Another Ruling that Discharges to Groundwater May Be Subject to the Clean Water Act

Last week, the 4th Circuit Court of Appeals – not the most liberal court in the land – joined the 9th Circuit in ruling that discharges from a point source to groundwater can be subject to the Clean Water Act.  The decisions follow a number of district court cases to the same effect.  It’s hard to deny the trend at this point.  

I’ve always been skeptical of these cases, largely because it’s fairly obvious that groundwater is not a “Water of the United States” and pretty much all groundwater discharges to surface water eventually, so it’s hard to know where CWA jurisdiction would end.  Nonetheless, I think that the 4th Circuit decision is the most persuasive argument I’ve seen to date, and I’m beginning to believe that the 4th and 9th Circuit position might actually survive Supreme Court review, though that’s by no means certain.

A few points about the 4th Circuit decision are worth noting.  First, the decision shrewdly coopts Justice Scalia in support of the proposition that discharges from a point source can be subject to CWA jurisdiction, even if not directly to navigable waters:

Justice Scalia observed that “[t]he Act does not forbid the ‘addition of any pollutant directly to navigable waters from any point source,’ but rather the ‘addition of any pollutant to navigable waters.’”

Second, like the 9th Circuit and the District Court decision in Tennessee Clean Water Network v. TVA, the 4th Circuit made clear that not all discharges to groundwater are subject to the CWA.  Noting that the discharge before it was only 1,000 feet from a navigable water, the 4th Circuit held that:

a plaintiff must allege a direct hydrological connection between ground water and navigable waters in order to state a claim under the CWA for a discharge of a pollutant that passes through ground water.

It is still not obvious to me what the statutory basis for this interpretation is, but it at least provides a limiting principle, even if a somewhat vague one.

Finally, I note that the 4th Circuit decision contains an additional important holding.  It concluded that the plaintiffs adequately alleged a continuing violation – a prerequisite to a CWA citizens suit – by asserting that contaminated groundwater continues to leach into navigable waters, notwithstanding that Kinder Morgan had already stopped the leak from the pipeline.  If discharges to groundwater are subject to the CWA, then it could be very important that a violation may continue even after the release from the point source has ended, so long as migrating contamination continues to reach a navigable water.

Green Guide Annual Review: Environmental False Advertising in 2017/2018

Earth Day is coming up on April 22, and you may be looking to capture some environmentally-minded consumers with nifty green-themed advertising campaigns. But before you do, remember that the Federal Trade Commission (“FTC”) monitors environmentally-themed marketing for potentially deceptive claims, and evaluates their compliance with Section 5 of the FTC Act by reference to the “Green Guides.”

The Green Guides, located at 16 C.F.R. § 260, are a series of FTC guidelines initially promulgated in 1992 and most recently updated in 2012, the object of which is to help marketers avoid FTC actions by ensuring that environmental advertising is not deceptive. The Green Guides are also used by the National Advertising Division of the Better Business Bureau, a self-regulatory mechanism for the advertising industry, before which the veracity of green marketing claims are often challenged.

The Green Guides contain specific advice as to many common environmental marketing buzzwords, such as “recyclable” and “renewable.” They also prohibit unqualified “general environmental benefit claims.” For example, calling a product “eco-friendly” without saying why it is eco-friendly is considered a deceptive general environmental benefit claim because the term can reasonably mean a lot of different things to a lot of different consumers (recyclable, carbon-neutral, sustainable, compostable, organic, etc.); unless you can substantiate that all of those potential meanings are true, which is unlikely, the FTC may find that your ad is deceptive.

To help you sort through the FTC requirements for environmental marketing and keep up with the latest developments, here is our second annual review of disputes involving the Green Guides.  The cases featured here were all resolved since the last Earth Day.  You can see last year’s 2016/2017 review here.

