The Uprising or Downfall of the Clean Water Act’s Permit Shield

Posted on July 31, 2014 by David Buente

            Section 402(k) of the Clean Water Act (CWA) is commonly known as the “permit shield.”  It has been part of the CWA since 1972.  Even seasoned environmental lawyers would not likely need even one hand to count the number of permit shield cases that mattered to one’s practice.  If you fall into this category, it is time to listen up! 

Background.  Section 402(k) states that compliance with a National Pollutant Discharge Elimination System (NPDES) Permit “shall be deemed compliance, for purposes of,” among others, various government enforcement actions and citizens’ suits.  EPA’s regulations make clear that where a party has been issued a permit, if the permit holder complies with the express limits of the permit, the permittee has “the security of knowing that . . . it will not be enforced against for violating some requirements of the [CWA] which was not a requirement of the permit. 45 Fed. Reg. 33,290, 33,311 (May 19, 1980). Federal Register.

            Almost 40 years ago, the Supreme Court in E.I. Du Pont De Nemours & Co. v. Train, confirmed that the purpose of the permit shield is to “insulate permit holders from changes in various regulations during the period of a permit and to relieve them of having to litigate in an enforcement action the question of whether their permits are sufficiently strict.  In short, Section 402(k) serves the purpose of giving permits finality.”

            Train, however, was not the last word on the permit shield.  In 1994, EPA issued a Guidance Memorandum providing its interpretations of the scope of the permit shield.  EPA’s 1994 Guidance explains that:

A permit provides authorization and therefore a shield for the following pollutants             resulting from facility processes, wastestreams and operations that have been clearly identified in the permit application process . . .: (1) Pollutants specifically limited in the   permit or pollutants which the permit, fact sheet, or administrative record explicitly          identify as controlled through indicator parameters.; (2) Pollutants for which the permit authority has not established            limits or other  permit conditions, but which are specifically identified as present in facility discharges during the permit application process; and (3) Pollutants not identified as present [in the facility discharges] but which are constituents of wastestreams, operations, or processes that were clearly identified during the permit application process.

Policy Statement on Scope of Discharge Authorization and Shield Associated with NPDES Permits at 2-3 (July 1, 1994) quoted in In re Ketchikan Pulp Co., CWA Appeal No. 96-7, p. 624 (May 15, 1998).

Shortly thereafter, in 1995, EPA re-issued the July 1994 memorandum entitled Revised Policy of Scope of Discharge Authorization and Shield Associated with NPDES Permits(now known as the “1995 Policy Statement”). The 1995 Policy Statement added qualifying text to the second and third conditions in EPA’s 1994 Guidance document.  In both cases, EPA required that the pollutants for which the permit authority has not established limits or other permit conditions or that were not identified as present but which are constituents of wastestreams, operations or processes had to be “specifically” or “clearly” identified in writing and contained in the administrative record which is available to the public.”  Id. at 2-3.  

Thirteen years later, in Piney Run Pres. Ass’n v. City Comm’rs, 268 F.3d 255 (4th Cir. 2001), the Fourth Circuit held that the permit shield applies to discharges of pollutants not listed in a permit as long as the permittee had adequately disclosed the unlisted pollutants  to the permitting authority.  If the discharger, however, “has not adequately disclosed the nature of its discharges to permit authorities, and as a result thereof the permitting authorities are unaware that unlisted pollutants are being discharged, the discharge of unlisted pollutants has been held to be outside the scope of the permit.”    

            The Piney decision held the day for 13 years with no significant permit shield decisions in the interim. 

Times Are Changing.  After more than a decade of dormancy, the scope of the permit shield is now being tested.  In 2013 and 2014, the DOJ on behalf of EPA has filed – under very quick time frames – two briefs as amici curiae addressing NPDES individual and general permits and providing a more nuanced interpretation of Section 402(k).  DOJ now takes the position that a NPDES permit can shield its holder from liability only where the permit holder (1) complies with the express terms of the permit and with the EPA/State permit application rules; and (2) the permit holder does not make a discharge of pollutants that was not within the reasonable contemplation of the permitting authority at the time the permit was granted.  DOJ made clear that any reliance on prong three from the 1995 EPA guidance “is misplaced” because, in the government’s view, the third prong of the guidance deals with  an entirely different situation – namely, it is intended to cover pollutants where there is no affirmative duty to disclose them during the permit application but where, nonetheless, the applicant has made a complete and adequate disclosure with respect to constituents of wastestreams, operations, or process” that “are clearly identified in writing and contained in the administrative record.  Southern Appalachian Mountain Stewards v. A&G Coal Corp., Case No. 13-2050 (4th Cir.), DOJ Brief at 27.

            Then, earlier this year, the Fourth Circuit issued a sharply-worded decision in  Southern Appalachian  Mountain Stewards v. A&G Coal Corp. upholding a lower court’s decision that A&G was not entitled to the permit shield because nowhere in the NPDES application did A&G state that it would be discharging selenium.  The Fourth Circuit did an about face from its decision in Piney based on upon DOJ’s amicus brief and its new disjunctive test, and held that unlike in Piney,  A&G did not disclose the unlisted pollutant adequately and, thus the permit shield was not available. 

