GLOBAL WARMING: PROBABLY AN INCREMENTAL SUCCESS STORY

Posted on July 31, 2009 by Stephen E. Herrmann

On July 8, 2009, at the meeting of G8 world leaders, the United States agreed to a benchmark to limit climate change. It joined some other industrialized countries by agreeing that the globe should not warm up more than 2º Celsius (that is 3.6º Fahrenheit). A limit of 2º Celsius arose out of a scientific consensus. Scientists assembled by the United Nations in 2007 said that the world could face significant dangers if we warmed it up more than 2º Celsius. But David Archer at the University of Chicago said that it’s not a hard and fast danger point, more of a judgment call.

 

The results left some Western leaders cheering. British Prime Minister Gordon Brown called the group’s statement a “historic agreement.” Germany Chancellor Angela Merkel said it was “a clear step forward.” However, White House Press Secretary Robert Gibbs was a little less definite, saying: “I think in many ways success for us is going to be getting something through Congress and to [the President’s] desk. It puts in place a system, a market-base system, that lessens the amount of greenhouse gases in the air. Look, that’s going to be the true measure of things.” 

So what was agreed to on July 8? Michael Forman, Obama’s chief negotiator at the Summit said: [The G8 countries] pledged to confront the challenges of climate change and committed to seek an ambitious global agreement. They agreed to join with other countries to achieve a 50% reduction in global emission by 2050 and a goal of 80% reduction by developed countries by 2050.” 

 

But, we should realize that there is a hitch. The 50%and 80% reductions do not refer to the same starting number. The language in the G8 declaration is that there will be an 80% reduction from 1990 or later years. In other words, nations could pick their own starting point. In the United States, emissions have increased nearly 16% since 1990 so there is quite a bite of room in deciding where to start. Also, much of the world’s population is in non-G8 countries. China, India, Mexico and Brazil feel the better-established nations are not doing enough in the short term. They also worry that major reduction commitments on their parts, even if below the 80% target of rich nations, would hamper their economic growth.

 

But, it would certainly appear that the G8 accord is probably an incremental success. Until now, the United States has resisted embracing a target because it implied a commitment to dramatically change the way the world generates electricity, fuels its cars and builds its houses. The long range goals over the coming decades may be easier to agree upon when what the short-term action should be to start moving in the right direction. We all need to hope for the best.

 

DC CIRCUIT UPHOLDS US EPA'S PM 2.5 NON-ATTAINMENT DESIGNATIONS

Posted on July 17, 2009 by David Flannery

On July 7, 2009, the United States Court of Appeals for the D.C. Circuit rendered its decisions in the PM2.5 Designations Litigation, Catawba County, NC v. EPA, No. 05-1064 and consolidated cases (D.C. Cir. July 7, 2009). Applying the standard of review set forth in Section 307(d)(9) of the Clean Air Act, which “requires the Court to set aside EPA’s final actions when they are excess of the agency’s statutory authority or otherwise arbitrary and capricious,” the Court denied all of the petitions for review except Rockland County, New York and remanded the designation of Rockland County to EPA for a “coherent explanation of its designation”. Slip op. at 3, 9, 53-56. 

 

Overall, the Court complimented EPA on its handling of “the complex task of identifying those geographic areas that contribute to fine particulate matter pollution”. Id. The Court concluded “EPA both complied with the statute and, for all but one of the 225 counties or partial counties it designated as nonattainment, satisfied – indeed, quite often surpassed – its basic obligation of reasoned decisionmaking.” Id. (emphasis added).