“100% Certified Compostable”

One of the Kauai Coffee Company’s mantras is: “Don’t trash the Earth with your coffee. Brew & Renew.”  Kauai offers a “100% certified compostable” single-serve coffee product which features a soft mesh-like net, thus cutting down on the landfill waste created by the traditional single serve “K-Cup” design.

Pursuant to Section 260.7 of the Green Guides, you can only call a product compostable if (a) it will break down in a safe and timely manner in a home compost pile or (b) it is accompanied by qualifying language explaining that the product cannot be composted at home and that the appropriate composting facilities are not available in most places where the item is sold. Kauai coffee included the appropriate qualifying language on its product right next to the word “compostable,” where Kauai disclosed that the product is only “Compostable in industrial facilities. Check locally, as these do not exist in many communities. Not suitable for backyard composting.”

However that disclaimer was absent or not prominent in some of Kauai’s online promotions and in an AARP Magazine advertisement. These ads were challenged by NAD, which found that the use of the word “compostable” without any qualifying disclaimer language could create the false implication that the product was also safely compostable at home.  NAD recommended that Kauai discontinue or modify these claims, and Kauai agreed. In re Kauai Coffee Company, LLCCase No. 6078 (NAD May 5, 2017).

The “Green Safety Shield”

Last December, the FTC approved a final consent order against Moonlight Slumber, a manufacturer of baby mattresses. The FTC administrative complaint charged that the company violated Section 5 by making false claims that its “organic” and “eco-friendly plant-based”   mattresses had earned the “Green Safety Shield.”

Green Guide Section 260.6 states that it is deceptive to misrepresent, directly or by implication, that a product has been endorsed or certified by an independent third party. Here, according to the FTC, the “Green Safety Shield” was presented to the public as if it were a third party certification, an impression supported by the company’s website: if you clicked the “Green Safety Shield” on the  website, you’d see a message telling you that the shield was “not just a marketing tool” but a “promise” that the produce went through “third party laboratory testing.” But in fact, the “Green Safety Shield” did not represent a certification from a third party; it was simply a made-up logo that Moonlight Slumber bestowed upon itself.

The final consent order prohibits Moonlight Slumber from further misleading certifications. The order also prohibits further misleading statements using the terms “organic” (which is not addressed by the Green Guides) and “plant-based” (which is indirectly addressed in Section 260.16 of the Green Guides as potentially implying the inclusion of renewable materials). In re Moonlight Slumber, LLC, Docket No. C-4634 (FTC Dec. 11, 2017).

“Made of Recycled Material”

Olivet International takes post-consumer products like plastic flower pots and transforms this “steady stream of post-consumer resin” into “food safe” products like pet food containers, which it advertises as “made of recycled material” without any further qualification.  According to Section 260.13 of the Green Guides, marketers can only make unqualified claims of recycled content if the entire product or package, excluding minor incidental components, is made from recycled material. Thus, from the point of view of the Green Guides, a “made of recycled material” claim implies that a product was made entirely from recycled material, which was not true in the case of the pet food containers. In fact, Olivet discontinued this unqualified claim on its own before any formal dispute arose, and instead began claiming that its product contained “a minimum of 25% recycled material.”

Competitor Van Ness Plastic brought a complaint before NAD anyway, alleging that even the “25%” claim could not be substantiated. Van Ness argued that this number did not include lids and latches, which it opined were most likely made of virgin material because of their uniformity of color. However Olivet was able to show that its lids and latches were actually created out of 100% recycled polypropylene resin made from post-use plastic buckets and lids that had been discarded by Walmart bakeries.  Therefore, NAD found that Olivet had substantiated its “25%” claim.

NAD also found that Olivet’s “food safe” claim was supported, based on a no objection letter from the FDA addressing Olivet’s ability to process recycled plastic, and other evidence that the virgin resin used in the remaining portion of the product was food safe. Van Ness Plastic Molding Company, Inc. v. Olivet International, Inc.Case No. 6149 (NAD January 22, 2018).