            There are two cases pending before the Sixth and the Ninth Circuits that will address the scope of the permit shield.   The Sixth Circuit case – Sierra Club v. ICG Hazard, Inc. – was argued in April, 2013, and the Ninth Circuit case -- Alaska Community Action on Toxics v. Aurora Energy Services, LLC and Alaska Railroad Corp. --  has just recently concluded the briefing process.  DOJ has filed an amicus brief in the Alaska Community Action case which is substantially similar to the one submitted in the A&G Coal litigation.

            Once these decisions are rendered, there may well be a circuit split giving the Supreme Court the opportunity to become the final arbiter of the scope and meaning of Section 402(k)’s permit shield.

CERCLA

Posted on July 30, 2014 by Andrew Brown

More than thirty years after the enactment of CERCLA, basic questions relating to the liability provisions remain.  These issues can become critical when attempting to apply the limitation periods set out in the statute.  One of the unsettled questions is whether an Administrative Order on Consent (AOC) can give rise to the Section 107 cost recovery claim, or are the potential plaintiffs limited to a claim for contribution under Section 113. This question can loom large when trying to determine the applicable limitations period because a three-year statute of limitations applies to contribution claims, as opposed to the usually more generous limitations periods – three years for removal actions and six years for remedial actions --  provided for Section 107 cost recovery claims. 

The Supreme Court has addressed the relationship between Section 107 cost recovery claims and Section 113 contribution claims in two cases:  Aviall Servs., Inc. v. Cooper Indus. and U.S. v. Atl. Research Corp. In Aviall, the Court held that a Section 113(f) contribution action can only be brought during or following a suit under CERCLA Sections 106 or 107, or after liability is resolved in an administrative or judicially approved settlement.  In Atl. Research, the Court held any party, including a potentially responsible party (PRP), may bring a Section 107 action to recover cleanup costs but observed that Sections 107 and 113 provided distinct causes of actions that were available to PRPs depending on whether they were seeking recovery or contribution.  The Court noted that it was deciding the question of whether compelled costs of response can be recovered under Section 107(a), Section 113(f), or both. 

Since Atl. Research, circuit courts have not allowed cost recovery claims when a contribution claim is available.  This issue was addressed recently by the Sixth Circuit Court of Appeals in Hobart Corp. v. Waste Mgmt. of Ohio.  More specifically, the court considered whether the plaintiff was limited to a claim for contribution – and thus subject to the three-year limitations period – because it had entered into an AOC to prepare the Remedial Investigation/Feasibility Study. Following the lead of other circuit courts, the Sixth Circuit declined to apply a bright-line test but focused on whether under the AOC the plaintiff had resolved its liability to the government for some or all of the response costs.  If so, then recovery was limited to a contribution action under Section 113. The court held the AOC had resolved the plaintiff’s liability and called attention to three specific provisions in the AOC:  the release was operative upon the effective date of the AOC, contribution protection was available as of the effective date of the AOC, and the effective date was the date that the AOC was signed (rather than the date of the completion of the work).

Hobart is another reminder that litigants must evaluate their case very carefully before they assume they will have a Section 107 claim for costs incurred to satisfy the terms of an AOC.  At this point, it seems clear that for many AOCs, the only available claim will be one for contribution, especially when the terms of the AOC foreclose further adjudication of legal liability.  But the courts have taken on this issue on a case-by-case basis.  There may be some cases, as in ITT Industries v. BorgWarner, Inc., where the AOC is found not to be a “settlement” under Section 113(f) and a cost recovery claim may exist.  But until there is further guidance from the Supreme Court, the safest approach is likely to be to assume that only a Section 113 contribution claim is available to recover costs incurred under an AOC. 

EPA to Revisit Emission Guidelines for Existing MSW Landfills

Posted on July 29, 2014 by Carolyn Brown

In an Advanced Notice of Proposed Rulemaking (ANPRM) published in the July 17, 2014 Federal Register, EPA requests public input on reduction of emissions from existing municipal solid waste (MSW) landfills.  “Landfill gas” (LFG) contains methane, carbon dioxide and nonmethane organic compounds (NMOC).  NMOC includes various organic hazardous air pollutants and volatile organic compounds and was the focus of EPA’s initial landfill emission regulations in 1996.  However, the current driver for EPA’s focus on this source category is the President’s Climate Action Plan and the March 2014 Strategy to Reduce Methane Emissions

With respect to landfills, the Methane Strategy calls for EPA to update its rules to reduce emissions from new, modified, and reconstructed landfills; to explore options to reduce emissions from existing landfills; and to encourage energy recovery from LFG through voluntary programs.  The ANPRM addresses the existing landfill component of the strategy.  EPA notes that LFG is typically composed of roughly equal parts of methane and carbon dioxide and less than one percent of NMOC.  Methane has a global warming potential 25 times greater than carbon dioxide and is also identified as a precursor to ground-level ozone.

MSW landfills are a source category for which EPA has issued new source performance standards (NSPS) under Section 111(b) and emission guidelines under Section 111(d) of the Clean Air Act.  Both the NSPS and the emission guidelines were promulgated in 1996.  The designated facilities to which the guidelines apply are existing MSW landfills for which construction, reconstruction or modification commenced before May 30, 1991.  EPA required state plans to control MSW landfills of a certain size and NMOC emission rate if the landfill had accepted waste at any time since November 8, 1987, or had additional design capacity available for future waste deposition.

