAIR

Schiff Hardin LLP‘s Environmental Group recently had an article regarding CSAPR published in The National Law Review:

 

In a 2-1 decision, the Court of Appeals for the D.C. Circuit vacated the United States Environmental Protection Agency’s (“USEPA”) Cross-State Air Pollution Rule (“CSAPR” or the “Transport Rule”), USEPA’s attempt to “fix” the Clean Air Interstate Rule (“CAIR”) to regulate downwind state air pollution under the Clean Air Act (“CAA”). EME Homer City Generation LP v. EPA, D.C. Cir. No. 11-1302 (Aug. 21, 2012). In 2008, the D.C. Circuit struck down and remanded CAIR, with instructions to USEPA to continue administration of the CAIR until the replacement rule was implemented. Here, in light of the vacatur of the CSAPR, the D.C. Circuit has instructed USEPA to “continue administering CAIR pending [USEPA’s] promulgation of a valid replacement.”

By way of background, USEPA promulgated the Transport Rule in August 2011 in response to the court’s order in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008) remanding the CAIR, and to address the 2006 24-hour national ambient air quality standard (“NAAQS”) for fine particulate matter. The Transport Rule established an interstate program to require power companies in 28 “upwind” states to reduce emissions of sulfur dioxide (“SO2”) and nitrogen oxides (“NOx”) to enable downwind states to achieve and maintain NAAQS for ozone and fine particulate matter. Following challenges by affected states and industry, the D.C. Circuit stayed the Transport Rule on December 30, 2011. The stay remained in effect until today’s decision on the merits, where the D.C. Circuit provided two independent grounds for vacatur.

First, the court found that USEPA exceeded its statutory authority granted under Section 110(a)(2)(D), the so-called “good neighbor” provisions of the CAA, by potentially requiring an upwind state to reduce emissions in excess of its contribution to a downwind states exceedance of air quality standards. In so ruling, the court explained that USEPA may require an upwind state to “eliminate only its own ‘amounts which will . . . contribute significantly’ to a downwind State’s ‘nonattainment,'” and “may not require any upwind State to ‘share the burden of reducing other upwind states’ emissions.'” Moreover, while the court acknowledged that USEPA may consider the cost of pollution reductions to lessen the burden upon an upwind state, it may not, as the court found USEPA did in establishing emission reductions under the Transport Rule, use cost considerations to impose pollution reduction obligations above and beyond what was necessary for downwind states to meet air quality standards.

Second, the D.C. Circuit struck USEPA’s decision to require that each state comply with a federal implementation plan (“FIP”) to implement the emission reductions mandated by the Transport Rule rather than allowing each state to determine how best to achieve the reductions within the state, i.e., the FIP-first approach included in the Transport Rule. By imposing a FIP prior to allowing states to implement their own plans, USEPA had usurped a role that was clearly designated by statute to the states. With regard to the “good neighbor” provision, the court held that USEPA must first inform states of their reduction obligations and then provide the states time to develop and submit SIPs, just as it does for new NAAQS. USEPA may not impose a FIP that directs each state on how to achieve the requirements of the Transport Rule without first providing each state a “reasonable time to implement that requirement [under a state implementation plan] with respect to sources within the State.”

The D.C. Circuit advised that its “decision … should not be interpreted as a comment on the wisdom or policy merits of EPA’s Transport Rule” and that USEPA should “proceed expeditiously” to promulgate yet another replacement for CAIR consistent with this decision and, presumably, with the North Carolina decision. The decision in this case further clarifies USEPA’s role and obligations regarding identifying states’ air quality impacts on downwind states. It also emphasizes that the cooperative federalism concept embodied in the CAA is vital to successful implementation of the Act.

