NEPA Review — Still the Land of Deference

Last week, District Judge Ralph Beistline allowed the summary judgment motion filed by the United States Forest Service, and dismissed citizen claims challenging the Forest Service decision to approve an logging project in an old growth area in the Tongass National Forest tongass 2known as Big Thorne.  The case seems interesting because of the deference Judge Beistline showed to the Forest Service.  Reading between the lines of the record, my sense is that the Forest Service may not have gotten it right.  The point is that they were not so wrong as to warrant reversal.

All judges talk the deference talk; not all of them walk the deference walk.

It also seems to me that, based on my purely anecdotal sense of the cases, judges are more willing to defer to agency decision-making under NEPA than under other environmental statutes.  It’s certainly not an absolute; I’ve seen plenty of NEPA cases in which judges refused in practice to defer to the extent that their rhetoric would otherwise seem to have required.  Nonetheless, it would be interesting to know whether a systematic look would confirm my anecdotal assumption.

Arranger Liability for Sale of a Used Product: Standard of Metaphysics Or An Unstated Rule?

In Consolidated Coal Company v. Georgia Power Company,the Fourth Circuit recently applied the same four part test used by trial court(and blogged about here) to hold that the sale of a used product containing PCBs would not give rise to arranger liabiity under Section 107(a)(3) of CERCLA.  The appeals court reaffirmed the basic proposition that selling a used product that contains hazarous substances which eventually will be disposed is not sufficient to establish arranger liability:

Anytime an entity sells a product that contains a hazardous substance, it also ‘intends’ to rid itself of the hazardous substance in some metaphysical sense.  But intent to sell a product that happends to contain a hazardous substance is not equivalent to intent to dispose of a hazardous substance under CERCLA.  For arranger liability to attach, there has to be something more.

Precisely what beyond metaphysics is needed to establish arranger liability seems to be pretty metaphysical in the majority’s opinion: “The something more could be the seller’s ‘intentional steps,’ beyond what is inherent in the sale, to dispose of the hazardous waste.”  In the end, the majority says there must be a “fact-intensive” inquiry into the nature of the transactions.  Noting that a grant of summary judgment is rarely appropriate to resolve fact intensive issues such as intent, one of the appellate judges lodged a dissent.

In the end, after all the vague verbal formulations, the courts on this issue all seem to follow an unstated rule which I have recited before:  a party will be held liable if it sells a used product or waste that cannot be used or won’t be used as delivered without first causing the release of a hazardous substance.

What’s a Court to Do When An Agency Admits Error? Vacate? Remand?

In Black Warrior Riverkeeper v. ACOE, decided this week by the 11th Circuit Court of Appeals, the Court was faced with a quandary.  “On the eve of oral argument”, in a case challenging The Army Corps of Engineers Nationwide Permit 21, which allows certain surface coal mining activities without an individual permit, the Army Corps of Engineers informed the Court that it had significantly underestimated the acreage that would be affected by NWP 21.  Moreover, the Corps acknowledged that this error was sufficiently significant that it needed to revisit NWP 21. black warrior river

Thus, the Court had to remand the case so that the Corps could reassess NWP 21 on the correct factual baseline.  So far, so good.  However, this did not address whether the Court should vacate the rule pending the reassessment.  The Court concluded that, because it was possible that the Corps would determine that the error was harmless, it need not vacate the rule (though it did provide that the District Court could order vacatur if it determined that to be appropriate).

The problem is that the aspect of the rule being challenged was a grandfathering provision – The Corps had grandfathered surface mining activities that had already been covered by the prior version of NWP 21.  At the same time, the Corps had determined that, going forward, significant new limits had to be placed on the availability of NWP 21, due to the risk of environmental damage from surface mining.  Thus, the dissent was skeptical that, if the Corps had in fact determined that these activities can cause environmental damage, the Corps could still somehow reasonably determine that the grandfathered activities:

will cause only minimal adverse environmental effects when performed separately, and will have only minimal cumulative adverse effect on the environment.

Good question.  It will be interesting to see what the District Court and the Corps do in response to the remand.

