The Atmosphere Is a Public Trust. So What?

The last frontier of citizen climate litigation has been state-based litigation alleging that states have a public trust obligation to mitigate climate change. As I have previously noted, I’m skeptical that these cases are viable. A decision last month by the Supreme Court of Alaska suggests that such skepticism is well-founded.  Kivalina Aerial View

In Kanuk v. Alaska, a number of minors living in Alaska brought suit, claiming that Alaska had violated its public trust obligation to protect the atmosphere. While finding that the plaintiffs had standing, the Court held that the claims were non-justiciable due to “the impossibility of deciding [them] without an initial policy determination of a kind clearly for nonjudicial discretion.”

Following the lead of the decision in American Electric Power v. Connecticut, the Court stated that:

The limited institutional role of the judiciary supports a conclusion that the science- and policy-based inquiry here is better reserved for executive-branch agencies or the legislature, just as in AEP the inquiry was better reserved for the EPA.

Is there any guarantee that courts in other states will follow the Alaska Supreme Court’s lead? Certainly not. However, I’ll admit to being greatly surprised if they don’t.

The Expanding Availability of Apportionment To Limit Liability in Superfund Cases

In Burlington Northern in 2008, the US Supreme Court ruled that Superfund liability could be apportioned whenever there was a reasonable basis for showing that the harm was divisible, such as by considering the length of time a PRP had been operating a site, the volume of waste contributed, or the percentage of the site utilized by that PRP. Notwithstanding that ruling, many courts since 2008 have continued to shy away from apportionment, content to relegate the division of liability to “equitable factors” pursuant to Section 113(f) contribution. Indeed, I blogged several years ago on the reluctance of the Seventh Circuit to follow Burlington Northern in connection with the Lower Fox River Superfund matter.

In a new decision on the Lower Fox River case, US v. P.F. Glatfelter Company , however, the Seventh Circuit has now reversed field, ruling that the trial court erred in failing to recognize the possibility that the harm might be shown to be divisible. Originally in enforcing a preliminary injunction on behalf of the government, the Seventh Circuit had agreed with the trial court that PCB cleanup costs in one portion of the Lower Fox River were not susceptible to apportionment because the PRP’s contribution was sufficient by itself to trigger the cleanup level of 1 part per million. In its new decision, the Seventh Circuit notes that information adduced at trial shows that the issue of divisibility is more complex than a binary test whether the PRP’s contribution was over 1 ppm:

As a result, we think the harm would be theoretically capable of apportionment if [the PRP] could show the extent to which it contributed to PCB concentrations in [that portion of the River]. And if [the PRP] cleared that hurdle, we think a reasonable basis for apportionment could be found in the remediation costs necessitated by each party.

In the end, the Seventh Circuit decision underscores that PRPs should not overlook the opportunity to limit their CERCLA liability through apportionment.  It’s hard to imagine a multiparty Superfund site where expert opinion cannot be found to offer a basis for dividing up the response costs in some mathmatical way.  Such a division of liability avoids the uncertainty of contribution proceedings where it is difficult to know what equitable factors will be found to be controlling or what parties will have the resources to pay their share of the liability.   

 

 

 

 

 

EOEEA Releases Draft Ocean Management Plan Update: Now with Fees

The Massachusetts Executive Office of Energy and Environmental Affairs (EOEEA) recently released for public review and comment a draft update to the Ocean Management Plan for the Commonwealth. The Oceans Act, signed by Governor Patrick in 2008, required the Secretary of EOEEA to develop a comprehensive ocean management plan to be reviewed every five years. The first plan was released in 2009, and the recently released update is a result of this five year review. The plan addresses the areas of habitat, fisheries, sediment resources, recreational and cultural services, transportation and navigation, and… More

CERCLA Preempts Local Cleanup Bylaws; PRPs Everywhere Breath a Sigh of Relief

In an important decision yesterday, Judge Douglas Woodlock of the District of Massachusetts confirmed that CERCLA preempts local cleanup bylaws. The case involved one aspect of the cleanup of the W.R. Grace Superfund Site in Acton, Massachusetts. In 2005, EPA issued a Record of Decision requiring operation of a groundwater pump and treat system in what is known as the Northeast Area of the Site. However, EPA recognized that the contamination in the area was limited and stated in the ROD that the treatment system might be turned off in three years if certain criteria were met. After three… More

The SAB Enters the “Waters of the United States” Fray: Guess Which Side the Scientists Support

The Science Advisory Board has now provided its advice to EPA and the ACOE concerning their proposed rule clarifying the definition of “waters of the United States” BM-NeedToKnow-WetlandBanking-GALunder the Clean Water Act. In a brief letter that can only worry the National Farm Bureau and embolden those who thought that the EPA/ACOE proposal did not go far enough, the SAB concluded that:

the available science supports the conclusion that the types of water bodies identified as waters of the United States in the proposed rule exert strong influence on the physical, biological, and chemical integrity of downstream waters.