“Plant-Based” Ingredients

A putative class action was filed last year in the Northern District of California, alleging that Babyganics wipes were advertised as made from “plant-based ingredients,” when in fact they were made at least in part from polyester. Although the counts of the complaint arose out of California consumer protection and false advertising law, the assertion of deceptiveness was based in part on the premise that the “plant-based” claims violated the Green Guides. Specifically, the plaintiff asserted that the claims violated the General Principles, Section 260.3, because the lack of any qualifying language (e.g., the percentage that is plant-based; if the claim applies to the package and/or product; etc.) creates a misleading impression about whether the product is environmentally friendly. The plaintiff also alleged that the claim violated Section 260.16, because the term “plant-based” falsely implies that the product is made only from renewable materials.

Babyganics argued (in a motion to dismiss) that the use of the term “plant-based” alone did not mean it was making environmental benefit claims or that the matter was within the scope of the Green Guides, and further noted that the packaging contains plenty of indications that not all the ingredients are made from plants (further supported by the warning “Do Not Flush”).  The plaintiff voluntarily dismissed the matter before the Court could rule on the motion. Machlan v. S.C. Johnson & Son, Inc.Case No. 3:17-cv-02442 (SDNY).

“Free Of” VOC

Last year, the FTC focused on the paint industry, and settled claims against four companies that were making various environmental claims in their advertising. Among the claims alleged were that the paints were advertised as “free of VOC” or containing “zero VOC,” that is, volatile organic compounds (carbon-containing compounds that evaporate at room temperature and can be harmful to humans and the environment).

Section 260.9 of the Green Guides prohibits misrepresentations about whether a product is “free of, or does not contain or use, a substance.” Here, the paint companies made various claims about the lack of VOC and other emissions, and stated that this lack made the products safe for babies, children and pregnant women. However, the FTC alleged that the companies had no evidence to support these claims.

In addition, two of the companies had affixed to their products what allegedly appeared to be third party certifications of environmental friendliness (the “Eco-Assurance Logo” and the “Green Promise seal”), but which were in fact merely titles the companies had awarded to themselves. Information about all four cases is available here.

“The Ultimate in Sustainability”

Nestle Nutrition complained to NAD about Beech-Nut’s claim that its glass containers were “the ultimate in sustainability.” Nestle argued that this was a general environmental benefit claim without qualification, and thus prohibited by the Green Guides; as noted above, Section 260.4 provides that broad terms like “sustainable” are capable of conveying a wide range of reasonable meanings, and that marketers using those terms are responsible for substantiating all of these meanings, unless the term is qualified with language that explains which meaning was intended (e.g., that it is recyclable, that it is carbon neutral, that it is biodegradable, etc.).

Here, although other parts of the ad referred to the recyclability of glass, NAD found that the “sustainability” claim stood by itself independent of other claims and was unqualified by any explanatory language. Thus, NAD recommended that Beech-Nut discontinue the advertisements in question. Nestle Nutrition USA, Inc. v. Beech-Nut Nutrition CompanyCase No. 6070 (NAD April 4, 2017).

How Much Deference Will EPA Get On Its CAFE Standards Decision?

There’s been a lot of discussion regarding EPA’s decision to withdraw EPA’s Mid-term Evaluation of Greenhouse Gas Emissions for Model Year 2022-2025 Light-duty Vehicles. After pondering for a while, my question is how much deference courts will give to EPA’s decision.

I’ve previously speculated about whether the typical deference to agency decisions might eventually lose its luster, not because conservative judges hate Chevron, but simply because courts might get tired of agencies under this Administration abusing their discretion.

Contrary to the statements in the withdrawal decision, the Obama Mid-term Evaluation was exhaustive.  The withdrawal decision itself, on the other hand, was, as far as I can tell, based largely just on what scientists might objectively describe in jargon as “bitching and moaning” by the auto industry. 

