Brick/Clay MACT: Environmentalists in a TKO Over Industry

Earlier this month, the D.C. Circuit Court of Appeals ruled on challenges to EPA’s National Emission Standards for Hazardous Air Pollutants from the brick and clay industries.  The Court granted the environmentalists’ petitions almost in their entirety and denied the industry petitions in their entirety.

The decision is not really surprising, because EPA had failed to justify a number of the decisions that it made.  Nonetheless, I don’t see the decision as a total loss for the regulated community.  Why not?  Chevron, that’s why!  The Court affirmed several of EPA’s interpretations of the statutory requirements that were favorable to the regulated community.  For example, the Court deferred to EPA’s interpretations of the statutory terms in section 112(d)(4) of the statute, providing that EPA may implement a health threshold-based emissions limit for “pollutants for which a health threshold has been established.”  The environmental plaintiffs still prevailed on their challenge, but only because, even under EPA’s interpretation of ambiguous statutory language, the record did not support EPA’s determination.

Even more significantly for future EPA decision-making, the Court affirmed EPA’s deference in determining how to include an “ample margin of safety” in setting health thresholds.  This is a critical issue in the Clean Air Act.  The question before the Court was whether EPA may comply with the requirement to provide an “ample margin of safety by including conservative assumptions in setting the threshold or whether, even after setting a conservative threshold, EPA must include “ample margin of safety” beyond the calculated threshold.  The Court agreed with EPA that it is a reasonable interpretation of the statutory requirement to make conservative assumptions in setting the threshold and that it did not need to provide an extra margin of safety beyond the calculated threshold.  (Once more, EPA lost on the merits, but only because the record indicated that EPA did not provide any margin of safety.)

I think that this is potentially a really important issue.  Those of us who represent regulated industries have complained for years about EPA’s tendency to pile conservative assumption on top of conservative assumption, leading to standards that seem to bear no real connection to any reasonable calculation of the risks actually posed by a compound or a situation.  The decision here seems to strike the perfect balance, requiring the agencies to comply with the statutory requirement to include an ample margin of safety, but not requiring the agencies to make every possible conservative assumption.

An ample margin of safety does not necessitate a risk-free world under the most conservative assumptions possible.

I just hope that this administration does not forget that it really does face statutory requirements to provide an ample margin of safety, even if it has some flexibility in how that margin is determined.

WOTUS: Legal Issue or Scientific Issue?

Last week, EPA and the Army Corps issued a Supplemental Notice of Proposed Rulemaking in support of their efforts to get rid of the Obama WOTUS rule.  It’s a shrewd but cynical document.  It’s shrewd, because it fairly effectively shifts the focus from the scientific question to the legal question.  Instead of asking what waters must be regulated to ensure that waters of the United States are protected, it asks what are the jurisdictional limits in the Clean Water Act.

It’s cynical, because, by failing to take on the science behind the 2015 rule, which seemed fairly persuasive to me, EPA and the Corps avoid the hard regulations necessary to protect our waters while clothing themselves in feel-good words about the integrity of the statute and the important role given to states under the Clean Water Act.

Part of the beauty of the SNPR is the way it carefully navigates between whether the broader jurisdictional interpretation taken by the 2015 rule is prohibited under the Clean Water Act or simply not required under the Clean Water Act.

The agencies are also concerned that the 2015 Rule lacks sufficient statutory basis. The agencies are proposing to conclude in the alternative that, at a minimum, the interpretation of the statute adopted in the 2015 Rule is not compelled, and a different policy balance can be appropriate.

I’m not sure I agree with the administration’s interpretation of the scope of the CWA, but it’s not crazy.  If I had to bet, I’d assume that it would survive judicial review.

The problem is that this simplistic legal approach ignores the science and ignores the missions of both EPA and the Corps.  If the 2015 rule is more protective of the nation’s waters, and if there are questions about the scope of jurisdiction under the CWA, then shouldn’t the administration be asking Congress to clarify EPA’s and the Corps’ authority so that they can regulate in a manner consistent with what good science says is necessary to protect the waters of the United States?

