A Combined Superfund and Stormwater Rant

Posted on July 7, 2010 by Seth Jaffe

Sometimes, the practice of environmental law just takes my breath away. A decision issued earlier last month in United States v. Washington DOT was about as stunning as it gets. Ruling on cross-motions for summary judgment, Judge Robert Bryan held that the Washington State Department of Transportation had “arranged” for the disposal of hazardous substances within the meaning of CERCLA by designing state highways with stormwater collection and drainage structures, where those drainage structures ultimately deposited stormwater containing hazardous substances into Commencement Bay -- now, a Superfund site -- in Tacoma, Washington.  

I’m sorry, but if that doesn’t make you sit up and take notice, then you’re just too jaded. Under this logic, isn’t everyone who constructs a parking lot potentially liable for the hazardous substances that run off in stormwater sheet flow? 

For those who aren’t aware, phosphorus, the stormwater contaminant du jour, is a listed hazardous substance under Superfund. Maybe EPA doesn’t need to bother with new stormwater regulatory programs. Instead, it can just issue notices of responsibility to everyone whose discharge of phosphorus has contributed to contamination of a river or lake.

The Court denied both parties’ motions for summary judgment regarding whether the discharges of contaminated stormwater were federally permitted releases. Since the Washington DOT had an NPDES permit, it argued that it was not liable under § 107(j) of CERCLA. However, as the Court noted, even if the DOT might otherwise have a defense, if any of the releases occurred before the permit issued – almost certain, except in the case of newer roads – or if any discharges violated the permit, then the Washington DOT would still be liable and would have the burden of establishing a divisibility defense. 

If one were a conspiracy theorist, one might wonder if EPA were using this case to gently encourage the regulated community to support its recent efforts to expand its stormwater regulatory program. Certainly, few members of the regulated community would rather defend Superfund litigation than comply with a stormwater permit.

You can’t make this stuff up.

A Bridge Too Far? EPA's War on Lead-Based Paint Takes Aim at Commercial Buildings

Posted on June 30, 2010 by Charles Efflandt

No one doubts that EPA’s war on lead-based paint serves the cause of mitigating an established health threat. With children being particularly at risk, the regulations to date have focused on lead-based paint in older homes and other “child-occupied facilities.” On May 6, 2010, however, EPA gave notice of its intent to take the battle to an undefined set of commercial and public buildings. Can a full-scale assault on commercial facilities, which will involve a more complex set of regulatory variables and which will venture farther from the core health risk concerns, succeed in achieving a proper balance of competing factors?


EPA’s May 6, 2010 Advance Notice of Proposed Rulemaking announcing the next step in the lead-based paint campaign was published only days after the April 22, 2010 effective date of the controversial Renovation, Repair and Painting Rule (“RRP Rule”). That rule regulates renovation and repair activities disturbing lead-based paint in older homes and child-occupied facilities. The RRP Rule affects contractors, landlords and others who perform RRP work for compensation.


The RRP Rule includes provisions for the required certification (for a fee) of firms performing covered RRP work, the training and certification (at a significant cost) of “Certified Renovators” through EPA-accredited classes, the required use of detailed RRP work practices when performing covered activities, the retention of compliance records, and the verification of compliance with work practice obligations. Even though the RRP Rule has a relatively narrow focus - residences and other child-occupied facilities - its requirements have generated substantial controversy.


Because the RRP Rule applies to numerous trades and contractors, as well as to certain landlords and other persons, issues related to obtaining the required training, safe implementation of the work practice requirements, costs of compliance and the possibility of a $37,500 per day, per violation penalty are only now being confronted by the regulated community as well as the regulators. Small contractors may be forced out of business, impacting competition. Needed RRP work may not be performed due to cost. Lead-contaminated waste disposal will create new environmental/health problems partially offsetting the benefits of the RRP Rule. Suffice it to say, EPA has not yet solved the numerous problems and complexities of implementing even these regulations focused on older homes and child-occupied facilities.


With this background, and setting aside for the moment legal mandates, one can reasonably question whether EPA is prepared to set its sights on a significantly more complex regulatory challenge- the renovation and repair of an estimated two to three million commercial and public facilities constructed prior to 1980. The ANPR includes no proposed language. Rather, the public is invited to respond to over 100 detailed questions and data requests.


At this time, the scope of EPA’s assault on the renovation and repair of commercial and public buildings is unknown. No current limitations on covered “commercial” and “public” buildings exist and both exterior and interior renovation and repair work are included in the ANPR. Unresolved questions include: What renovation and repair work should be covered? What activities create the most risk? Should exposure pathways be broadened to include nearby properties? How should the substantial amount of lead-contaminated waste be handled to avoid creating a different health and environmental hazard?


