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.

FERC Rejects Grid Reliability and Resilience Pricing — For Now!

Yesterday, FERC terminated the docket it opened in response to DOE Secretary Perry’s September proposal to compensate generators who maintain a 90-day fuel supply on-site.  The intent of the proposal was to compensate generators who provide reliability and resilience attributes to the grid.

The decision was unanimous, though there were several concurrences.  The commissioners were not persuaded that there is a reliability problem that requires immediate, out-of-market relief to coal and nuclear generators.

Neither the Proposed Rule nor the record in this proceeding has satisfied the threshold statutory requirement of demonstrating that the RTO/ISO tariffs are unjust and unreasonable. While some commenters allege grid resilience or reliability issues due to potential retirements of particular resources, we find that these assertions do not demonstrate the unjustness or unreasonableness of the existing RTO/ISO tariffs. In addition, the extensive comments submitted by the RTOs/ISOs do not point to any past or planned generator retirements that may be a threat to grid resilience.

It also has not been shown that the remedy in the Proposed Rule would not be unduly discriminatory or preferential.  For example, the Proposed Rule’s on-site 90-day fuel supply requirement would appear to permit only certain resources to be eligible for the rate, thereby excluding other resources that may have resilience attributes.

FERC did open a new docket, in which it will explore whether there is a reliability or resilience problem.  It asked RTOs and ISOs to provide answers within 60 days to questions it posed in the Order.

As a result, I don’t think we’ve heard the last of this issue.  Indeed, three of the commissioners wrote concurrences, laying down markers regarding what they see as potentially acceptable – or unacceptable – outcomes.  Commissioners LaFleur and Glick both made clear that they would not support any kind of payments to generators for providing “reliability,” though they both agreed that the discussions with the RTOs and the ISOs make sense.  Here’s LaFleur’s conclusion:

This proposed remedy, which simply designated resources for support rather than determining what services needed to be provided, would be highly damaging to the ability of the market to meet customer needs—including any demonstrated resilience needs—fairly, efficiently, and transparently. In effect, it sought to freeze yesterday’s resources in place indefinitely, rather than adapting resilience to the resources that the market is selecting today or toward which it is trending in the future.

Commissioner Glick was on the same page:

The Proposed Rule had little, if anything, to do with resilience, and was instead aimed at subsidizing certain uncompetitive electric generation technologies.

He also noted that it is transmission and distribution that raise the biggest resilience issues, not generation.

Finally, Commissioner Chatterjee weighed in as well.  As he has throughout the process, Commissioner Chatterjee has stated that he supports the intent of the NOPR, so long as protection for coal and nuclear generators would be “legally defensible” and “would not distort markets.”

I continue to think that that is a null set.

Does EPA Have a Non-discretionary Duty To Make a Statute Work?

If this Administration’s first year has taught us anything, it is that determining when EPA has an affirmative duty to act is going to be very important over the remaining 3 (or 7!) years of the Trump presidency.  That was the subject of last week’s decision in A Community Voice v. EPA, in which the 9th Circuit ordered EPA to issue a proposed rule updating its lead paint standards within 90 days, and a final rule within one year of issuance of the proposed rule.

Put simply, the case is a mess.  As Judge Smith noted in dissent, the majority tried to find a non-discretionary duty in the statute, but this was the best that it could do:

Despite the dissent’s attempt to recharacterize congressional intent, Congress did not simply state a goal when enacting the TSCA and the Paint Hazard Act; Congress established statutory standards that the EPA must enforce. (“Within 18 months after October 28, 1992, the Administrator shall promulgate regulations which shall identify, for purposes of this subchapter and the [Paint Hazard Act], lead-based paint hazards, lead-contaminated dust, and lead-contaminated soil.”); (“The regulations may be amended from time to time as necessary.”).

A careful reader might note that, while the initial promulgation of regulations was clearly mandatory, the majority’s own citation seems to suggest that EPA does not have any obligation to amend the regulations.

EPA did accept a petition for a rulemaking to lower the standards in 2009 – but without committing to do what the petitioners had asked.  More than eight years later, EPA still has not acted on the petition, notwithstanding that there appears to be no scientific dispute that the current standards are not sufficiently protective.  Moreover, without disagreeing with the scientific evidence, EPA told the court that it would be 2021 before a proposed rule might be issued and 2023 before a final rule might be issued.

