Someone Left the Cake Out in the Rain: The Dissolution of Cooperative Federalism in the Trump Era

Posted on October 30, 2019 by Vicki Arroyo

The Trump Administration’s recent lawsuit against California’s climate change policies has cast a spotlight on a stark and troubling reality.  U.S. v. California is just the latest salvo in a sustained, direct assault by EPA and the Administration on the bedrock principles of states’ rights and “cooperative federalism.” An assumption that states will work together with the federal government to solve our most pressing problems is a crucial element in many of our environmental laws, including the Clean Air Act and the Clean Water Act. 

Cooperative federalism has been described as a “marble cake,” blending the rights and responsibilities of government entities at all levels. Together, those at different levels of government can accomplish more than any one level could do alone to advance public policy goals and protect the public, while enabling states and local communities to tailor the particulars to meet the needs of their constituents.

Since its founding in 1970, in both Republican and Democratic administrations, EPA faithfully followed this powerful approach to address threats like hazardous air pollution. Even during the turbulent Reagan era, when I was a career official in the EPA Office of Air and Radiation and federal action on air toxics was painfully slow, we not only allowed states to regulate beyond federal minimums, we actively    encouraged their actions. States were closer to those affected by pollution and helped make up for slow federal progress on air toxics standards.   

In fact, frustrated by the lack of progress, I left D.C. to help draft and enact legislation in my home state of Louisiana that cut air toxics emissions by half in just four years. My former colleagues back at EPA continued their work on the 1990 Clean Air Act Amendments signed into law by President George H.W. Bush, and were able to implement regulations requiring the use of advanced technologies to reduce air toxics and apply a “residual risk” assessment. Together, state and federal action delivered major cuts in pollution that causes cancer, miscarriages, and other serious health problems.

Now we face an even greater planetary threat—climate change—and state action has been one of the few bright spots in an overall grim U.S. policy picture. Thirty years ago, when I represented Louisiana Governor Buddy Roemer on a bipartisan National Governors’ Association (NGA) task force on climate change, we recognized the importance of national and global action. We also saw major roles for states in areas like electric power and transportation, where they hold significant authority over planning, investment, and regulation. 

Where the federal government has largely dropped the ball on climate law and policy, states and cities from across the U.S. have stepped up to the plate. They sued EPA (successfully) to force regulation of carbon dioxide using Clean Air Act authority in Massachusetts v. EPA, and (unsuccessfully) to hold major polluters responsible for damage to their jurisdictions in Connecticut v. AEP. Meanwhile they moved forward in their own jurisdictions to promote clean energy, cut greenhouse gas emissions, and to respond to the impacts of climate change.   

State action has been impressive and bipartisan, exemplifying Supreme Court Justice Lewis Brandeis’s description of states as the “laboratories of democracy.” The Regional Greenhouse Initiative, embraced by nine states in the Northeast, many with Republican governors, has successfully cut emissions from power plants and strengthened the clean energy economy. In California, Republican Governor Arnold Schwarzenegger and the legislature created a cap-and-trade program to limit carbon emissions that has been extended and strengthened over time.  Most U.S. states have mandated utilities to integrate clean renewable power into their resource mix, and many have taken on increasingly ambitious targets, through robust and enduring policies that have been widely supported.

Meanwhile the federal government has utterly failed to do its part. Three decades ago when I first learned about global warming through that NGA task force, I never would have predicted that the lack of a strong national and international response would allow carbon dioxide levels to soar to 410 ppm from the preindustrial level of 280 ppm, bringing rapid and devastating consequences in a generation. Even harder to imagine would be an Administration like the current one taking a wrecking ball to crucial progress at the federal level—in particular, the Clean Power Plan and the national clean car standards.   

