More Guidance on Guidance: DOJ Will Not Enforce “Improper” Agency Guidance Documents

Posted on February 21, 2018 by Seth Jaffe

In November, Attorney General Sessions issued a memorandum prohibiting DOJ from issuing regulations disguised as guidance.

Folders with the label Regulations and Guidelines

Now, DOJ has taken the prohibition a step further.  It will no longer rely on guidance issued by other agencies when taking civil enforcement action.  The memorandum has made the regulated community and the NGO community sit up and take notice.

I am sympathetic to the concerns raised in the Sessions memo.  I hate circumvention of notice and comment rulemaking by guidance.  However, as I noted when the memo was released, the problem with guidance documents is not how they are drafted; it’s how they are implemented.

For example, the new memorandum states that:

The Department may continue to use agency guidance documents for proper purposes in such cases.  For instance, some guidance documents simply explain or paraphrase legal mandates from existing statutes or regulations.

Well, but in the first instance, who decides whether a guidance document “simply explains or paraphrases legal mandates” or whether it instead “purports to create rights or obligations binding on persons or entities outside the Executive Branch”?

The agency does, of course – perhaps aided by its counsel, DOJ.

This will particularly be an issue where guidance has been in place for many years and has been relied on by both an agency and the regulated community as accurately describing what the law actually is.  Take, for example, the New Source Review Workshop Manual.  The Manual is not only not a regulation; it’s been in draft for 28 years.  Nonetheless, it’s been relied on as the bible for practitioners since then.  It might be exempt from this policy, which makes clear that it does not apply to internal training materials.  However, when internal training materials are used to say what the law is, that sounds like regulation masquerading as guidance to me.

Here’s another issue.  What are the implications of this guidance memorandum for cooperative federalism?  In a delegated program, what happens if states continue to rely on guidance documents in enforcing federal obligations?  Are we going to have one interpretation under federal law and another interpretation under state law?  Can you say “forum shopping”?!

Finally, I cannot resist pointing out the irony inherent in the AG issuing two separate guidance documents on the proper – and improper – use of guidance documents.

“It’s What We Know for Sure That Just Ain’t So”

Posted on February 16, 2018 by Paul Seals

In his current bestseller, 12 Rules for Life: An Antidote to Chaos, Jordan B. Peterson, a clinical psychologist and University of Toronto professor of psychology, quotes Mark Twain in discussing the potential consequences of our conventional assumptions regarding nature and the environment. Mark Twain once said, “It’s not what we don’t know that gets us in trouble. It’s what we know for sure that just ain’t so.” In our current period of environmental regulatory conflict and chaos, Dr. Peterson’s rules could be fruitful in thinking more critically about “what we know for sure” and in advancing the sort of discourse that can help us find our way to a more rational and orderly regulatory consensus.

Dr. Peterson presents informative, fascinating, and often humorous prescriptions on how we should approach the disorder and tumult in the world in order to achieve meaning in our lives. His provocative and controversial assertions are woven through essays on each of his twelve rules:

  1.  Stand up straight with our shoulders back.
  2.  Treat yourself like someone you are responsible for helping.
  3.  Make friends with people who want the best for you.
  4.  Compare yourself to who you were yesterday, not to who someone else is today.
  5.  Don’t let your children do anything that makes you dislike them.
  6.  Set your house in perfect order before you criticize the world.
  7.  Pursue what is meaningful (not what is expedient).
  8.  Tell the truth—or, at least, don’t lie.
  9.  Assume that the person you are listening to might know something you don’t.
  10.  Be precise in your speech.
  11.  Do not bother children when they are skateboarding.
  12.  Pet a cat when you encounter one on the street.

We could use a little of Rules 7, 8, and 9 as we grapple with the significant environmental regulatory controversies that we face. We have competing facts and assumptions to support our contentions. We are in our separate corners armed with our arguments and beliefs, with little room for honest debate, dissent, or compromise. Too often, we become the conscious or unconscious proxies of ideological tyranny. Orthodoxy, dominance, and power are more important than advancing our knowledge to further effective and appropriate public health and environmental regulations.

