Three Weeks; Three Decisions Rejecting Regulatory Delays

The Trump administration.  The gift that keeps on giving to bloggers.  After posting last week about the order requiring DOE to send its energy efficiency standards to the Federal Register for publication, I noted that that regulatory delay cases were going to have to become a regular feature in this space.  Lo and behold, on the same date, Judge Jeff White rejected EPA’s “Delay Rule” that would have postponed compliance deadlines under the Formaldehyde Act.  

The decision was not difficult.  The Court concluded that the statute unambiguously precluded EPA’s interpretation.

Although the Court owes deference to the EPA’s interpretation of the statute, the Court is compelled to give meaning to the statutory provisions and cannot endorse an interpretation that permits the EPA to exercise its authority “‘in a manner that is inconsistent with the administrative structure that Congress enacted into law.’”

The EPA’s interpretation creates inconsistency within the full text of the Act, renders the 180-day compliance deadline superfluous, leads to the absurd result of permitting the perpetual delay of the effectiveness of the Formaldehyde Rule, and fails to satisfy the stated purpose of the Act. Accordingly, the Court finds that the Delay Rule is in excess of the EPA’s authority under the Formaldehyde Act and is not in accordance with law.

That’s three strikes in less than three weeks, but I don’t expect the administration to stop swinging.  I would give the administration one piece of advice and suggest that calling something the “Delay Rule” seems to be asking for trouble.

Of course, I shouldn’t rule out the possibility that the administration cares more about advertising its effort at delaying regulations than it does in actually winning these cases.

The Clean Air Act is Really Complicated; Can’t We Call the Whole Thing Off?

Last week, the Court of Appeals for the District of Columbia struck down EPA’s rule implementing the 2008 ozone standards.  My primary take-away?  The structure of the Clean Air Act is so dense and so complicated that they give me a headache, and I do like to think I’m something of an expert.  Those of us who believe in government regulation need to be honest and admit that there’s a reason why some people become LIbertarians.  

At a more substantive level, and trying to cut through the regulatory thicket, here are the important messages:

  • Areas in non-attainment may only satisfy their obligations to demonstrate progress towards attainment with reductions within the specific non-attainment area at issue.
  • Where areas have been in non-attainment under prior ozone standards, the anti-backsliding provisions of the CAA preclude implementation rules for newer standards from abrogating any requirements that would have any bearing on improvements in air quality.
  • Even for areas that appear to have reached attainment with newer, more stringent NAAQS, anti-backsliding provisions prevent relief from prior requirements if the areas have not formally been redesignated as being in attainment.

As Hillel might have said.  This is the whole of ozone implementation.  The rest is commentary.  Go forth and study.

Now It’s DOE’s Turn — Another Court Requires the Administration to Promulgate Regulations

Last week, I noted that EPA had been ordered to respond to a petition by Connecticut under § 126(b) of the Clean Air Act.  This week, DOE was ordered to promulgate energy efficiency rules under the Energy Policy and Conservation Act.  My mother used to say that comparisons are odious, but I have to say that DOE’s conduct was even more egregious than that of EPA.

DOE actually finalized the standards in 2016.  It simply did not send the regulations to the Federal Register, because DOE’s “Error Correction Rule” required that DOE give the public 45 days to review the regulations, not for substantive comment, but only to find “errors,” defined as:

an aspect of the regulatory text of a rule that is inconsistent with what the Secretary intended regarding the rule at the time of posting

Other aspects of the Error Correction rule make clear that it is not an opportunity for the public to make substantive comment or for DOE to revise the efficiency rules.  Moreover, each energy efficiency rule was described by DOE as being a “final rule.”

There were four rules.  DOE received no suggestion of error as to three rules.  One rule had an error.  One “table included the value ‘>300,000’ instead of ‘≥300,000.’”  And yet, DOE still has not sent the rules to the Federal Register, which is required for them to take effect.  The Court was was not pleased. It rejected what DOE described as its:

“free-standing authority and discretion to continue to assess, modify, or withdraw draft rules that the agency has contemplated before those rules are published as final rules in the Federal Register.”

