Waters of the United Chaos

Posted on November 3, 2015 by Richard Horder

                The Clean Water Act’s judicial review provision is bizarrely phrased and at times impenetrable.  It can force litigants into lengthy threshold battles over jurisdiction that delay and sideline the actual challenges to EPA’s action.  Nowhere is this better showcased than in the recent litigation over EPA’s new definition of “waters of the United States” (“WOTUS”).  Companies, industry groups and public interest organizations have filed dozens of suits in district and circuit courts across the country to cover all the possible jurisdictional possibilities.  The circuit court cases were filed under the Clean Water Act’s judicial review provision that automatically centralizes the cases in a randomly selected circuit court (here, the Sixth Circuit).  The district court cases were filed under the Administrative Procedure Act, which contains no mechanism for consolidating the numerous cases.

                In a heroic attempt to combine the district court cases and litigate in only one court, EPA looked to the multidistrict litigation process designed for coordinated discovery among cases sharing common facts.  The circus that ensued was a mini-caricature of the WOTUS litigation and highlighted the intrinsic problems with the Clean Water Act’s judicial review process.  The hearing before the multidistrict litigation panel began at 8:00 a.m. in a large courtroom filled beyond capacity with hundreds of lawyers representing the litigants in the fifteen matters scheduled for oral argument that day.  Clerks of the court spread across the room calling each matter, and lawyers fought through the crowd to form a bunch in front of their clerk, struggling to hear over the noise.  The clerks doled out oral argument time in minute increments, giving some lawyers as few as two minutes of argument time.  Once the schedule was set and after a brief recess, the panel called each of the thirteen cases preceding the WOTUS matter on the docket – the Amtrak derailment, airline anti-trust, various medical device and product liability matters, etc. – moving from one matter to the next with seamless agility.

                DOJ (Martha Mann) presented oral argument for EPA, and met with stiff resistance from the panel.  The panel challenged EPA’s attempt to fit an APA case, to be decided on the record and the law with minimal discovery, into the MDL process designed mostly for coordinated discovery.  Ultimately the panel commended Ms. Mann for a noble effort in an exceptionally uphill battle.  Elbert Lin, the Solicitor General of West Virginia, presented argument for the plaintiffs and, sensing the favorable persuasion of the panel, highlighted only the diverse procedural postures of the various matters.  The various jurisdictional and preliminary injunction rulings in the district courts and an appeal already before the 11th Circuit would all greatly complicate any attempted consolidation.

                On October 13th, the panel issued its ruling, deciding not to consolidate the district court cases.  The panel agreed that not only was the MDL process not applicable to the predominantly legal WOTUS challenges, but consolidation would only further complicate the already chaotic litigation.

                Jurisdictional questions are now pending before the 6th and 11th Circuit Courts of Appeals.  The 6th Circuit offers EPA its last hope of litigating the WOTUS challenges in one court.  If the 11th Circuit were to disagree, the jurisdictional issues could continue to eclipse the merits of the litigation for months, if not years, pending final resolution by the Supreme Court.

Oklahoma Federal Court Says It Lacks Jurisdiction to Award Declaratory Relief to EPA in Clean Air Act Case

Posted on March 23, 2015 by Donald Shandy

On January 15, 2015, Oklahoma Western District Judge Timothy DeGiusti dismissed a declaratory judgment action brought by the United States Environmental Protection Agency (EPA) against Oklahoma Gas and Electric Company (OG&E) under the Clean Air Act.  In United States v. Okla. Gas & Elec. Co. , the Court found that it lacked subject matter jurisdiction over EPA’s claims.

The litigation involved certain modifications made by OG&E at its Muskogee and Sooner plants.  These modifications occurred more than five (5) years prior to EPA’s suit.  Before commencing each of the projects, OG&E submitted “Project Notifications” to the Oklahoma Department of Environmental Quality (DEQ) that: (1) stated that each of the modifications would not result in a significant emissions increase; and (2) committed to submitting annual reports supporting this conclusion.  OG&E did not submit detailed emissions calculations.  However, five years of data subsequent to the modifications confirmed that significant emissions increases did not occur. 

Although the underlying dispute revolves around whether OG&E was required to obtain a Prevention of Significant Deterioration (PSD) permit before commencing each of the modifications, EPA did not allege that the projects were “major modifications” or that the projects resulted in “significant emissions increases” from the Sooner or Muskogee plants.  Nor did the government seek penalties for violations of the PSD permit requirements or injunctive relief requiring OG&E to obtain permits, likely seeking to avoid the application of the five year general statute of limitations applicable to government claims for fines, 28 U.S.C. § 2462. Instead, the government only sought a declaration that OG&E did not properly project whether the modifications to the Sooner and Muskogee plants would result in a significant increase in emissions.

Given that the government did not allege a “major modification” or a “significant emissions increase” for any of the projects, the Court found that the government had not presented an actual case or controversy sufficient for the Court's exercise of jurisdiction. 

Even if OG & E failed as a matter of law to evaluate whether the modifications would result in a significant increase in post-modification emissions of regulated pollutants at each facility, that failure to project is not, without more, determinative of whether a PSD permit is required. Unmoored from a claim that the modifications at issue are major modifications, Plaintiffs ask this Court to make a declaration as to a collateral legal issue governing aspects of a future potential suit. EPA's attempt at piecemeal litigation, therefore, cannot withstand the Court's jurisdictional limitations.

The Court also rejected EPA’s novel claim for injunctive relief seeking to require OG&E to properly calculate whether the projects were likely to result in a significant emissions increase prior to construction.

The Court is not aware of any decision in which the injunctive relief requested by EPA has been granted, or for that matter, ever requested. As the parties concede, there is no statutory or regulatory requirement that projections be submitted to EPA or any other regulatory authority in the first instance. And, as the Sixth Circuit addressed in DTE Energy, there is no prior approval required by the agency. Thus, if the Court were to grant the injunctive relief requested by EPA it would be directing OG & E to submit projections where no statutory or regulatory authority for such action exists. The availability of relief of the nature requested by EPA is a matter to be addressed by Congress, not this Court.

This is an important decision limiting EPA’s ability to “second-guess” a facility’s pre-construction permitting calculations in the absence of data demonstrating a significant emissions increase.