Conservative Support for a Carbon Tax? Hope Springs Eternal

I have long thought that the best argument for market-based approaches to climate change scientists-clues-printmitigation was the clunkiness of the alternative.  However much time EPA has spent trying to make the GHG regulations efficient, no one can say that EPA’s proposal is elegant.

Although it is at best a dim glimmer of hope on the horizon, it was nonetheless comforting to see Jerry Taylor of the Libertarian Niskanen Center make “The Conservative Case for a Carbon Tax.”  While I don’t agree with every aspect of his proposal, and liberals will likely howl at some elements, it is certainly a principled approach and makes sense as something that could be the centerpiece of a grand bargain on climate change.

To me, it is the “compared to what” issue that is Taylor’s strongest argument, and I hope conservatives are listening.  This pretty much gets it:

Lawsuits might stop the regulations, but only for a time. The agency’s rulemaking is vulnerable to a number of legal challenges. But as long as the EPA’s endangerment finding stands, a successful challenge to the rules will just send the agency back to the drawing board, with new rules to follow. There’s no guarantee that the new rules will be an improvement over the old rules.

I would only add that this is particularly true given that it is the most market-oriented parts of the rules that seem on the shakiest legal foundation.

A market-based approach to climate change mitigation is not going to happen in this Congress, but I remain hopeful.

Is Injunctive Relief Available Against Former Owners? At Least One Judge Thinks So.

As we noted in 2013, two different Courts of Appeal had ruled that injunctive relief is not available in PSD/NSR enforcement cases against former owners.  Both United States v. Midwest Generation and United States v. EME Homer Generation held that, because the former owner no longer controls the site, courts cannot impose injunctive relief against them.  As the Court stated in EME Homer Generating:

with time travel yet to be discovered, it is impossible to “restrain” a violation that occurred twenty years ago. Likewise, courts cannot “require compliance” from defendants who are not currently violating the Clean Air Act and who cannot violate the Act in the future because they no longer own or operate the source.

However, in an opinion issued last month in United States v. Westvaco, Judge Marvin Garbis has found a way around this conundrum.  Since the point of the injunction is not per se to have controls on the facility, but to mitigate the harm caused by the excess emissions allegedly resulting from the failure to comply with PSD BACT requirements, Judge Garbis concluded that he may order the defendant former facility owner to buy and retire emission credits to counterbalance the harm caused by the facility’s historical excess emissions.

The Court did not impose an injunction, instead scheduling further proceedings to determine whether such an injunction is in fact feasible and, if so, what its scope should be.  However, it certainly appears that the Court will order such an injunction as long as the retirement of emission credits “bear[s] a reasonable relationship to the decree and kind of wrong it is intended to remedy.”

It’s not obvious to me that this works and I expect Westvaco to appeal any final judgment (assuming it does not seek and obtain the right to interlocutory appeal), but it’s certainly a creative approach that the government is likely to enthusiastically support, where the alternative is no relief at all.

RCRA Still Poses Some Interpretive Problems (To Put It Gently)

In a potentially significant opinion last week, in Little Hocking Water Association v. DuPont, Judge Algenon Marbley gave hope to citizen plaintiffs everywhere, with a remarkably expansive reading of the imminent and substantial endangerment language in RCRA’s citizen suit provision.  The decision covers a lot of ground, and is well worth reading (and, in fairness, Judge Marbley did reject some of plaintiffs’ claims).

The most significant holding was that DuPont’s emissions of perflourooctanoic acid, or C8, Teflon PFOA Edgar181 wiki comminto the air could constitute “disposal” of a “solid waste” that would subject DuPont to liability under RCRA.  Although Judge Marbley struggled mightily to distinguish it, his holding seems difficult to reconcile with the recent decision in Ctr. For Cmty. Action & Envtl. Justice v. BNSF R. Co., in which the 9th Circuit – that noted bastion of conservative environmental decisions – ruled that diesel emissions into the air did not constitute disposal of a solid waste.  I think that the 9th Circuit got it right, but Judge Marbley’s interpretation is not crazy within the scheme of RCRA and its jurisprudence.