As the Court emphasized, “there is no support for this assertion in the language of the Rule or the history of its adoption.”  The Court thus found the rule to be unambiguous in requiring publication in the Federal Register following the “error correction” process.

I think that the courts’ efforts to rein in the Administration’s efforts to avoid issuing regulations is going to have to become a regular feature of this blog.

Trump’s Infrastructure Plan — Environmental Reviews, They Are a-Changin’

President Trump’s infrastructure plan includes a number of important proposals.  My initial reaction is consistent with my view of many of the President’s initiatives – he gives regulatory reform a bad name.  We do need to reform the way we implement infrastructure projects in the US, but this President is not the one to lead the effort.


Here are some of the problems I see.

First, the President wants a hard deadline, requiring that infrastructure projects be permitted within 24 months (21 months for NEPA review and three months more for permitting).  Having suffered the slings and arrows of NEPA delays, I understand the frustration, but this is not the place for a Gordian Knot solution.  For complicated projects, which are likely to be the ones we care about, these reviews just take time.  And what happens to the projects when a court finds the review to be inadequate because it was done in a slapdash manner?

Second, he wants to limit injunctive relief to “exceptional circumstances.”  As someone who almost always represents project proponents, I can tell you that the common sense advice to get shovels in the ground is always wise.  Once these projects start, it’s going to be very difficult to stop them.  Precluding injunctive relief is just saying that NEPA is nothing more than an annoyance.

Finally, the proposal would eliminate EPA’s authority to veto Army Corps permits under § 404 of the Clean Water Act, calling it “duplicative” authority.  Sorry, to me, the situation is analogous to when Congress realized that having the Atomic Energy Commission both cheerlead for and regulate nuclear power was probably a bad idea.  Let’s face it, the Corps likes projects.  To have the Corps be the final word on the environmental impacts of projects is probably not a wise idea, regardless of the Corps’ obvious expertise.

We need Nixon in China for real regulatory reform.  Instead, we get the fox in the henhouse.

The “Best Available Science” Is That the Arctic Ringed Seal Is Threatened

Earlier this week, the 9th Circuit Court of Appeals reversed a District Court decision and reinstated the National Marine Fisheries Service’s decision to list the Arctic ringed seal as threatened under the Endangered Species Act.  The decision was not a surprise, because the 9th Circuit had already affirmed NMFS’s decision to list the bearded seal on identical grounds.

What caught my eye was this language in the opinion – actually a quote from the bearded seal decision.

[T]he IPCC climate models constitut[e] the best available science and reasonably suppor[t] the determination that a species reliant on sea ice likely would become endangered in the foreseeable future.

If courts of appeal believe that the IPCC climate models are the “best available science,” that doesn’t really bode well for any Trump administration efforts to undo the endangerment finding or take other regulatory action based on the view that mainstream climate science is not reliable.

More Guidance on Guidance: DOJ Will Not Enforce “Improper” Agency Guidance Documents

In November, Attorney General Sessions issued a memorandum prohibiting DOJ from issuing regulations disguised as guidance.

Folders with the label Regulations and Guidelines

Now, DOJ has taken the prohibition a step further.  It will no longer rely on guidance issued by other agencies when taking civil enforcement action.  The memorandum has made the regulated community and the NGO community sit up and take notice.

I am sympathetic to the concerns raised in the Sessions memo.  I hate circumvention of notice and comment rulemaking by guidance.  However, as I noted when the memo was released, the problem with guidance documents is not how they are drafted; it’s how they are implemented.

For example, the new memorandum states that:

The Department may continue to use agency guidance documents for proper purposes in such cases.  For instance, some guidance documents simply explain or paraphrase legal mandates from existing statutes or regulations.

Well, but in the first instance, who decides whether a guidance document “simply explains or paraphrases legal mandates” or whether it instead “purports to create rights or obligations binding on persons or entities outside the Executive Branch”?