In fact, the SAB explicitly called for EPA to include within the definition of WOTUS certain categories of waters that the rule would exclude. “Some of the exclusions listed in the proposed rule do not have strong scientific justification and the SAB recommends that several should be reconsidered.”

In a nice little swipe at the lawyers among us, the SAB also found that:

the term “significant nexus” was not well defined in the proposed rule and recommends that the EPA clarify in its general communications and in the preamble to the final rule that “significant nexus” is a legal term, not a scientific term.

I have posted often about the role of EPA’s scientific oversight committees in judicial review of EPA rules. It’s not obvious how that process will play out here, because, as the SAB itself noted, these are legal questions as much as they are scientific questions. However, while the SAB thinks that “significant nexus” is a legal term, I’m not sure that Justice Kennedy agrees. At the very least, he may consider it a mixed question of fact and law and I’d bet that he’d consider the SAB’s conclusion that the science supports the rule relevant in passing on the any final rule promulgated by EPA and ACOE.

More Than (You Thought) You Ever Wanted To Know About Waters Of The United States

Over the past few months, I worked with a number of colleagues from the American College of Environmental Lawyers to provide the Environmental Council of the States with a balanced review of the history and background of how the term “waters of the United States” rapanos-cartoonhas been defined and interpreted under the Clean Water Act. In announcing the release of the memorandum, Dick Pedersen, President of ECOS, thanked “those members of ACOEL who spent significant time and effort developing this comprehensive memorandum.”

To which I can only add, that’s for darn sure. There is a reason this stuff is so controversial. It’s really difficult to develop a comprehensive and neutral explanation of the sometimes inscrutable judicial opinions in this area. I was honored to work with a truly distinguished group of lawyers to develop the memorandum. It really is everything you ever wanted to know about WOTUS. Enjoy.

Some PURPA Qualifying Facilities are More Qualified Than Others

In a fascinating decision last week, a divided panel of the 5th Circuit Court of Appeals held that the Texas Public Utilities Commission had authority to limit the universe of “Qualifying Facilities” under the Public Utilities Regulatory Policies Act which can choose to enter into a “legally enforceable obligation” requiring a utilities to purchase power from a renewable energy producer. The decision could be a big problem for wind power facilities in jurisdictions less than fully hospitable to renewable energy.

FERC’s rules implementing PURPA provide in part that:

Each qualifying facility shall have the option either:

(1) To provide energy as the qualifying facility determines such energy to be available for such purchases, in which case the rates for such purchases shall be based on the purchasing utility’s avoided costs calculated at the time of delivery; or
(2) To provide energy or capacity pursuant to a legally enforceable obligation for the delivery of energy or capacity over a specified term.

The Texas PUC, however, issued a rule stating that only Qualifying Facilities which could provide “firm power” were entitled to enter into a “legally enforceable obligation.” The majority concluded that nothing in the FERC rules precluded Texas from promulgating its limiting regulation. The dissent, not surprisingly, noted that the regulation provides that “each qualifying facility” is eligible to enter into such obligations. As the dissent also noted, the use of the word “each” in a context such as this, generally means “every.”

It is important to note that the Texas PUC did not take the position that wind facilities per se cannot supply “firm power.” However, the reality is that an obligation to do so makes it much more difficult for wind facilities to utilize the “legally enforceable obligation” option that PURPA appears to provide qualifying facilities.

I don’t foresee en banc review here and Supreme Court review would be a reach, since the case turns so much on the specifics of the Texas PUC approach, but I think that the dissent’s plain language interpretation of the FERC rule might appeal to the Supremes if they were ever to have an opportunity to review it.

