A Federal Court Rules that Increased Conductivity Impairs a Stream — How Shocking!

On Tuesday, Chief Judge Robert Chambers ruled that Fola Coal Company violated the Clean Water Act by discharging mine waste with sufficiently high levels of conductivity to cause or materially contribute to impairment of Stillhouse Branch.  The decision appears designed to be bullet-proof to any appeal.  Judge Chambers thoroughly explained why the opinion of the defendant’s expert should not be given “great weight,” why the plaintiffs’ experts were reliable, and why EPA’s “Field-Based Aquatic Life Benchmark for Conductivity in Central Appalachian Streams” is entitled to substantial Chevron deference.

In short, Judge Chambers found on a number of independent grounds that plaintiffs more than met their burden do demonstrate impairment caused or materially contributed to by Fola Coal’s operations.  I just don’t see an appellate court reversing those findings.  For those interested in the actual nitty-gritty of putting together an expert case, the Court’s discussion of the both sides’ experts is well worth reading.

It’s interesting to compare this decision with the 6th Circuit permit shield decision also issued on Tuesday.  It is possible that the 6th Circuit decision could have important consequences, if it causes EPA to take a second look at what some delegated states are doing with their general permit programs.  Otherwise, the Fola Coal case is likely to have the more lasting impact.  If mine owners cannot address conductivity issues, more decisions such as this are likely, and that would be a serious problem for surface mine operations.

General Permits Are Also Entitled to a Permit Shield

On Tuesday, the 6th Circuit Court of Appeals held that the “permit shield” provisions of the Clean Water Act protected ICG hazard from Sierra Club claims that effluent from ICG Hazard’s Thunder Ridge mine thunderridgecoalminecaused exceedances of Kentucky water quality criteria for selenium.  Thunder Ridge is covered by a general permit, not an individual site permit, and the Sierra Club argued that the shield should not apply.  However, this seems like a classic case of a distinction without a difference, and the Court agreed.

The statute provides that “compliance with a permit issued pursuant to this section shall be deemed compliance” with the relevant parts of the CWA itself.  In interpreting this provision, courts have concluded that, with respect to individual permits, the shield is available so long as:  (1) the permittee complies with reporting and disclosure requirements and (2) the discharge at issue was “within the permitting authority’s reasonable contemplation.”

The Court of Appeals here agreed that the same rule should apply to general permits.  Reviewing prior case law, the Court concluded that EPA has already determined that the scope of the permit shield should be the same for general permits as for individual permits.  Finding EPA’s interpretation reasonable, the Court deferred to it under Chevron.  Having crossed that bridge, the Court easily found that selenium discharges were within KDOW’s “reasonable contemplation” when it issued the general permit.  After all, KDOW included monitoring requirements for selenium in the general permit and also specified how permittees would have to respond if selenium were detected.

Given that ICG Hazard disclosed selenium information to the Kentucky Division of Water  and the KDOW knew about the potential for selenium in the mine effluent, the decision seems clearly correct.  The plaintiffs have a legitimate complaint, but it’s not with ICG Hazard.  The complaint should be with KDOW for issuing a general permit that allows the selenium water quality criterion to be exceeded and with EPA for delegating to Kentucky a program that issues permits allowing exceedances.  Given that the general permit is in effect, however, mine companies choosing to be covered by the general permit should be no less entitled to rely on the permit shield than mine owners covered by individual permits.

Coming Soon to a Settlement Near You: Next Generation Compliance

In a memorandum issued earlier this month, EPA Assistant Administrator for Enforcement Cynthia Giles encouraged use by EPA staff of “Next Generation Compliance Tools” in civil settlements.  Some of the tools are more “next generation” than others, but they all bear watching by the regulated community.  The specific tools highlighted in the Giles memorandum include:

  • Advanced monitoring, including real-time monitoring of ambient pollution levels at the facility fence-line or in the immediate neighborhood
  • Third party compliance verification
  • Electronic reporting
  • Increased public availability of compliance data

To me, the first and last bullets are key.  Third party compliance verification is so last generation that I remember suggesting it in 1978 in a class at MIT.  I believe it may have been innovative then; it isn’t now.

Advanced monitoring, particularly when combined with real-time disclosure to neighbors or citizen group, is a whole other kettle of fish.  It will certainly facilitate citizen oversight – and citizen enforcement – of environmental laws.  Of course, in some circumstances, done right, there could be advantages to regulated entities in having such information.  The question always arises, though, if it’s so good for the regulated entities, then why don’t they voluntarily install such equipment, without an enforcement prod by EPA.