In the ANPRM, EPA states that it is not statutorily obligated to conduct review of emission guidelines but has the discretionary authority to do so when appropriate.  Despite the focus on the methane strategy, the circumstances EPA identifies for making the review appropriate here are “changes in the landfills industry and changes in size, ownership, and age of landfills” since the emission guidelines were promulgated in 1996.  The ANPRM states that any changes to the emission guidelines would apply to landfills that accepted waste after November 8, 1987, and that commenced construction, reconstruction or modification prior to the publication of proposed revisions to the landfill NSPS.  Landfills currently subject to the 1996 NSPS would have to comply with those requirements as well as any more stringent requirements in the applicable revised state plan or federal plan implementing the revised Section 111(d) guidelines.

Among the topics on which EPA requests comment are the following: (1) extent to which reduction in methane emissions should be taken into account in revising the guidelines; (2) possible changes in the regulatory framework such as eliminating or reducing the design capacity threshold for applicability; (3) criteria and timing for capping or removing the landfill gas collection and control system (GCCS); (4) emission reduction techniques and GCCS best management practices; (5) alternative monitoring and reporting requirements; and (6) what constitutes sufficient LFG treatment, including use of LFG as fuel.  Comments are due September 15, 2014.

Raining On The Cities’ Parades

Posted on July 22, 2014 by Charles F. Becker

Every city of any size wants development.  Some prefer commercial over residential, but they share the common belief that growing is the best way to survive.  The problem that arises, however, is nature. 

Development is, necessarily, hard surfaces.  It is rooftops, streets and driveways.  In other words, it is impervious area.  When rain hits the impervious area, it must be diverted, collected and pushed downstream.  While attempts can be made to allow it to soak into the ground, the reality is that there is simply no way to make up for all of the new impervious area without a great deal of planning, preparation and expense. 

Most attorneys who practice in the area of water regulation have received a call from a business or homeowner that is located at the “bottom of the hill.”  These entities are the ones who are feeling the effects of the urban development.  They have noticed that over the past five or ten years, they have been receiving more and more water to the point that they are now flooding on a routine basis.  They ask the obvious question:  Who is at fault?  Who can pay me for the destroyed basement, the flooded parking lot or the months of work stoppage while repairs are made?

In most states, riparian law prohibits the upstream neighbor from altering the water flow from his/her property in a way that adversely affects the next door neighbor.   But that does not provide a solution when it is the cumulative effect of many upstream neighbors, all of which have been issued permits from the city, that is the root of the problem.

As was recently reported, the stormwater runoff question was called in a recent series of class action cases filed in Illinois by an unlikely plaintiff, the Illinois Farmers Insurance Company.  In the suits, the insurance carrier alleged that 200 cities in Illinois had negligently maintained the stormwater system, had failed to remedy a known dangerous condition and had undertaken an unlawful “taking” in that the government had appropriated the properties of others to use as diversion and retention basins.  The carrier sought to recover amounts it had paid out under flood claims made by their insureds.

Interestingly, about fifty days after filing, Farmers Insurance filed a notice to dismiss the action.  The carrier said that it had successfully brought important issues to the attention of the respective cities and counties and that it hoped to continue a constructive conversation with the cities to build stronger, safer communities.  As one would expect, the spokesman for the cities believed that the dismissal was because the carrier recognized it did not have sufficient grounds for the suit. 

There are some things that local governments are particularly suited to do: manage solid waste, ensure the timely delivery of electricity and coordinate the development and maintenance of streets, for example.  These are matters that potentially affect everyone within the city limits and for which everyone must pay.  There is no better example of this than addressing stormwater that lands on every property in the city.  Having a system in place that safely carries the stormwater away from buildings cannot be done by any single landowner.  And regulating the bigger picture -- building the necessary stormwater infrastructure while encouraging development -- is uniquely within the purview of the city.

It would appear that the proverbial warning shot has been fired across the bow.  If cities are going to encourage activity that significantly exacerbates the stormwater problem, they may also be charged with protecting those that are affected by the fallout from those activities.  For this problem, time, without action, is only going to make the problem worse and the solution more expensive. And counting on the next case being voluntarily dismissed is a lot like hoping the rain won’t fall.      

3 BR, 2 Baths, With a Spectacular View of the Northwest Ordinance

Posted on July 21, 2014 by Linda Benfield

In Wisconsin, the desire to develop prime Milwaukee lakefront property is running head on into the Public Trust Doctrine and fueling interest in the state’s earliest history.  The lands that are now Wisconsin, Ohio, Indiana, Michigan and Illinois were initially included in the Northwest Ordinance of 1787 which established that navigable waters are “common highways” and are “forever free” to all citizens of the United States.  This language was incorporated into the state Constitution in 1848, and the Public Trust Doctrine is an integral part of Wisconsin’s environmental identity. The doctrine has been interpreted over the years to ensure that beaches have public access, that the public can swim, boat or walk in any water body as long as they “keep their feet wet,” and that restaurants located along Lake Michigan offer at least one cheap meal.   

Now a developer wants to replace an ill-suited County bus garage along the lake front with a high rise development that would include a hotel and high end apartments with lovely lake views.  The problem:  under the Public Trust Doctrine, title to the Lake Michigan lake bed (as it existed in 1848) off the shores of Milwaukee rests with the state, which is required to “preserve” and “promote” the public trust. A scramble to the history books and maps ensued, and an initial memorandum from the Wisconsin Department of Natural Resources “determining” that the land in question was not part of the lake bed in 1848 was rescinded when historical maps were found showing that approximately 2/3 of the property was in the lake bed at that time.  Proponents next argued that the property in question had accreted naturally, thus exempting it under a narrow exception to the Public Trust doctrine.  When historical documents showed that any structures that would have led to accretion were placed after the property was filled (and soil borings identified fill material), these parties turned to a 1913 deal with the Chicago Northwestern Railway.  The arguments that the city conveyed this property to the railroad, and that it would have become upland by the process of accretion, and in any event was for a public purpose and did not materially affect the rights of the public, did not gain independent traction, over similar public trust concerns.  