 

The Court rendered two decisions: a published per curiam opinion and an unpublished memorandum attached to the judgment. In the per curiam opinion, the Court explains its holdings rejecting the following general challenges to the designations: (1) EPA violated the Administrative Procedure Act (APA) by failing to publish both the Designations Rule and the Holmstead Memo for notice and comment; (2) EPA violated the section of the Clean Air Act governing designations, § 107(d), by applying the C/MSA presumption and nine-factor test to identify areas that contribute to nearby PM2.5 violations; (3) EPA’s analysis contained such serious “methodological deficiencies and inconsistencies,” including the carbon error, as to render the entire Designations Rule arbitrary and capricious; and (4) EPA acted arbitrarily and capriciously in making particular designations.  Id. at 10. The court in its opinion discusses in detail the New York county designations, rejects the petition as to all of the New York counties except Rockland County, and dismisses all of the other county-specific challenges in one paragraph concluding that “none of them has merit” Id. at 55. The memorandum, which will not be published pursuant to D.C. Circuit Rule 36, sets forth the Court’s rationale for rejecting the other county-specific challenges: Oakland County, Michigan; Anderson, Greenville, and Spartanburg Counties, South Carolina; Catawba County, North Carolina; Guilford County, North Carolina; Catoosa County, Georgia; Porter County, Indiana; Randolph County, Illinois; and the Ohio Townships.

 

On its own motion, the Court ordered the Clerk to withhold issuance of the mandate until after issuance of any timely petition for rehearing or petition for rehearing en banc. However, “any party may move for expedited issuance of the mandate for good cause shown.” Under Rule 40 of the Federal Rules of Civil Procedure, any petition for panel rehearing is due within 14 days after entry of judgment. The judgment was filed July 7, 2009. 

 

Among the highlights of the decision are the following:

 

  1. Speciation data is useful for the area designation process. It reveals the kinds of particles (carbon, sulfate, nitrate, crustal particles, etc.) that account for an area’s PM2.5 problem and suggests, by extrapolation, the kinds of sources most responsible for the problem. Id. at 11. 
  1. No petitioner challenged EPA’s decision that a county boundary would determine the extent of an area reflected by a violating PM2.5 monitor. Id. at 13. 
  1. The Court upheld the C/MSA presumption to identify those areas that, although deemed to be meeting the standard themselves, are contributing to nearby violations.
  1. Weighted emissions scores (WESs) only provide a measure for comparing counties within the same C/MSA. “Importantly, because these scores scale a county’s raw emissions based on attributes specific to individual C/MSA – i.e., the urban excess number and total level of metropolitan emissions – [WESs] only provide a measure for comparing counties within the same C/MSA.”   Id. at 15.
  1. PM2.5 designations are exempt from notice-and-comment rulemaking. Id. at 15-18.
  1. The mandate in § 107(d)(4) that EPA apply the C/MSA presumption in ozone and carbon monoxide designations, while the section pertaining to PM2.5 designations says nothing about the C/MSA presumption and instead provides that PM2.5 designations must be “based on air quality monitoring data,” does not prove that Congress intended to preclude EPA from using the C/MSA presumption in PM2.5 designations. Id. at 22-24.
  1. The word “contribute” in § 107(d)(1)(A)(i) is ambiguous. “Contribute” does not necessarily connote a significant causal relationship. EPA may not designate a county as contributing to nonattainment even if “corrective measures in [the county] will do nothing to address the problem or help achieve compliance in the nonattainment area.” Id. at 29. A contribution may simply exacerbate a problem rather than cause it. Id. 
  1. EPA “is free to adopt a totality-of-the-circumstances test to implement a statute that confers broad discretionary authority, even if that test lacks a definite ‘threshold’ or ‘clear line of demarcation to define an open-ended term’.” Id. (citations omitted). To be reasonable such an “all-things-considered standard” must simply define and explain the criteria the agency is applying. The Holmstead Memo and the Technical Support Document satisfied this test “in spades”.  Id. at 30-31.
  1. EPA does not owe to the states “substantive deference”. EPA has “no obligation to give any quantum of deference to a designation that ‘it deems necessary’ to change.” Id. at 32. 
  1. EPA did not err in refusing to consider emissions reductions from CAIR and the NOx SIP Call. With respect to CAIR, there was no “assurance” when EPA promulgated its PM2.5 designations in December 2004 as to “which power plants would reduce SO2 and NOx emissions and how they would do so,” i.e., installation of controls or trading, “near term,” and the NOx SIP Call “has nothing to do with reducing SO2”. Id. at 37-39. EPA may account for future emissions reductions in contribution designations only when “it is evident that federally enforceable pollution controls will yield significant near-term reductions in emissions.”  Id. at 37.
  1. The carbon error did not render the designations arbitrary and capricious because EPA “used the best available information”. Id. at 39. “EPA was not obligated to upend the designation process when it discovered a mistake in its speciation profile for certain power plants. EPA used the best information available in making its designations, and that is all our precedent requires.” Id. at 41.