Be Careful With Pollution Insurance Coverage Disclosures – How Conditions Actually Disclosed Were Deemed Not Disclosed

A Massachusetts company learned the hard way that you need to pay close attention to policy endorsements when you negotiate them. In Market Forge Industries, Inc. v. Indian Harbor Insurance Company, the Appeals Court of Massachusetts held, in an unpublished decision, that a Pollution and Remediation Legal Liability Policy did not cover the costs of cleaning up certain pollution because the “Pollution Conditions” were not specifically listed in the “Known Conditions” endorsement. This despite the fact that the policy was intended to cover known pollution conditions and the policyholder had… More

EPA Proposes to Eliminate Affirmative Defenses for Excess Emissions During Startups, Shutdowns, or Malfunctions — Get Ready for Some Citizen Suits

This past April, the D.C. Circuit struck down the part of EPA’s cement kiln rule that would have provided an affirmative defense to civil penalties for excess emissions resulting from unavoidable malfunctions. As we noted at the time, that decision clearly had implications beyond the cement kiln rule.

Those implications were made more concrete this week when EPA issued a supplemental notice of proposed rulemaking in which it proposed to rescind its policy allowing affirmative defenses to penalties for excess emissions during startup, shutdown, or malfunction events. Moreover, EPA proposes to reject SSM affirmative defenses in existing SIPs.

EPA’s rationale is pretty straightforward:

The EPA acknowledges that its SSM Policy since the 1999 SSM Guidance has interpreted the CAA in such a way that states could in effect alter the jurisdiction of federal courts to assess monetary penalties under certain conditions through creation of affirmative defenses. In other words, even though Congress explicitly empowered federal courts to assess monetary penalties for a CAA violation, an affirmative defense could, contrary to the statute, limit the ability of a court to do so. The EPA believes that the court’s decision in NRDC v. EPA compels the Agency to reevaluate its interpretation of the CAA and its proposed action on the Petition concerning affirmative defense provisions in SIPs.

Although there has already been criticism that EPA went farther than NRDC v. EPA requires, and that EPA could have preserved some affirmative defenses, I don’t see EPA significantly changing this proposal when it goes final, and I’d certainly expect the new interpretation to survive judicial review.

EPA’s proposal states that, as a result of the new interpretation:

some sources may be required by the state to, or may have strong business reasons to, modify their physical equipment or operating practices. These changes could be aimed at improving the effectiveness of the emission control systems when operating as designed during startup and shutdown, increasing the durability of components to reduce the occurrence of malfunctions, and/or improving monitoring systems to detect and manage malfunctions promptly.

Ya think?

 

NPDES Permits Are Construed Narrowly Against the Permittee

In July, we noted that the Clean Water Act’s permit shield defense would be construed narrowly, applying only where a permittee had clearly disclosed that the relevant pollutant to the agency.  This week, in Alaska Community Action on Toxics v. Aurora Energy Services, the 9th Circuit Court of Appeals treated the stormwater general permit in a similar manner, rejecting the defendants’ arguments that periodic discharges of coal from their coal-loading facility SewardCoalFacilitywere authorized under the stormwater general permit.

To the Court, this was a straightforward, plain meaning interpretation of a regulation (general permits are considered rulemaking):

In Part 2.1.2.10, the General Permit states: “You must eliminate nonstormwater discharges not authorized by an NPDES permit. See Part 1.2.3 for a list of non-stormwater discharges authorized by this permit.” The referenced section (which is actually Part 1.1.3) lists eleven categories of non-stormwater discharge which are “the non-stormwater discharges authorized under this permit.” None of these categories cover defendants’ coal discharge.

The permittees pointed to sections of the general permit that were “superfluous” if the quoted section truly barred all stormwater discharges not listed in Part 1.1.3. However, while the Court recognized this superfluity, it concluded that “our analysis here is controlled by the plain text of Part 2.1.2.10, which prohibits defendants’ discharges.”

The Court also noted that a separate permit shield analysis yields the same result. Since the permit shield only applies where the permittee “complies with the permit’s express terms,” no shield is available.

As has always been the case, the permit shield is valuable, but narrow.

Economic Development Is Not an Unqualified Environmental Evil (In Case You Didn’t Know)

I do not want to suggest that most environmentalists are Luddites or that the environmental movement is opposed to economic development. Indeed, hardly a speech is made today that does not tout the economic benefits of environmental protection. Less focus is given, however, to the environmental benefits of economic development.

I therefore thought it worth noting that, according to a recent study published in Environmental Science and Technology, more than 40% of trash disposal world-wide is accomplished through open-air burning. open-air burningIt should be no surprise that the greatest emissions from open-air burning come from developing countries, including China, India, Brazil, Mexico, Pakistan, and Turkey. The flip side, of course, is that wealthier countries can afford the regulatory systems that prevent such open-air burning and consequent emissions.