Enter the legislature. A budget bill was initially passed, whereby the legislature, as “Trustee,” approved the 1913 transaction. However, because Wisconsin law does not allow the legislature to include private bills in budget bills, a second bill was introduced and Act 140 was signed into law on March 17, 2014.  Act 140 sets the boundary of the lake bed at the line of the 1913 transaction, bars the Wisconsin Department of Natural Resources from taking a position on the determination, and declares that the legislature’s findings are “in lieu of, and have the same effect as,” a quiet title action entered by a court. 

The new law could have a profound impact on Milwaukee’s lake front.  This month, another company offered to purchase the county parking garage in the same area; this land was also part of the lake bed in 1848 and was included in the 1913 transaction.  The private company will pay off existing debt and commit to immediate, much-needed repairs to the parking garage.  It remains to be seen whether Act 140 will survive a judicial challenge, and whether judicial confirmation of the statute will be necessary to entice any necessary funding and title insurance for the developments.

TSCA Reform: Dead for Now

Posted on July 18, 2014 by Lynn L. Bergeson

Despite high hopes earlier this year for the promise of a legislative make-over, Toxic Substances Control Act (TSCA) reform measures are dead, certainly for the remainder of this Congressional session and possibly the next.  In the category of all things happen for a reason, maybe there is a silver lining to this disappointing result.

TSCA is among the oldest federal environmental laws, one of the most neglected, and clearly one of the most complex and divisive.  At the ripe old age of 38, TSCA’s elasticity has proven remarkable given the tremendous technological advancements made in the chemical manufacturing sector over the past four decades.  In other respects, however, TSCA is impossibly ill-suited to address advancements in risk identification, assessment, and management, societal changes that have profoundly recalibrated consumer expectations, and a more muscular role for states, especially forward-thinking ones like California.

The TSCA reform debate has focused on a handful of tough issues -- preemption, safety standard/risk management, and prioritization of existing chemicals.  Preemption tends to dwarf other issues and how amenable preemption is to resolution has been made all the more challenging given the implementation of the California Safer Consumer Products Regulations (SCPR), which went into effect last October.  The SCPR truly are game-changers and require consumer product manufacturers to assess the safety of chemicals in consumer products by mandating chemical substance “alternative” assessments to ensure products marketed to consumers contain chemical components least likely to cause risk to human health and the environment.

TSCA reform in the shadow of a Presidential election and a new Congress, the composition of which is anything but clear, makes meaningful predictions impossible.  A question worth pondering is not when TSCA will be amended, but whether we bother at all.  The European Union Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) chemical management model, like it or not, is firmly embedded in multiple jurisdictions, and has already triggered massive changes and product deselection in the chemical sector.  The California SCPR are in place and with each passing day are becoming the default standard against which product formulation is being measured, fueled in no small part by a retailer imperative that directionally is joined at the hip with the California approach of “just get rid of the bad stuff.”  Given Congress’s attention span, the better part of valor may be to direct Congress’s limited attention to climate change and give up on TSCA reform.

New FDA Fish Consumption Advisories: Is the Proof in the Eating?

Posted on July 17, 2014 by Gregory Bibler

            On June 10, FDA issued draft updated advice on fish consumption. 

            The announced purpose of the new advice is to redress a health problem largely attributable to the old advice:  “For years many women have limited or avoided eating fish during pregnancy or feeding fish to their young children,” FDA stated.  Prominently featured in the old advice, which is still in effect, were warnings that methyl mercury may harm an unborn baby or young child’s developing nervous system, and that nearly all fish and shellfish contain traces of methyl mercury.  Women, and their doctors, became so concerned about the potential for trace amounts of methyl mercury in fish to cause harm that they avoided fish entirely.

            Acting on the misperception that all fish and all risk should be avoided caused more harm than good.  “[P]rimary research studies with pregnant women have consistently found that the nutritional value of fish is important during growth and development before birth,” FDA now says, “even though nearly all fish contain at least traces of mercury.”  Rather than trumpeting the dangers of methyl mercury in fish and shellfish, therefore, the new advice affirmatively promotes fish consumption (including shellfish).

            There is no indication in the advice that the data on methyl mercury have changed.  Both the old and new advisory, in fact, target the same four “bad” fish to be avoided:  shark, tilefish, swordfish, and king mackerel.  What has changed is a realization that, absent appropriately worded warnings, the public inevitably will conclude that there is no level of acceptable risk.

            The essential premise of FDA’s new advice, in short, is that it is not possible to eliminate all risk without unacceptable cost.  Implicit in FDA’s justification, in fact, is the realization that warning the public that trace levels of chemicals may cause harm, without making clear either the relative magnitude of the risk or the countervailing benefits that may be sacrificed in eliminating such risk, may itself cause harm.  This is not a new lesson.  Unfortunately, it is an historical lesson that we appear doomed to repeat.