I’ve also previously noted that, in the history of major environmental rules going back to the 1970s, the evidence shows that every single rule has cost less than estimated prior to implementation.  And that’s less than EPA’s estimates of compliance, not just less than industry’s estimates, which have routinely been wildly high.  The reason is that compliance cost estimates never fully account for the ability of the market to respond efficiently to the new standards.

There is some question as to whether the recent withdrawal decision even constitutes final agency action, but the courts will get a crack at this at some point and I am waiting with bated breath to see how they respond.

BLM Loses Another One: Resource Management Plans for Coal Leasing Areas Are Sent Back to the Drawing Board

Late last month, Judge Brian Morris granted summary judgment to plaintiffs on three claims alleging that the environmental impact analysis supported BLM’s Resource Management Plans for managing coal leases in the Powder River Basis were flawed.  It’s a very thoughtful decision.  Judge Morris rejected three of plaintiffs’ claims and did not provide the injunctive relief that they sought.  Nonetheless, it’s an important setback for BLM and further evidence that courts are going to require more of BLM in assessing climate impacts associated with energy resource development.

The plaintiffs had to get over two significant hurdles just to get in the game.  One was BLM’s argument that plaintiffs’ concerns could all be addressed in the context of individual leasing decisions; there was, BLM argued, essentially no harm flowing from approval of the RMPs.  The Court rejected that argument – rightly, I think.  The problem is that it essentially proves too much, making the entire planning process irrelevant.  If the RMPs miss essential elements of the analysis, shouldn’t those flaws be addressed at the planning level, rather than in the context of each individual leasing decision?

Second, the land at issue is already potentially open to development.  The BLM argued that it had no obligation to assess alternatives that would change the status quo.  Judge Morris gave this argument short shrift, noting that:

Plaintiffs’ alleged injury stems from Federal Defendants’ decision to keep these lands open to potential development. This outcome represents the type of injury “contemplated by Congress” in drafting NEPA.

The three claims granted by Judge Morris were:

  • Inadequate consideration of alternatives.  The EISs only looked at alternatives that maintained the same acreage for leasing as is currently available.  The Court concluded that “Climate change concerns presented a reasonable basis for BLM to conduct a new coal-screening and to consider adopting an RMP that foreclosed coal extraction in additional areas.”
  • Consideration of Climate Change.  The Court concluded that indirect and downstream impacts of coal extraction were sufficiently foreseeable to “permit a ‘productive analysis’ of” those impacts.
  • Improper assessment of the global warming potential associated with methane releases.

The Court refused to vacate BLM’s Record of Decision.  Instead, it ordered the parties to try to develop a joint response to the Order.  Absent that, the parties will submit briefs on the appropriate remedy.  In the meantime, the Court has issued an injunction requiring BLM to perform the analyses described in the Order in any individual leasing decisions that are made before the RMP environmental analysis are revised.

A fairly Solomonic decision, if I do say so.

ExxonMobil’s AG Claims Are Dismissed — What a Shock!

Yesterday, Judge Valerie Caproni dismissed claims brought by ExxonMobil against New York Attorney General Schneiderman and Massachusetts Attorney General Healey.  Boiled down to their essence, ExxonMobil’s claims were that investigations by Schneiderman and Healey into the possibility that ExxonMobil had committed fraud by misleading investors regarding the risks that climate change poses to ExxonMobil’s business were politically motivated and in bad faith.

The decision was not difficult.  ExxonMobil pretty much assumed its conclusion and then simply alleged as ipse dixit that statements by the AG’s were proof of that conclusion.  Thus, the case falls squarely under the Supreme Court decisions in Iqbal and Twombly – pounding the table very loudly does not convert speculation into the type of assertion that can survive a motion to dismiss.

Quoting a number of relevant paragraphs from the complaint or proposed amended complaint, the Court simply noted that:

It is not possible to infer an improper purpose from any of these comments; none of which supports Exxon’s allegation that the NYAG is pursuing an investigation even though the NYAG does not believe that Exxon may have committed fraud.

