Law and the Environment : Environmental Lawyer & Attorney : Foley Hoag Law Firm : Boston, Washington D.C.

In December, I posted about the decision in Canton v. Paiewonsky, in which Judge Fabricant held that a party seeking to challenge the certificate of the Secretary of Energy and Environmental Affairs approving an Environmental Impact Report must do so within 30 days of issuance of the first permit for a project – even if the plaintiff’s concerns about the project are totally unrelated to that permit and the plaintiff would not be harmed by issuance of the permit. As before, I’ll provide the disclaimer that this firm represents the plaintiff in the Canton case.

That acknowledgment aside, it is difficult to read today’s Appeals Court opinion in Hertz v. Secretary of the Executive Office of Energy and Environmental Affairs as saying anything other than that Judge Fabricant got it wrong. Hertz is technically not even a decision about MEPA. The plaintiffs in Hertz challenged an amendment to a municipal harbor plan. The Appeals Court ruled that they did not have standing, notwithstanding that they abutted the property that was the subject of the amendment to the plan, because they did not suffer a particularized harm that was protected by the municipal harbor plan process.

What is most interesting about the decision in Hertz is that, even though it is not a MEPA case, the Court’s analysis focused on the Supreme Judicial Court decision in Enos v. Secretary of Environmental Affairs – which is a MEPA decision and which is the case on which the Town of Canton relied for the argument its suit was timely. Reading the opinion in Hertz together with Enos, the conclusion seems clear that, had Canton sued to challenge the adequacy of the EIR upon issuance of the first permit issued to the project, Canton’s inability to allege that the issuance of the permit would cause it to suffer particularized harm would have meant that the suit would have been dismissed for lack of standing. That being the case, the statute of limitations cannot begin to run on issuance of the first permit; the statute of limitations has to begin to run on issuance of the permit about which the plaintiff is complaining, because only then has the plaintiff suffered a harm sufficient to provide it with standing to sue.

We’ll see what the SJC does with the appeal in Canton, but it still seems here that the better reading of the MEPA statute is that the statute of limitations for a suit challenging a certificate on an EIR must begin to run when the permit that is the subject of the plaintiff’s concern is issued, rather than when the first permit is issued, regardless of whether the plaintiff has any concerns about that first permit.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

The batting average of the Bush administration EPA in appeals of its regulatory proposals may now have dropped below the proverbial Mendoza line. This week, the Court of Appeals for the District of Columbia remanded a substantial part of EPA’s particulate rule. That the Bush administration could achieve results where the Mendoza line is even a close metaphor is a testament to just how low its stock has fallen in the courts.

The case itself is important for a number of reasons, but is too lengthy for detailed analysis here. Highlights include:

• First, the basic holding: the court remanded EPA’s primary annual standard for PM_2.5, because EPA did not justify that the 15 ug/m³ standard was sufficient to protect public health with an adequate margin of safety. Second, the court also remanded EPA’s determination of the secondary, public welfare, standard for PM_2.5.
• The court gave great weight to the role of the Clean Air Science Advisory Committee (CASAC) and staff recommendations in the regulatory process. After this decision, EPA is going to think twice about choosing a regulatory course difference than that recommended by CASAC and staff. On balance, I think that this is a bad thing and more evidence of the collateral damage from the extreme positions taken by the Bush administration. After all, while the Clean Air Act sets some boundaries, these are ultimately policy decisions that should be made by the President and his or her chosen staff, not by a committee no one’s heard of or low-level staff.
• Unlike the chaos created when the court vacated the CAIR regulations, the court appears to have learned its lesson. This time around, the court remanded the rule, but left the standard in place for now.
• The court’s decision to remand the public welfare standard will have implications for current efforts to implement the its Regional Haze Rule. The extent to which this decision throws Haze Rule implementation back to the drawing board may not be known for some time.

How many more cases can the Bush administration lose after it’s already out of office? At least one. Greenwire reports today about speculation that this decision means that the EPA rules regarding the nitrogen oxide NAAQS may also be in trouble.