We need to do a little more listening combined with a humility that what we know for sure may not be so. The challenge is great. We must overcome the straightjacket of our ideology and follow Rules 7, 8, and 9—beginning with the assumption that the person you are listening to might know something you don’t.

Prizes for Progress with a Caveat: DOE Offers $3 Million Incentive

Posted on February 15, 2018 by Irma S. Russell

The U.S. Department of Energy (DOE) recently announced a $3 million prize competition for solar energy manufacturing innovations.  The American Made Solar Prize, seeks to encourage innovation in solar manufacturing in the private sector.  Given the urgency of the threat of climate disruption, incentives for a green energy industry are definitely a good thing.  

In 2017 the U.S. Global Change Research Program Climate Science Special Report reported key findings, including stronger evidence of “rapid, human-caused warming of the global atmosphere and ocean,” and observable changes in the planet have made the scientific consensus about climate disruption clear as glaciers shrink, oceans and rivers warm, and coast lines recede.  A draft report by agencies such as NASA and the National Oceanic and Atmospheric Administration released late last year states that the world “has warmed by about 1.6 degrees Fahrenheit over the past 150 years and that human activity is the primary cause for that warming.”   It seems clear that rewards for innovation to combat climate disruption are worth the effort and worth the money if they produce progress in sustainable energy.  Despite such promise, however, DOE and community oversight groups should use caution in this new prize enterprise. 

Entrepreneurs have a played a dramatic role in historic energy discoveries of the past.  For example, the discovery and development of fossil fuel was driven by the private energy sector.  A recent example is the rocket launch by Elon Musk in February or 2018.  Likewise, DOE’s laboratories, university researchers and other energy researchers have a proven track record of progress in energy research.  Moreover, private investment seems posed to spur renewable energy technologies.  Venture capital investments needed to take ideas and turn them into marketplace reality seem likely to support private innovations, particularly when those innovations have the endorsement of the DOE. These factors suggest optimism about the result of this prize and others like it. 

So what’s the caution and why?  In an article forthcoming in the UMKC Law Review Green Economy Symposium later this spring, I survey current-day green economy sector jobs and other efforts to build markets to help encourage sustainable practices.  The article describes natural incentives to promote an all-hands-on-deck approach to addressing climate disruption and argues for the use of ex post rewards for innovations, like the award now offered by DOE.  Caution: it won’t work toward environmentally positive outcomes if, rather than creating incentives for real innovation, it is an excuse for a give-away. 

However, Concerns that ex ante rewards may confer unfair benefits to inventors turns a blind eye to the risks accompanying the failure to attract innovations to solve the global climate problem and other environmental problems.  Government support should encourage the progress that a modern-day Edison, Tesla or Jonas Salk might make with true break-through advances.  In such cases, governments should mobilize to support inventions even when the government did not foresee such developments.

The possibility that the reward program will advance new and robust solar energy manufacturing innovations makes it worth pursuing.  The risk, however, that the program will fail to advance the science of solar energy is real. It is again that some wasted funding is likely.  And distinguishing between an incentive for innovation and a reward for being part of the energy structure can be difficult.   For example, last year Secretary of Energy Rick Perry announced payments to nuclear and coal companies for their status as sources of power based on the rationale that such payments serve as insurance against a compromise of the energy grid in the future.  The plan did not include payments to renewable energy companies, however, causing some to speculate that the payments had a political purpose rather than the stated purpose of insuring an uninterrupted energy supply. 

The answer to whether the DOE program is worth pursuing hinges not on the ultimate result but on the good faith nature of the incentive and the effectiveness of the efforts of those monitoring the implementation of the reward.    The use of government incentives, including prizes, presents a potentially fertile avenue for progress.  While risks exist, the possibility of progress is alluring.  So long as the rewards serve to stimulate new ideas rather than simply rewarding existing players to continue business as usual, the expenditures are justifiable and, ultimately, justified because of the possibility of new.   Discovering innovation that moves the country toward a carbon-neutral economy is a goal worth funding – even when the success of such research is not assured.  In fact, this is the nature of research itself.  

