Startup, Shutdown, and Malfunction — No Longer Any Automatic Exemptions or Affirmative Defenses

Last week, EPA finally responded to the Sierra Club’s petition requesting that it eliminate exemptions and defenses for excess emissions resulting from startup, shutdown, or malfunction events.  SSMEPA concluded that it needed to issue a SIP call to 36 states requesting that they revise their SIPs to conform to EPA’s current understanding regarding how SSM events should be handled.

The SIP call will require affected states to eliminate three separate types of protection currently given to generators in connection with excess emissions during SSM events:

  • Automatic exemptions
  • “Director’s discretion” exemptions
  • Affirmative defenses

To a significant extent, EPA’s hands were tied by the decision in NRDC v. EPA, which held in the NESHAP context that the CAA bars EPA from creating affirmative defenses to liability.  Those states which previously incorporated such provisions in their SIPs will presumably still be sympathetic to at least some claims by generators that excess emissions during SSM events were unavoidable, and thus may exercise enforcement discretion.  Therefore, the most significant impact of the SIP call will likely be an increase in citizen suits related to emissions during SSM events.

If you don’t want to wade through the entire 554 pages of EPA’s response to the petition to learn what EPA did with respect to states that matter to you, EPA’s 5-page fact sheet includes a table listing EPA’s final action for each affected state.

EPA Defines “Waters of the United States”. The Sky Has Not Fallen.

Yesterday, EPA and the Army Corps finally released their long-awaited rule defining “waters of the United States.”  I’m actually with EPA and the Corps on this one.  It’s an important rule, and I’m glad that EPA and the Corps did finally give up on the guidance approach and issue a rule, but here’s why I don’t see this as earth-shattering.

Since Rapanos, EPA and the Corps have made numerous jurisdictional determinations.  While EPA and the Corps project a small increase in positive jurisdictional determinations under the rule as compared to recent practice, the increase is likely to be small and recent determinations have been basically consistent with the positions they are taking in the rule.  (And given EPA’s and the Corps’ view of the science behind the rule, one would expect case-by-case positive determinations to increase even if EPA did not finalize the rule.)  Those determinations have been upheld so long as EPA and the Corps have provided some scientific support for the determination.  In short, the rule pretty much codifies what EPA and the Corps see as the extent of CWA jurisdiction.

Of course, there will never be a perfect match between a rule of broad applicability and case-by-case determinations, but I think everyone agrees in the abstract that the certainty of a rule is better than incurring transaction costs anew with each separate determination.  Moreover, just as EPA and the Corps have prevailed in judicial review of individual determinations, here too EPA has mustered sufficient scientific support for its position that the waters identified in the rule as jurisdictional have a “significant nexus” to traditional navigable waters.Prophet

Putting aside the possibility of congressional action that can withstand a veto, I’d be surprised if this rule does not survive judicial review.

I’d also be surprised if this rule leads to the end of western civilization.



Easy Cases Make Better Law — Standing Edition

In an interesting, but not really difficult, decision on Tuesday, the D.C. Circuit Court of Appeals found that the National Association of Home Builders did not have standing to challenge a consent decree pursuant to which the Fish and Wildlife Service agreed to a schedule for moving 251 species from “warranted-but-precluded” status under the ESA to either warranted or unwarranted.  ontheesawaitinglistbannergunnison_sagegrouse_noppadolpao13225The FWS, short of resources to make final listing decisions under the ESA, had simply been parking candidate species in the “warranted-but-precluded” category, and the environmental groups were mad as hell and weren’t going to take it anymore.  Recognizing that its approach was untenable, the FWS settled, agreeing to a strict schedule.

The NAHB, on the other hand, was pleased as punch with the delays in listing resulting from the FWS’s use of the “warranted-but-precluded” category.  It sued, arguing that its members suffered procedural injuries from the acceleration of the listing decisions.  The Court gave short shrift to the NAHB:

Unfortunately for Appellants, the warranted-but-precluded determination is a safety valve for the Service, not an escape hatch for beleaguered landowners.

As a result, the Court concluded that the NAHB had to meet the traditional requirements for standing.  “Appellants must show actual or imminent, concrete and particularized injury-in-fact; causation, such that the injury is fairly traceable to the challenged conduct; and redressability.”  Because the settlement only requires that the FWS act, “without dictating the agency’s substantive judgment”, NAHB could not demonstrate the required harm.

