Can the Majority and the Dissent Both Be Wrong? The Supreme Court Remands the MATS Rule

The short answer is, yes, though the majority is more wrong.

In fact, the issue in Michigan v. EPA seems so simple that the MATS rule could have been affirmed in a two-page opinion.  Judge Scalia notes that the word “appropriate” – on which the entire 44 pages of the majority, concurring, and dissenting opinions focus – is “capacious”.  capaciousI agree.  If so, and if Chevron means anything, “appropriate” is surely capacious enough to allow for an interpretation that does not include cost considerations.  That should have been the end of the case.

I do feel compelled to note, however, that Justice Kagan’s dissent also got it wrong, in at least three ways:

  • I think she’s flat wrong to suggest that, because the MATS “floor” is based on the top 12% of facilities already in operation, that means that establishment of the floor already takes cost into account. As Justice Scalia cogently notes, those existing facilities may well have been under their own regulatory duress – a duress that may not have considered cost.
  • Justice Kagan confuses cost-benefit analysis and cost-effectiveness analysis. For any given goal sought by EPA, the various options provided by the MATS rule may allow power generators to attain the goal in the most cost-effective means possible, but if even the most cost-effective approach were to yield $10B in costs and $10M in benefits, that would fail the cost-benefit test for most people.
  • Finally, and most importantly, Justice Kagan got the consequences wrong. Instead of suggesting, as she did, that the majority decision

deprives the American public of the pollution control measures that the responsible Agency, acting well within its delegated authority, found would save many, many lives,

she should have made the point that the majority decision will have no impact on EPA or the MATS rule.  The Supreme Court did not vacate the rule; it merely remanded the rule to the Court of Appeals.  Justice Kagan’s position should have been that EPA still has sufficient discretion, even on the existing record, to defend the MATS rule within the confines of the majority opinion.  Instead, Justice Kagan gave ammunition to those who oppose the rule, by suggesting that it cannot be saved.

A pox on both their houses.

Do Climate Change and Same-Sex Marriage Have Anything in Common?

Recent events have me pondering this question.

Most notably, in two court decisions last week, courts ordered the State of Washington and the government of the Netherlands to take more aggressive action against climate change.  In the Washington case, in response to a complaint from eight teenagers, a trial court judge has ordered the Washington Department of Ecology to reconsider a petition filed by the teenagers requesting reductions in GHG emissions.  Similarly, in the Netherlands, a court ordered the government to reduce GHG emissions by 25% within five years.  The Dutch case was brought under human rights and tort law, not under existing Dutch environmental laws.

I have been very skeptical of the use of nuisance-type litigation to require more aggressive government regulatory efforts.  I still think comprehensive market-based regulation is the best approach.  However, in the absence of aggressive action in the United States and world-wide, these suits are going to increase in number.

So, how are they similar to the same-sex marriage issue?  First, as noted in Obergefell, courts were initially – and for some time – not just unfriendly to litigation efforts in support of same-sex marriage, they were positively dismissive.  Second, there is the gradual increase over time in the litigation.

Next, there is also the change over time in the scientific understanding of the issues.  While same-sex marriage has always been, on both sides, primarily a moral issue, it would be wrong to ignore the role that an increasing understanding of the genetics of sexual preference has played in the debate.  Similarly, the move towards an overwhelming weight of evidence, not just that climate change is occurring, but that it is anthropogenic, has obviously been important to the climate change debate.

Finally, while the moral issues in same sex marriage may seem to distinguish it from the climate issue, the recent papal encyclical makes clear that there are moral aspects to the climate change debate as well.

I have no crystal ball.  I do not know whether we are going to see a groundswell, and then, perhaps, a tidal wave that will somehow overcome the gridlock in United States and world politics on climate change.  There are differences in the two issues, most obviously in the short-run economic costs of addressing climate change.  Nonetheless, I do know that it wouldn’t surprise me if the tidal wave comes, and relatively soon.



The Second Installment of our Paris Climate Change Negotiations Tracker

As the date for the Paris climate talks logomoves closer, we have our second installment of our climate negotiations tracker.  This episode discusses the concept of “dynamism” – being able to adjust over time just how ambitious the mitigation goals will be; the mechanism for assessing the Nationally Determined Contributions, or NDCs; the role of non-state actors; and how to differentiate among developed and developing countries.

There’s still a lot to do if Paris is going to be a success.

FWS To Authorize Incidental Takes Under the Migratory Bird Treaty Act?

Late last month, the Fish & Wildlife Service issued a Notice of Intent to prepare a programmatic environmental impact statement to evaluate various options for authorizing incidental takes under the Migratory Bird Treaty Act.  Of likely the greatest interest to the regulated community, FWS will consider issuing general permits, with performance standards, for certain industry sectors.  FWS specifically called out the following sectors:

  • Oil, gas, and wastewater disposal pits
  • Methane or other gas burner pipes at oil production sites
  • Communications towers
  • Electric transmission and distribution lines.

Although not called out in separate bullets, the Notice also states the FWS is considering a general permit for wind energy.  image of birds flying by wind turbineGiven recent concerns over bird deaths associated with  solar  installations, that would also seem to be a fruitful area.

There are obviously pluses and minuses to promulgation of a general permit and the performance standards could end up being unduly onerous.  Overall, though, I’d expect that the certainty and reduced transaction costs associated with a form of general permit could be a net gain for the wind and solar industries.

The comment period ends July 27.

Environmental Impact Assessments Don’t Have to Be Wise, But They May Not Assume Their Conclusion

In an important decision last week, United States District Judge Jorge Alonso rejected the Environmental Impact Statement for the Illiana Corridor Project, Illianawhich would connect I55 in Illinois to I65 in Indiana. (And why Illiana?  Why not Indianois?)