This delay might fairly be described as unconscionable.  Indeed, if Administrator Pruitt wants to bring EPA back to its core mission, one might think that tightening lead standards would fit within that characterization.  (And, in fairness, the delay occurred during the Obama administration and the court papers in the appeal were filed under the Obama administration.)  Even Judge Smith felt compelled to note that he was not actually in favor of poisoning children:

without a congressional mandate in the TSCA, we have no authority to mandate that the EPA act to meet Congress’s goals (even if we believe it is in the best interest of society for the EPA to act).

Although we may not like the actions of the agency, our jurisdiction is limited to determine whether the agency assumed a duty.

I think we’re going to see a lot more of these cases.  Scott Pruitt will look into his crystal ball and determine that some regulatory program he doesn’t like isn’t “core” to EPA’s mission.  He’ll avoid regulating wherever possible.  An NGO will bring a law suit to compel EPA action.  The science supporting regulation will be indisputable.

The only question will be whether the statutory basis for action cited by the NGO is sufficiently clear so as to give rise to a non-discretionary duty.  I wish I could be sanguine about the outcome.  I don’t think Judge Smith will be unique among appellate judges in his views on mandamus.

To be blunt, though, if enough judges act on similar views, people will be poisoned and people will die.

Some Extreme Climate Events Would Not Have Happened But For Climate Change: Lawyers Are Paying Attention

Today’s ClimateWire (subscription required) contained a long summary of evidence that scientists are increasingly able to demonstrate that climate change is what we lawyers would call the “but for” cause of extreme weather events.  One of the most interesting is the recent paper “Explaining Extreme Weather Events of 2016:  From a Climate Perspective,” from the Bulletin of the American Meteorological Society.  It looked at a number of extreme events and found – for the first time –

that some extreme events were not possible in a preindustrial climate.  The events were the 2016 record global heat, the heat across Asia, as well as a marine heat wave off the coast of Alaska.

A couple of years ago, I pondered whether climate change litigation might be similar to marriage equality  litigation, in that it would lose always and everywhere until, seemingly overnight, it would all of a sudden become inevitable.  The biggest problem with climate change litigation has always been the difficulty in proving causation.

These recent scientific studies at least suggest that improved scientific models have solved half of potential climate plaintiffs’ problem.  If an expert is willing to get on the stand and state that it is more likely than not that a particular event would not have occurred but for anthropogenic climate change, then plaintiffs will have given a factfinder a basis to conclude that their damages resulted from climate change.

Plaintiffs still have a significant mountain to climb.  There is no entity called “climate change” to name as a defendant.  Plaintiffs still have to establish the second part of the causation chain – that specific named defendants have in some way caused climate change.  That’s going to be difficult, but I can imagine a judge determining that defendants should be jointly and severally liable.

The Bloomberg story also mentions an article in Nature Geoscience, “Acts of God, human influence, and litigation (fee required) that makes the same point:

Developments in attribution science are improving our ability to detect human influence on extreme weather events. By implication, the legal duties of government, business and others to manage foreseeable harms are broadening, and may lead to more climate change litigation.

More litigation.  That’s generally a safe prediction.

The Migratory Bird Treaty Act No Longer Criminalizes Incidental Takes

Last week, the Office of the Solicitor in the Department of the Interior issued a legal Opinion concluding that the Migratory Bird Treaty Act does not prohibit the incidental take of migratory birds.  It’s a thorough Opinion.  While I disagree with it on some individual issues and I’m sure many will disagree with its conclusions, I think it should survive judicial review, assuming that a reviewing court can get past the fact that it directly contradicts a prior Opinion of the Interior Department issued less than a year ago.

First, on the fun facts to know and tell front, the Fish & Wildlife Service states that the largest “Human-caused” threat to birds – by almost an order of magnitude – is, you guessed it, cats!  Cats kill an estimated 2.4 billion birds a year.