As I’ve noted previously, industry groups, which – rightly – often use standing arguments against citizen groups, cannot complain when those same arguments are used against them.

Kansas Thumbed Its Nose at EPA’s SIP Requirements — How’d That Work Out?

The D.C. Circuit Court of Appeals today rejected Kansas’s challenge to EPA’s disapproval of Kansas’s SIP revisions intended to comply with the Interstate Transport Rule.  The Court found that EPA was not arbitrary or capricious in rejecting Kansas’s SIP, noting that:

The discussion of interstate transport in Kansas’s SIP was only one page long and failed to provide any analysis at all of the downwind effect of its in-state emissions.

Generally speaking, it’s just not wise for a state simply to thumb its nose at EPA.  I realize that the legal issues related to EPA’s greenhouse gas rule are much more substantial, but assuming EPA does promulgate a final GHG rule, and if that rule survives legal challenge, I don’t suggest that states embark on a course of nullification.

Half a Loaf May Not Be Too Bad: The 9th Circuit Affirms Most of EPA’s Approval of the San Joaquin Valley SIP

Earlier this week, the 9th Circuit Court of Appeals granted part of a petition challenging EPA’s approval of California’s SIP for ozone and PM 2.5 in the San Joaquin Valley.  ca_san_joaquin (1)While the trade press has been focusing on the partial reversal, I think that EPA won much more than it lost.

What did it lose?  California’s plans for complying with the ozone and PM 2.5 NAAQS relied in part on emissions reductions to be attained as a result of California’s authority under the CAA to impose more stringent mobile source emissions standards than are applicable nationally.  However, those mobile source standards were not formally incorporated into the SIP.  To the Court, that was a fatal error:

the plain language of § 7410(a) refutes EPA’s position. The statute makes clear that SIPs “shall include” all emissions limitations, control measures, means, and techniques on which the state relies to assure compliance with the CAA.

Indeed, because the Court concluded that the plain language of the CAA requires that all emissions limitations be included in the SIP, it did not even reach the second step of Chevron analysis.  The Court did nonetheless volunteer its view that its decision was consistent with CAA policy goals, because emissions limitations not included in a SIP cannot be enforced directly by EPA or by citizens.

What did EPA win?  The most significant issue was that both plans:

rely on state commitments to propose and adopt emission control measures and to achieve aggregate emission reductions sufficient to comply with the NAAQS.

The plaintiffs argued that a commitment to impose adequate emissions limitations in the future was not sufficient, but the Court disagreed.  Why?

The reason is simple: Once approved into a SIP, the measures and the emissions reduction requirements, as well as the relevant deadlines, are binding on the state, and can only be altered through a SIP revision approved by EPA in another notice-and-comment rulemaking.

To me, EPA’s win is much more significant than its loss.  It seemed fairly obvious that, when the statute says that all emissions limitations relied on to attain the NAAQS must be in the SIP, it means just what it says.  Moreover, the consequences to EPA and California don’t seem significant.  The plans remain the same.  On the other hand, the 9th Circuit’s holding that a SIP need not include all the required emissions limits, but instead can include a promise to promulgate such emissions limits in the future, seems quite significant and substantially increases the flexibility that EPA and states have in meeting NAAQS.

MassDEP Has A Lot of Discretion in Implementing the Global Warming Solutions Act

Unsatisfied with the pace of the administration’s implementation of the Global Warming Solutions Act, progress-on-2020-planthe Conservation Law Foundation sued the Massachusetts Department of Environmental Protection, seeking a court order requiring MassDEP to:

promulgate regulations establishing a desired level of declining annual aggregate emissions limits for sources or categories of sources that emit greenhouse gas emissions.

The Court did not oblige.  Earlier this spring, noting the vagueness of the requirements imposed on MassDEP by the GWSA and the discretion given to MassDEP, the Court examined the regulations that MassDEP has promulgated and found them more than sufficient to meet any nondiscretionary duty MassDEP may have under the GWSA.

The opinion, which is on appeal, is noteworthy for at least two reasons.  First, the purpose and goals of the GWSA are sufficiently broad that the Court felt compelled to cut MassDEP some significant slack.

With a legislative enterprise as broad and complex as the GWSA, “there are likely to be casual overstatements and understatements, half-answers, and gaps in the statutory provisions.  As practice develops and the difficulties are revealed, the courts are called on to interweave the statute with decisions answering the difficulties and composing, as far as feasible and reasonable, an harmonious structure faithful to the basic designs and purposes of the legislature.”