In any case, we’re certainly going to see more of this.  While EPA may not always have legal authority to require the various Next Generation Compliance tools, the memorandum encourages EPA staff to include them in Supplemental Environmental Projects.

And if you want some idea of what EPA considers to be Next Generation settlements, EPA has provided a list of examples.

The Need For Expert Evidence To Make Out An Innocent Landowner Defense Under CERCLA

As every litigator knows, evidence almost always tells a story that is untidy and riddled with loose ends.  This was illustrated by a recent innocent landowner case in California — Coppola v. Smith.  There, a company had purchased land in 1995 without knowledge that it had been contaminated with perchloroethylene (PCE) from a dry cleaning operation in the 1950s and 1960s.  When the company was sued under contribution by a nearby dry cleaner for contributing PCE to to regional groundwater contamination, the company claimed that it was protected by the innocent landowner defense under Section 101(35)(A) and (B) of CERCLA.  The company moved for summary judgment on its innocent landowner defense, and the federal court mostly agreed, finding that the company had purchased the site long after disposal of the PCE, had no knowledge of the contamination until eight years after the purchase,  had done nothing to contribute to the contamination, and had cooperated fully with the government.

The sticking point, however, was whether the company in purchasing the property in 1995 had made all “appropriate” inquiries about the property and its environmental condition.  Here’s where the untidiness came in.  The company had reviewed a preliminary site assessment prepared four years before the 1995 purchase.  Although that assessment found no environmental issue with the property, the assessment was not conducted in accordance with ASTM standards and the assessment specifically noted that information about the ownership and operation of the property from 1958 to 1972 could not be found and that PCE had been detected at low levels in two nearby groundwater wells without any apparent source.

The dry cleaner contended that this preliminary site assessment could not satisfy the company’s  innocent landowner defense because it did not employ ASTM standards, did not involve soil and groundwater testing, and failed to consult historical Sanborn maps which showed the site being used for dry cleaning.  The court rejected the dry cleaner’s contention on the ground that it had failed to show that it was applying standards and practices which were customary in 1995 in this part of California.  Nonetheless, the court went on to deny summary judgment.  According to the court, the company had likewise failed to present any evidence as to whether its review of the preliminary report was consistent with the standard of environmental due diligence customarily employed in the area in 1995 when purchasing property.  Plainly, an expert witness on what was customary environmental due diligence in 1995 was necessary to tidy up the loose ends in the evidence.


No Arranger Liability For Sale of A New Hazardous Substance

Relying on the 2009 Supreme Court decision in Burlington Northern, the Fifth Circuit recently overtuned a CERCLA liability finding against a supplier of perchloroethylene.  Vine Street LLC v. Borg Warner Corp. involved the familiar CERCLA issue whether the seller of a hazardous substance can be liable for its disposal by the buyer.  The lower court, in a pre-Burlington Northern decision, had found it sufficient that the seller had sold unused PERC to a dry cleaner with knowledge that the dry cleaner would inadvertently dispose of some of that PERC in wastewater because the dry cleaner was using a water separator installed by the seller that was not 100% effective in removing all… More

It’s All Connected: EPA Finally Determines that the Science Supports an Expansive Definition of Waters of the United States

On Thursday, EPA issued its final report on Connectivity of Streams & Wetlands to Downstream Waters:  A Review & Synthesis of the Scientific Evidence.  The Connectivity report is intended to support EPA’s rule clarifying the definition of waters of the United StatesCorps_Regulatory_Jurisdiction.  I know that groups on all sides will be providing their two cents, but of this I am sure enough to abandon my usual reluctance to speculate:  This report will be more than sufficient to insulate EPA’s final rule from judicial challenge.  If opponents of the rule want to defeat it, they’d better be working on those 60 votes in the Senate.

There’s a lot to the report, but the key conclusions can be summarized fairly simply:

  • The scientific literature unequivocally demonstrates that streams, individually or cumulatively, exert a strong influence on the integrity of downstream waters.
  • Wetlands and open waters in riparian areas and floodplains are physically, chemically, and biologically integrated with rivers via functions that improve downstream water quality.
  • Wetlands and open waters in non-floodplain landscape settings provide numerous functions that benefit downstream water integrity.
  • Watersheds are integrated at multiple spatial and temporal scales by flows of surface water and ground water, transport and transformation of physical and chemical materials, and movements of organisms.
  • The incremental effects of individual streams and wetlands are cumulative across entire watersheds ….  When considering the effect of an individual stream or wetland, all contributions and functions of that stream or wetland should be evaluated cumulatively.

I have frequently discussed the role EPA’s scientific support plays in judicial review of EPA regulations.  Suffice it to say that the level of peer review to which this report has been subjected will be enough for the Court of Appeals.