I’m not holding my breath.

Challenging EPA NPDES Permitting Decisions Is Really An Uphill Battle.

The decision last week in City of Taunton v. EPA did not break any new ground, but it is certainly a reminder of just how much of an uphill battle it is to challenge an NPDES permit.

The City of Taunton challenged EPA’s decision to include a numeric limit for nitrogen in Taunton’s renewed permit.  The Court rejected all of Taunton’s challenges in a tone that, while not explicitly disdainful, certainly gives one the impression that it wished that the City had not wasted so much of the Court’s precious time.

Here are just some of the reasons why such challenges are so difficult:

  • Deference is given both to EPA’s permitting decision and to the EAB’s affirmance of that decision.
  • The “scientific and technical nature of the EPA’s decisionmaking” increases the level of deference.
  • The courts (for now!) grant Chevron deference to EPA’s interpretation of the statute and Auer deference to its interpretation of its regulations.
  • EPA has authority to regulate discharges that merely have a “reasonable potential” to cause – or contribute to – an exceedance of a water quality standard.  EPA’s interpretation of this phrase – which of course is given Auer deference – is that is means “some degree of certainty greater than a mere possibility.”  Can you say “precautionary principle”?!
  • “EPA is required to exercise its judgment even in the face of some scientific uncertainty.”
  • Thus, EPA need not prove causation, both because it may regulate under uncertainty and because it may regulate where a discharge merely “contributes” to a water quality exceedance.
  • EPA need not – and in fact may not – delay permit issuance in order to get better data and eliminate uncertainty.

I used to say that the arbitrary and capricious standard means that the agency wins even if it’s wrong, so long as it’s not crazy wrong.  Now, I’m not even sure that the standard is that stringent.

WOTUS, SCHMOTUS. Can the Corps Reach a Reasoned Jurisdictional Determination In Less Than 12 Years?

The debate over the definition of “Waters of the United States” goes on and on.  I tend to think that Kennedy’s “significant nexus” test was a reasonable approach to making sense of a vague statute.  I also think that the Obama administration definitional rule was supported by good science.

What we sometimes lose track of in the ongoing debate is that the definition – whatever we choose – matters, that ordinary citizens’ use of their property is affected by how the Corps applies the rule, and that the current system fails to provide anything near the level of reasonable certainty that we’re entitled to expect.

Exhibit A?  Orchard Hill Building Company v. US Army Corps of Engineers, in which the 7th Circuit Court of Appeals just vacated a District Court judgment and ordered the Corps to revisit its determination that the plaintiff’s wetlands constitute Waters of the United States.  Orchard Hill originally asked for a jurisdictional determination in 2006.  It’s now 2018.  The case still isn’t over, because the Corps has yet another shot at determining whether the wetlands at issue are in fact jurisdictional.

Would it be rhetorical excess to argue that delays such as this help explain why President Trump is in fact President Trump?  May I at least suggest that such delays undermine respect for the regulatory system?

One final note, just to confirm that I haven’t gone over to the dark side.  One of the arguments that the Obama administration made in support of the WOTUS rule was precisely that it would provide a lot more certainty and thus eliminate many such delays.  I happen to think that they were right – though it’s also true that some of the presumptions in the Obama WOTUS rule were challenged from the left as not being sufficiently protective.

Sometimes I think that the perfect is the enemy of the good.  Sometimes I think that our entire political system is the enemy of the good.  And I’m an optimist!

Thanks For Proving Me Right, Rhode Island!

Late last month, when I reported on the dismissal of the California climate change public nuisance litigation, I stated boldly that we should not expect advocates to stop trying.  I did not really think I was going out on a limb with that prediction, but I also did not know that I’d be proved correct so quickly.  Less than a week later, on July 2, the State of Rhode Island brought its own public nuisance claim.

Time will tell whether Rhode Island fares any better than California.