In short, the Legislature’s reach exceeds its grasp, and the courts have to fix the mess left by the legislative process.  With such a background, and given the deference given to administrative agency interpretation of statutes within its jurisdiction, it would have been a huge surprise had the Court ruled for CLF.

The other notable aspect of the opinion is its conclusion that MassDEP traditionally builds flexibility into its regulations and that MassDEP should therefore not be expected to impose hard limits on GHG emissions without any kind of waiver or exception process.

If [the GWSA] did impose such an inflexible restriction, it would entail a departure from the manner in which DEP customarily implements hard limits.  In the ordinary course, DEP’s public safety regulations allow for exceptions to generally-imposed limits or requirements.

Really?  News to me.  Where’s that warm and fuzzy, flexible DEP when my clients need it?

Is the Shrinking Availability of Joint And Several Liability In Superfund Cases A Good Thing?

Although it has taken a surprisingly long time, the holding in Burlington Northern which greatly lowered the standard for apportionment in Superfund cases is finally being embraced by lower courts.   Last fall I blogged about a Seventh Circuit decision which rejected the trial court’s conclusion in the long-running Lower Fox River Litigation (US v. NCR Corp.) that a portion of the liability was not divisible.  On remand, the trial court completely switched its earlier ruling and held that the harm was divisible based entirely on the relative volumetric contribution of the PRPs; the court then decided that the liability could be apportioned largely… More

The SJC Walks Back the GE Decision; State Agencies Can Protect Work Product

In its 1999 decision in GE v. DEP, the SJC surprised most Massachusetts lawyers by ruling that the Commonwealth’s Public Records Act (our version of FOIA) did not have an exemption for work product materials and that it had no discretion to read any implied exemptions into the Act.  Yesterday, in DaRosa v. New Bedford, the SJC, in the immortal words of David Byrne, asked itself “My God, what have I done.”

Realizing that allowing parties in litigation with government agencies to obtain through the Act what they could not obtain in discovery made no sense, the SJC eviscerated GE.  (That’s a technical term for what the SJC does when it recognizes that a prior decision was plain wrong, but for some reason does not want to reverse it.)

Without formally overruling GE, the SJC did state that:

We no longer hold to the view declared in General Electric that there are no implied exemptions to the public records act….

Having gone that far, the SJC did not actually rely on any implied exemption from the Act for work product.  Instead, the Court simply concluded that, in most circumstances, work product constitutes “policy deliberation” which is explicitly exempt from the Act.

So what is the rule?  Opinion work product will be protected under almost all circumstances, though the Court stopped short of calling the protection “absolute.”  Fact work product is protected as to uncompleted reports and remains protected as to completed reports, if and to the extent that the facts are “interwoven with opinions or with analysis leading to opinions”.

You may wonder at the significance of DaRosa to environmental law practitioners.  In response, I’ll only note that both GE and DaRosa were in fact Superfund cases.  These issues arise with some regularity.  Now, lawyers representing parties opposed to state agencies will not be able to use the Public Records Act as an end-run around discovery privileges.  This might disadvantage some of my clients, but it’s difficult to say that it’s the wrong result.

Are Concurrent CERCLA Claims For Section 107(a) Cost Recovery and Section 113(f) Contribution Permissible?

Given the uncertainties after Cooper Industries v. Aviall about what cause of action a PRP has for recovering response costs under CERCLA, many parties take the prudent course of pleading claims under both for cost recovery and for contribution.  A federal court in South Carolina in PCS Nitrogen, Inc. v. Ross Develop Corporation recently held that when a PRP can satisfy the pleading requirements of both a cost recovery claim and a contribution claim it is limited to only a contribution claim.

In that case, a PRP performed certain response work pursuant to a Section 106(a) unilateral order and sought to recovery its costs under both Section 107(a) and Section 113(f).  The court reasoned that the PRP had a potential cause of action under Section 107(a) since it had incurred necessary response costs and also had a potential cause of action for contribution since a unilateral order was the functional equivalent of a civil action under Section 106.  The court then ruled that whenever a party may properly bring a contribution action, it is precluded from bringing a cost recovery action as well:

if [the PRP] has met one of the statutory triggers for a  § 113 action, then [the PRP] may proceed under only § 113 and not under § 107(a).