© 2012 Schiff Hardin LLP

DC Appeals Court Upholds EPA’s Greenhouse Gas Rules

Timothy J. Lundgren of Varnum LLP recently had an article regarding EPA’s Greenhouse Gas Rules, published in The National Law Review:
Varnum LLP

The U.S. Court of Appeals, D.C. Circuit, upheld the EPA’s greenhouse gas (GHG) regulations against a challenge brought by business interests and the attorney generals of a number of states seeking relief from EPA’s new GHG regulations. As a result, EPA’s GHG regulations remain effective, and PSD and Title V permits must continue to include BACT limits on GHG emissions. Barring a reversal by the Supreme Court (which seems unlikely at this point) or action by Congress, the inexorable processes of the CAA will likely lead to further and more restrictive regulation of GHGs by EPA going forward.

The regulations grow out of an earlier case decided at the Supreme Court, in 2007,Massachusetts v. EPA, which determined that GHGs are an “air pollutant” for purposes of the Clean Air Act, and so are subject to regulation. Since that 2007 decision, the EPA has taken a number of steps related to GHG regulation, including issuing an Endangerment Finding (that GHGs may “reasonably be anticipated to endanger public health or welfare”), setting emission standards for cars and light trucks (the “Tailpipe Rule”), and establishing construction and operating permits for major stationary sources of GHGs. These permits would require implementation of the best available control technology (“BACT”) to limit GHG emissions.

The various Petitioners raised numerous substantive and procedural challenges to EPA’s findings, including claims that the bases for EPA’s Endangerment Finding and Tailpipe Rule were improper, that the scientific record was inadequate or improperly addressed, and that the requirements of the Administrative Procedures Act (“APA”) had not been met during the development of these regulations, among other claims. The court upheld EPA’s review of and reliance on the scientific record it had compiled, as well as its compliance with the APA. The court also rejected challenges to major source permitting requirements, largely based on the statutory language of the Clean Air Act. Given the court’s heavy reliance on the Clean Air Act and the Supreme Court’s 2007 decision, a reversal seems unlikely without some change in direction by the high court.

© 2012 Varnum LLP

Air Quality Alert: EPA Proposes Stricter Particulate Matter Standard

An article by Environmental Law Department of Barnes & Thornburg LLP, Air Quality Alert: EPA Proposes Stricter Particulate Matter Standard, was featured in The National Law Review:

On June 15, 2012, U.S. EPA proposed stricter standards to the National Ambient Air Quality Standards (NAAQS) under the Clean Air Act for fine particulate matter. The proposed rule, which is the result of a lawsuit in the U.S. Court of Appeals in the Washington D.C Circuit brought by environmental groups and certain states, proposes to tighten the annual standard for particulate matter under 2.5 microns (PM 2.5) from 15 micrograms per cubic meter (ug/m3) (the 2006 standard) to between 12 and 13 ug/m3. The rule also proposes a new separate standard for improving visibility in urban areas of either 28 to 30 “deciviews,” a measurement of visibility. The proposed rule and “fact sheets” provided by the Agency make clear that EPA is not proposing a change to the existing 24-hour and secondary standards for fine and course particulate matter set in 2006.

EPA claims that the new standard will come at an annual cost of between $2.9 million and $69 million (depending upon a final standard of 12 or 13 ug/m3), but claims these costs are outweighed by alleged health benefits of $220 million to $5.9 billion. EPA is also claiming that all but six counties in the United States should be able to meet the new standards without additional action. However, San Bernadino and Riverside Counties in California, Santa Cruz County in Arizona, Wayne County in Michigan, Jefferson County in Alabama, and Lincoln County in Montana – are all expected to need to reduce fine particulate emissions to attain the new standards.

Under state and federal Clean Air Act regulations, counties that are out of attainment with the NAAQs can be subject to special “Retro-active Control Technology” (RACT) requirements, and new sources of fine particulate emissions will need to obtain “offsets” prior to construction among other requirements.

In addition to the new proposed standards, EPA is also proposing changes to monitoring requirements for fine particulate matter including the addition of fine particulate ambient air monitors especially along urban highways.