My only complaint with the opinion was that it did not clearly distinguish between the possibility that the AGs had a political motive and the requirement that ExxonMobil prove bad faith.  Exxon’s evidence was basically that the investigation was politically driven.  However, there’s nothing per se wrong with that, so long as the AGs do believe that ExxonMobil may have committed fraud.  The two are not inconsistent and in fact the most weight ExxonMobil’s complaint can bear is that the investigation was politically motivated but that the AGs do truly believe that ExxonMobil may have committed fraud.

Scheiderman and Healey are both elected officials.  Elected officials are supposed to be political and supposed to respond to constituents.  There’s nothing wrong with that.  There’s actually a lot of case law to that effect in the § 1983 context.  Subjects of an AG investigation can’t bring claims based on allegations that an AG was politically motivated.  They have to allege that the AG doesn’t actually believe that he/she has a case.  ExxonMobil did not come close to asserting that here and the case was properly dismissed.

Shooting Fish In a Barrel: EPA Loses Another Regulatory Delay Case

On Wednesday, EPA lost yet another regulatory delay case.  After the Obama EPA promulgated rules updating requirements concerning certification and use of “restricted use pesticides” in January 2017, the Trump EPA purported to delay the rule’s implementation date five separate times.  According to the Court, EPA provided no notice and opportunity to comment on four of those occasions; once, they provided a four-day (yes, four) comment period.

EPA’s primary defense of the delay was that the plaintiffs did not have standing.  However, the plaintiffs included a farmworkers union, which submitted evidence that their members work with restricted use pesticides and have suffered harm as a result of currently inadequate training and safety measures.  That was more than enough for the Court.

On the merits, the best EPA’s lawyers could do was argue that it had no obligation to provide an opportunity for notice and comment, because the “good cause” exception applied.  You can almost hear the Judge laughing at this argument.

The good cause, exception, however, is extraordinarily narrow and is reserved for situations where delay would do real harm. A new administration’s simple desire to have time to review, and possibly revise or repeal, its predecessor’s regulations falls short of this exacting standard. Cf. Clean Air Council, 862 F.3d at 9 (“Agencies obviously have broad discretion to reconsider a regulation at any time. To do so, however, they must comply with the [APA], including its requirements for notice and comment.”).

This administration just keeps proving my point.  They care more about burnishing their anti-regulation credentials than they do about actually reforming any regulations.

Federal Common Law Climate Claims: Now You See Them, Now You Don’t

Just a few weeks ago, Federal Judge William Alsup ruled that claims brought by San Francisco and Oakland against certain large oil companies belonged in federal court, because they raise issues of federal common law.  Last week, in a similar law suit asserting similar claims, Judge Vince Chhabria remanded the case to state court.  Why?  Because there is no federal common law applicable to such climate-related claims.  

Everyone agrees that the starting point of analysis must be the Supreme Court’s decision in AEP v. Connecticut.  There, the Court concluded that the federal Clean Air Act displaced the federal common law of nuisance with respect to regulation of emissions of greenhouse gases.

That was enough for Judge Chhabria.  Federal common law no longer exists.  The claims (which may or may not be preempted) are purely creatures of state law.

Judge Alsup was more creative (which does not equate to correct!).  He determined that the claims were not based on the defendants’ emissions of GHGs, but were instead based on the companies’ conduct in selling fossil fuels without disclosing their climate impacts.  Because the Clean Air Act does not regulate the sale of fossil fuels, he concluded that federal common law is alive and well.

Either way, if two federal judges a few miles apart in California can’t even agree on what law applies to these cases, that hardly bodes well for their prompt and efficient resolution.  I don’t think that these cases are going to drone on for decades, but this somehow does have a Jarndyce v. Jarndyce feel about it to me.  Maybe there can be a reality TV show.  “Bleak House, the Sequel:  California Adaptation Edition.”