While a consensus is gradually growing in the case law as to what facts will permit a CERCLA contribution claim, there remains considerable uncertainty .  Until that uncertainty is resolved, the prudent course remains for a party to plead a claim for both cost recovery and contribution.

Staying Up To Date on the Run-Up to the Paris Climate Negotiations

As we approach the start of the UN Framework Convention on Climate Change Conference of the Parties 21, slated to open in Paris on November 30, 2015, logoFoley Hoag begins a series of documents tracking the negotiations.  The first installment discusses the range of Intended National Determined Contributions of four players in the talks:  the United States, the EU, Russia, and Mexico.  They provide a fairly wide range of positions, both on the extent of promised GHG reductions and on whether those commitments are conditional or unconditional.

May you live in interesting times.

Is There Any End to Post-Closure Care Under RCRA?

Late last month EPA issued draft guidance on adjusting post-closure periods under RCRA.  hwlf-csIt’s not good news.

Although the Guidance is technically neutral concerning shortening or lengthening post-closure periods, let’s not kid ourselves; this is all about extending post-closure care.  For how long?  How does forever sound?

Why do I think that this is all about extensions?  First, if anyone can give me any examples where EPA has ever decreased this type of monitoring/oversight period, I’d love to see them.  Second, the examples that EPA gives in the draft guidance are pretty much exclusively the types of issues that would lead to a longer post-closure period, rather than a shorter one.

In most cases, by the time a 30-year post-closure period has ended, a site will have achieved some time of equilibrium.  EPA acknowledges in the guidance that institutional controls can play a role in determining the length of a post-closure period, but why isn’t that the entire answer in almost all cases?

States routinely use institutional controls as the linchpin of permanent solutions for sites at which hazardous materials remain after active remediation is complete.  Shouldn’t RCRA do the same?

EPA Is Not an Expert in Determining Electric System Reliability

The D.C. Circuit Court of Appeals just reversed and remanded EPA’s rule allowing backup generators to operate for up to 100 hours per year as necessary for demand response.  demand responseIt’s an important decision that could have lessons for EPA and the regulated community across a wide range of circumstances, including eventual challenges to EPA’s proposed GHG rule.

EPA said that the rule was necessary to allow demand response programs to succeed while maintaining grid reliability.  Commenters had argued that, by encouraging greater use of uncontrolled backup generators, EPA’s rule makes other generators less economic, thus creating a negative feedback loop, with less and less power generated by controlled units, resulting in greater and greater need for uncontrolled backup generators. Here’s what the Court concluded:

  1. EPA failed adequately to respond to the commenters’ arguments. Noting that “an agency must respond sufficiently to “enable [the court] to see what major issues of policy were ventilated,” the Court instead found that EPA “refused to engage with the commenters’ dynamic markets argument.”
  1. To the extent EPA did respond, it was “self-contradictory”, arguing that it was not justifying the regulation on reliability grounds, even though the final rule said that it was based on reliability concerns.
  1. The 100-hour rule was based on faulty evidence. EPA relied on evidence that backup sources had to be available at least 60 hours to participate in a PJM “Emergency Load Response Program.”  However, PJM itself noted that this minimum does not apply to individual engines.
  1. Finally, and perhaps most importantly, while EPA justified the rule on reliability grounds, the Court stated that:

grid reliability is not a subject of the Clean Air Act and is not the province of EPA.

This last issue is the part of the opinion that could have some bearing on judicial review of EPA’s GHG rule.  The Court noted that there was no evidence that FERC or NERC had participated in the backup generator rule or provided comments to EPA.  When, during the course of the rulemaking, a commenter suggested that EPA work with FERC, this was EPA’s response:

the rulemaking’s purpose was to address emissions from the emergency engines “and to minimize such pollutants within the Agency’s authority under the CAA. It is not within the scope of this rulemaking to determine which resources are used for grid reliability, nor is it the responsibility of the EPA to decide which type of power is used to address emergency situations.

This statement did not make the Court happy:

EPA cannot have it both ways it [sic] cannot simultaneously rely on reliability concerns and then brush off comments about those concerns as beyond its purview. EPA’s response to comments suggests that its 100-hour rule, to the extent that it impacts system reliability, is not “the product of agency expertise.

And why is this relevant for the GHG rule?

First, because EPA had better consult with FERC and NERC, so that it can defend any statements it makes in the GHG rule about its impact, if any, on reliability.  Second, it’s clear that the court will not show deference to EPA’s conclusions about reliability, since that is not within the scope of EPA’s expertise.