This much is known. The regulatory variables associated with extending the war on lead-based paint to commercial and public buildings are more numerous and the targeted health risks have expanded. I suggest that there is a real possibility that the regulations could fail to appropriately balance the legitimate interests of contractors, building owners and the public with the known and perceived health risks. Let us hope that the regulated community weighs-in on these issues and that the EPA gives careful thought to this next step in its campaign against lead-based paint.


The public comment period for this proposal ends July 6, 2010.

EPA Issues a New Policy on Superfund Negotiations: Time For Another Rant?

Posted on October 19, 2009 by Seth Jaffe

Late last week, Elliott Gilberg, Acting Director of EPA’s Office of Site Remediation Enforcement (OSRE) issued an Interim Policy on Managing the Duration of Remedial Design/Remedial Action Negotiations. Members of the regulated community may not be surprised by the contents of the memo, but they certainly will not be pleased. In brief, the memorandum fundamentally makes two points:

EPA wants to shorten the duration of RD/RA negotiation

EPA is going to use the heavy hammer of unilateral administrative orders, or UAOs, to keep PRPs’ feet to the fire and ensure that negotiations move quickly.

PRPs will likely agree that shortening the duration of negotiations would be a good outcome in the abstract – but achieving it by greater use of UAOs? I don’t think so.

I can only wonder if EPA has even considered the impact of the Burlington Northern decision here. Is this a perverse reaction from EPA? A metaphorical throwing down the gauntlet to PRPs? It certainly feels that way.

I have a different suggestion, if EPA truly wants to shorten negotiations. First, acknowledge Burlington Northern and compromise on the merits in those great majority of cases where there are legitimate divisibility arguments. Second, stop acting like the last bastion of command and control regulation. Set cleanup standards and then, to the maximum extent permitted by existing law, let PRPs clean up to those standards, without micromanaging every detail of the cleanup process.

A Rant Against Superfund

Posted on April 15, 2009 by Seth Jaffe

As some of my clients know all too well, I’ve been spending a lot of time on some Superfund matters recently. Although I can’t remember a period when I didn’t have at least one moderately active Superfund case, significant immersion in complex remedial decision-making and negotiations provides an unwelcome reminder just how flawed CERCLA is. Almost 20 years after the acid rain provisions of the Clean Air Act ushered in wide-spread acceptance of the use of market mechanisms to achieve environmental protection goals and the state of Massachusetts successfully privatized its state Superfund program, the federal Superfund program, like some obscure former Russian republic which remains devoted to Stalinism, is one of the last bastions of pure command and control regulation.


Can anyone tell me why the remedy selection process takes years and costs millions of dollars – before any cleanup has occurred or risk reduction been achieved? Can anyone tell me why, after the remedy has been selected, EPA has to spend millions of dollars – charged back to the PRPs, of course – to oversee the cleanup? Oversight costs can easily exceed 10% of cleanup costs, while oversight during the remedial design and feasibility study process sometimes seem to be barely less than the cost of actually performing the RI/FS.

While there are certainly a multiplicity of causes, there are two factors which greatly contribute to the problem. One was, coincidentally, highlighted in a post today by my friend Rob Stavins. As Rob noted, unlike the acid rain program, which was new at the time, the Superfund bureaucracy is well entrenched and there are a number of actors with a vested interest in maintaining the status quo

The second issue relates to the genesis of the Superfund program, as well as its continuing raison d’être. Whenever EPA has ranked relative risks from different environmental hazards, Superfund sites come in at the bottom. However, if you think back to Superfund’s origins, what comes to mind? Love Canal and the Valley of the Drums – and some concerned near-by residents who rallied around a cause to ensure that the problem would be addressed. As renowned risk communications expert Dr. Peter Sandman has noted, there is not necessarily a significant correlation between actual risk levels and public outrage, and it’s not possible to decrease outrage simply by providing accurate information about risks.

In short, the public is outraged by hazardous waste sites and does not trust PRPs to clean them properly. All of those EPA oversight costs are, in large part, intended not to decrease risk, but to lower outrage.  Outrage is understandable in some circumstances, and efforts to reduce it are laudable, but is it really an appropriate use of scarce environmental protection resources to spend the money that gets poured into Superfund sites?

There has to be a better way. Indeed, there is a better way. It’s called a privatized system in which PRPs have to meet well-defined cleanup standards, but are allowed to do so on their own, in whatever manner is most cost-effective, subject to audits by regulators. Privatized programs such as the one in Massachusetts are not perfect. However, their flaws – which largely stem from a failure to fully support privatization -- pale in comparison to the waste that is the federal program under CERCLA.

In other contexts, I’ve called on the Obama administration to embrace regulatory reform. Why not start with Superfund? Notwithstanding Rob Stavins’ point about the difficulty of overturning an entrenched status quo, if the states could do it, why not the federal government?

Besides, I have an entrenched personal reason for seeking Superfund reform. This stuff drives me nuts.