One final note.  I just loved this response from Lindsey de la Torre, executive director of the National Association of Manufacturers “Manufacturers’ Accountability Project.” 

It’s time for politicians and trial lawyers to put an end to this frivolous litigation.

The response itself is pretty much what one would expect, but who knew that the NAM had created something called the “Manufacturers’ Accountability Project.”  Somewhere, George Orwell is smiling grimly.

The Dutch Government Also Doesn’t Like Citizen Climate Litigation

As a follow-up to my June 27 post about the dismissal of public nuisance claims brought by the City of Oakland and the State of California against five oil majors concerning their contribution to climate change, I note that ClimateWire (subscription required) is reporting that the Dutch government is appealing a court order that would require it to cut carbon emissions by 25 percent by 2030.  

The Dutch case is more similar to the Oregon children’s suit than Oakland litigation, because the Oregon case, like the Dutch case, is against the government, seeking further regulation, rather than against private parties, seeking damages.  All of these cases, though, present some of the same concerns regarding whether courts are the right place to make climate policy, as noted by the Dutch government spokesman, quoted in ClimateWire:

We also believe that renewable energy should be increased and CO2 emissions should be reduced, so this is really about something else: It’s about how the judge has intervened in something that’s [called] democracy, and actually democracy has been sidelined.

It would be nice if democracy could show a greater capacity for addressing climate change, but I still agree that sidelining democracy is rarely a good thing.  Of course, there are good scientific reasons why democracies don’t do so well at dealing with climate change.  Appeals to the courts may be unavoidable.

Still No Judicial Remedy For Climate Change — Don’t Expect Advocates To Stop Trying

On Monday, Judge William Alsup dismissed the public nuisance case brought by the City of Oakland and the State of California against five major oil companies.  The suit sought payment of damages into a fund to be used for necessary adaptation expenditures to deal with sea level rise.  

Why did he dismiss the case?  Simple.  The courts are not the right forum in which to address the problems of climate change.  The more complicated answer?  Because AEP v. Connecticut held that the Clean Air Act displaces federal common law claims for greenhouse gas emissions in the United States and because claims with respect to sales by the defendants outside of the United States could not be addressed by a U.S. court without violating the presumption against giving extraterritorial effect to U.S. laws.

Here, plaintiffs seek to impose liability on five companies for their production and sale of fossil fuels worldwide. These claims — through which plaintiffs request billions of dollars to abate the localized effects of an inherently global phenomenon — undoubtedly implicate the interests of countless governments, both foreign and domestic. The challenged conduct is, as far as the complaints allege, lawful in every nation. And, as the United States aptly notes, many foreign governments actively support the very activities targeted by plaintiffs’ claims. Nevertheless, plaintiffs would have a single judge or jury in California impose an abatement fund as a result of such overseas behavior. Because this relief would effectively allow plaintiffs to govern conduct and control energy policy on foreign soil, we must exercise great caution.

This order fully accepts the vast scientific consensus that the combustion of fossil fuels has materially increased atmospheric carbon dioxide levels, which in turn has increased the median temperature of the planet and accelerated sea level rise. But questions of how to appropriately balance these worldwide negatives against the worldwide positives of the energy itself, and of how to allocate the pluses and minuses among the nations of the world, demand the expertise of our environmental agencies, our diplomats, our Executive, and at least the Senate.  Nuisance suits in various United States judicial districts regarding conduct worldwide are far less likely to solve the problem and, indeed, could interfere with reaching a worldwide consensus.

I couldn’t have said it better myself.  I’ve always thought that these types of suits are not the way to address climate change.  I’ve recently acknowledged that, if the current administration continues to rely on fake news to formulate its position on climate change, courts at some point might conclude that the exigencies of the situation require them to act.  For now, we haven’t reached that point, and I hope we never do.

The Constructive Submission Doctrine — Not Much of a Club Against States or EPA

Earlier this week, the 4th Circuit Court of Appeals reversed a District Court opinion and held that West Virginia had not “constructively submitted” no TMDLs for waters affected by ionic toxicity.  (And, yes, that sentence is difficult to parse.)