The agency does, of course – perhaps aided by its counsel, DOJ.

This will particularly be an issue where guidance has been in place for many years and has been relied on by both an agency and the regulated community as accurately describing what the law actually is.  Take, for example, the New Source Review Workshop Manual.  The Manual is not only not a regulation; it’s been in draft for 28 years.  Nonetheless, it’s been relied on as the bible for practitioners since then.  It might be exempt from this policy, which makes clear that it does not apply to internal training materials.  However, when internal training materials are used to say what the law is, that sounds like regulation masquerading as guidance to me.

Here’s another issue.  What are the implications of this guidance memorandum for cooperative federalism?  In a delegated program, what happens if states continue to rely on guidance documents in enforcing federal obligations?  Are we going to have one interpretation under federal law and another interpretation under state law?  Can you say “forum shopping”?!

Finally, I cannot resist pointing out the irony inherent in the AG issuing two separate guidance documents on the proper – and improper – use of guidance documents.

NGOs Again Fail to Establish that EPA Has a Non-Discretionary Duty Under the CWA Stormwater Regulations

Last month, the 1st Circuit Court of Appeals rejected the Conservation Law Foundation’s argument that EPA had a non-discretionary duty to require persons owner property where stormwater runoff contributes to an exceedance of a TMDL to obtain NPDES permits.  Now, Judge George Russell has ruled that EPA does not have non-discretionary duty under the Clean Water Act to determine whether commercial, institutional, and industrial users contribute to a violation of water quality criteria in the Back River watershed. 

Do I detect a trend?

If EPA had such a duty, it was pursuant to its own regulations, not the CWA itself.  Here’s the critical language:

On and after October 1, 1994, for discharges composed entirely of storm water, … operators shall be required to obtain a NPDES permit only if … [t]he Director, or in States with approved NPDES programs either the Director or the EPA Regional Administrator, determines that the discharge, or category of discharges within a geographic area, contributes to a violation of a water quality standard or is a significant contributor of pollutants to waters of the United States.

Sometimes language really is pretty clear.  As the Court noted, the non-discretionary duty here is on the operator, not on EPA.  If EPA finds a problem, then the operator must obtain a permit.  There is nothing in this language that requires EPA to determine whether or not the operator’s discharge in fact poses a problem.

Although the clarity of the language made it unnecessary, I will note that the Court relied on Auer v. Robbins, and emphasized that “EPA’s interpretation of its own regulations is entitled to significant deference.”

More support for the conservative case for Chevron – and Auer – deference!

Statutory Deadlines Matter — EPA Gets Taken to the Woodshed

Earlier this week, EPA was ordered to take final action on a Clean Air Act § 126(b) petition filed by the State of Connecticut, asserting that emissions from the Brunner Island Steam Electric Station in Pennsylvania contribute to nonattainment in Connecticut.  EPA did not dispute liability; it had clearly missed the original statutory deadline.  The case was all about the remedy.  EPA asked to be given until December 31, 2018 to respond.  Plaintiffs said EPA could respond within 60 days.

Noting the “heavy burden” EPA bears in trying to demonstrate that it cannot comply with the congressionally mandated timeline, The Court ordered a response within 60 days, concluding that:

Defendants’ proposed schedule contravenes the congressional intent that EPA “act quickly on a Section 126(b) petition.”

I noted last spring that we are likely to see more of these cases and I think we’re also going to see increasing judicial impatience with agency delay.  I also wonder if this case might be the first bit of evidence that Scott Pruitt’s order precluding the notorious – if mythical – practice of “sue and settle” may have come back to bite EPA.

EPA had to know it was going to lose this case.  In bygone days – meaning 2016 – EPA would have negotiated for the best schedule it could have gotten.  If EPA had told the plaintiffs it would respond to the petition within 90 or even 120 days, my guess is that the plaintiffs would have accepted such a proposal.  Given the Pruitt memorandum, that was not possible.  The outcome?  The worst possible result for EPA.