The two key criticisms were raised by metropolitan planning organizations (MPOs) in Illinois and Indiana.  First, they argued that DOT used a “market-based” population forecast that showed much faster growth in rural areas than the “policy-based” forecast used by the planning agencies.  As best as one can infer from the decision, it appears that the planning organizations want to drive growth in existing urbanized areas, rather than in currently sparsely populated rural areas.

The Court acknowledged that given

the MPOs’ legal mandate to develop long-range transportation plans for their areas and the influence they wield over local land use decisions through those transportation plans, it would seem unwise for the Agencies to reject the MPOs’ population forecasts.

Nonetheless, DOT won this issue.  In a commendable show of judicial restraint, the Court deferred to DOT’s choice, because it “articulated reasonable, if not persuasive, reasons” for using the market-based forecasts.

The second issue was the killer for DOT.  The Court concluded that DOT’s no-build scenario in fact assumed the development of substantial transportation improvements, including the “potential construction of the Illiana Expressway”.

Oops.  That’s a no-no.  The agency can’t put the impacts of the project under consideration into the no-build scenario.

Although the Court remanded the EIS to DOT, I  think that this case may prove to be more help to road builders than to opponents.  It’s not really news that the transportation agency can’t base its forecasts for the no-build alternative on growth that will result from implementation of the project.  On the other hand, conflicts between transportation agencies and other planners are common and the decision strengthens the transportation agencies’ hand in resisting the suggestions of planning agencies.

EPA’s EJSCREEN: Making Citizen Environmental Suits Just a Little Bit Easier

I have previously noted that EPA, perhaps recognizing that an unfriendly Congress will lead to budgetary constraints on government enforcement, has been trying to facilitate citizen enforcement efforts.  EPA’s latest move on this front was the recent release of “EJSCREEN:  Environmental Justice Screening and Mapping Tool.”  environmental-justice

Putting aside the definitional concerns that many people have concerning environmental justice, there is no doubt that tools such as EJSCREEN can provide powerful assistance to groups who think that they may have suffered disparate environmental impacts.  Environmental and other citizen groups are going to be using EJSCREEN and they are going to be identifying potential targets for citizen suits based on what they find.

Members of the regulated community would do well to undergo a little self-analysis and see what EJSCREEN says about the intersection of their own operations and arguably disadvantaged communities.

Forewarned is forearmed.

No, Virginia, You Can’t Challenge a Rule that Hasn’t Even Been Promulgated

Easy way to tell when you’ve lost your appeal?  When a pithy judge starts making fun of you in the first sentence of the opinion.  In a case that was only ever going to have one outcome, the D.C. Circuit Court of Appeals today rejected all of the pre-promulgation challenges to EPA’s Clean Power Plan.  Judge Kavanaugh began by noting that:

Petitioners are champing at the bit to challenge EPA’s anticipated rule restricting carbon dioxide emissions from existing power plants.

(And kudos to Judge Kavanaugh for “champing”, rather than “chomping”.)  He then quickly demolished petitioners’ arguments.  In short, the Court of Appeals reviews final agency action and a proposed rule just plain isn’t final agency action.  Petitioners made three arguments attempting to get around the lack of finality.  Judge Kavanaugh made short shrift of them all.

  1. The All Writs Act, relied on by petitioners, is only to be used to protect a court’s jurisdiction. This is not such a case.
  1. Petitioners argued that EPA’s public statements about its legal authority demonstrated that it had already made up its mind. However, even if true – which the Court did not accept – “the agency’s statements about its legal authority – unconnected to any final rule or other final agency action – do not impose any legal obligations or prohibitions on petitioners.”
  1. The petitioners could not avoid these problems by casting their challenge as relating instead to an EPA settlement in 2011. The argument failed twice.  First, because EPA did not agree to promulgate the Clean Power Plan rule; it only agreed to a schedule for deciding whether it would issue such a rule.  Second, the petitioners’ challenge to the settlement was in any case untimely.

There are legitimate legal questions about EPA’s authority here, but this case was a dead cert loser from the get-go.  I think it was frivolous.  Companies always complain about frivolous law suits and ask why they cannot recover their costs in defending them.  EPA’s got to be wondering here why it cannot recover all of the resources it was forced to expend defending this case.

Dog bites man.

If Congress Wants to Limit EPA’s Discretion, Perhaps It Should Do a Better Job Legislating

Earlier this week, the D.C. Circuit Court of Appeals rejected both industry and environmental group petitions challenging EPA’s determination of what is a solid waste in the context of Clean Air Act standards for incinerators and other combustion units.  It wasn’t actually a difficult case, but it does provide a lesson for Congress.  When the technical nature of EPA’s decisions was layered on top of the fundamental deference given EPA’s interpretation of the statute under Chevron, the petitioners were never going to prevail:

We afford great deference to EPA’s determinations based on technical matters within its area of expertise.

The crux of the environmental petitioners’ case was that certain of the materials, such as scrap tires, Scrap_Tiresexempted by EPA from the definition of solid waste, are unambiguously “discarded” within the meaning of RCRA, so that EPA did not have discretion to exempt them.  Unfortunately, as the Court noted:

the term “discarded” is “marked by the kind of ambiguity demanding resolution by the agency’s delegated lawmaking powers.”

In other words, given the current state of decrepitude of the non-delegation doctrine, when Congress enacts legislation using words as vague as “discarded”, it is essentially telling EPA to figure out what Congress meant to say.  And when EPA does figure out what Congress meant to say, the Courts are not going to disturb EPA’s interpretation.

For those in Congress who don’t like the way EPA implements statutes for which it is responsible, they might learn a lesson from Pogo.

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