EPA’s proposed rule comes during an election year and is expected to draw broad criticism from Republicans and industry groups. Environmental groups are already praising the new proposed lower standards. The new proposed rule has not yet been published in the Federal Register. Comments on the new proposed rule are due within 63 days of publication in the Federal Register and can be submitted through http://www.regulations.gov. The proposed rule and related fact sheets can be viewed at http://www.epa.gov/pm/actions.html.

© 2012 BARNES & THORNBURG LLP

Federal Court Approves Plan to Drill Off Alaska’s North Shore

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On May 25, the Ninth Circuit Court of Appeals issued adecision upholding theBureau of Ocean Energy Management’s (BOEM) approval of Shell Oil Company’s plan for exploratory drilling in Alaska’s Chukchi Sea. Two Alaskan Inupiat groups and ten environmental groups, including Greenpeace and the Sierra Club, brought the appeal challenging BOEM’s August 2011 approval of the drilling plans. The environmental groups claimed that BOEM erred in approving the plan because (1) the plan did not adequately inform BOEM about its oil spill response plan, and (2) the seven-paragraph description of the well-capping stack and the containment systems was incomplete. However, the court deferred to BOEM’s technical expertise in evaluating the adequacy of the oil spill response plan and found that BOEM had complied with applicable statutes and regulations in approving the plan.

The court’s deference to BOEM’s approval of well-capping technology is significant because it opens a gateway through which other drilling efforts in the Arctic can get approval. Well-capping, the same technology that BP used in containing the Deepwater Horizon spill, had never before been approved for use in Alaska or in Arctic drilling conditions. The opinion also marks a victory for Shell, which has been trying to get approval for the exploratory drilling project since 2005, when Shell purchased a lease portion in Alaska’s continental shelf from the Minerals Management Service.

Other appeals are still pending in the Ninth Circuit, including one challenging the approval of federal air quality permits for the project. Unless that litigation disrupts the project, the Chukchi Sea drilling operations will commence early next month.

From Chelsae Johansen, summer associate, of GT Tampa:

©2012 Greenberg Traurig, LLP

Dept of Energy Liable for $150 Million Because It Has Not Built a Nuclear Waste Facility

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On May 18, in Yankee Atomic Elec Co. v. United States, the Federal Circuit affirmed a damages judgment of $142.6 million, and added $17.0 million to the judgment by granting a cross-appeal, in a breach of contract action against the government arising from the Department of Energy’s failure to remove spent nuclear fuel from three reactor sites in New England.  The decision came in three consolidated cases from among the 55 that have been filed in the Court of Federal Claims as a result of DOE’s breach of contracts it has with all nuclear utility companies under which the agency was required to begin removing spent fuel from reactor sites in 1998.  Due to chronic delays with the DOE program, including controversy over the proposed Yucca Mountain, Nevada, repository DOE has never commenced any performance.  The utilities have therefore been required to license and construct on-site storage facilities for the nuclear waste, the substantial cost of which constitutes the bulk of the damages claimed in the breach of contract actions.

Beginning in 2004 the government began settling some of these contract cases, and in recent years the pace of settlements has increased following utility victories on most contested issues.  Settlements to date are estimated to exceed $2 billion, and only about 20 of the contract cases remain pending.  However, separate litigation has arisen in the D.C. Circuit over DOE’s proposal to formally cancel work on the Yucca Mountain repository, and also seeking to relieve the utilities of the obligation to pay ongoing fees to DOE under the spent fuel contracts, fees that collectively cost the industry about $750 million per year.

Yankee Atomic was the first of these spent fuel damages cases filed, in 1998, and GT lawyers have represented Yankee Atomic as well as the other two companies involved in the May 18 decision, Connecticut Yankee Atomic Power Company and Maine Yankee Atomic Power Company, throughout the litigation, which has involved two trials and three appeals.

For the Legal Times of Washington’s take on this opinion, click here.

©2012 Greenberg Traurig, LLP