The next highest on the list is building glass, at 303.5 million bird deaths.  In fairness to the new Opinion, these data do make a telling point.  Even if it’s not reasonable to say that human owners of pet cats can foresee that their cat will kill a migratory bird, it seems reasonable to me to conclude that developers who build buildings with glass can foresee that their building glass will cause migratory bird deaths.  Do we really think that they should be subject to criminal liability?  If not them, then why wind turbine developers (174,000 bird deaths)?  Or utilities that maintain transmission lines (25 million bird deaths)?

From a legal point of view, the only part of the opinion that really concerned me was the argument that statutory language is written in stone and “must be given the meaning [it] had when the text was adopted.”  As I have previously noted, judges have authority to change the landscape of the common law over time.  If the word “take” has in fact changed its common meaning since the statute was enacted more than 100 years ago, shouldn’t the word be given its current interpretation?  (And this isn’t an argument against the Opinion, which I think is reasonable.)

Shareholder Activism on Climate Is Only Going to Increase

While EPA continues to go backwards on climate, evidence continues to mount that investors are only going to get more aggressive.  There were two developments worth noting this month.

First, Bloomberg Markets reported that BlackRock, which seems increasingly willing to put its mouth where its money is, has sent letters to 120 companies, telling them to report climate risks in a manner consistent with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures.  We had previously noted BlackRock’s new willingness to vote in favor of shareholder resolutions about climate reporting.

Second, the group of investors known as the Climate Action 100+ is going to start assessing how large emitters of GHG are doing in reducing emissions.  Bloomberg Environment refers to this as an effort to “Shame Top Carbon Emitters.”  Time will tell whether this effect succeeds.

Regardless of whether corporations can feel shame, there is little doubt that efforts such as these are going to continue.  Shame aside, the real question is whether private efforts to make corporations internalize the costs of carbon pollution can really work in the absence of government regulations.

The Members of EPA’s Superfund Task Force Had Really Good Memories

In July, EPA released the recommendations of the Superfund Task Force.  Public Employees for Environmental Responsibility filed a FOIA request, looking for documents related to the operation of the Task Force.  This week, the AP reported on EPA’s defense of the inevitable law suit that PEER filed when EPA did not turn over any documents.  

It turns out that, according to Johnny Walker, the DOJ attorney representing EPA in the litigation, there is a simple explanation for EPA’s failure to produce any documents – there aren’t any.  According to the AP, Walker has told PEER that the Task Force kept no minutes and no materials were presented to the Task Force.  The Task Force also retained no work product other than the final report.

That’s one way to minimize the impact of those pesky FOIA requests.  On the other hand, I suspect that it would be fun to depose those who managed the Task Force about how good their memories must have been to keep track of all of the recommendations as they were being developed.

Personally, I am keeping an open mind to the possibility that, like Athena, the Task Force report was born full-grown from the forehead of Scott Pruitt.

The North Slope Is Really, Really, Getting Warmer. Drill, Baby, Drill

The Washington Post reported this week that Utqiagvik, Alaska (formerly known as Barrow), has gotten so warm, so fast, that NOAA’s computers can’t even believe it.  The data for Utqiagvik (that’s hard to type!) were so high that the computers determined it must be anomalous and pulled all of the data from Utqiagvik from the NOAA monthly climate report.  Only when scientists realized that Utqiagvik was completely missing from the report did they notice what had happened.

How hot does it have to get to get bounced by the computer?  How about average October temperatures 7.8 degrees warmer than in 2000?  Average November temperatures 6.9 degrees warmer than in 2000?  Likely culprit?  Melting sea ice means that less sunlight is reflected.  That’s one nasty negative feedback loop.

In the meantime, as I noted in October, Alaska Governor Bill Walker has concluded that Alaska needs more oil drilling (can you say “Open ANWR” three times fast?) in order to pay for climate change mitigation.  It’s apparent that Governor Walker has not read Faust.

Governor Walker, this one’s for you.

EPA Will NOT Second-Guess Generators’ Projections of Future Emissions Under the NSR Program

I’ve noted numerous times that the NSR program is incomprehensible gibberish.  These are scientific and objective comments.  The most recent example of this is the DTE litigation, in which a one-judge minority somehow ended up writing the opinion of the 6th Circuit Court of Appeals, allowing EPA enforcement claims against DTE Energy to continue.