The basic issue is pretty simple.  The responsibility for promulgating TMDLs in the first place belongs to the states.  Once a state submits TMDLs to EPA, EPA must approve – or disapprove – a state’s list within 30 days.  The constructive submission doctrine was developed to prevent states from avoiding EPA’s displeasure by simply never submitting a list of TMDLs.

Thus, under the doctrine, a court may interpret a lengthy failure of a state to submit TMDLs as in fact being a “constructive submission” of a list of no TMDLs.  If the failure to act is treated as an affirmative act, then EPA’s review clock is triggered and its failure to make a decision on the “no” list is subject to judicial review.

The problem with the doctrine, as with most judge-made law, is that it leaves some gaps that aren’t answered by the statute, precisely because the doctrine doesn’t exist in the statute.  The root of the crux of the nub of the issue is that no one really knows how little must the state in question do before a court will find that it has made an decision not to submit TMDLs.

The Court’s answer was that the state’s inaction must be pretty much total.  The Court adopted the holdings of other circuits and stated that “the doctrine applies only where a state ‘clearly and unambiguously’ expresses a decision not to submit TMDLs.”  Constructive submission does not apply so long as the state has adopted some TMDLs and has a plan to develop others.  Here, West Virginia agreed that it must develop TMDLs, including for ionic toxicity.

The Court left open the possibility that “continued intransigence” could change its conclusion.  Nonetheless, for now, the bar to winning a “constructive submission” case remains substantial.

FERC Remains An Independent Agency

In January, FERC rejected Secretary Perry’s proposal to compensate generators who maintain a 90-day supply of fuel on-site – a proposal widely seen as an attempt to prop up struggling coal and nuclear generators.  Not willing to take no for an answer, the Administration has recently floated the idea of using authority under the Federal Power Act and the Defense Production Act to require power purchases from coal and nuclear plans in order to address the national security emergency apparently resulting from the threatened shutdown of these facilities.

According to a report from E&E News (subscription required), at a Senate hearing yesterday, Senator Martin Heinrich asked all of the FERC commissioners the following question:

Do any of you believe that in the wholesale power markets we’re facing an actual national security emergency?

Commissioner LaFleur stated that she did not.  Senator Heinrich then asked if any of the remaining commissioners would answer yes.  None of them responded.  I’m sure that the silent pause made great political theater.

I am shocked to discover that FERC is not persuaded that national security requires interference in the power markets.

New Senate Bill in Massachusetts Provides Opportunities for Renewable Resources

Yesterday, June 7, 2018, the Massachusetts the Ways and Means Committee released S2545, “An Act to promote a clean energy future.” The far-reaching bill has the potential to provide new opportunities for renewable resources and in so doing, may also affect the competitive markets in the region. Among other things, the bill would:

  • establish new interim greenhouse gas (GHG) reduction limits;
  • require the development of an energy storage system target program;
  • allow for the procurement of an additional 5,000 MW of off-shore wind;
  • potentially allow for additional procurements of clean energy;
  • eliminate net metering caps for solar facilities; and
  • clarify the circumstances under which distribution companies can impose demand charges on new solar customers.

With respect to GHG emissions, the bill calls for a reduction of “between 35 per cent and 45 percent below the 1990 emissions level” by 2030 and a reduction of “between 55 percent and 65 percent” by 2040. To meet these goals, the bill requires the participation of the transportation, commercial and residential sectors under “market-based compliance” means as redefined in the legislation.

The bill also establishes a new energy storage target program that would deliver up to 2,000 MW of energy storage by January 1, 2025. The bill expressly allows for direct ownership of energy storage systems by distribution companies.

Finally, the bill would authorize the solicitation of up to an additional 5,000 MW of off-shore wind under the Section 83C procurement process. In addition, the legislation leaves open the possibility the additional solicitation of an unspecified amount of new clean energy resources in addition to the 9.45 million megawatt hours currently authorized under the 83D procurement process.