The interesting question in all this is the extent to which the abysmal record of the Bush EPA in defending its decisions in the courts will damage EPA’s credibility and thus result in a long-term weakening of the deference given EPA by the courts. At this point, my assumption is that, in the long run, these cases will be seen as an aberration and courts will resume their prior practice of granting EPA substantial deference. Of course, whether that is a good thing or not is a separate question.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Strange as it sounds, the next industry group to take substantive action on climate change might just be insurers.  In Tuesday's key vote by the Climate Change and Global Warming Task Force of the National Association of Insurance Commissioners, 18 state insurance commissioners voted to approve rules requiring insurers to disclose the impacts of climate change on their business decisions. If the rules are approved by the full committee in March, and each state adopts them, reporting could begin as early as May 2010.

The survey approved by yesterday’s vote asks insurers to annually answer eight questions involving what the company is doing to measure and mitigate its own emissions, how it identifies climate risks in its portfolio, how emerging climate risks could affect coverage, whether the company has altered its investment strategies in light of climate change risks, and what the company is or could be doing to change the behavior of millions of Americans, and reduce our overall risk from climate change.  The survey is based on the Carbon Disclosure Project questionnaire, the tool through which over 1550 companies voluntarily reported their emissions in 2008.

The proposed survey is not without controversy. In December, the Task Force agreed to remove a requirement that would have mandated survey answers to be included in each company's annual financial statements, and made the questions more general to avoid requiring companies to disclose confidential competitive information.

The Task Force is also working on guidance to help insurers answer the questions, and examples of how insurers can change their procedures to reach climate change goals. One idea that has been mentioned is pay-as-you-drive insurance, a policy that could reduce car emissions by rewarding motorists for driving less.

The next step for the proposed survey is a final vote by the full association at the national meeting in March. The National Association of Insurance Commissioners is a voluntary organization of the insurance regulatory officials of all 50 states, the District of Columbia and five U.S. territories (American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands).  As insurance is actually regulated by each state independently, there is no guarantee all states will adopt the survey. Nonetheless, it seems likely that at least some reporting requirements for insurers are on their way, and with them, probably other companies, too.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

As Congress considers approaches to climate change legislation, with pragmatists seeming generally to support a cap and trade system, while purists support a carbon tax, the Commonwealth of Massachusetts has now weighed in with a new approach: How about both?

Although Massachusetts dithered a bit at the end of the Romney administration, it rejoined the Regional Greenhouse Gas Emission under Governor Patrick in time to participate in the first auction under the RGGI cap and trade program. Last week, the Governor balanced the scales, announcing a proposal for a 19-cent increase in the gas tax. Now, to be fair to the Governor, the gas tax increase is not being touted as a carbon tax. Moreover, there is no doubt that the Commonwealth has a gaping hole in its infrastructure budget – to the tune of $15 billion to $19 billion over the next 20 years, according to the Findings of the Transportation Finance Commission. Indeed, the true need to improve the Commonwealth’s infrastructure has led development interests to support a gas tax increase for some time now.

Nonetheless, a tax is a tax, and an increase in the size of the gas tax will inevitably have some impact on vehicle miles traveled. Just as anti-smoking advocates view cigarette taxes, environmentalists will applaud this move either way. It will almost certainly decrease VMT, thus decreasing greenhouse gas emissions. At the same time, because people will still drive, the revenue from the tax will facilitate important infrastructure spending, including various transit projects that environmentalists have long supported. In fact, even aside from the gas tax itself and the funding of mass transit, the Governor’s announcement included provisions to make the Commonwealth’s transportation infrastructure more green and to reduce transportation-related GHG emissions.