But now it gets even worse. The Trump Administration, not content to undermine U.S. leadership and the Paris Agreement, is hell bent on attacking any state that does not share its climate-denying, pro-fossil fuel agenda. The federal attacks on the California-led greenhouse-gas emissions standards for autos (embraced by 15 states representing nearly half the U.S. economy), and now on California’s cap- and-trade program are assaults on all of us, and make a mockery of the GOP’s espoused fealties to states’ rights and cooperative federalism.

The Administration claims that California is unlawfully acting like a national government by working with Quebec on a linked trading system that crosses state and national boundaries. But the program is designed so that each jurisdiction operates independently yet recognizes the others’ allowances through the “Western Climate Initiative” as broader trading systems yield greater opportunities for cost savings.  Subnational governments across the U.S. and beyond routinely collaborate and cooperate across areas of policy, trade, and commerce without harassment by our federal government:  think of the ubiquitous trade missions by governors and their counterparts from around the world.  Consider as well cross-border collaboration on important sectors like transportation – e.g., through joint efforts on electric vehicle charging networks and other infrastructure, including bridges and related tolling arrangements.

I can only explain the Administration’s motivation to attack this arrangement that has been around since 2013 as a spiteful desire to quash any successful effort to address climate change in the “marble cake” of government.  This Administration’s actions bring to mind the lyrics to the song, MacArthur Park: “I don’t think that I can take it, ‘cause it took so long to bake it, and I’ll never have that recipe again, oh no!”  Oh no, indeed.

A Good Defense is an Affirmative Defense

Posted on May 14, 2019 by Paul Seals

Citing cooperative federalism, the Environmental Protection Agency (EPA) Region 6 Regional Administrator has proposed to withdraw the agency’s 2015 determination that the affirmative defense provisions in Texas’ State Implementation Plan (SIP) applicable to excess emissions that occurred during upsets and unplanned events made the SIP substantially inadequate to meet Clean Air Act (CAA) requirements.  84 FR 17986 (April 29, 2019).  The proposal, if finalized, would reinstate Texas’ affirmative defense provisions that had been approved by the EPA in 2010 and upheld by the Fifth Circuit in 2013.  See Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir, 2013, cert. denied) holding that the EPA’s interpretation of the CAA to allow certain affirmative defenses as to civil penalties in section 110 SIPs was a permissible interpretation warranting deference.

The proposal was in response to Texas’ petition for the EPA to reconsider the 2015 Texas SIP call and reinstate EPA’s prior interpretation regarding affirmative defenses for malfunctions. 

In 2015, the EPA had reversed its interpretation of the legality of affirmative defense provisions in CAA section 110 SIPs following the decision of the D.C. Circuit in NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014), which addressed the legality of affirmative defense provisions in a certain national emission standard for hazardous air pollutants (NESHAP) established under CAA section 112.  In vacating the affirmative defense provisions, the D.C. Circuit held that the CAA gives district courts sole authority in federal enforcement proceedings to determine whether a penalty for a violation of a section 112 NESHAP is appropriate.  The EPA reconsidered the legal basis for affirmative defense provisions in CAA section 110 SIPs and concluded that the reasoning of the D.C. Circuit in NRDC should extend to state affirmative defense provisions in CAA section 110 SIPs.  Texas and 16 other states were subject to a SIP call to revise their SIPs consistent with the 2015 interpretation.

EPA Region 6 now believes the policy position on affirmative defense SIP provisions for malfunctions as upheld by the Fifth Circuit’s Luminant decision should be maintained and that it is not appropriate to extend the D.C. Circuit’s reasoning in NRDC to the affirmative defense provisions in the Texas SIP.

It is important to note that the EPA Region 6 sought and obtained concurrence from the requisite EPA Headquarters office to propose an action inconsistent with the EPA’s interpretation of affirmative defense provisions contained in the 2015 SIP call.

What should the other 16 states, subject to the SIP call based on EPA’s 2015 interpretation, make of this proposal?  Does it simply reflect the special circumstances surrounding Texas’ affirmative defense provisions – a prior approval by the EPA, which was upheld by the Fifth Circuit?  Or, is it the first step in a new policy with national applicability?