Statutory Deadlines Matter—EPA Gets Taken to the Woodshed

Posted on February 14, 2018 by Seth Jaffe

Last week, EPA was ordered to take final action on a Clean Air Act § 126(b) petition filed by the State of Connecticut, which asserted that emissions from the Brunner Island Steam Electric Station in Pennsylvania contribute to nonattainment in Connecticut.  

EPA did not dispute liability; it had clearly missed the original statutory deadline. The case was all about the remedy. EPA asked to be given until December 31, 2018 to respond. Plaintiffs said EPA could respond within 60 days.

Noting the “heavy burden” EPA bears in trying to demonstrate that it cannot comply with the congressionally mandated timeline, the Court ordered a response within 60 days, concluding that:

Defendants’ proposed schedule contravenes the congressional intent that EPA “act quickly on a Section 126(b) petition.”

I noted last spring that we are likely to see more of these cases. And I think we’re also going to see increasing judicial impatience with agency delay. I also wonder if this case might be the first bit of evidence that Scott Pruitt’s order precluding the notorious—if mythical—practice of “sue and settle” may have come back to bite EPA.

EPA had to know it was going to lose this case. In bygone days—meaning 2016—EPA would have negotiated for the best schedule it could have gotten. If EPA had told the plaintiffs it would respond to the petition within 90 or even 120 days, my guess is that the plaintiffs would have accepted such a proposal. Given the Pruitt memorandum, that was not possible. The outcome? The worst possible result for EPA.

Just wonderin’.

(Full disclosure: Foley Hoag has represented Talen Energy, owner of Brunner Island, on matters unrelated to Brunner Island. We take no position on the merits of the underlying § 126(b) petition.)

Fast & Furious: 21 Superfund Sediment Sites Targeted for “Immediate, Intense Action”

Posted on February 13, 2018 by Mark W. Schneider

On December 8, 2017, U.S. Environmental Protection Agency Administrator Scott Pruitt designated 21 Superfund sites for “immediate, intense action”. It’s an open question whether this effort will be more successful than many of EPA’s previous failed efforts to comply with its policies for contaminated sediment sites.

EPA has not met many of its prior commitments regarding sediment sites. On July 25, 2017, EPA’s Superfund Task Force identified 42 recommendations intended to, among other things, “evaluate and expedite NPL sites to completion”, “encourage and facilitate responsible parties’ expeditious and thorough clean-up of sites”, “create oversight efficiencies for PRP lead cleanups”, and “promote redevelopment/reuse of sites by encouraging PRPs to invest in reuse outcomes”. Since that time, some stakeholders have sought action from EPA based on the principles set forth in Task Force recommendations. In response, some have received commitments from EPA headquarters to seriously consider the requests, but the promises made by Headquarters often have not been turned into constructive action consistent with the recommendations.

Last year, EPA’s Office of the Land and Emergency Management (OLEM) issued Directive 9200.1.130 (Jan. 9, 2017), which identified 11 recommendations “based on current best practices for characterizing sediment sites, evaluating remedial alternatives, and selecting and implementing appropriate response actions”. OLEM directed the regions to, among other things, “develop risk reduction expectations that are achievable by the remedial action”. Unfortunately, just two days earlier, EPA issued a Record of Decision for the Portland Harbor Superfund Site that, in direct conflict with the OLEM Directive, established cleanup goals that are unachievable.

And these are just EPA’s recent promises. In 2002, EPA identified 11 principles in its Principles for Managing Contaminated Sediment Risks at Hazardous Waste Sites (OSWER Directive 9285.6-08). EPA announced that, among the key principles, it was important to “control sources early”, “ensure that sediment cleanup levels are clearly tied to risk management goals”, and “design remedies to minimize short-term risks while achieving long-term protections”. Similar principles were articulated in EPA’s 2005 Contaminated Sediment Remediation Guidance for Hazardous Waste Sites (OSWER Directive 9355.0-85). Unfortunately, many of EPA’s decisions regarding sediment contamination sites have been made without consideration or application of these principles.