The question in DTE Energy is whether EPA can second-guess a generator’s pre-construction prediction of future actual emissions and bring a claim for an NSR violation – even where post-project actual emissions did not show a significant net increase in emissions.  While the 6th Circuit said no second-guessing, it then allowed EPA to – you guessed it – second-guess DTE Energy’s projections.  (Does your head hurt yet?)

Now Scott Pruitt has leapt into the fray.  Last week, he issued a memorandum stating that:

When a source owner or operator performs a pre-project NSR applicability analysis in accordance with the calculation procedures in the regulations, and follows the applicable recordkeeping and notification requirements in the regulations, that owner or operator has met the pre-project source obligations of the regulations, unless there is clear error (e.g. the source applies the wrong significance threshold).  The EPA does not intend to substitute its judgement for that of the owner or operator by “second guessing” the owner or operator’s emissions projections.

So far, so good.  Of course, with this administration, it should not be a surprise that, even when they do something right, they get it wrong.  In classic regulation by guidance fashion, the Pruitt memorandum has a major caveat:

This document is not a rule or regulation, and the guidance it contains may not apply to a particular situation based upon the individual facts and circumstances.  This memorandum does not change or substitute for any law, regulation or other legally binding requirement and is not legally enforceable.  This memorandum is not final agency action, but merely clarifies the EPA’s current understanding regarding certain elements of the NSR regulations.

I’m sorry, but isn’t this just another example of making regulatory changes by guidance and pretending it isn’t so in order to avoid judicial review?  It’s precisely what this administration has said its against.  EPA’s interpretation of the NSR rule, until December 7, 2017, was that it had the right to second guess generators’ pre-construction projections of post-construction actual emissions.  Now, EPA is saying that it won’t do that.  This seems a fairly significant shift in policy to me.

EPA clearly does not want anyone second guessing its decision to second guess its policy on second guessing.

Attacking Invasive Species Requires Serious Measures — A Judicial Opinion with Beatles Annotations

Everyone knows what a problem invasive species can be.  Difficult problems require difficult solutions.  In a recent case decided by the 1st Circuit Court of Appeals, the scope of the government’s authority to address one invasive species – the Asian Longhorned Beetle – was made clear.

On the merits, the case was relatively simple.  In order to combat the ALB, the USDA removed numerous trees from plaintiff’s property without permission.  The Court concluded that the discretionary function exception to liability under the Federal Tort Claims Act barred plaintiff’s claims, holding that the USDA had no non-discretionary duty to seek a landowner’s consent prior to removing the trees.

The decision is particularly noteworthy for the opinion by Judge Bruce Selya – known for his occasionally whimsical approach to opinion-writing – in which each section is given the title of a Beatles’ song.  This seemed the least I could do in homage.

Norwegian Wood (It’s all about the wood)  

Come Together (Massachusetts DCR and USDA come together to fight the ALB)  

Here Comes the Sun (Plaintiff’s claim arises (bit of stretch, I’ll admit))  

The Long and Winding Road (The history of the claim) 

Her Majesty (The essentials of sovereign immunity)  

Tell Me Why (Why the FTCA claim fails)

Let It Be (The 1st Circuit lets the decision below stand)  

Climate risk? Credit risk! Moody’s Warns State and Local Governments

Earlier this week, Moody’s Investors Service announced issuance of a report (payment required) warning that:

the effects of climate change, including climbing global temperatures, and rising sea levels, are forecast to have an increasing economic impact on US state and local issuers. This will be a growing negative credit factor for issuers without sufficient adaptation and mitigation strategies.

In other words, if you are an issuer of state or local bonds in an area likely to be impacted by climate trends, and particularly if you are likely to be subject to “climate shocks” that “have sharp, immediate and observable impacts on an issuer’s infrastructure, economy and revenue base, and environment,” be prepared for a downgrade, unless you can demonstrate that you have taken appropriate actions to mitigate those impacts – even if the impacts may not occur until “a number of years in the future.”

Many cities and states are now moving aggressively to adapt to climate change.  Others, to date, have not been doing so.  Perhaps the threat of a downgrade might jump start adaptation among those who have thus far been laggards.

Texas Now Has More Wind Than Coal Capacity. So Far, Trump Has Not Saved Coal.

The Houston Chronicle reported yesterday that electric generation capacity from wind now exceeds that of coal in Texas.  That’s not even counting Vistra’s recent announcement that it intends to close three coal-fired plants.  