That being said, I have three takeaways from this case:

  • Judge Marbley may not be crazy, but RCRA is. As I noted as recently as last December, it speaks volumes that, almost 50 years after its passage, we still don’t know what a solid waste is.
  • How many different statutes and causes of action do we need to provide? Don’t like Superfund?  Try RCRA.  Doesn’t work?  How about the Clean Air Act?  Statutory remedies aren’t sufficient?  Let’s resuscitate public and private nuisance doctrines.  Of course, one can always – like Judge Marbley here – fall back on the canon that remedial statutes are to be construed broadly.
  • And for a party in litigation, don’t ever forget rule number 1 – the Judge better like you. When the Judge starts citing statements by in-house counsel blasting their own client, you know you are in trouble, regardless of the technical merits:

Bernie and I have been unsuccessful in even engaging the clients in any meaningful discussion of the subject [of C8 emissions]. . . we continued to increase our emissions into the river in spite of internal commitments to reduce or eliminate the release of this chemical.

The business did not want to deal with this issue in the 1990s, and now it is in their face, and some are still clueless. Very poor leadership….

Talk about an uphill battle.

 

What’s a Significant Nexus? The Answer, My Friend, Is Flowin’ Through the Ditch.

Even assuming that the “significant nexus” test from Justice Kennedy’s concurring opinion in Rapanos defines waters of the United States subject to Clean Water Act jurisdiction, the question remains what establishes a significant nexus.  In a decision earlier this week, the 4th Circuit Court of Appeals provided some important guidance in answering this question.  The news is good for EPA and the Corps, not so good for developers.

The Court laid out four general precepts that apply to all cases:

  • Either qualitative or quantitative evidence may demonstration jurisdiction.  Here, the Court rejected the developer’s argument that, because the project involved only a tiny percentage of the watershed, the nexus simply could not be “significant” to the watershed.
  •  Expert evidence that the nexus is not “statistically significant” to the watershed “sets the bar too high, as purely qualitative evidence may satisfy the significant nexus test.”
  • While a court will assess the various different wetlands functions, “the ultimate inquiry is whether the collective effect of these functions is significant.”
  • Finally, since the purpose of the CWA is both to “restore and maintain” the nation’s waters, in a permitting context:

The Corps exercises its jurisdiction to prevent damage and thus cannot be expected to present evidence of the actual ecological impact of the wetlands on downstream waters.

The facts are too detailed for blog discussion.  The geographic nexus was this:  The project involved 4.8 acres of a 448 acre wetland.  The wetlands are adjacent to a 2,500 foot man-made ditch, which itself connects to the Saint Brides Ditch, which joins a small tributary, which ultimately reaches the Northwest River, northwest riverseven miles from the wetlands.  Sounds attenuated, no?

The court found the following two factors sufficient to demonstrate the required significant nexus:

1.  The ACOE actually obtained some flow data and the Court found that the Corps’ determination of a hydraulic connection was not arbitrary and capricious.

2.  The Corps’ found that the Northwest River has low dissolved oxygen levels and that the wetlands at issue trap nitrogen, which could otherwise worsen the problem.

QED.  The bottom line is that, as long as they do their job, EPA and the Corps are going to win most of these cases.

News Flash: Courts Still Defer to an Agency’s Interpretation of Its Own Rules

The Supreme Court today ruled that, when an agency revises its interpretive rules, it need not go through notice-and-comment rulemaking.  Although the decision, in Perez v. Mortgage Bankers Association, required the court to reverse a long-held line of D.C. Circuit cases, the decision was not difficult; it was, in fact, unanimous.  In short, the Administrative Procedure Act:

states that unless “notice or hearing is required by statute,” the Act’s notice-and-comment requirement “does not apply … to interpretative rules.”

It carves out no exception for revisions to interpretive rules.  Game over.

The truly interesting part of the case was in the concurring opinions.  Both Justices Scalia and Thomas, effectively joined by Justice Alito, argued that Supreme Court decisions giving deference to agencies’ interpretation of their own rules have no constitutional foundation and should be overruled.