The bill will be heard on the floor of the Senate next week. Proposed amendments to the bill are due by 5:00 on Monday, June 11.  In light of the number of interests affected in the energy, transportation, and building sectors, we can expect the debate to be lively.

EPA Must Produce Any Agency Records Supporting Administrator Pruitt’s Statement that Human Activity Is Not the Largest Contributor to Climate Change

Last Friday, EPA was ordered to produce documents, in response to a FOIA request, on which Administrator Pruitt relied in stating on CNBC that: “I would not agree that [carbon dioxide] is a primary contributor to the global warming that we see,” and “there’s a tremendous disagreement about of [sic] the impact” of “human activity on the climate.”

Photo courtesy of Ritchie Rosson AKA Rubber Ritchie

I’ve done a fair number of FOIA requests in my time.  The request here was about as plain and simple – and clear – as it is possible to be.  The extent to which the government contorted the request in order to make it seem impossible to answer did not sit well with the Court.  Here’s the request as modified by the plaintiffs.  They sought:

(1) agency records that Administrator Pruitt relied upon to support his statements in his CNBC interview,” and “(2) any EPA documents, studies, reports, or guidance material that support the conclusion that human activity is not the largest factor driving global climate change.

EPA objected to the request in part on the basis that it was an improper interrogatory that required the EPA to take a position on the climate change debate.  To which the Court stated that “this hyperbolic objection strays far afield from the actual text of both parts of the FOIA request.”

EPA also argued that the request was vague, asking “how is one to even know precisely what documents one relies on forming one’s beliefs.”  Yikes.  And what is the definition of “is,” Mr. Administrator?

I loved the Court’s response.

Particularly troubling is the apparent premise of this agency challenge to the FOIA request, namely: that the evidentiary basis for a policy or factual statement by an agency head, including about the scientific factors contributing to climate change, is inherently unknowable. Such a premise runs directly counter to “an axiom of administrative law that an agency’s explanation of the basis for its decision must include ‘a rational connection between the facts found and the choice made.  EPA’s strained attempt to raise an epistemological smokescreen will not work here to evade its obligations under the FOIA.”

Epistemological smokescreen.  Humph.

Nor was the Court done.  Responding to EPA’s objection to having to take a position on climate change, the Court trenchantly noted that:

EPA’s apparent concern about taking a position on climate change is puzzling since EPA has already taken a public position on the causes of climate change.

The bottom line?  EPA must complete a search for responsive documents by July 2, 2018, promptly disclose responsive documents, and explain any withholding by July 11, 2018.

This is not the first case under this Administration where I’ve thought how blessed I am that I’m not at DOJ and in the position of having to defend the indefensible from EPA.

The Science Advisory Board Appears to Think that Its Job Is Still to Give EPA Independent Advice

I’ve posted a lot over the years about the role of EPA’s Science Advisory Board in judicial review of agency decisions.  The short version is that, on scientific questions, EPA’s going to be on thin ice if its regulatory decisions are inconsistent with SAB advice.  Recently, I’ve speculated on the level of deference that EPA will get on scientific issues if it starts to ignore scientific consensus.  Last week, these two strains began to weave together, as the SAB decided to review of number of EPA proposals, including efforts to relax CAFE standards and EPA’s proposal to restrict the use of “secret science.”   

The decision follows release of a memorandum prepared by an SAB work group recommending full SAB review of several proposals.  The work group review was highly critical of certain of the proposals.  For example, on the so-called “Glider Kit” proposal, the work group memo stated that:

The scientific and technical statements in the proposed rule, and the scope of analyses in the proposed rule, are dubious and highly questionable.

Although EPA claims that the proposed rule hinges on “legal authority,” the proposed rule is clearly predicated on various scientific and technical claims that are of unknown or dubious merit, including a study cited by EPA that has since been withdrawn by its performing organization.

That does seem a mite problematic to me.