Ode to Angus: The Macbeth Report

Posted on January 17, 2019 by Scott Fulton

In the Summer of 2017, ELI undertook a special project in memory of our dear departed colleague Angus Macbeth. We did so with support, encouragement, and input from across the ELI and ACOEL communities and in cooperation with the Environmental Council of States (ECOS). Angus was the friend of many, but was also one of the great leaders in environmental law, a former president of the college, and a long-time supporter of ELI. As Angus played no small role in the construction of the system of environmental protection as it exists today, and was also relentlessly committed to the pursuit of new ways to deliver environmental quality, we settled on cooperative federalism as the project topic. The Macbeth Dialogues sought to bring together leading experts to discuss the federal-state relationship in the environmental sphere, in hopes of shining a light on law and policy solutions for optimizing the configuration of governmental roles.

Under this project, we convened a Chatham House Rules gathering of current and former senior state and federal officials, many of whom had worn both state and federal hats. We also convened several dialogues with a broader array of stakeholders and did some rather extensive surveying. The resulting report, The MacBeth Report: Cooperative Federalism in the Modern Era, is, I believe, one of the more thoughtful pieces on cooperative federalism that has been rendered. Let me highlight some of the report’s key contributions.  

As the report reflects, there is considerable support at this juncture for giving states with demonstrated capabilities greater independence and flexibility in running delegated environmental protection programs; but even enthusiasts for greater state primacy consistently agree that EPA must continue its leading role in developing national standards, conducting scientific research, and governing on interstate issues.

The report reveals broad support for flexibility for states in meeting minimum national standards, setting more stringent standards, and in enforcing delegated programs. Experts were more evenly split on state discretion to depart from national technology standards and compliance strategies as well as on primacy for criminal enforcement and environmental justice cases. But over 70 percent of those surveyed felt that the federal government should defer where states can do a better, or as good of a, job, and over 50 percent of respondents felt that EPA intervention in delegated states should be limited to circumstances of documented failure or when the state has provided inadequate resources.

With the traction of sustainability policies in the private sector, driven in part by shareholder and customer demand, the report also explores whether a parallel flexibility in government oversight of high-performing companies might be possible under the rubric of public-private parallelism. The report also considers the role that a citizenry — equipped with unprecedented amounts of environmental information and operating in a socially networked world — can play as a driver of environmental behavior going forward.

In terms of opportunities for adjustment or realignment, The Macbeth Report points to a number of options, including:

· Possible recalibration of compliance expectations under a concept of actionable noncompliance, which could serve to shift the threshold for enforcement intervention from an absolute compliance expectation to one that would allow certain types of exceedances to be timely self-corrected without enforcement implications.

· ECOS has recommended that EPA move to an audit system for oversight in lieu of matter-by-matter reviews. The report advises that auditing be first piloted in a few EPA regions and programs before broader deployment, so that the mechanics can tuned. Permitting decisions may a good place to focus such pilot projects.

· Recognizing the importance of the interstate dimension in defining the federal role, the report recommends that a formal structure be created to give downwind/downstream states a more meaningful voice in implementation decisions.

· The report generally recommends greater use of protocols designed to provide aggrieved states with a time-limited elevation opportunity prior to federal intervention.

· Given technology’s advance toward much more comprehensive, real-time understanding of environmental conditions, the report recommends that EPA and the states experiment with new approaches for framing compliance expectations, for example by using sophisticated fence-line monitoring systems to allow for considerably more within-the-plant flexibility.

This gives you a flavor, but there is considerably more there, so please give The Macbeth Report a look. Be sure to read again Steve Ramsey’s wonderful tribute to Angus, which we have embedded in the report. Many thanks to all who contributed to the thinking in the report, and, of course, a special thanks to you, Angus. 

“Move Not Away from Struggle, But from Stillness”

Posted on July 13, 2017 by Renee Cipriano

Out of struggle and challenges comes a brighter future.  For environmental practitioners, the time is now to engage in struggle. 