To those who might point out that wind is intermittent and it thus has lower capacity factors, the same Chronicle story reports at least one expert prediction that wind generation will exceed that of coal by 2019.

So far, President Trump has not succeeded in propping up coal.  No wonder Secretary Perry is trying to persuade FERC to do so.  What happened to not picking winners and losers?

In any case, the story is a welcome excuse to publicize one of my favorite haunting Jimmie Dale Gilmore songs (and, yes, I know it’s really a Joe Ely song.)

Significant Nexus Lives! (For Now, In the 9th Circuit)

On Monday, the 9th Circuit affirmed the conviction of a Joseph Robertson, Montana man who:

discharged dredged and fill material into the surrounding wetlands and an adjacent tributary, which flows to Cataract Creek. Cataract Creek is a tributary of the Boulder River, which in turn is a tributary of the Jefferson River—a traditionally navigable water of the United States.

This somewhat attenuated connection to a “traditionally navigable water” put the case in the crosshairs of those seeking to narrow the definition of “Waters of the United States.”  Robertson appealed on two grounds relevant to this larger debate.  First, he argued that there was no jurisdiction, because the wetlands were not WOTUS.  Second, claimed that he lacked fair warning of the scope of jurisdiction.

On the jurisdictional issue, the 9th Circuit had previously adopted, in Northern California River Watch v. City of Healdsburg, Justice Kennedy’s “significant nexus” test from his concurrence in Rapanos.  The Court here therefore spent more time analyzing the complex rules for how to determine what the “holding” is in a Supreme Court decision without a majority opinion.  Those fascinated by this topic can read more in the American College of Environmental Lawyer’s White Paper on the WOTUS issue.  Suffice it to say here that the 9th Circuit found no reason to upset its precedent adopting the “significant nexus” test.

As to the notice issue, important to the criminal conviction, but not relevant to the broader jurisdictional issues, the Court found that Robertson was on notice that he was working in Waters of the United States, because the 9th Circuit had decided City Of Healdsburg before Robertson began work on his property.  The Court might also have noted that Robertson was warned by EPA agents that his activities required permits under the CWA.  Sounds like fair warning to me.

The decision breaks no new ground, either in the 9th Circuit or elsewhere, but given the attention on the WOTUS jurisdictional issue, it’s worth noting that the 9th Circuit is still backing Justice Kennedy.  The real question at this point is whether Justice Kennedy still backs Justice Kennedy!

AG Sessions Speaks. No More Guidance. Make It So.

Last week, Attorney General Sessions sent a memorandum prohibiting the use of guidance in place of notice and comment rulemaking “when purporting to create rights or obligations binding on members of the public or the agency.”  Who can doubt that Scott Pruitt is jealously thinking that he should have been the first on this one?

The debate between guidance and regulation has long been a concern of mine, and I am generally supportive of the views expressed by the AG in the memorandum.  When a guidance document “reads like a ukase,” to quote from one of my favorite cases concerning the guidance/regulation debate, and when an agency implements guidance documents as though they are regulations, then something has gone seriously wrong.

However, the Sessions memo is a curious document, and its oddity goes to the heart of the dilemma in opposing guidance documents that function as regulations.  The memorandum has five bullet points intended to ensure that regulations no longer masquerade as guidance documents.  The problem?  Every single administration, Republican and Democratic, since the modern administrative state began in the New Deal, could say that it already complied with all of the Sessions memo requirements.

The problem with guidance documents isn’t how they’re drafted; it’s how they’re implemented.  No matter how much the AG wishes it weren’t so, street-level bureaucrats are always going to retain a lot of discretion in implementing the policies and programs for which they are responsible.  If they decide that it’s easier just to require compliance with a guidance document than to interpret it flexibly as was no doubt intended by those who wrote it, then it’s going to function as a regulation in the real world.

What can be done to avoid this outcome?  It would require senior managers making clear that they are not going to support their underlings when they take the easy way out and just tell the regulated community to comply with the guidance.  Perhaps the AG – and EPA – need to create a position called something like the “Guidance Ombudsman” (or woman), where members of the regulated community could take concerns about the implementation of guidance without fear of retribution.

Make it so.