I don’t think that environmentalists or those who simply believe in good science should be dancing in the street quite yet, but it is evidence that the SAB, even following removal of a number of members and installation of new members thought to be friendly to the administration’s agenda, remains at least somewhat independent of agency leadership.  I do think that EPA is going to have great difficulty in defending these rules if the SAB ultimately finds that they are not scientifically sound.

Massachusetts Selects Vineyard Wind In 83C RFP

The Evaluation Team in Massachusetts’ Section 83C Offshore Wind Generation request for proposals (“RFP”) for long term contracts for offshore wind has announced that our client Vineyard Wind was named the winning bidder in the RFP for an offshore wind project to be built off the coast of Martha’s Vineyard.  The project will include approximately 800 megawatts of offshore wind energy generation as well as a generator lead line connection. … More

Has the Horse Already Left the Barn? FERC Tries to Limit Review of Climate Impacts

Last week, FERC rejected arguments that the Environmental Assessment for the New Market Project should have considered upstream and downstream climate impacts.  It also announced as policy that it would not in the future analyze:

the upstream production and downstream use[s] of natural gas [that] are not cumulative or indirect impacts of the proposed pipeline project, and consequently are outside the scope of our NEPA analysis.

The decision was made in the shadow of Sierra Club v. FERC, in which the D.C. Circuit required such analyses with respect to the Sabal Trail pipeline.  FERC distinguished Sierra Club v. FERC on the grounds that the New Market Project involves only compressor stations, both the suppliers and end users of the gas are unknown, and any climate impacts are too speculative.  The decision states that:

providing a broad analysis based on generalized assumptions rather than reasonably specific information does not meaningfully inform the Commission’s project-specific review.

Commissioners LaFleur and Glick both dissented, arguing that the decision was inconsistent with Sierra Club v. FERC.  Commissioner Glick had this to say:

Adding capacity has the potential to “spur demand” and, for that reason, an agency conducting a NEPA review must, at the very least, examine the effects that an expansion of pipeline capacity might have on production and consumption.  Indeed, if a proposed pipeline neither increases the supply of natural gas available to consumers nor decreases the price that those consumers would pay, it is hard to imagine why that pipeline would be “needed” in the first place.

To which I can only say, touché.

What the FERC decision and the dissents really illustrate is that one person’s “reasonably foreseeable” is another person’s “speculation.”  This issue is not going to go away.

Just How Arbitrary Does EPA Have to Be to Be Arbitrary and Capricious?

Last Friday, the D.C. Circuit Court of Appeals vacated EPA’s rule adding the West Vermont Drinking Water Contamination Site to the National Priorities List, finding EPA’s decision to be arbitrary and capricious and not supported by substantial evidence.  As the opinion makes clear, EPA has to work pretty hard to lose these cases.

Why did EPA lose?

The critical issue was whether the overburden and bedrock aquifers beneath the site were directly connected.  EPA said that they were.  However, the petitioners pointed to cross-sections in the record that showed a confining layer existed between the bedrock and overburden aquifers.  More importantly, the record showed that EPA did not even attempt to explain why the cross-sections did not undermine its determination.  That’s a no-no.  As the Court noted:

It was arbitrary and capricious for EPA to rely on portions of studies in the record that support its position, while ignoring cross sections in those studies that do not. … Although EPA ‘is not required to discuss every item of fact or opinion included in the submissions it receives in response to a Notice of Proposed Rulemaking, it must respond to those comments which, if true, would require a change in the proposed rule.’

Counsel from DOJ tried to repair the damage in the litigation, to which the Court replied that:

These arguments come too late. We may only uphold a rule “on the basis articulated by the agency” in the rule making record.

Lesson for EPA?  Don’t ignore comments in the record – and don’t count on your lawyers to fill in the gaps.

Lesson for potential petitioners?  Make sure that the record looks as good as possible – and focus like a laser beam on EPA failures to respond to your evidence.

And who knew that there was a band called The Substantial Evidence?