Looking ahead to EPA’s next GHG Permit Program: more 2/3rds solutions when Congress goes missing

Posted on July 10, 2014 by Michael R. Barr

Last Monday June 23,  it was the Supreme Court’s turn in the UARG case to decide whether EPA could “tailor” its climate policy to fit the PSD and operating permit programs in the current Clean Air Act.  Both the Court and EPA faced the issue without any precise guidance from the missing branch:  Congress.

As a result, yet another court – the DC Circuit – must next consider the proper remedy in the UARG case and, if past DC Circuit decisions are a sound guide, remand the matter back to EPA to take action consistent with the courts’ decisions.  The DC Circuit will almost certainly not tell EPA what it can do, nor should it tell EPA how to exercise its remaining substantial discretion.  The courts are only telling EPA what it cannot do in certain respects.  Thus, the courts’ guidance to EPA is limited.

EPA will retain considerable discretion when it tries again to regulate GHG emissions from major stationary sources and major stationary source modifications under titles 1 and 5 of the Clean Air Act.  EPA has loads of options, as many commenters pointed out during the prior EPA rulemaking.  The options may fit the current Clean Air Act to varying degrees.  In the words of the Supreme Court in the June 23 UARG decision, though, “Even under Chevron’s deferential framework, agencies must operate ‘within the bounds of reasonable interpretation.’” (J. Scalia for the Court, slip opinion at p. 16)  

EPA may try to avoid options that would be most vulnerable to challenge under the principles expressed by the Court in the UARG opinion.  One Court majority held that EPA lacked authority to “tailor” the Act’s numerical thresholds governing the PSD and operating permit programs.  A different Court majority upheld EPA’s BACT rules for GHGs.  Some commenters will undoubtedly urge EPA to continue its drive towards regulating GHGs under titles 1 and 5 of the current Clean Air Act.  But, EPA should re-solicit the broadest public comment and carefully consider all options, as the Supreme Court requires under the Chevron standard of judicial review.  After all, there will be a national election in 2016 and there will be a new Administration with its own views on the options.  If the current Administration wishes to leave a lasting legacy in this area, it would be well advised to act on the basis of the most solid record and adopt moderate, fully vetted polices that can survive.  As retiring Congressman John Dingell recently said in a farewell speech held by the National Press Club in Washington, D.C., “Compromise is an honorable word."  

Congress is very unlikely to provide any additional guidance in this area any time soon, though.  The nation will miss some basic policy decisions and compromises, such as:

Should the PSD and operating permit programs apply to GHGs?  How?

Which sources should be covered?  When?  With a phase-in?  Tied to what?

In the PSD program, can and should BACT work the same way for GHGs as for criteria pollutants?

In the operating permit program, when should sources have to add GHG provisions (since there aren’t yet any substantive requirements for the operating permits to pick up)?

What substantive requirement should EPA develop and for which sources?  When? E.g., should EPA set GHG emissions standards or other requirements for power plants and other source categories under section 111(d) of the Act, as EPA recently proposed?

What role(s) should state and local agencies and programs play?

In the 1990 Clean Air Act amendments, Congress resolved issues like these in the Act itself.  The leading precedent is title 4 – acid rain – where Congress even allocated emissions of SO2 by individual numbered electric power generators in named powerplants in named states.  Both houses and both parties held hands and made this deal under the Capitol dome – a deal which has resulted in a stunning and stable policy success.  The acid rain deal largely avoided the dilemmas that EPA and the courts now face in dealing with stationary source permitting under titles 1 and 5 of the Clean Air Act.  It seems most likely that whatever EPA does next under the current Clean Air Act will be challenged vigorously in court – again and again – until Congress can once again come together under the dome.

Who’s doing a good job at water conservation? The answer might surprise you.

Posted on July 9, 2014 by Patricia Barmeyer

I was surprised by a recent piece on National Public Radio. California is in an historic drought, as we all know.  The story reported that Sacramento, the capital city of California, is now-- just now!--installing residential water meters.  Water meters are the simplest of all water conservation devices, and yet, the story reports, more than 250,000 households in California receive unmetered water.  Sacramento and other California cities are working now to remedy this obvious shortcoming.

The story invited a comparison to metro Atlanta.  As you may remember, metro Atlanta was the poster child for drought in 2007.  Lake Lanier, Atlanta’s primary source of drinking water, was at historically low levels.  Both Florida and Alabama accused metro Atlanta of taking more than its fair share of the streams that rise in Georgia and flow to our neighboring states.  The assertion that metro Atlanta was not managing its water resources wisely was trumpeted loudly and often repeated.  And even today, you’ll find “experts” opining that metro Atlanta has done “nothing” to address its water supply use. 

But are these claims true?  Hardly.  The fact is that metro Atlanta has been working hard for the past fifteen years to become a conservation leader, and  its efforts are paying off.  From 2000 to 2010, total water withdrawn from streams and reservoirs by metro Atlanta decreased by almost 10% while the population increased by almost 25% (1 million people).   Total per capita use in metro Atlanta is now just 106 gallons per day.  This is on par with the best of the best, and it is far better than peer cities in the Southeast.  Per capita usage in Birmingham, Alabama, for example, is more than 160 gallons per day.

This progress is the result of aggressive conservation planning at the State, regional, and local levels.  For example, the Metropolitan North Georgia Water Planning District has required local providers to do the unthinkable, which is not only to require metering, but also to put those meters to good use by charging more per gallon as usage increases.  99% of the population of the District is now subject to conservation pricing.  The impact has been dramatic.  Meanwhile, at the State level, the Georgia Water Stewardship Act of 2010 has helped to establish a culture of conservation statewide.