MORE CLEAN WATER ACT SUITS ON THE WAY?

Posted on July 14, 2009 by Fournier J. Gale, III

Part II

And now for the rest of the story…

As reported in this blog in January, the Eleventh Circuit’s recent decision in Black Warrior Riverkeeper, Inc. v. Cherokee Mining, LLC, 548 F.3d 986 (11th Cir. 2008), left an opening for Clean Water Act citizen suits to proceed despite an enforcement action being filed by the state environmental agency on the heels of the issuance of a plaintiffs’ 60-day notice letter. However, the recent dismissal of the Cherokee Mining case upon its return to District Court may give some pause to those who file citizen suits in the future.

As reported in more detail in January, the defendant in Cherokee Mining originally filed a Motion to Dismiss plaintiff’s Clean Water Act citizen suit for lack of subject matter jurisdiction arguing that the suit was barred under Section 309 because the state environmental agency had commenced enforcement subsequent to the plaintiff’s issuance of a 60-day notice letter. The plaintiff successfully defeated the Motion to Dismiss in the District Court by relying on what was a largely overlooked provision of Section 309 stating that the bar to citizen suits does not apply to actions filed “before the 120th day after the date on which…notice is given.” 33 U.S.C. § 1319(6)(B)(ii). The Eleventh Circuit, which is still the only Court of Appeals to address this issue, affirmed the District Court’s decision. See also Black Warrior Riverkeeper v. Birmingham Airport Authority, 561 F. Supp. 1250 (N.D. Ala. 2008) (applying the 120th-day exception to the citizen suit bar and allowing the same plaintiff to go forward in a separate case filed against other defendants).

 

However, upon Cherokee Mining’s return to District Court, the plaintiff’s case was dismissed on mootness grounds—arguably the same grounds on which Congress based the statutory bar to citizen suits filed after a state enforcement action. Specifically, the United States District Court for the Northern District of Alabama dismissed plaintiff’s claims for injunctive relief and civil penalties as moot because the issuance of a consent order by the state environmental agency adequately addressed the plaintiffs’ alleged violations. Indeed, despite allegations of additional violations subsequent to the issuance of the consent order, the District Court concluded that the plaintiff had failed to demonstrate that there was a serious prospect that the alleged violations would continue to occur. The District Court further held that because the consent order required Cherokee Mining to pay a penalty of $15,000, the Court was reluctant to second guess the state agency enforcement action. Thus, the Court dismissed plaintiff’s claims as moot. Black Warrior Riverkeeper v. Cherokee Mining, No. 07-AR-1392-S (N.D. Ala. Jun. 5, 2009).

Notwithstanding the ultimate outcome of Cherokee Mining, the back door to citizen suits opened by the Eleventh Circuit’s opinion is still available. In other words, at least in Alabama, Florida, and Georgia, a plaintiff can proceed with a Clean Water Act citizen suit despite enforcement action taken by the state environmental agency as long as the plaintiff files suit within 120 days of its 60-day notice letter. However, the entry of an administrative order by the state may quickly make the citizen suit moot. As aptly noted by the District Court, “[i]f there is a lesson to be learned from this case, it is that a citizen who admittedly has a right to file a citizen suit seeking to remedy a perceived water violation, although knowing, as a matter of law, that ADEM has concurrent jurisdiction over the issue, is taking the risk that he will be headed off at the pass by subsequent appropriate ADEM enforcement action.” Cherokee Mining, No. 07-AR-1392-S at 14-15.

New Jersey Follows Massachusetts into the World of Licensed Environmental Consultants and Privatized Cleanup Oversight

Posted on July 9, 2009 by David Farer

On May 7, 2009, New Jersey enacted the Site Remediation Reform Act (S.1897/A.2962). SRRA, with its new Licensed Site Remediation Professional (“LSRP”) Program, is having a far-reaching impact on the way transactions and redevelopment projects are being planned and handled in New Jersey.