Just wonderin’.

(Full disclosure.  Foley Hoag has represented Talen Energy, owner of Brunner Island, on matters unrelated to Brunner Island.  We take no position on the merits of the underlying § 126(b) petition.)

The 9th Circuit Weighs In — Discharges to Groundwater Are Subject to the Clean Water Act

As I’ve previously discussed, whether a discharge to groundwater may be subject to Clean Water Act jurisdiction is currently in dispute.  Now the 9th Circuit has weighed in, finding that point discharges to groundwater are subject to the Clean Water Act, so long as an ultimate discharge of pollutants to surface waters of the United States is “fairly traceable” to the discharge to groundwater.  My advice to the County of Maui? File a certiorari petition.

It’s fairly certain that groundwater is not a water of the United States.  How then, can discharges of groundwater be subject to the Clean Water Act?  Good question.  Although not solidly grounded in the text of the CWA, I admit I like the approach taken in Tennessee Clean Water Network v. TVA, in which the Court concluded that discharges of groundwater are subject to the CWA:

if the hydrologic connection between the source of the pollutants and navigable waters is direct, immediate, and can generally be traced.

The decision avoids the seemingly ridiculous situation in which the outcome differs if the point source discharges to surface water or if the discharge is to groundwater 10 feet away from the surface water.

The 9th Circuit decision is much broader, finding jurisdiction so long as the “pollutants are fairly traceable from the point source to the navigable water.”  The 9th Circuit approach does not require that the connection be “direct” and “immediate.”

The problem with the 9th Circuit approach is demonstrated by regulations promulgated by the Massachusetts Department of Environmental Protection which basically provide that all groundwater should be assumed to discharge to surface water.  I’m skeptical that Congress intended discharges to groundwater to be subject to the CWA, in any case where an ultimate discharge to surface waters can be traced back to a point source discharging to groundwater.

As a practical level, I still like the Tennessee Clean Water Network case approach, but I’m not even sure that that interpretation would command a majority at the Supreme Court.

Settling Federal Environmental Enforcement Claims — Some Payments to Third Parties May Be Allowed (But Not Many)

Earlier this month, Jeffrey Wood, Acting Assistant Attorney General for Environment and Natural Resources issued a memorandum expanding on Jeff Sessions’ memorandum of June 5, 2017, generally barring payments to third parties as part of government settlements.  (And, yes, I know there should be another “s” after the apostrophe, but I’m hereby announcing a new rule; if I can’t pronounce it, I’m not writing it!) The Wood Memorandum affirms – of course – the June 5 Memorandum, but attempts to set forth in a little more detail what types of payments are exempt from the prohibition.  It also requires approval by the Assistant Attorney General of any settlements containing third-party payments.

The examples given in the memorandum are useful and should be carefully reviewed by practitioners.  The bottom line is that the scope of such payments will certainly be more limited than under prior administrations.

What I particularly liked about the Wood Memorandum was this language, repeated numerous times:

Care should be taken to ensure that the project does not mitigate harm out of proportion with the harm that resulted from the unlawful conduct.

I’m glad that ENRD will take care to ensure that defendants never make any 3rd party payments that would result in any extra remediation or mitigation!

EPA Approvals of TMDLs Are Not “Drive-by Permitting Determinations”

Last week, the First Circuit Court of Appeals rejected the Conservation Law Foundation’s argument that EPA’s acceptance of TMDLs in Rhode Island and Massachusetts carried with it a concomitant obligation to require permits of landowners contributing to violations of the TMDLs.  Easy cases make good law.

CLF’s position was simple.  EPA’s approval of the TMDLs meant that EPA had determined that stormwater controls are needed.  This determination, in turn triggered a duty to notify the dischargers contributing to the waste load allocation that they need to apply for a permit.

To which the Court said “Holy non-discretionary duty, Batman!”