What is the Social Cost of Carbon? And Who Bears Those Costs?

As I noted last year, there has been significant criticism of the Integrated Assessment Models used to calculate the social cost of carbon.  An article published this week in Nature Climate Change (not free), attempts to respond to some of those criticisms.  The result is a social cost of carbon that might be as high as $220/ton of CO2.  The authors thus conclude that, if their findings are confirmed, “aggressive, near-term mitigation could well be warranted.”

I’m not the person to provide that confirmation – or refutation.  I will note, though, that the results are almost entirely linked to more significant impacts in poorer regions.  Indeed, the authors acknowledge that:

uncertainty around the magnitude of growth impacts in rich regions means that they could benefit from warming.

Yikes.  If that finding is replicated, the difficulty of getting the developed world to agree to the carbon reductions scientists generally think are necessary may have just gotten more difficult to achieve.

Is a Clean Energy Standard Coming to Massachusetts? We’ll See What the New Governor Thinks

Last week, the Massachusetts Department of Environmental Protection proposed to implement a “Clean Energy Standard,” which would require that, by 2020, at least 45% of electricity sales come from sources which have “clean energy attributes.”  The required percentage would increase to 49% by 2024, and MassDEP would then have to define percentages going forward at least 10 years in advance, with the caveat that the required percentage can never decrease.

What energy sources would qualify as having clean energy attributes?  The proposal includes two options.

  • All generation units that are RPS Class I renewable generation units
  • Any generation unit demonstrated to have lifecycle GHG emissions at least 50% below the life cycle emissions of a state of the art combined cycle gas generating unit

If you are thinking that this sounds like an RPS on steroids, I think you’re right.  If you are wondering about MassDEP getting into the business of regulating the power purchase choices of utilities, rather than the emissions of generators, so am I.  If you are also wondering what the new Baker administration will do with this, so am I.

And if you wanted a signal about how at least the now-departed Patrick administration was planning to meet the Global Warming Solutions Act requirement of an 80% decrease in GHG emissions by 2050, look no further than the Fact Sheet for the proposal, which very pointedly notes that:

Clean energy supplied in compliance with the CES could include hydroelectric power from Canada.




EPA Extends The Schedule For Issuing Its Power Plant Carbon Rules

As most readers know, EPA has extended its schedule for issuing its rules addressing GHG emissions from both existing, and new and modified, power plants.  EPA expects to issue the rules in the Summer of 2015.  Only time will tell whether the agency makes the new date.

For those looking for a handy summary of actions to date and EPA’s schedule going forward, EPA has provided a short Fact Sheet which sets out the relevant dates for the various rules.

Not a Good Day For Cape Wind: NStar and National Grid Terminate the Power Purchase Agreements

According to today’s Boston Globe, both NStar and National Grid have terminated their power purchase agreements with Cape Wind, visual_sim_boat1mile_thumbciting the failure by Cape Wind to meet a December 31, 2014 deadline to obtain financing and begin construction.  Cape Wind is asserting that the utilities may not validly terminate the PPAs, arguing that the protracted litigation against the project excuses Cape Wind’s obligation to meet the December 31 date.

I’m not going to get into the merits of the contractual wrangling.  I’m only going to note here that this development once again raises the question how Massachusetts is going to meet the greenhouse gas reduction targets in the Global Warming Solutions Act.  Activists, local renewable developers, and other stakeholders have been concerned about what electricity sources will qualify to help meet the GWSA standards and, in particular, how much the Commonwealth will rely on Canadian hydropower.  If Cape Wind is not available, the Commonwealth better start working on Plan B (or C).

With Treatment, Less May Be More

As environmental regulators look more and more to scientific experts to devise treatments for contaminated sites, it might behoove those regulators to consider the import a a recent medical study which dramatically suggests that problems may not always be best addressed by the application of aggressive treatments devised by experts.  That study evaluated mortality rates among cardiac patients hospitalized during the period when national cardiology conventions were being held.  Stunningly, cardiac patients fared significantly better if they were hospitalized when cardiologists were away at national conferences.  Indeed, almost 30 percent fewer patients hospitalized for heart failure died when their cardiologists were at professional conferences than when those cardiologists were… More

Fish Two, Water Withdrawals Zero: The 9th Circuit Affirms Another Biological Opinion

On Monday, the 9th Circuit Court of Appeals dealt another blow to traditional operation of the massive water projects that supply California’s Central Valley. The Court reversed those parts of a District Court opinion that had rejected parts of the biological opinion issued by the National Marine Fisheries Service intended to protect various salmonid species in the Central Valley.  Oncorhynchus_tshawytscha

As we noted, a different panel of the 9th Circuit had previously affirmed the BiOp issued by the Fish and Wildlife Service with respect to the Delta Smelt, for largely similar reasons.