 

Following the Massachusetts Licensed Site Professional program, SRRA establishes a licensing procedure for consultants and contractors to be certified as LSRPs and overseen by a licensing board. 

 

In most cases New Jersey DEP will no longer be required or authorized to review and approve investigation and cleanup plans in advance, or to issue No Further Action letters and Covenants Not To Sue when cleanups have been wrapped up. Instead, LSRPs will determine the propriety and conclusion of investigations and cleanups, and will issue the final sign-off document, which is now to be known as a "Response Action Outcome" ("RAO"). LSRPs – rather than DEP – will determine the required amount of any financial assurance, and will determine when and to what extent the financial assurance can be reduced as a cleanup progresses. 

 

Once the LSRP issues the RAO, the party conducting the cleanup will be deemed to have received a Covenant Not to Sue by operation of law. Following an LSRP’s issuance of an RAO, DEP will have three years to audit the LSRP’s work, though the bases for DEP to invalidate an RAO are limited.

 

By August 7, 2009, a temporary licensing program must be operational, and by November 7, DEP must issue interim rules for implementing the new law. Once the interim rules and temporary licensing program are in place, all new projects subject to the state's cleanup laws – including transaction-triggered investigations and cleanups under the state's Industrial Site Recovery Act – will be overseen by LSRPs rather than DEP, unless they fall into specific exceptions such as sites ranked most highly on a new ranking system to be established by DEP under the reform law.

Parties currently under DEP oversight for existing cases will have up to three years to switch over to the LSRP program.

 

Pursuant to the reform law, DEP is directed to establish a permitting program for institutional and engineering controls, with specific financial assurance requirements. (New Jersey has not adopted the Uniform Environmental Covenants Act.)

 

The state's innocent purchaser protections are modified so that LSRP-certified work is deemed equivalent to that overseen and approved by DEP.

 

DEP is directed to establish, within a year, "presumptive remedies" for cleanups of residential properties, schools and day care facilities. Such projects are to be cleaned up to unrestricted use standards, or pursuant to a presumptive remedy, with certain exceptions available on a case-by-case basis.

 

The reform law also alters reporting obligations in situations where spills and discharges are discovered. Until now, it has been the responsibility of a property owner or operator – not a third party such as a consultant or potential purchaser – to report discovery of contamination to DEP, except as to spills or discharges from regulated underground storage tank systems. Under SRRA, however, LSRPs will now have specific affirmative obligations to report knowledge of contamination directly to DEP in a variety of settings. 

DEP has been gearing up for the new program. Aside from its current efforts in development of the interim rules and temporary licensing procedures, DEP is also in the process of developing standard operating procedures, applications, fees and forms, and guidance documents covering subjects such as mandatory timeframes and presumptive remedies.

KANSAS RENEWABLE ENERGY ACT: UNUSUAL COMPROMISE RESURRECTS COAL PLANT CONSTRUCTION; LIMITS AUTHORITY OF STATE ENVIRONMENTAL AGENCY

Posted on July 9, 2009 by Charles Efflandt

With the May 2009 enactment of comprehensive energy legislation, Kansas joined a majority of states establishing renewable and clean energy requirements. Although a significant step in the development of renewable energy, the story receiving the most attention was that the new law, ironically, resurrected a presumed-dead coal-fired power plant project. That project, which involved two proposed 700 megawatt coal-fired generating units, had previously been denied a construction permit solely due to concerns over the climate change impact of perceived excessive emissions of carbon dioxide. The legislature further enacted limitations on the broad regulatory authority relied on by the state environmental agency to deny the coal plant project a permit. The question now being asked is whether the complex political compromise that enabled the passage of the legislation was a “win-win” or a “no-win” result.