‘Nuf said.

How Low Will They Go? A Lower Ozone NAAQS Begins to Have An Air of Inevitability

On Friday, EPA released its “Policy Assessment for the Review of the Ozone Ozone_Molecule_FormulaNational Ambient Air Quality Standards.” EPA staff concluded:

that it is appropriate in this review to consider a revised primary O3 standard level within the range of 70 ppb to 60 ppb. A standard set within this range would result in important improvements in public protection, compared to the current standard, and could reasonably be judged to provide an appropriate degree of public health protection.

As staff noted, the Clean Air Science Advisory Committee made the same recommendation. I therefore think it’s game over for the current standard. Whatever the politics surrounding the ozone NAAQS, I just don’t think that a decision by EPA to retain the current standard would survive judicial review.

The real question, then, is how low EPA will actually go. Both CASAC and staff hedged their bets by recommending a range of 70 ppb to 60 ppb. Basically, a standard of 70 ppb would appear to provide a “margin of safety” for all impacts other than “the lowest exposure concentration demonstrated to result in lung function decrements and pulmonary inflammation (i.e., 60 ppb).”

It’s worth noting that, if Gina McCarthy wants to use lung function decrements as the basis for the NAAQS, even 60 ppb may not be enough, because it provides no margin of safety. Thus, if I were forced to bet, I’d predict a new NAAQS at 70 ppb. I don’t think it will save EPA from criticism on the right, but it’s a reasonable balancing act.

Yes, Virginia, It Is Possible To Win A Fee Award Against An Environmental NGO

Last week, Judge Walter Smith, Jr., ordered the Sierra Club to pay more than six million dollars – yes, you read that correctly – to Energy Future Holdings and Luminant Generation, after finding that the Sierra Club’s Clean Air Act citizen suit against them concerning the Big Brown big-brown-coal-plant(great name for a coal-fired facility!) plant was “frivolous, unreasonable, or groundless.”

The Sierra Club had avoided a motion to dismiss, which in the long run was a disaster, because the defendants incurred millions of dollars in discovery and expert witness fees. What were the key factors leading to the fee award?

• Sierra Club could not make out a prima facie case of a particulate matter emissions violation

• Sierra Club knew that the Big Brown permit exempted it from PM deviations during maintenance, startup, or shutdown

• Sierra Club had one standing witness, who could not demonstrate any causation or injury.

• Sierra Club refuse to dismiss Energy Future Holdings from the case, even though it knew that EFH had no role in the ownership or operations of Big Brown.

• The Texas Commission on Environmental Quality found no violations at Big Brown. I doubt if, on its own, that would provide a basis for a fee award against an NGO. After all, the point of the citizen suit provisions is to allow citizens to supplement agency enforcement. However, Sierra Club apparently admitted that it did not analyze or investigate the TCEQ reports.

Ultimately, the court gave the defendants 100% of their fees, other than denying a conditional request for appellate fees. Notably, the Court agreed that the CAA is complex and requires expert counsel, thus justifying use of counsel outside the “home market.”

In Texas, at least, NGOs appear to face some risk if they act on the assumption that, because they are saving the world, they can do no wrong.

What Triggers Excess Coverage In An Environmental Case: Not Necessarily the Payment of the Full Underlying Policy Limits

More and more excess insurers are taking the position that a policyholder which settles with primary or low level excess insurers for less than the full amount of the policy limits has waived its right to obtain coverage from any of the high level excess insurers.   A Texas appellate court recently rejected this position in Plantation Pipe Line Company v. Highlands Insurance Company in Receivership.  There, the policyholder had expended over $18 million to clean up a contaminated site in North Carolina.  Because the policyholder had settled with the lower level insurers and recovered less than the full $8 million in… More

CERCLA’s Three Year Statute of Limitations for Contribution Applies To Non-CERCLA Settlements

Parties which settle environmental liability in a judicially approved settlement have three years from the date of that settlement in which to seek contribution even if the settlement is not a CERCLA settlement.  That is the holding in a recent federal case in Montana, ASARCO LLC v. Atlantic Richfield Company.  There, ASARCO had entered into a 1998 consent decree under RCRA and the Clean Water Act to remediate a contaminated site that for over a century had been used as a lead smelting facility.  In 2005 ASARCO filed for bankruptcy and in 2009 entered into a new settlement, this time said to… More