On top of these and many other efforts to reduce the amount of water withdrawn from the environment, metro Atlanta water suppliers have spent more than $2 billion on advanced systems to recycle the water withdrawn.  The District now recycles over 60 million gallons per day by discharging highly treated wastewater directly into area drinking water reservoirs.

In short, metro Atlanta is way beyond meters.  Are you surprised?

Ere the Bat Hath Flown: FWS Ponders Listing the Northern Long-Eared Bat as Endangered

Posted on July 8, 2014 by Chester Babst

 

On October 2, 2013, the United States Fish and Wildlife Service (FWS) proposed to list the Northern Long-Eared (NLE) bat as endangered across its entire range under the Endangered Species Act of 1973 (ESA).   The NLE bat is native to a large geographic area and hibernates or often roosts in caves or mines with large openings.  Within its range, which encompasses some 39 states and much of Canada, NLE bat populations have declined.  While an insignificant portion of this decline has been attributed to human activities, the predominant threat to the NLE bat population is White-nose syndrome (WNS) – a fungal disease that is transmitted in cold temperatures and exhibits a particularly high mortality rate.


Under Section 4(a)(1) of the ESA, FWS must consider five factors in determining whether to list the species as endangered: (1) “the present or threatened destruction, modification, or curtailment of its habitat or range,” (2) “overutilization for commercial, recreational, scientific or educational purposes,” (3) “disease or predation,” (4) “inadequacy of existing regulatory mechanisms,” or (5) “other natural or manmade factors affecting its continued existence.” According to FWS, where “one or more of these factors imperils the survival of a species,” an endangered listing may be necessary.


The proposed listing of the NLE bat carries particularly significant implications for the natural gas and mining industries, whose activities will require permitting that may be more difficult to obtain should the NLE bat ultimately be listed as endangered or threatened, even though such operations are acknowledged to insignificantly impact the NLE bat population.  Several other industries are likely to be affected as well, such as construction and agriculture.

In Pennsylvania, the Game Commission and Department of Conservation and Natural Resources are in the process of preparing an application to FWS for an incidental take permit (ITP) and habitat conservation plan (HCP) covering foresting activities over 3.9 million acres of state land that may provide habitat for the NLE bat and the endangered Indiana bat.  As described in the early scoping document for the proposed application, the draft HCP includes setback distances from roost trees and protection of hibernacula as potential impact “minimization measures.”  Although the draft HCP, if approved as submitted, would not cover coal mining activities on such lands, it is possible that agencies may nonetheless consider such measures in coal mining permitting decisions.

 Recently, several US Representatives from the Pennsylvania delegation sent a letter to the FWS challenging the proposed listing of the NLE bat as endangered due to its potential impact to several industries.  Instead, the Representatives requested consideration of listing the species as threatened, which would allow for establishment of special ESA “4(d)” rules that exempt activities that minimally affect the species.

 The FWS responded on June 30, 2014 by extending the NLE bat final listing determination period by six months and reopening the public comment period for 60 days through August 29, 2014, based on “substantial disagreement regarding the sufficiency and accuracy of the available data,” including NLE bat population trends and the probability of transmission of WNS to unaffected areas.  FWS also pledged to minimize or avoid the economic impacts described above by exercising “regulatory flexibility available under the ESA.”  However, it remains to be seen whether FWS will take a cooperative approach towards industries that could be impacted by the listing decision.  A final determination by FWS is expected no later than April 2, 2015.

Turning Guano into Gold

Posted on July 7, 2014 by Larry Ausherman

            From guano of seabirds, national treasure springs.  The treasure is the Pacific Remote Islands Marine National Monument in the south-central Pacific Ocean, and it contains some of the most pristine tropical marine environments in the world.  It is way out there and mostly under water.  The Monument was initially created by George W. Bush in 2009, days before leaving office, pursuant to his executive authority under the Antiquities Act of 1906.  But recently, on June 17, 2014, President Obama announced his proposal to expand the Monument nearly tenfold, from the existing area of almost 87,000 square miles to a new total area of 782,000 square miles.  Although the size of the Monument will not be finally determined until after this summer’s comment period, the proposal would create the largest protected area on earth and essentially double the area of the world’s oceans that is fully protected.  The Monument would be off limits to fishing, energy exploration, and various other activities.  Again, the Antiquities Act is the basis of President Obama’s action.  The announcement came at the “Our Ocean” conference, hosted by the State Department on June 16 and 17, where other marine conservation initiatives were also announced.  The guano that made it possible came at a different time and venue, which I will describe shortly. 

            Since the presidency of Theodore Roosevelt, the scope of executive power exercised by presidents under the Antiquities Act of 1906 has prompted both needed conservation and heated criticism.  For some, criticism of Obama’s proposal aligns with the “Imperial Presidency” moniker.  Indeed, the scope of Obama’s proposal is enormous.  But many other presidents have used the Act as well, and George W. Bush leads the league in number of marine monuments created by any president under the Act.  He created four.  The reach of executive powers under the Antiquities Act is told in history that ranges from the Grand Canyon to the Statue of Liberty. 