If the Governor can get the tax through the legislature – and use the revenue as he has indicated (as opposed to funding legislators’ pet projects) – and implement the reforms he has described – then maybe we’ll be able to talk about a real win-win situation.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The next Bush-era rule to be tossed overboard may be a big one, namely EPA's hands-off stance on regulation of CO₂ for PSD purposes.   EPA  Administrator Lisa Jackson said today in a letter to the Sierra Club that the agency would grant the group's petition seeking reconsideration of former Administrator Johnson's December 18th memo which described why EPA should not regulate CO₂ emissions from new coal-fired plants.  Although EPA did not stay the effectiveness of the Johnson memo, the letter emphasizes that the memo does not bind States issuing permits under their own State Implementation Plans, and cautions other PSD permitting authorities against assuming that the Johnson memo is the final word on interpreting the Clean Air Act requirements.  EPA will take public comment on concerns raised over the Johnson memo and the appeals board's decision, and plans to publish a notice of proposed rulemaking soon.

As we previously noted, the new administration was likely to be saddled with the decision of whether CO₂ emissions must play a part in PSD decisions, given the Deseret Power decision that the Clean Air Act was ambiguous on whether the EPA must impose a BACT limit for CO₂.   Now it looks like the Obama administration may take the issue on soon.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

We posted recently about the revival of EPA’s NSR enforcement program. Now, yet another shoe has dropped. The Center for Biological Diversity has announced the creation of the Climate Law Institute, the purpose of which is to use citizen law suits under existing laws to advance regulations intended to address climate change. The press release states that the Institute has $17 million in funding with which to pursue its mission.  

While that mission will focus on climate change, as its name implies, it will not be limited to litigation under the Clean Air Act. It was the CBD which led the litigation resulting in the listing of the Polar Bear under the Endangered Species Act.  The Institute indicates that, in addition to the Clean Air Act, the ESA, NEPA, and the Clean Water Act may all be utilized as part of its overall litigation strategy.  

Among other specific targets identified in the press release, the Institute states that it aims to prevent the construction of any new coal-fired power plants and to phase out existing coal plants as quickly as possible.

Unless EPA moves very quickly across a number of fronts – which may well happen – it looks as though we’re going to see a lot of climate-related litigation in the near future.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

While a lot of attention has been paid to whether EPA would reverse the Bush EPA decision denying California’s petition to regulate greenhouse gas emissions from mobile sources,  it is now clear even outside the climate change arena that life at EPA is going to be substantially different under the current administration.  As if evidence were really needed for that proposition, EPA announced this week that it was putting on hold the NSR aggregation rule that EPA had promulgated on January 15, 2009.

The rule, which had been long sought by industry, would have provided that nominally separate projects would only have to be combined – aggregated for NSR/PSD purposes – if  they are “substantially related.” It also would have created a rebuttable presumption that projects more than three years apart are not substantially related. Responding to a request from NRDC and the OMB memo asking agencies to look closely at rules promulgated before the transition but not yet effective, EPA concluded that the rule raises “substantial questions of law and policy.” Therefore, EPA postponed the effective date of the rule until May 18, 2009 and also announced that it was formally reconsidering the rule in response to the NRDC petition.

To those in industry, the aggregation rule was not a radical anti-environmental roll-back of environmental protection standards.  Rather, it was more of a common-sense approach towards making the NSR program simpler and clearer.  It is one of my pet peeves with the prior administration, however, that it gave regulatory reform a bad name.  

In any case, I feel as though I should open a pool regarding what will be the next Bush-era rule to be tossed overboard.  We surely won’t have to wait long for it to happen.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

It looks as though Massachusetts is going to at least try to avoid having lengthy environmental reviews create obstacles to spending its share of the federal stimulus package. A draft report prepared by the Commonwealth’s Permitting Task Force makes several recommendations which, if implemented, would indeed help to ensure that the money can get out the door and the shovels in the ground. Highlights include:

·                     Allowing projects to proceed, at their own risk, during permit appeals.

·                     Providing that appeals related to any stimulus projects would be heard in the permit session of the Land Court.

·                     Exempting stimulus projects from federal review. This echoes a suggestion previously made by Governor Schwarzenegger and by at least one Republican Senator. The Senate has already rejected it. As described in the Task Force report, the exemption would be limited to projects where the only basis for federal review is federal funding. There would be no general exemption from federal permitting requirements. Unlike Governor Schwarzenegger, the Task Force is not recommending that MEPA, the state environmental review statute, be waived for stimulus projects.