KANSAS RENEWABLE ENERGY ACT: UNUSUAL COMPROMISE RESURRECTS COAL PLANT CONSTRUCTION; LIMITS AUTHORITY OF STATE ENVIRONMENTAL AGENCY

Posted on July 9, 2009 by Charles Efflandt

With the May 2009 enactment of comprehensive energy legislation, Kansas joined a majority of states establishing renewable and clean energy requirements. Although a significant step in the development of renewable energy, the story receiving the most attention was that the new law, ironically, resurrected a presumed-dead coal-fired power plant project. That project, which involved two proposed 700 megawatt coal-fired generating units, had previously been denied a construction permit solely due to concerns over the climate change impact of perceived excessive emissions of carbon dioxide. The legislature further enacted limitations on the broad regulatory authority relied on by the state environmental agency to deny the coal plant project a permit. The question now being asked is whether the complex political compromise that enabled the passage of the legislation was a “win-win” or a “no-win” result.

Tenth Circuit Holds Collateral Source Rule Inapplicable to CERCLA 113 Actions

Posted on July 8, 2009 by Delmar Ehrich

Friedland v. Indus. Co, No. 08-1042, 2009 U.S. App. LEXIS 11660 (10th Cir. May 29, 2009). 

 

The United States Court of Appeals for the Tenth Circuit has held that the collateral source rule is inapplicable in CERCLA actions, affirming the district court’s grant of summary judgment to defendants on the ground that Mr. Friedland already recouped all of his recoverable costs from other persons and therefore had no damages to recover. 

 

The plaintiff, Mr. Friedland, is the former director and president of the Summitville Consolidated Mining Company, Inc. (“SCMCI”). SCMCI operated a gold mine from 1984 to 1992. Defendants-appellees helped construct the mine and provided quality assurance regarding the heap leaching system – where cyanide solution was sprayed on gold-bearing ore to remove the gold. 

 

SCMCI declared bankruptcy and abandoned the mine in 1992. EPA thereafter undertook actions to address acid mine drainage and other conditions at the facility. In 1996, the United States and the State of Colorado sued Mr. Friedland under CERCLA § 107 to recover the costs of these measures. Mr. Friedland settled the governments’ claims against him for approximately $20 million, after incurring legal fees in excess of $28 million. 

 

Mr. Friedland brought several actions against contractors that had built the mining facility. He entered into a series of settlement agreements with these parties or their insurance companies pursuant to which he recovered in excess of the $20 million he agreed to pay to settle the cost-recovery claims by the State of Colorado and the United States. In the latest action, Friedland sued The Industrial Company and another defendant. The defendants moved for summary judgment on the ground that Mr. Friedland had no damages or right to contribution under CERCLA § 113(f) because he had recovered in an amount exceeding the payment made to the United States and State of Colorado. The district court granted summary judgment and Mr. Friedland appealed, arguing that: (1) the collateral source rule prohibits crediting the defendants in the amount of the settlement money he received from the insurance companies; and (2) the settlement money should be credited toward the $28 million in legal fees as opposed to the $20 million settlement amount. 

 

The Tenth Circuit upheld the district court’s ruling, holding that the collateral source rule does not apply to CERCLA contribution actions. The Tenth Circuit differentiated CERCLA contribution action which involves “two or more culpable tortfeasors” from personal injury actions where innocent plaintiffs seek to be made whole. The Tenth Circuit held that allowing a CERCLA contribution plaintiff to recover more than the response costs he paid out of pocket “flies in the face of CERCLA’s mandate to apportion those costs equitably among the parties” and would create a windfall for those responsible for the pollution. CERCLA § 9613(f)(1).

 

The Tenth Circuit also held that under Hess Oil Virgin Islands Corp. v. UOP, Inc., 861 F.2d 1197 (10th Cir. 1988) and Burlington Northern Railroad, 200 F.3d 679 (10th Cir. 1999), the defendant-appellees were entitled to a full credit in the amount of the settlements Mr. Friedland received if the damages he alleged against defendant-appellees were the same as those addressed the settlements. The settlements did not expressly allocate the settlement money between settling the underlying litigation or to legal defense. The Tenth Circuit held that Mr. Friedland’s failure to allocate the settlement monies between legal fees and response costs was fatal to his contention that the defendants-appellees were not entitled to a credit in the settlement amount. Therefore, the Tenth Circuit upheld the district court’s finding that there was no basis to allocate the settlement money between the clean-up costs and legal fees, and defendants-appellees were entitled to a full credit in the amount of the settlements.