            As elegant as the tradition of the Antiquities Act is to the cause of conservation, the Pacific Remote Islands Marine National Monument was made possible in part by a less glamorous law -- the lowly Guano Islands Act of 1856.  It is guano as much as antiquities that support much of what may become the largest protected area in the world.  And, as an example of an ambitious stretch of governmental authority, the Antiquities Act has nothing on the Guano Islands Act either.  The Antiquities Act gives presidents the right to preserve American antiquities with the stroke of a pen.  But the Guano Islands Act gave American citizens the right to take possession of and claim for the United States any island in the world that was unoccupied and not under the jurisdiction of another country – so long as the island held guano deposits. 

            Enacted in a time of global exploration and exploitation, the Guano Islands Act was inspired by tales of vast island deposits of guano, a valuable source of fertilizer.  The Act gave any enterprising guano company the green light to become an American Midas, turning guano into big profits in the fertilizer business.  In the mid-1800s, most of the tiny islands around which the Pacific Remote Islands Marine National Monument is based were apparently known as “guano islands”.  There were also many other guano islands.  Under the authority of the Guano Islands Act, the remote guano islands of the present day Monument were claimed for the United States, and the islands became territories of the United States.  It is largely that “territory” status that creates the modern-day jurisdiction of the United States over the islands of the Pacific Remote Islands Monument. 

            The seven islands and atolls of the Monument are tiny.  How then could these specks in the ocean provide authority to the United States to require preservation for an underwater realm of 782,000 square miles?  It is because each of the scattered islands now comes complete with a U.S. Exclusive Economic Zone (“EEZ”) which surrounds it for 200 miles in all directions from its shore.  In 1983, in accord with the United Nations Convention on the Law of the Sea, a Presidential Proclamation by President Reagan (which was unrelated to the Antiquities Act) created this 200 mile EEZ for the United States and its territories.  The EEZ provides the United States with rights to conserve and manage resources within the 200 mile zone.  The remoteness of the islands causes pristine environments and minimizes commercial activity, two factors that work in favor of creating a reserve of this size. 

            The Pacific Remote Islands National Monument bears the fingerprints of at least five presidents, reaching across the aisle and the passage of time.  Franklin Pierce signed the Guano Islands Act of 1856 into law.  Theodore Roosevelt is responsible for the Antiquities Act of 1906.  Ronald Reagan created the 200 mile EEZ for territories of the United States.  George W. Bush created the Pacific Remote Islands Marine Monument out to 50 miles from the shores of each of the Monument’s islands.  Now, President Obama is going for the whole enchilada by expanding the Monument to the full 200 mile limit around each island. 

            The moral of the story is that the thing you cheer or fear is often not the thing that matters most in the end, and sometimes conservation comes from unheralded sources.  Executive authority under the Antiquities Act is a perennial topic in the conservation conversation, but the Guano Islands Act is a sleeper.  Its original mining purpose no longer pans out in the remote Pacific, but the Act is a federal foot in the door for a very different conservation purpose over a century and a half later.  These days, the gold in the guano islands is their marine environment.  It extends offshore for a very long way, and this time the President wants to bank it.

Engagement, Proportionality and Cooperation: Proposed Changes to the Federal Rules of Civil Procedure

Posted on July 3, 2014 by John Barkett

The Advisory Committee on Rules of Civil Procedure has taken a major rulemaking step to bring down the costs of federal court litigation.  Encouraging judges to become more engaged earlier in litigation, modifying the scope of discovery, and eliminating the circuit conflicts on the exercise of inherent authority in sanctioning the loss of electronically stored information are among the changes that will be made if the amendments are adopted.

In my October 17 2013 blog post, I described proposed changes to the Federal Rules of Civil Procedure published for public comment by the Advisory Committee on Civil Rules (of which I am a member).  The Committee received about 2,300 pubic comments on the proposed amendments.  There were three public hearings and the Committee listened to nearly 125 commenters in what amounted to about 25 hours of oral presentations.

The Advisory Committee assimilated these comments and at its meeting on April 10-11, 2014, adopted a final set of amendments.  On May 29-30, the Standing Committee on Rules of Practice and Procedure adopted the proposed amendments.  The votes of both Committees were unanimous.

The proposed reduction in the presumptive limits on depositions and interrogatories, and the proposed creation of a presumptive limit on requests for admissions (except as to authenticity of documents) received the greatest public attention.  The Committee was persuaded by the commenters to leave the existing limits in place and not to create a limit on requests for admission.

The change to Rule 1 received the least amount of public attention.  If it becomes law, it will provide that the rules will be “employed by the court and the parties” to secure the just, speedy, and inexpensive determination of every action.  Cooperation was on the minds of the Advisory Committee as a means to help bring down the costs of litigation without compromising a lawyer’s duty of diligence in representing a client.

Slight changes were made to Rule 16 to encourage district court judges to make maximum use of the initial case management conference to develop an understanding of the claims and defenses and then to keep the parties focused on discovery that is relevant to those claims and defenses.  In addition, Rule 16(b)(3) adds to the potential list of items included in a scheduling order that directs a party to request a conference with the court before moving for an order relating to discovery—consistent with the belief that addressing discovery disputes at their incipiency will reduce costs to all parties.