·                     Efforts to bring the Massachusetts Historic Commission to the table – MHC declined to participate in the Permitting Task Force

·                     Creation of permits by rule for certain types of projects in order to avoid delays resulting from individual permit applications/reviews

Time will tell whether the Commonwealth adopts any or all of these recommendations. This is only a draft report at this point. Time will also tell regarding the stimulus effort itself and efforts in Congress to smooth out the environmental review process. 

In any case, these common-sense recommendations could only help

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I have posted a few times recently about the tension between environmental regulation and economic development, particularly in the context of current efforts at devising a stimulus package in Congress. Yesterday, Congress rejected an amendment to the stimulus bill, offered by Senator John Barrasso (R-Wyo.), which would have required NEPA reviews to be completed within 270 days for projects funded through the stimulus. Projects not reviewed during this time period would have been constructively approved, i.e., the absence of NEPA review during the 270-day period would have resulted in a determination that the project had no significant impact.

Instead, Congress approved a competing amendment offered by Senator Boxer, which simply requires that NEPA reviews be completed as expeditiously as possible. Senator Barrasso went on record thanking Senator Boxer for at least introducing her amendment recognizing the importance of expedited review.  Nonetheless, the proof will be in the pudding when highway projects – or other projects in the stimulus bill that might have significant environmental opposition – attempt to run the NEPA gauntlet.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

Coal has taken its lumps this week. Today, legislation was introduced in Congress to require EPA to promulgate MACT standards for mercury emissions from coal-fired power plants within one year of enactment of the legislation.

There has been some suggestion that the legislation was filed simply to prod EPA to drop its appeal of the decision by the D.C. Circuit Court of Appeals rejecting EPA’s Clean Air Mercury Rule (CAMR), which would have created a cap and trade program for mercury emissions. If so, it worked, if only by telepathy, because, in a separate announcement today, EPA withdrew that appeal.

One way or another, it is clear that EPA will be promulgating, as soon as it reasonably can manage, MACT standards for mercury emissions. What is also clear is that complying with those standards will be more expensive than compliance with the CAMR would have been. What’s not clear is whether EPA will figure out a way to harmonize the mercury rule with other air rules issued and to be issued, so that, while compliance will have to occur on a facility-specific basis, it can at least be achieved as cost-effectively as possible at each facility.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In addition to our post yesterday and the items highlighted in the New York Times Green.Inc blog on the difficulties facing new and existing coal-fired power plants this week, the Environmental Protection Agency and the Department of Justice have launched what they call a new national crackdown targeting coal-fired plants that violate the Clean Air Act.

As the first piece of this campaign, the agencies filed suit on Wednesday against a Kansas power plant for PSD violations dating back to 1994, and following a notice of violation issued to the plant owners in January 2004.   

EPA and DOJ  had been criticized for not pursuing new cases against power plants during the Bush administration, but it looks as though efforts to take on the coal industry are ramping up again.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The EPA and DOJ announced yesterday that Kentucky Utilities (KU), a coal-fired electric utility, has agreed to spend approximately $135 million on pollution controls to resolve violations of the Clean Air Act New Source Review program.  KU will also pay a $1.4 million civil penalty plus $3 million in implementing supplemental environmental projects, or SEPs.  Finally, KU will also surrender over 50,000 SO₂ allowances shortly after entry of the consent decree, and annually surrender any excess NOx allowances resulting from the installation of pollution control equipment.   

The consent decree, which covers one of the three coal-fired electric generating units at the E.W. Brown plant in Mercer County, Kentucky, requires KU to meet the most stringent limit for nitrogen oxide (NOx) emissions ever imposed in a federal settlement with a coal-fired power plant.  According to the EPA's fact sheet, the new pollution control equipment will reduced combined emissions of SO₂ and NOx by more than 31,000 tons per year to just 10% of the 2007 emission levels.  KU has also agreed to install controls to reduce particulate matter emissions by approximately 1,000 tons per year.