This is not the first time that they have made these arguments.  As I noted previously, in Decker v. Northwest Environmental Defense Center, Chief Justice Roberts also suggested that it might be time to revisit what is generally known as Auer deference.  It is notable in Perez that the Chief Justice joined the Court’s opinion.  Absent a change in the make-up of the Court, I don’t see it revisiting Auer any time soon.

Otherwise, the most notable part of the case is a statement from Justice Thomas that, to me, already wins the metaphor of the year prize.  Justice Thomas’s argument against Auer deference, while couched in constitutional terms, is really a screed (parts of which I sympathize with) against the growth of rulemaking and the modern administrative state.  He laments the use of interpretive rules and the decline of formal notice-and-comment rulemaking, and the protections that are required:

Today, however, formal rulemaking is the Yeti Yeti-590x330of administrative law. There are isolated sightings of it in the ratemaking context, but elsewhere it proves elusive.

True dat.  It just doesn’t justify abandoning Auer deference in my book.

Self Righteousness Still Does Not Help the Environmentalists’ Cause

Fully five years ago, I noted that the cavalier treatment by government officials of FOIA requests made by opponents of government policy revealed a degree of self-righteousness that was both offensive and self-defeating – because it undermines support for the very policies that those officials were pursuing.

It now seems as though little has changed – except that now a federal judge has taken the time to put on record his dissatisfaction with how EPA responds to FOIA requests.  In a decision yesterday, Judge Royce Lamberth lamberth_475_100122actually denied sanctions against EPA.  Nonetheless, he was so upset by EPA’s handling of the FOIA request at issue that he spent 25 pages detailing just how poorly EPA responded.  His bottom line?

It is plain to this Court that EPA perceives [plaintiff] as an enemy, rather than ‘a rightful participant in a FOIA regime….’  This Court would implore the Executive Branch to take greater responsibility in ensuring that all EPA FOIA requests – regardless of the political affiliation of the requester – are treated with equal respect and conscientiousness.

To which I can only say, amen.

MassDEP — A Voice of Reason in the Stormwater Permitting Debate

EPA has been working to craft a general permit for small Municipal Separate Storm Sewer Systems for quite some time.  The most recent draft permit, published last September, has received significant comment, most recently from the Massachusetts Department of Environmental Protection.  While emphasizing cooperation and appreciate for EPA’s efforts at collaboration, it is difficult to read MassDEP’s comments as anything other than as a sign of significant concern about overreach by EPA.

What’s the problem with the draft permit?  Nothing that a modicum of attention to cost – and cost-effectiveness – couldn’t solve.  Indeed it’s telling that MassDEP led its comments with concerns about costs, noting that EPA’s owns estimates show that, for three small communities in the Charles River watershed, charlesriverupper222x332annual compliance costs would range from $865,000 to $1.7M annually.

MassDEP also requested that EPA “harmonize” the permit requirements with the Commonwealth’s 2008 stormwater rules, stating that EPA should use:

the Massachusetts Stormwater Standards as the basis for its successor MS4 permit, rather than requiring a second federal-only layer of permit requirements on top of the existing Massachusetts Stormwater Standards.

Substantively, MassDEP’s most significant concern was that the draft MS4 permit reflects:

a significant shift in approach from the BMP-based program envisioned in the 2003 permit to the current draft which includes additional provision to ensure that the discharges from small MS4s do not cause or contribute to an exceedance of water quality standards.

Hear, hear.  There’s a reason that stormwater standards have always been focused on attaining reductions to the “maximum extent practicable” based on best management practices.  As MassDEP also noted, it is this shift that significantly drives the increase in costs.  I would have thought that it went without saying, but stormwater discharges aren’t like manufacturing discharges that are far more predictable and easy to control and predict.

There are a number of other important points in the MassDEP comments, including support for pollution credit trading programs, but this is the heart of the issue.  If the MS4 general permit is going to succeed in obtaining cost-effective reductions in stormwater pollution, EPA is going to have to be responsive to these concerns.

No Competitors In My Backyard?