Governor Baker Burnishes His Green Credentials

Governor Baker has sent some mixed messages to the environmental community in his first term.  After promising during the campaign to increase environmental spending to 1% of the state budget, he’s made essentially no progress whatsoever.  More recently, the administration’s selection of Northern Pass to provide renewable energy under the so-called “83D” procurement was panned by pretty much everyone who is neither a member of the administration nor a resident of the Sovereign Nation of Eversource.

On the other hand, the Baker administration has advanced the ball in a number of environmental initiatives, particularly in the area of climate change.  These include pushing for more stringent GHG emission limits under RGGI and beginning the discussion of much-needed controls over GHG emissions from the transportation sector.

This week, the Governor moved even farther on the climate issue, introducing “An Act Promoting Climate Change Adaptation (and a bunch of other stuff).”  The shorthand description is that it is a codification of the Governor’s climate change executive order from 2016 combined with a really good environmental bond bill focused on investments in climate adaptation.

To me (and I don’t think I’m alone in this), the most interesting part of the bill is the introduction of the concept of “clean peak energy resources,” and the requirement that the Department of Energy Resources promulgate regulations requiring electricity suppliers to provide a minimum percentage of “clean peak energy resources” even during times of peak demand.

As at least local readers know, the January cold snap resulted in 2 million barrels of oil being burned for electrical generation.  These provisions are clearly intended as a response to the January problems.  However, regulations requiring use of clean energy resources during peak demand won’t be easy.  We’re going to need a lot more battery storage — and quickly!

In any event, the development of a clean peak energy standard is going to be a very closely-watched rulemaking.  Stay tuned.  It could be a bumpy regulatory process.

CSAPR is Better Than BART

Today, the D.C. Circuit Court of Appeals rejected environmental and state/industry challenges to EPA’s Regional Haze Rule.  In essence, the ruling confirms that EPA was reasonable in determining that compliance with its Cross-State Air Pollution Rule was sufficiently stringent to constitute “better-than BART” and thus could excuse states from complying with Best Available Retrofit Requirements where they are subject to CSAPR.  

Boy, that was a mouthful.

The ruling is not really surprising, but here are a few notable items.

  • Judge Williams went out of his way to note the accepted pronunciation of CSAPR – as though it were “CASPER”.  I’m glad that important point has finally been put to rest.
  • The opinion counts as another example in my accumulated list of cases in which Chevron or Auer deference has been used to uphold the conservative position in a case.  The environmental groups had argued that EPA’s interpretation of its own regulations was flawed.  The Court, relying in part on Auer, concluded that EPA’s interpretation was reasonable and must be upheld.
  • The case does provide some helpful guidelines regarding when EPA’s failure to address comments on proposed rules is significant enough to matter.  The Court made clear that, where the point made in the comment is too speculative, agency failure to address it need not be fatal.

I am disappointed, however, that there are no Casper the Friendly Ghost / Bart Simpson videos that would illustrate the principle that CSAPR is better than BART, so you’ll have to make do with this clip that I somehow had never heard before today.

A Trial on Climate Change Claims Against the United States? What Fun!

Yesterday, the 9th Circuit rejected the Trump administration’s request for a writ of mandamus ordering the trial court to dismiss litigation brought by 21 children alleging that the government’s failure to address climate change had violated their constitutional rights.  It appears that the plaintiffs will get an opportunity to prove their claims.

It’s important to remember that this opinion is not about the merits.  It’s about whether the United States met the standard to be granted the “extraordinary” remedy of mandamus.  There are five factors in reviewing a mandamus request:

(1) whether the petitioner has no other means, such as a direct appeal, to obtain the desired relief;

(2) whether the petitioner will be damaged or prejudiced in any way not correctable on appeal;

(3) whether the district court’s order is clearly erroneous as a matter of law;

(4) whether the district court’s order is an oft repeated error or manifests a persistent disregard of the federal rules; and

(5) whether the district court’s order raises new and important problems or issues of first impression.