When Does a Judge Refuse an Unopposed Motion to Enter a Consent Decree?

Last week, Judge John Copenhaver refused to allow a motion by the United States to enter a consent decree that would have resolved government claims against DuPont concerning alleged violations of the Clean Air Act, CERCLA, and EPCRA at its facility in Belle, West Virginia.  DuPont Belle facilityThe motion was unopposed.

Instead, Judge Copenhaver ordered the United States to file a revised memorandum in support and he specifically directed that the memorandum address certain issues that concerned him, including:

  • The strength of the government’s case
  • How the government calculated penalty
  • What the potential statutory penalties were for the alleged violations, and
  • Whether the remediation steps described in the consent decree were otherwise required under applicable law.

How does the government fail to win an unopposed motion to enter?  After all, the decree did require payment of a $1.275M penalty and various remedial measures.  It probably did not help that the alleged violations sounded quite serious, involving multiple releases of some extremely hazardous materials, including a release of phosgene that killed a worker.  Moreover, the complaint alleged that DuPont violated its own procedures concerning the handling of these extremely hazardous materials.

It also did not help that the government’s memorandum in support of the motion to enter was barely five (5) pages long, and was “composed almost entirely of prefatory language and boilerplate.”  After pointing out that entry of a consent decree does not simply implement a compromise between the parties, but puts the court’s imprimatur on the deal, Judge Copenhaver concluded that the motion did not provide the information the Court required to sanction the settlement.

It will be interesting to see how the government responds, since it presumably wants the decree entered, but presumably also also wants to avoid acknowledging anything other than generic litigation risks.

As a practical matter, it’s going to be difficult for Judge Copenhaver to second-guess the government, but the decision is still a useful reminder that a consent decree is not just a court approval of a deal between to private parties.  It formally puts the court in the position of adopting the decree as its own order.  As difficult as the review may be, it’s nice to see a judge not simply rubber-stamping a consent decree.

The Stormwater Mess Continues in Massachusetts: CLF and CRWA Sue EPA

In February, we noted that the Conservation Law Foundation and the Charles River Watershed Association had threatened to sue EPA for failing to require that “commercial, industrial, institutional, and high density residential property dischargers of nutrient-polluted stormwater” obtain NPDES permits, and for failing to make a final determination on CLF’s and CRWA’s petition that EPA exercise its residual designation authority with respect to stormwater discharges in the Charles River Watershed.  charles15

If this was a case of “sue and settle”, at least EPA decided not to settle until it was actually sued.  Yesterday, CLF and CRWA made good on their threat and filed a complaint in federal court.  We’ll see where this goes.  It’s clear that EPA understands that it has no good choices here, that additional stormwater controls are much more expensive than the advocates have generally acknowledged, and that there is significant opposition, not just from private real estate interests, but also from municipalities.

Indeed, MassDEP, which recently weighed in with comments critical of EPA’s draft MS4 permit, is probably also looking on with trepidation.  Of course, Massachusetts is one of the few states without a delegated NPDES program.  The Governor’s recent Executive Order purports to prevent the Commonwealth from issuing or maintaining regulations more stringent than federal regulations, but what about the flip side?  What happens when EPA begins to consider regulating more stringently than would the Commonwealth, if the Commonwealth were to operate the program itself?  I’m sure that MassDEP is not eager to take on CLF or the CRWA, but neither can this administration be eager to see EPA impose stringent new stormwater regulations on cash-strapped municipalities.  Precisely because of issues such as this, numerous stakeholders have been pressing MassDEP for years to take delegation of the NPDES program.  It will be interesting to see whether MassDEP can somehow come up with the money necessary to run its own program.

Majority Support for a Carbon Tax?

What are the politics of climate change?  A new poll done by Stanford University and Resources for the Future suggests that the public may be more ready to regulate carbon carbon taxthan has previously been thought.  When asked if “the federal government should or should not require companies to pay a tax to the government for every ton of greenhouse gases the companies put out,” 61% of respondents said yes.  That figure rose to 67% when the question was modified to provide for a revenue neutral tax the proceeds of which would be rebated through income tax reductions.

Fairly or not, Hillary Clinton has never been known for her boldness.  Wouldn’t it be interesting if she supported a carbon tax and made it major issue in the campaign?  Wouldn’t it be even more interesting if one of the GOP candidates did so?