As the Court made clear, EPA’s approval of the TMDLs did not identify specific dischargers contributing to the problem.  To the contrary, the TMDLs specifically found that there was no sufficient information to apportion phosphorous loading.  Since the duty CLF sought to impose on EPA is triggered when an individual permit is required, how can such a duty exist when EPA does not know which property owners in fact require individual permits?

EPA also noted that the practical consequences of CLF’s position would be vast:

Under plaintiffs’ view of the case, in 1990, by enacting the regulations cited in this opinion, the EPA committed itself to notifying a very large number of companies and persons (perhaps as many as tens of millions) as it approved TMDLs covering storm water discharges across the country. Yet the record contains no suggestion whatsoever that either the EPA or the states or the regulated entities — or plaintiffs for that matter — viewed the storm water regulations as having such a far-reaching ramification.

Finally, EPA noted that Auer deference – the doctrine, like Chevron, that is under siege from conservatives – also supports EPA’s interpretation, since it requires deference to EPA’s interpretation of its own regulations, so long as it is not “plainly erroneous.”

The TMDL provisions of the CWA may be deeply flawed.  It is not, however, the courts’ responsibility to amend them to CLF’s specifications.

The Supreme Court Sends WOTUS Rule Challenges to the District Courts — It’s Good to Be King

On Monday, the Supreme Court ruled that challenges to the WOTUS Rule must be heard in the district courts.  At a certain level, the decision was easy and obvious – as evidenced by the absence of any dissent. 

After all, the Clean Water Act does assign jurisdiction to the district courts of all cases under the Act other than in seven specifically identified categories, for which cases are assigned to the circuit courts.  The government argued that two categories applied, actions either:

approving or promulgating any effluent limitation or other limitation under section 1311, 1312, 1316, or 1345 of this title, [or] issuing or denying any permit under section 1342 of this title.

It seems pretty clear that a rule defining what constitutes a water of the United States is not an action promulgating an effluent limitation or other limitation – particularly when the WOTUS Rule itself states that it “imposes no enforceable duty.”  It seems even more clear that promulgation of the Rule was not the issuance of a permit – under section 1342 or any other section.

Thus, the challengers could easily have won under the “give me a break” doctrine of statutory interpretation.  And, by the way, it appears that “give me a break” was the tenor of most of the justices’ questions at oral argument.

The government had only one real argument in its favor:  sending these cases to the district courts is just plain nuts.  And it’s worth noting that the “just plain nuts” argument had triumphed over the “give me a break” argument in almost all of the lower courts to decide the issue.

The Supreme Court, however, sits on a higher throne.  It does not need to get its hands dirty with the practicalities of lower court review.  And, in fairness, it has an obligation to interpret the statute as it is written; it does not have an unlimited brief to fix all the mistakes made by Congress.

It’s good to be king.  In a democracy with separation of powers, it’s good to be the Supreme Court.

It’s Better to Be the Plaintiff Than the Defendant in Massachusetts Superfund Cases

In the early days of Superfund, defense lawyers used to joke that all government lawyers had the same oral argument script.  It was three sentences long.

Good afternoon, your honor.  My name is _____ and I represent the government in this case.  We win.

Lawyers in Massachusetts rightly feel that that pretty much remains the state of affairs in Massachusetts, at least for private cost recovery or property damage claims.  The latest evidence is the Supreme Judicial Court’s opinion in Grand Manor Condominium Association v. City of Lowell, in which the SJC ruled that the plaintiffs had not missed the statute of limitations, notwithstanding that suit was filed more than three years after they learned that the condominiums were on top of a former City landfill and that contamination had been discovered that required reporting under the state Superfund law, Chapter 21E.  The Court stated that:

A plaintiff has notice of a claim under § 5 (a) (iii) once the plaintiff learns whether or not remediation and response costs will fully compensate the plaintiff for the harm he or she has suffered, as well as the identity of the party who caused such harm. This will not ordinarily occur until the plaintiff learns that the damage to his or her property is not reasonably curable by the remediation process.