What are the big takeaways?

• The 9th Circuit really means it when it says that the circumstances in which a District Court can review material outside the administrative record are few and far between.

• Judicial deference to agency action really is at its height where the agency decisions are at the core of its technical expertise.

• Deference really means affirming decisions with which courts might disagree, as long as they are reasoned decisions based on the record.

The core of these cases may seem simplistic, but given the scope of the Endangered Species Act, one short quote from the opinion pretty much explains the result:

People need water, but so do fish.

CCRs Dodge a Hazardous Waste Bullet: EPA Regulates under RCRA Subtitle D

On Friday, EPA finally released its final rule regulating coal combustion residuals.  Facility owners breathed a sigh of relief, as EPA chose to regulate under Subtitle D of RCRA, rather than under the cradle-to-grave provisions of Subtitle C.  Given the extensive beneficial reuse of CCRs, EPA clearly made the right call.

The rule is obviously lengthy.  EPA provided a Fact Sheet to summarize the rule, but those who want the quick summary should review the Executive Summary in the rule itself, which has a helpful table summarizing the different requirements of the rule, and which apply to existing landfills or surface impoundments, and which apply only to new landfills and surface impoundments and lateral expansions of existing landfills and surface impoundments.

I’m not even going to try to summarize the requirements here, but I will provide a reminder that the rule is not enforceable by EPA.  It is subject to EPA’s citizen suit authority.  EPA has also strongly encouraged states to implement the criteria in the rule through amendments to their Solid Waste Management Plans.

I do feel compelled to note that EPA projects that the net present value of the cost of the rule substantially exceed its benefits (costs of $23 billion, benefits of less than $9 billion).  I thought it was supposed to work the other way around.

Finally, because, to those of us of a certain generation, CCR will always have a totally different meaning than that provided by EPA, I leave you with the following:

EPA Releases FY 2014 Enforcement Results: Maybe Less Enforcement Is Good News

Last week, EPA released its report on Enforcement Annual Results in EPA Regions for Fiscal Year 2014.  As always, the report is worth reading, if only for the interactive map which shows where EPA has brought various kinds of cases.

Notwithstanding the traditional self-congratulatory tone of the report, the press coverage has almost uniformly focused on the year-to-year decrease in cases brought and dollars recovered.  Greenwire’s headline was “Enforcement actions decline again; agency blames shutdown, budget woes.”

I’m just a poor country lawyer and I don’t have the time to do the necessary sophisticated statistical analysis, but isn’t it also possible that the decline results from a decrease in noncompliance?

Proof and Causation Matter: District Court Declines to Penalize ExxonMobil in Texas Citizen Suit

On Wednesday, Judge David Hittner, of the District Court for the Southern District of Texas, in a decision long enough to require two separate pdfs, declined to impose an injunction or penalties (plaintiffs sought $642,697,500) against ExxonMobil in a Clean Air Act citizens’ suit brought by Environment Texas and the Sierra Club concerning the ExxonMobil facility in Baytown, Texas. baytown-night-lights_supporting_image (1) The plaintiffs lost even though Judge Hittner did find a number of violations of the CAA.  Why did plaintiffs lose?  Here are some of the reasons:

*  ExxonMobil never exceeded any annual limits on emissions

*  Emissions from the facility were steadily decreasing over the time period covered by the suit

*  Exxon had spent hundreds of millions of dollars annually on facility maintenance

*  Exxon did careful root cause analyses of every apparent violation and persuaded the court that it was dedicated to preventing recurrences

*  The sheer size of the facility actually worked in ExxonMobil’s favor; the Court found that it is literally impossible to prevent all violations

*  The plaintiffs’ experts were not found credible in demonstrating that ExxonMobil benefitted economically from the non-compliance

*  The plaintiffs were not able to demonstrate any link between any of the proven violations and any impact to public health or the environment

On the legal side, the Court’s conclusion that imposition of any penalty at all is within a judge’s discretion is obviously critical.  Similarly, the Court concluded that the requested injunction – which was that ExxonMobil comply with the CAA for five years –

would be an excessively intrusive remedy, because it could entail continuing superintendence of the permit holder’s activities by the federal court – a process burdensome to court and permit holder alike.

Finally, I note that the Court’s detailed discussion of the witnesses put forward by the parties on the issues of economic benefit of noncompliance and the impacts – or lack thereof – of the violations are well worth reading.  It really does matter how you put on a case.

Final score, Goliath 1, David 0.