The Court found that none of the factors weighed in favor of mandamus.  As to burdensome discovery, the United States hadn’t even filed a motion for a protective order in the District Court, so the Court of Appeals wasn’t about to say that the United States had no adequate remedy there.  On the merits, the Court basically said that the United States had made no showing that going through a trial and then the standard appellate process would be damaging in a way that is not correctable.

I’m still very skeptical, both of the plaintiffs’ likelihood of success on the merits and of the use of this kind of litigation to address the government’s responsibility for climate change.  However, with each passing day of this Administration, my willingness to entertain such litigation increases.

If there really is a trial, it could be quite a show.  I’m not sure it will be the trial of the century, but somehow I keep seeing images of Inherit the Wind.

Can Trump Save Coal Without Killing All the Miners?

Last month, the New York Times reported on the identification of the largest cluster of advanced black lung cases ever reported.  (And lest you think that this is fake news, the Times contains a link to the article, which was a Research Letter published by the Journal of the American Medical Association, that known collection of left-wing zealots.)  Here’s the sobering summary from one of the authors:

There’s an unacceptably large number of younger miners who have end-stage disease and the only choice is to get a lung transplant or wait it out and die.

Apparently, the increase stems from changes in mining operations that have led to increased exposures to Silica dust.  We’ll see if this study has any impact on the Trump administration’s review of the 2014 coal dust rule promulgated by the Obama Administration.

It may be necessary to destroy all the miners in order to save coal mining.

OMB Reports that the Benefits of Regulation Exceed the Costs. The President Knows that Can’t Be Right

Late last month, to no fanfare whatsoever, OMB released its annual report on the costs and benefits of federal regulations.  There’s a reason that the Administration did not give the report any attention.  The report states that, for the 10-year period ending September 30, 2016, the benefits of major Federal regulations ranged from $219 billion and $695 billion, while the costs ranged between $59 billion and $88 billion.  Not a report that supports a deregulatory agenda.

Not surprisingly, the report qualifies the conclusions as much as possible without actually repudiating them.

We are issuing this report after a change in Administration, and therefore would like to clarify that OMB’s reporting of the results of these RIAs does not imply an endorsement by the current Administration of all of the assumptions made and analyses conducted at the time these regulations were finalized.

Of course, it’s been known for some time that the cost of environmental regulations is regularly is less than – not more than – what EPA estimated at the time rules were promulgated.  None of this matters, however, since the President already knows that regulations aren’t worth it and that any contrary information is fake news.

Federal Common Law Controls California Climate Actions: Never a Dull Moment

Earlier this week, Judge William Alsup denied a motion by Oakland and San Francisco to remand their public nuisance claims against some of the world’s largest fossil fuel producers to state court.  However, I’m not sure that this is a victory for the oil companies.  This might be more of a “be careful what you wish for” scenario.

After the Supreme Court decision in AEP v. Connecticut and subsequent decisions, such as Native Village of Kivalina, it seemed pretty clear that the federal Clean Air Act had displaced federal common law, leaving only potential state law claims in its place.

Judge Alsup had a different idea.  The cities’ claims were only brought against fossil fuel producers, not electric generators.  The claims were based on the allegations concerning the companies’ conduct in selling fossil fuels into the stream of commerce, while at the same time allegedly making misrepresentations concerning the risks of climate change.

Judge Alsup concluded that this was a distinction with a difference.  The Clean Air Act displaces federal common law regulating operations that emit GHGs.  The Clean Air Act, however, does not regulate the sale of fossil fuels.  Thus, it does not displace the type of public nuisance action at issue in this case.  (Of course, this leads to the odd result that the companies’ sale of fossil fuels is subject to public nuisance claims, even though methane emissions from oil wells and refineries are not, because those are subject to regulation under the CAA!)