In so holding, the Court seemed simply to ignore that, traditionally, all that is required to trigger the statute of limitations in property damage cases is the knowledge that one has suffered some harm and of the identity of the person responsible for the damage.  It has never been the case that one could wait until every dollar of damage was quantified before bring suit.

Here, the Court seems to take the position that property damage is an all-or-nothing claim.  Either one has no damage at all or one’s property is irretrievably harmed.  If that were the case, then it would make sense to say that the statute does not run until the plaintiff obtains knowledge of the permanent damage.  What’s weird about the decision is that Court acknowledged that, in some cases, there can be temporary damage, but did not seem to understand the full implications of that acknowledgement.

Indeed, in many, if not most, cases, there will be temporary harms, even apart from the possibility of permanent damage.  There can be odors that cause a loss of quiet enjoyment.  What about someone who is looking to sell the property before the cleanup has been completed?  When does the statute of limitations run on those claims?  Are there multiple statutes of limitations for different types of property claims?

Avoiding such questions is precisely why there has always been one simple rule – the statute runs when the plaintiff knows it has suffered some harm, and knows who caused the harm.

Instead, the rule in Massachusetts seems to be that the statute of limitations begins no earlier than the date which still allows the SJC to preserve the claims.

When Did Chevron Become a Dirty Word?

Last week the 9th Circuit Court of Appeals rejected arguments that the Fish and Wildlife Service may only issue permits under the Migratory Bird Treaty Act for the “scientific use” of a species where the use will benefit the species being used.  The facts are interesting, if you enjoy nature red in tooth and claw. The Northern Spotted Owl is endangered and it appears that it is being outcompeted by the Barred Owl.  The FWS wanted to investigate whether the Northern Spotted Owl would do better if the Barred Owl were removed from its habitat.

The Court of Appeals carefully disposed of plaintiffs’ various arguments that the Migratory Bird Treaty Act unambiguously precluded the FWS from issuing the permit under the so-called “same species theory.”

What’s really interesting about the opinion is its handling of the Chevron issues that the case seems so obviously to present.  The FWS argued that, if the Court found the MBTA to be ambiguous, it should prevail under Chevron, because its interpretation of the statute is entitled to deference.  The Court, however, explicitly refused to rely on Chevron.

Because the plain text of the MBTA and the Conventions do not compel a same-species limitation, however, we need not consider the question of deference to the agency’s interpretation.

However, this seems to me to miss the point.  The Court also did not find that the statute precluded the plaintiffs’ interpretation; it specifically found that FWS could adopt the same species theory if it so chose.  That being so, where the statute does not unambiguously preclude either interpretation, it seems to me that the case very clearly becomes an issue of Chevron deference – was the FWS interpretation reasonable?

I still don’t understand fuss about Chevron.

EPA Does Have a Duty to Update Its Lead Paint Standards: Cass Sunstein Agrees With Me

As a follow-up to my post last week about the 9th Circuit decision requiring EPA to propose new lead paint standards under TSCA within 90 days, I was encouraged to see Cass Sunstein support the decision in a BloombergView piece.  Noting as I had the uphill battle plaintiffs face in these cases – and agreeing that they should in general face an uphill battle – Sunstein concisely summarized the issues:

In many contexts, it makes sense for agencies to refuse to regulate. And when agencies fail to act, courts are usually right to stand aside — and to defer to those who have political accountability and superior expertise.

But for the executive branch in 2018 and beyond, last week’s decision is a lesson, a warning and a promise: Some delays are unreasonable, and when human health is at stake, inaction may not be a legally acceptable option.

We must remember that EPA did not dispute the science here.  EPA acknowledged that the current standards simply are not protective.  Nonetheless, I doubt that this is a one-off.  There will be other cases in which agencies refuse to regulate notwithstanding that regulation would seem to be called for by the governing statute, even if the statute has no deadlines for action.

In those cases, protection of public health – consistent with the statutory goals – seems to me a sufficient basis for the type of decision issued by the 9th Circuit.