I witnessed firsthand the creation and evolution of the Environmental Council of the States (ECOS).  Back in 1994, ECOS was the brainchild of several state environmental commissioners, including Mary Gade, the then Director of the Illinois Environmental Protection Agency.  In ECOS’s early years, the federal-state relationship was evolving, and state regulatory sophistication could not be denied.  The path to create a strong state organization with meaning was not easy and the young organization was forced to deal many struggles coming into its own.  As Ms. Gade explained in a 1996 American Bar Association article published in Natural Resources & the Environment, Winter 1996, “[t]he states were coming of age.  The formation of ECOS is a quantum leap forward in the ongoing shift in the balance of responsibility for protecting the nation’s environment.” She continued, “ECOS may not seem at all exceptional, yet more than any other environmental organization, it embodies the rising environmental leadership of states and the long overdue transfer of power in the federal–state relationship.”

Challenges and struggles have characterized the federal-state partnership upon which the nation’s regulatory system was built. The formation of ECOS helped the states collaborate and deal with the struggles together head on.  Today, no question exists that states are primarily responsible for the administration of environmental laws in this country, assuming more than 96% of the delegable authorities under federal law.  The states are on the frontline of enforcement, permitting, innovation and streamlining efforts.  The public looks to them first for answers.  Industry relies on the states to be effective partners, balancing the needs of industry and the public while allowing industry to run operations efficiently and in compliance.

Over the life of ECOS, state environmental regulators have been delegated more responsibility for environmental protection, education and enforcement but the resources provided them have measurably decreased.  Federal monies dedicated to financially support state programs have declined and are jeopardized further by proposed budget cuts.  At the same time, state elected officials face their own budget crises.  In response, state environmental protection agencies are being challenged to operate with little to no state funding and instead rely on federal funding and increased fees imposed on regulated entities.

With funding issues looming larger today than ever, there is a need to revisit both our national approach to environmental protection and, whether we are effectively enlisting the federal-state partnership to avoid staff duplication, regulatory confusion and resource waste.  For example, states and stakeholders should be able to rely on the state’s implementation of federally approved state programs without facing contrary interpretations from U.S. EPA.  Some state decisions are scrutinized repeatedly, with no meaningful purpose or resulting benefit; sometimes years after decisions are made. Stakeholders should be able to expect that if U.S. EPA identifies a deficiency in the state administration of a delegated program, U.S EPA will act swiftly under the authority granted to it by Congress to demand a fix to deficiency and approve the state’s modification just as timely.  And states should be able to rely on U.S. EPA to ensure that state delegated programs it approves set a level playing field across the nation to avoid disadvantaging economic growth in one state simply because another state’s approved program does not quite meet U.S. EPA’s interpretation of federal standards.

This brings us to the current Administration’s work around regulatory reform.  See President Trump, E.O. 13771, “Reducing Regulation and Controlling Regulatory Costs (Jan. 30, 2017); President Trump, E.O. 13777, “Enforcing the Regulatory Reform Agenda” (Feb. 24, 2017); EPA, Evaluation of Existing Regulations (Apr. 13, 2017).  Although many see “regulatory reform” under a Pruitt U.S. EPA as the end of environmental protection, I prefer to see it as an opportunity to examine holistically our current environmental regulatory framework and identify innovative ways to build on our environmental successes.  Even more importantly, I also see it as an opportunity to reinvigorate the national conversation around the federal-state relationship and embrace more fully the unparalleled state leadership we have in our country.  There is a rightful place for both U.S. EPA and the states as we move towards addressing our future environmental challenges but we can no longer support or afford duplication and burden without purpose.