The public comments also affected the change to Rule 26(b)(1), which addresses the scope of discovery.  New Rule 26(b)(1) contains these changes:

• the words “proportional to the needs of the case” have been added to provide an additional contour on discovery that is otherwise “relevant to any party’s claim or defense”;
• the limits on discovery in current Rule 26(b)(2)(C) (the importance of the issues at stake in the action, amount in controversy, importance of discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefits) were moved directly into (b)(1) as factors to be considered in evaluating proportionality;
• an additional proportionality factor has been added: “the parties’ relative access to relevant information”;
• the current sentence allowing discovery of information “relevant to the subject matter involved in an action” upon a showing of good cause has been deleted; and
• the sentence, “Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence,” has been replaced with this sentence: “Information within this scope of discovery need not be admissible in evidence to be discoverable.”

Similar to the goal of greater engagement by the court under Rule 16’s changes, the changes to the scope of discovery are designed to reduce discovery costs by encouraging courts and parties to focus more thoughtfully on what information is important to a fair resolution of a claim.

The Committee decided to replace existing Rule 37(e) with new Rule 37(e) and to leave in the limitation of Rule 37(e) to electronically stored information.  Proposed Rule 37(e) creates a uniform standard nationwide for issuance of an adverse inference instruction for the loss of electronically stored information after a duty to preserve is triggered.  The Advisory Committee chose a bad faith standard (followed in the 5th, 10th, and 11th Circuits) over the negligence standard (followed in the 2nd Circuit).  Specifically, proposed Rule 37(e) provides that, “if electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery,” then a court

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation, may

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

There will be changes relating to document production.  I note two of them here.  Rule 34 will require that objections to document requests be made “with specificity” and that an objection state whether any responsive materials are being withheld on the basis of the objection.  Proposed Rule 26(d)(2) will allow delivery of a Rule 34 request more than 21 days after service but the request will not be deemed served until after the Rule 26(f) conference.

There will be changes relating to document production.  I note two of them here.  Rule 34 will require that objections to document requests be made “with specificity” and that an objection state whether any responsive materials are being withheld on the basis of the objection.  Proposed Rule 26(d)(2) will allow delivery of a Rule 34 request more than 21 days after service but the request will not be deemed served until after the Rule 26(f) conference.

Rule 84 relating to the forms that appear at the end of the Federal Rules of Civil Procedure has been abrogated.  There were very few public comments on this proposal consistent with the sentiment expressed by many to the Committee that the forms were not used enough to subject them to change through the rulemaking process.  Instead, the Administrative Office of the United States Courts will post forms on its website.  The time limit for service in Rule 4 has also been reduced from 120 days to 90 days.

The next stop for the proposed amendments is the Judicial Conference in September 2014.  Assuming a favorable vote there, the amendments will be transmitted to the Supreme Court and then the Congress.  Assuming no action by either body, they will become part of the Rules of Civil Procedure December 1, 2015.

Reducing Phosphorus to Wisconsin Waters – Another Tool in the Toolkit

Posted on July 2, 2014 by Linda Bochert

Imagine a nutrient reduction program that achieves financially manageable point source reductions while generating new cash for nonpoint source reductions, has bi-partisan support and requires no new state regulatory or fee programs.  Not possible you say?  Meet the Wisconsin Clean Waters, Healthy Economy Act, now codified at Wis. Stat. s. 283.16.

 In prior postings, I have described Wisconsin’s phosphorus reduction rule, including its compliance options of water quality trading and adaptive management. These are innovative alternatives to traditional construction but, unfortunately, not viable for all dischargers.

Now Wisconsin has another tool:  a multi-discharger variance, based on a finding of statewide social and economic impact, available to dischargers that cannot meet the water quality based effluent limitation (WQBEL) for phosphorus without a major facility upgrade.   Under the variance, a point source will still be required to decrease its phosphorus discharge -- meeting interim limitations of 0.8 mg/L, 0.6 mg/L, 0.5 mg/L, and the final WQBEL over four WPDES permit terms; and while doing so will make payments to the counties within its basin, providing cost-share dollars for nonpoint source phosphorus reductions.  At $50/pound for the difference between the actual pounds of phosphorus discharged and the target value of 0.2 mg/L, this is expected to generate real money -- which the counties will use to implement existing, but seriously underfunded, nonpoint source reduction programs.

Because point sources have installed treatment and reduced their phosphorus discharges by 90% or more to meet Wisconsin’s prior technology-based limit of 1.0 mg/L, the remaining primary contributors of phosphorus to our waters are nonpoint sources.  Yet getting funding for nonpoint source controls has been an ongoing, and largely unsuccessful, effort.  For context, the Green Bay Metropolitan Sewerage District (GBMSD) currently removes about 95% of the phosphorus it receives; while the wastewater it discharges accounts for less than 3% of the total phosphorus to the lower Green Bay.  With an investment of $200 million in capital improvements GBMSD could increase its removal to 98% -- a reduction of less than 2% of the total phosphorus load to the bay.   Redirecting significant dollars to nonpoint source programs should be a game-changer.

The Wisconsin Department of Natural Resources (WDNR) has been reissuing WPDES permits with phosphorus WQBELs and compliance schedules based on the phosphorus reduction rule that went into effect in December 2010.  The variance law went into effect on April 25, 2014, but won’t become available to WPDES permit holders until approved by USEPA.  The rule package is expected to be sent to USEPA for approval in January 2015, once the statewide economic impact analysis is completed. 

We have an opportunity for creative and meaningful point source and nonpoint source participation in reducing phosphorus discharges to our waters.  But time is of the essence.  Note to USEPA:  there is much to like here – please don’t let the moment pass us by.