Having made this critical distinction, the rest of the decision was relatively easy.  As Judge Alsup noted:

If ever a problem cried out for a uniform and comprehensive solution, it is the geophysical problem described by the complaints, a problem centuries in the making. The range of consequences is likewise universal. Taking the complaints at face value, the scope of the worldwide predicament demands the most comprehensive view available, which in our American court system means our federal courts and our federal common law. A patchwork of fifty different answers to the same fundamental global issue would be unworkable. This is not to say that the ultimate answer under our federal common law will favor judicial relief. But it is to say that the extent of any judicial relief should be uniform across our nation.

I’m not sure that Judge Alsup is right, though I appreciate his creativity.  And if appellate courts decide he is right, the defendants may come to regret removing the action from state courts.

BLM Changes Policy; A Court Says Its Reasons Aren’t Good Enough

As I’ve noted previously, the fight over the Trump Administration’s effort to change course on a number of Obama environmental initiatives is going to focus in significant part on FCC v. Fox Television Stations, in which the Supreme Court stated that agencies are free to reconsider policies so long as:

the new policy is permissible under the statute, there are good reasons for it, and the agency believes it to be better.

Based on the decision last week in California v. BLM, if the Administration thinks that it can simply wave FCC v. Fox Television Stations before the Courts and succeed in making 180 degree turns in policy, it might want to think again.  In California v. BLM, the Court struck down BLM’s rule suspending the 2016 Waste Prevention Rule, intended to reduce waste from natural gas production on federal lands.

Let’s just say that BLM’s arguments in support of the rule were less than persuasive.  As the Court noted:

BLM does not have to provide the same reasoned analysis in support of a temporary suspension that it would for a future substantive revision, but it must nonetheless provide good reasons for the Suspension Rule. To the extent that its reasoning contradicts the reasoning underlying the Waste Prevention Rule, it must be prepared to provide the requisite good reasons and detailed justification.

New facts or evidence coming to light, considerations that BLM left out in its previous analysis, or some other concrete basis supported in the record—these are the types of “good reasons” that the law seeks. Instead, it appears that BLM is simply “casually ignoring” all of its previous findings and arbitrarily changing course. Given the various concerns that contradict the factual findings underpinning the Waste Prevention Rule, and BLM’s failure to provide the detailed justifications necessary to explain such contradictions in support of the Suspension Rule, Plaintiffs have shown a reasonable likelihood of success on the merits of their claim that the Suspension Rule is not grounded in a reasoned analysis and is therefore arbitrary and capricious.

We haven’t seen the last of these cases.  Just how much evidence does the administration need if it wants to change course?  That’s going to be the question the courts will face repeatedly over the next few years.

Three Weeks; Three Decisions Rejecting Regulatory Delays

The Trump administration.  The gift that keeps on giving to bloggers.  After posting last week about the order requiring DOE to send its energy efficiency standards to the Federal Register for publication, I noted that that regulatory delay cases were going to have to become a regular feature in this space.  Lo and behold, on the same date, Judge Jeff White rejected EPA’s “Delay Rule” that would have postponed compliance deadlines under the Formaldehyde Act.  

The decision was not difficult.  The Court concluded that the statute unambiguously precluded EPA’s interpretation.

Although the Court owes deference to the EPA’s interpretation of the statute, the Court is compelled to give meaning to the statutory provisions and cannot endorse an interpretation that permits the EPA to exercise its authority “‘in a manner that is inconsistent with the administrative structure that Congress enacted into law.’”

The EPA’s interpretation creates inconsistency within the full text of the Act, renders the 180-day compliance deadline superfluous, leads to the absurd result of permitting the perpetual delay of the effectiveness of the Formaldehyde Rule, and fails to satisfy the stated purpose of the Act. Accordingly, the Court finds that the Delay Rule is in excess of the EPA’s authority under the Formaldehyde Act and is not in accordance with law.

That’s three strikes in less than three weeks, but I don’t expect the administration to stop swinging.  I would give the administration one piece of advice and suggest that calling something the “Delay Rule” seems to be asking for trouble.

Of course, I shouldn’t rule out the possibility that the administration cares more about advertising its effort at delaying regulations than it does in actually winning these cases.