In June, 2017, ECOS issued a document entitled COOPERATIVE FEDERALISM 2.0: Achieving and maintaining a Clean Environmental and Protecting Public Health.  Under the leadership of Executive Director and General Counsel Alexandra Dunn, and through a consensus based process among members of ECOS, this blueprint for the future presents both the principles that should guide the federal-state relationship and lists the important “policy neutral issues” where application of cooperative federalism could be focused.  This document is not only insightful but timely and provides the opportunity for positive reforms that will allow the nation to continue its great work of environmental protection into the future.  It is a must read.

My yoga teacher always tells the class to “move away from struggle” when she is challenging us with new and different yoga moves. I find though, that unless I struggle, my moves will never improve.   Engaging in the process of change can be a struggle—from start to finish.  But we cannot do better if we don’t.  The national conversation is now, and we are only wasting our opportunity for an even better environmental regulatory system for the future if we decide to move away from struggle and move to stillness.

Big Party for the Chesapeake TMDL Appeal

Posted on October 28, 2014 by Ridgway Hall

Many Clean Water Act practitioners will have their eyes on the Third Circuit on November 18 when oral argument has been set on an appeal from a decision upholding EPA’s issuance of a multi-state Total Maximum Daily Load (TMDL) for the Chesapeake Bay and its tributaries.  The Chesapeake Bay TMDL, issued in December, 2010, is the biggest EPA has ever set, covering parts of 6 states and the District of Columbia. As I reported in a blog article a year ago on September 13, 2013, in a 99 page decision the Middle District of Pennsylvania upheld the TMDL against numerous challenges by the American Farm Bureau Federation, other agricultural trade associations and the American Home Builders Association. Those organizations appealed, and a flurry of intervenor and amicus briefs have been filed on both sides.

The issues raised by the appellants are whether EPA exceeded its statutory authority when (1) it set pollutant allocations for nitrogen, phosphorus and sediment on a watershed-wide basis, and then, by agreement with the states, subdivided them by state and by major river basin; and (2) it insisted that states provide “reasonable assurance” that they would implement measures reasonably calculated to achieve compliance with the TMDL within agreed-upon timetables.

As described in the district court decision, the Chesapeake Bay TMDL has a long history, including more than 25 years of cooperative but unsuccessful efforts by the Bay states, working together and with EPA, to design and implement programs to reduce the large amounts of nutrients and sediment flowing annually into the Bay.  This pollution has contributed to the decimation of oysters, blue crabs and other fish, destruction of hundreds of acres of bay grasses, and significant economic, recreational and cultural losses throughout the watershed.  Because of the inherently interstate nature of the pollution, and the inability of one state to stem pollution in another state, the states in 2007 asked EPA to set a multistate TMDL, which EPA did. At the heart of the legal dispute are issues of “cooperative federalism” – the proper roles for the states and EPA and the limits of EPA authority under Clean Water Act Section 303, which gives only minimal guidance on TMDL implementation. The district court decision addressed several issues of first impression and, in upholding EPA’s actions, provided a thoughtful analysis and helpful guidance.

The precedential significance of this case has not escaped states, cities and other interested parties elsewhere in the country. Briefs have been filed by intervening environmental groups, wastewater treatment agencies and municipal authorities in support of EPA. In addition at least 10 amicus briefs have been filed on behalf of over 100 other entities. A group of 21 attorneys general, mostly from western and Mississippi Valley states, filed a brief in support of the appellants. They were joined by a group of counties, and much later by a group of 39 Congressmen.  Amicus briefs were filed in support of EPA by the states of Virginia, Maryland, Delaware and the District of Columbia (all in the Chesapeake Watershed).  Also supporting EPA are a brief by the cities of New York, Baltimore, Philadelphia, Los Angeles, Chicago and San Francisco, and a separate brief for the City of Annapolis, plus two amicus briefs by groups of environmental organizations and a brief by 19 environmental law professors from around the country.