Notably, one of the SEPs provides for KU to contribute $1.8 million towards a $7 million carbon capture and sequestration pilot project led by the University of Kentucky.

This Consent Decree is the sixteenth judicial settlement in the series of cases begun in 1999 against 32 plants in 10 states to bring the power plant industry into full compliance with the NSR and PSD requirements of the Clean Air Act.  It shows that although these cases have been around for a while, the EPA and DOJ are still focused on enforcement for NSR violations.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In Key Tronic Corp. v. United States, the Supreme Court held that costs which are “closely tied to the actual cleanup may constitute a necessary cost of response in and of itself….” Such costs include “work performed in identifying other PRPs.”   According to the Supreme Court, “tracking down other responsible solvent polluters increases the probability that a cleanup will be effective and get paid.”

On the other hand, the Supreme Court noted that attorneys’ fees incurred in the course of negotiations with the government or for the purpose of defending a party against expected litigation are not recoverable. 

The problem in this approach is that distinguishing between these two motives will almost always be impossible. This difficulty was brought home by a recent case from the Eastern District of California. In BNSF Railway v. California, the court denied a contribution plaintiff’s effort to recover its attorneys fees incurred in identifying additional PRPs, because the court could “not distinguish [plaintiff’s] efforts expended in searching for PRPs from their own litigation expenses.”

Well, duh.

When a PRP attempts to identify other PRPs, is there ever a situation in which the PRP is acting solely out of the goodness of his heart? It seems more likely that the PRP is looking for others to share the pain. Indeed, for PRPs with large pocketbooks, the Supreme Court’s premise that identifying other PRPs will increase the likelihood that the cleanup will be effective and get paid for seems questionable, at best. Even if no other PRPs are identified, the well-heeled PRP is likely to perform the cleanup itself. The identification of additional PRPs, while possibly decreasing the share to be paid by the original PRP, is, if anything, likely to lead to more private cost recovery litigation.

On the other hand, is it reasonable to allow recovery of attorneys’ fees to small PRPs, because their identification of additional PRPs does increase the likelihood that the cleanup will be completed, but not to the GEs of this world? That hardly seems fair and certainly has no basis in the statutory language.

It seems to me that the Supreme Court’s language in Key Tronic is simply unworkable in the real world. The better approach would be to allow recovery of attorneys’ fees incurred in the identification of additional PRPs, regardless of whether the motivation for the PRP search might have been to protect the PRP’s own financial interests in defending an action brought by the government.   Such a rule might actually facilitate private settlements, but it would in any case be much easier for courts to administer and, on that basis alone, would be preferable to the current free-for-all, in which the outcome seems most likely to be decided by the judge’s respective level of sympathy for the plaintiff and the defendant.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Among energy efficiency advocates, “decoupling” is the word of the day. Last year, the Massachusetts Department of Public Utilities issued an order decoupling utility rates from sales volume, joining California on the front lines of this issue. The point of decoupling is to eliminate utilities’ rate-based incentive simply to sell more and more power, thus making it easier for utilities to get behind demand management measures.

Congress is now grappling with the decoupling issue as it considers whether to require that states implement decoupling as a quid pro quo for stimulus money related to energy efficiency and conservation. Last week, both the National Association of Regulatory Utility Commissions and the Industrial Energy Consumers of America sent letters to congress opposing decoupling provisions. 

With climate change lingering in the background, and with an increasing chorus saying that we have to act yesterday in order to prevent the worst impacts of global warming, there is going to be a lot of pressure on Congress to get this right, and to do so quickly, in order to maximize incentives for energy efficiency. Decoupling clearly seems right as a theoretical matter, but this is definitely a “devil is in the details” situation par excellence.  The decoupling issue might be better decided as part of comprehensive negotiations over a climate change bill than as part of hurried discussions over the stimulus package.

• Email This
• Print
• Comments
• Trackbacks
• Share Link