Will things be different for the 21 sites targeted by Administrator Pruitt for “immediate, intense action”? Unlike earlier pronouncements by the agency, which established program-wide recommendations to be implemented at all applicable sites, the list of actions for the 21 sites sometimes are specific and measurable, e.g., “initiate and complete negotiations to begin implementation of early actions” at the Anaconda Co. Smelter. It’s possible that, where the recommendations are specific and measurable, EPA will be able to take action to advance progress at a particular site. On the other hand, some of the actions proposed for other sites on the list are so general, e.g., “resolve issues expeditiously” at Allied Paper, Inc./Portage Creek/Kalamazoo River; “initiate actions to allow revitalization of the site” at Des Moines TCE (aka Dico Company, that it will be difficult to measure success.

Who Goes First? What Happens When Two Federal Mineral Lessees Clash Over The Same Acreage

Posted on February 7, 2018 by Tom Sansonetti

In January, the Wyoming Supreme Court declined to play umpire in a dispute between two federal mineral lessees. The decision merely defers an issue of first impression: what rules apply when competing mineral lessees occupy the same leasehold?

The Berenergy Corporation produces oil from several sites in Wyoming’s mineral rich northeast corner. Berenergy obtained its oil leases from the Department of the Interior’s Bureau of Land Management in the 1960s. Berenergy’s nine wells are spaced laterally on an east-west axis.

Peabody Powder River Mining extracts coal from several mines in the same area. Peabody also obtained its coal leases from the BLM, but in the 1970s. Peabody plans to mine the coal in a south to north direction for the next forty years.

Peabody’s mine is now within a mile of Berenergy’s wells. Peabody offered to pay Berenergy the fair market value of its wells. In response, Berenergy demanded a sizeable multiple of the appraisal value of the wells in order to get out of Peabody’s way. Not surprisingly, the parties could not reach an agreement and litigation ensued.

First, Berenergy sued Peabody in Wyoming state court claiming that its earlier-issued leases gave it priority on a “first in time is first in right” theory. Berenergy sought to require Peabody to mine around its wells if Peabody was unwilling to pay up.

Next, Peabody sued Berenergy in Wyoming federal court claiming that since both parties were federal mineral lessees with a common BLM lessor, the decision on priority should be made by a federal judge based on a doctrine of accommodation. Peabody argued that factors such as the number of jobs at stake, the amount of royalties paid to the government, the value of the respective minerals, and the ability to maximize production of both minerals should be used to decide if Peabody could mine through Berenergy’s wells or be made to mine around the wells. The latter decision would require Peabody to leave the bypassed coal in place forever as the mine proceeds in its northerly direction.

The Obama-era BLM declined to take a stance as to which lessee should prevail. Even though the BLM was a common lessor, the federal government declined to intervene or be impleaded as an indispensable party in either lawsuit.

In June 2014, the federal district judge remanded the case to the state district court for resolution under state law while dismissing the federal action for lack of federal question jurisdiction.

Following a weeklong bench trial, the state district judge, while acknowledging that the case was without precedent and one of first impression, issued an order in October 2016 rejecting Berenergy’s “first in time” argument and utilizing the doctrine of accommodation. The court’s ruling would allow Peabody to mine through if it paid Berenergy the full appraised value of its wells. Berenergy appealed the order to the Wyoming Supreme Court.

On January 4, 2018 the Wyoming Supreme Court vacated the state district judge’s order, declaring that there was no state law that applied to two federal mineral lessees in conflict with one another. Berenergy Corp. v. BTU Western Resources, Inc., 2018 WY 2, 408 P.3d 396 (Wyo. 2018).