One of the interesting features of this case is that none of the EPA actions challenged by the appellants were forced by the agency on unwilling states. The “reasonable assurance” features are contained in “watershed implementation plans” drafted by each state. The deadlines are not inflexible, cannot be enforced by EPA, and were agreed to by the states.  In fact on June 16, 2014, all 6 Bay states, the District of Columbia and EPA signed a new Chesapeake Bay Watershed Agreement reaffirming their commitment to the TMDL and the implementation measures. So stay tuned! The courtroom will likely be SRO, and I’ll be back to you after a decision.

Homer's Odyssey Continues Without Cooperative Federalism

Posted on April 30, 2014 by Paul Seals

On April 29, 2014, Justice Ginsburg delivered the opinion of the Supreme Court in EPA v. EME Homer City Generation, L.P., 572 U.S._(2014) reversing the DC Circuit’s decision regarding the Transport Rule, also known as the Cross-State Air Pollution Rule (CSAPR), a rulemaking designed to address the significant contribution of upwind States to nonattainment of National Ambient Air Quality Standards in downwind States under the Good Neighbor Provision of the Clean Air Act (CAA).   In addition to upholding EPA’s cost-effective allocation of air pollutant emission reductions among upwind States as a permissible interpretation of the Good Neighbor Provision, the majority held that the CAA does not compel EPA to provide States with an opportunity to file a SIP after EPA has quantified the State’s interstate pollution obligations.  This opinion is a severe blow to cooperative federalism.

In the majority opinion, cooperative federalism was relegated to a single footnote, which was surprising given the issues for which certiorari was granted.  The second issue addressed in the briefs and argument – whether states are excused from adopting state implementation plans prohibiting emissions that “contribute significantly” to air pollution problems in other states until after the EPA has adopted a rule quantifying each state’s inter-state pollution obligations – provided the Supreme Court with an opportunity to address the relative health of cooperative federalism and whether the federalism bar should be raised or lowered in the context of the CAA. 

Justice Ginsburg’s footnote addressed Justice Scalia’s dissenting opinion in which he criticized the majority for “making hash of the Clean Air Act, transforming it from a program based on cooperative federalism to one of centralized federal control.”  EPA’s promulgation of federal implementation plans without providing the States with a meaningful opportunity to perform the emissions reductions through state implementation plans is inconsistent with the core principle and regulatory strategy of cooperative federalism embedded in the CAA – air pollution control at its source is the primary responsibility of States and local governments.   

Homer’s Odyssey continues.  For the next chapter, his ship will not sail under the fair winds of cooperative federalism.

Cooperative Federalism? We Don’t Need No Stinkin Cooperative Federalism

Posted on July 31, 2013 by Seth Jaffe

On Friday, July 19, the Court of Appeals for the 10th Circuit, in Oklahoma v. EPA, affirmed EPA’s rejection of Oklahoma’s state implementation plan setting forth its determination of the Best Available Retrofit Technology, or BART, to address regional haze.  The Court also affirmed EPA’s promulgation of a federal implementation plan in place of the Oklahoma SIP.  While rehearsing the Clean Air Act’s “cooperative federalism” approach, the Court seemed more focused on deference to EPA’s technical assessment of the SIP than on any obligation by EPA to cooperate with states.

"Given that the statute mandates that the EPA must ensure SIPs comply with the statute, we fail to see how the EPA would be without the authority to review BART determinations for compliance with the guidelines.
                                                            ***
While the legislative history may evidence an intent to prevent the EPA from directly making those BART decisions, it does not necessarily evidence an intent to deprive the EPA of any authority to ensure that these BART decisions comply with the statute."

Judge Kelly dissented.  As he noted, while the courts normally grant deference to EPA’s decisions, such deference is appropriately limited where “EPA rejected Oklahoma’s evidentiary support with no clear evidence of its own to support its contrary conclusion.”  Judge Kelly also noted that, even in a statute relying substantially on state implementation, the amount of power given to the states to implement the regional haze program is particularly evident.

I don’t know whether Oklahoma will seeking rehearing en banc.  (It’s difficult to imagine that the Supreme Court would be interested in hearing this case.)  I do know that cooperation is in the eye of the beholder.