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

CERCLA’s Confusion Between Section 107 and Section 113

Over a decade after the Supreme Court’s decision in Cooper Industries v. Aviall, the divide between CERCLA Section 107 cost recovery claims and Section 113 contribution claims remains unsettled.  PRPs incurring response costs at Superfund sites would almost always prefer to seek reimbursement of those costs as a Section 107 claim given its more favorable statute of limitations and joint and several liability standard. However, the post-Aviall case law offers little clarity as to the precise dividing line between Section 107 and 113 claims.

The recent Michigan decision in Ford Motor Company v. Michigan Consolidated Gas Co., the 2014… More

Musings on Another Snowy Morning While Waiting For the Redline in Boston

As two current events illustrate, climate change over the coming years is likely to test and ultimately expose the fundamental inadequacy of much of the infrastructure built to support modern societies.  The first current event involves a record-breaking drought in South America which has left water taps dry in many homes in one of the largest cities in the world — San Paulo, Brazil.  The second current event involves record-breaking cold and snow over the past month which has left significant portions of Boston’s public transportation system inoperable.

The idea that a major urban center could be without water or public transportation for any significant period of time is hard to fathom.  These are epic lapses in public planning.  While it’s easy to point fingers in such circumstances, what these epic lapses seem most to show is an inherent limitation in the way people understand risk and the possibility of change. It’s human nature for people to assume that what has happened will always happen.

When planners design infrastructure, they typically review historical records to find the most extreme situations that have previously occurred and try to design a system robust enough to address those extremes.  The problem with this approach, of course, is that it assumes that at some point in recorded history we have already experienced the most extreme situations.   The record- breaking weather extremes that climate change brings are likely to subject our infrastructure to challenges beyond their design capabilities, as we are seeing in Boston and San Paulo.

Insanity is not only to do the same thing in the same situtation and expect a different result; insanity is also to continue doing the same thing in changed circumstances and to expect the same result.

Is It Too Late to Just Throw Superfund to the Curb?

Last week, Judge Paul Borman of the Eastern District of Michigan, allowed a motion by the United States for judgment on the pleadings, dismissing a third-party complaint brought against the United States by Michigan Consolidated Gas.  The decision is the latest judicial effort to clarify the distinction between cost recovery actions under § 107 of CERCLA and contribution actions under § 113 of CERCLA.

I don’t have any criticism of Judge Borman’s decision.  It seems fairly clearly correct under 6th Circuit jurisprudence.  I will say, nonetheless, that the decision is gibberish.  That’s a technical legal term.  It’s also the reason for this post.  Again, I don’t criticize Judge Borman.  I’m generally opposed to specialist courts.  However, does any experienced Superfund practitioner think that a decision such as this will make any sense to a lay person?  Isn’t that problematic?  Here’s my ultimate conclusion:

It is simply not possible to craft a decision explicating §§ 107 and 113 of CERCLA that is not gibberish.

Judge Borman made the now-usual bow towards prior precedent, noting that:

[n]o one accuses CERCLA of being a well-drafted or easy-to-follow statute.

At this point, I’m tired of these sheepish acknowledgements.  CERCLA is an embarrassment.  If it were just an embarrassment, it would be bad enough.  Unfortunately, it’s more than that.  It’s a waste of environmental protection dollars.  And, more to the point here, the terrible drafting has also led to a huge waste of transaction costs.

I know that sunk costs are sunk, but can we just junk the whole thing and start over?

The Impact of the Clean Power Plan on Reliability: Now We Have Dueling Assessments

In November, the North American Electric Reliability Corporation provided its “Initial Reliability Review” of EPA’s Clean Power Plan.  NERC raised a number of concerns about the impact of the CPP on reliability.

Now the Advanced Energy Economy Institute – you can guess its perspective – has engaged the Brattle Group to provide an assessment of NERC’s IRR.  Not surprisingly, the Brattle Group is more sanguine about EPA’s ability to implement the CPP without adversely impacting reliability.

I am not an expert in electric system reliability.  I will say only this – the historical record of environmental regulation since 1970… More