The Court noted that the Berenergy wells had been valued at less than a million dollars while Peabody’s mining of the coal in question would create many jobs and generate tax revenues that dwarfed the revenues produced from Berenergy’s aged and nearly depleted wells.

But the Court stated that it was the BLM’s duty to resolve the conflicts between its two lessees.  Thus, the Court remanded the case to the state district court judge with instructions to dismiss the case unless the BLM agreed to be joined as a party.

By the end of 2018, the coal pit wall will contact the first of Berenergy’s oil wells. Peabody plans to pull the drilling pipe and store it for future use along with all of the associated oil field equipment. The well hole would be plugged as Peabody’s huge drag lines mine through the area.

No doubt temporary restraining orders will then abound. But where will they be filed? The federal district court has already decreed that the conflict is not a federal issue. As of January 4th, the Wyoming state district courts have been instructed to stay out of the conflict since state law does not apply.

So who does get to go first? Will the Trump-era BLM decide to get involved? And if so, under what rules? Stay tuned.

Troubled Waters – Blue Lakes Turning Green From Toxic Algal Blooms

Posted on February 6, 2018 by Virginia C. Robbins

Frank DeOrio knows a lot about protecting drinking water.  For more than 25 years, Frank was Director of Utilities for the City of Auburn located in the pristine Finger Lakes region of Upstate New York.  He was responsible for the water supply drawn from Owasco Lake and the protection of the lake’s watershed.  During Frank’s tenure, the City won awards for the best water in the state and the U.S. 

Frank and I recently discussed his concerns about the potential impacts to drinking water from summer algal blooms in our region’s lakes.   Algal blooms can occur when spring rains flush nutrients, for example, phosphorous, into waterbodies.  Summer temperatures raise water temperatures, creating optimum growth conditions.    

Owasco Lake, September 18, 2017

Owasco Lake, September 18, 2017

Summer algal blooms now occur in more lakes, their duration has increased, and they are producing toxins that pose health risks to the public when ingested or during recreational contact.  These toxins are not easily treated by water suppliers because the technology to treat one toxin may not be effective for another.  And unlike bacteria, boiling water does not remove these toxins. 

In 2017, harmful algal blooms (HAB) occurred in all 11 of the Finger Lakes, reportedly for the first time.  Blue-green algae are cyanobacteria and they can produce several species of cyanotoxins.  What is disturbing about the recent HAB outbreaks is that some classes of these cyanotoxins (e.g., microcystins), are particularly toxic.  If present at high concentrations, they can be difficult or impossible to treat using the technology of most public water systems.  One of these is Microcystin-LR, a liver toxin that is considered one of the more toxic.  These toxins can also cause skin, digestive system and other health issues.

Mycrocystin-LR has been identified in raw water drawn from Owasco Lake and Skaneateles Lake, both jewels of the Finger Lakes.  And Owasco Lake provides drinking water to more than 50,000 customers.  In 2016, the City of Auburn was using filtration to treat its raw water.  When the level of Mycrocystin-LR increased, the City considered moving the location of its water intake away from the area of the lake containing the toxin.  But would the new intake remain safe if the toxin shifted location?  The City decided against moving the intake and instead added carbon filtration. 

Skaneateles Lake is the primary water supply for the City of Syracuse and surrounding communities.  The water authority operates under a “filtration avoidance” authorization.  After a severe storm on July 1, 2017, phosphorous levels in the lake rose, resulting in algal blooms, and Microsystin-LR was then detected in the raw water pumped from the lake.  The levels were low enough that treatment was not required and the toxin was not identified in the water that reached customers.  Nonetheless, the presence of this toxin in the raw water is a disturbing development. 

These examples are lakes in my area.  But similar algae toxins and blooms are occurring in New England states, including New Hampshire and Maine. 

The broader challenges?  The science around algae toxins is emerging.  Further, there are no federal or state drinking water standards for microcystins (though there are health advisory guidelines published by USEPA and some states).  Water treatment plants are generally designed to avoid taste and odor concerns and to manage the most commonly tested algae toxins.  The next generation of plants will need to have more flexible designs to accommodate advanced treatment technologies.  And water authorities will need to consider spatial needs, hydraulics, connections, utilities and process control for these technologies. 

Frank’s concerned.  So am I.  It may get worse before it gets better.  While we wait for science, regulatory efforts and focused treatment technology to develop, at least municipalities can take steps to control the potential for toxic algal blooms by a combination of runoff control, nutrient reduction and stream-bank restoration.  Why wait to build that bridge from troubled waters to cleaner lakes?

With the Stroke of a Pen…or a Tweet?

Posted on February 1, 2018 by JB Ruhl

John Milner’s recent post on executive orders, memorandums, and proclamations taps into something that is quite new and different for environmental lawyers—a president who uses these and other “direct actions” to shape environmental policy from day one, and who is doing so largely by undoing his predecessor’s direct actions.  

I’ve recently completed two empirical studies of presidential direct actions from FDR through the first year of the Trump Administration. In one paper we look at what topics presidents have focused on overall through time and then drill down on environmental (and energy) policies. In the other paper we examine the practice of presidents revoking predecessor direct actions (through yet another direct action).

Despite what you may read in the media, President Trump is by no means unlike other presidents in using direct actions, and lots of them, to steer policy early in his term, or in revoking predecessor direct actions to get the job done. What sets him apart is how early in his term he focused on environmental and energy policy, and how aggressive he has been in revoking President Obama’s direct actions in those fields. And then there’s…the tweets. Let’s take these one at a time.

Direct Actions and the Environment: There is a rich history of presidents using the big four direct actions—executive orders, memorandums, proclamations, and determinations—to shape policy straight from the White House, but environmental policy has not played a big role. Once you take out public lands policy, including the Antiquities Act, environmental policy has been a small component of direct action activity. Energy policy has been more prominent, however, and to the extent the two fields are increasingly merging, one does see more presidential attention going their way, but not usually concentrated at the beginning of a term. President Trump is quite different in this respect, using direct actions to dramatically change environmental and energy policy right out of the gate. 

Revoking Direct Actions: Presidents have revoked predecessor direct actions throughout history, and with great frequency. Here President Trump is no different, except that he is the first to bear down so much on environmental and energy policy. Part of the reason, of course, is that President Obama used direct actions to shape much of his administration’s environmental and energy policy, meaning President Trump could not advance his policies without negating President Obama’s actions. But he has gone further than that. For example, while not completely unprecedented, his orders “shrinking” existing national monuments established by Presidents Clinton and Obama have, for the first time, called into question whether a president has the power to do so.  

Tweets as Direct Actions: The rising use by politicians of social media as a channel of communication has raised questions regarding the status of President Trump’s frequent “tweets” as official policy. If the pen is mightier than the sword, is a tweet from the President even mightier?

Until recently, no one could be blamed for thinking a tweet is just a tweet—but they warrant their own treatment (tweetment?) given how important a role they have come to play in the Trump Administration. For example, former White House Press Secretary Sean Spicer somewhat circularly explained the status of President Trump’s tweets, stating that “The President is the President of the United States, so they're considered official statements by the President of the United States.” CNNPolitics, White House: Trump’s Tweets are “Official Statements." Ninth Circuit Court of Appeals apparently took him at his word when ruling on the so-called “travel ban,” pointing to a Trump tweet as tantamount to an official presidential “assessment.” Hawaii v. Trump, No. 17-15589, n. 14 (9th Cir., June 12, 2017). Indeed, the Department of Justice recently declared in litigation that Trump’s tweets are “official statements of the President of the United States.” James Madison Project v. Dep’t of Justice.  It’s not entirely clear where we are supposed to go with that—are tweets truly direct actions, or just official statements, and what’s the difference?

Presidents through time have shaped policy through direct actions, revoked predecessor direct actions, and, more recently, tweeted. For environmental lawyers, though, President Trump has done all three in ways that seem to be changing the rules of the game. Stay tuned for more?  How can you not?