Posted on February 27, 2009 by Joseph Manko

Among the priorities under the $787.5 billion American Recovery and Reinvestment Act of 2009 is repairing, rebuilding, and constructing the nation’s water infrastructure. Approximately $6 billion will augment the EPA’s clean water and drinking water state revolving funds, of which approximately $221 million will be disbursed to the Commonwealth of Pennsylvania’s Infrastructure Investment Authority (PennVest). The governing board of PennVest is appointed by Governor Rendell, and I have been serving as its chair for the past six years.


PennVest administers the approximately $300 million annual allotment of Clean Water and Drinking Water funds previously supplied by EPA on a matching basis with Pennsylvania. These funds will now be augmented by the $212 million in stimulus funds. The Clean Water Fund addresses waste water infrastructure. The fund also addresses brownfields (with its protection of water quality) and storm water, whereas the Drinking Water Fund is strictly for water supply and distribution. At least 50 percent of the funding must be in the form of grants.


With the current emphasis on sustainability, alternative energy, greenhouse gas emission reduction and the need for more stringent control over stormwater run-off, the allocation of stimulus funds by PennVest will focus on innovative green technology, including particularly, controlling stormwater and remediating brownfields (at least 20 percent of the stimulus funding must be used for “green infrastructure”.)


Although the final disbursement of the economic stimulus funding will be affected by various regulations, the awarding of grants and loans will likely be on the same timetable as in the past with an emphasis on “shovel ready” projects. Funding agreements must be entered into and contracts for the full amount signed within a year.  The ultimate goal is to immediately increase the amount of jobs needed to construct the infrastructural repair, rebuilding and construction. 

Environmental Site Assessment Flexibility or Further Complexity? EPA Adopts Forestland and Rural Property Phase I Standard Practice

Posted on January 16, 2009 by Charles Efflandt

On December 23, 2008, EPA issued a direct final rule amending the “All Appropriate Inquiries Rule” [Standards for Conducting All Appropriate Inquiry]by adopting ASTM International’s “Standard Practice for Environmental Site Assessment Process for Forestland or Rural Property” (ASTM E2247-08) [EPA Amendment to AAI Rule]. ASTM E2247-08 was published after EPA promulgated the All Appropriate Inquires (AAI) rule and is specifically tailored to conducting Phase I environmental site assessments of large tracts of rural and forestland property. EPA’s action incorporates the ASTM E2247-08 forestland and rural property assessment practices as a federal standard for establishing the AAI component of the bona fide prospective purchaser, contiguous property owner and innocent landowner defenses to CERCLA owner/operator liability.


The AAI Rule as originally promulgated referenced and recognized as compliant ASTM E1527-05, which provides practices for conducting AAI of commercial real estate. ASTM E2247-08 is a variant of the original standard that focuses on the environmental assessment of greater than 120 acres of forestland or rural property or property with a developed use of only managed forestland and/or agriculture. Users of the forestland and rural property Phase I practices are intended to include the forest industry, conservation organizations, natural resource industries and rural real estate professionals and lenders.


Although the Forestland or Rural Property Standard is over 40 pages in length, EPA admits that the differences between this standard and the standards incorporated in the original AAI Rule are few and relatively insignificant.


Generally, the forestland and rural property practices offer the “Environmental Professional” more options to satisfy the site reconnaissance component of the Phase I assessment to, in part, alleviate the burden of visually inspecting these large properties. Also, the 120 acres (or more) that qualify the property for this standard need not be contiguous, provided all parcels are part of the same transaction and have substantially the same land use. Minor differences in the “past and present owner/occupant” interview requirements also exist that take into account the nature and use of these properties.


Both the original Rule and ASTM E2247-08 require the Phase I “User” to search for environmental liens and collect other information reasonably ascertainable to the User. Although the original Rule does not mandate disclosure of this information to the Environmental Professional, ASTM E2247-08 requires that such information be disclosed.


ASTM E2247-08 also includes a more extensive list of potentially applicable historical records and offers guidance on “beyond scope” assessments particularly relevant to forestland and rural property such as endangered species and non-point source assessment considerations.

Conceptually, a modified Phase I assessment practice for large tracts of forestland and rural property makes sense. However, EPA’s recent amendment to the AAI Rule provides that a purchaser of forestland or rural property within the scope of ASTM E2247-08 need not use the practices in that standard. Rather, such purchasers may continue to follow the provisions of the original Rule and ASTM E1527-05.


That being the case, and given that the new forestland and rural property standard is in many respects more stringent than the original Rule, it is debatable whether this amendment of the Rule actually provides focus, efficiency and useful flexibility to the assessment of these types of properties or simply adds another layer of confusion and complexity for property purchasers and Environmental Professionals to evaluate.

EPA Attempts to Increase Recycling by Redefining Solid Waste

Posted on December 31, 2008 by Karen Aldridge Crawford

73 Fed. Reg. 64668 (Oct. 30, 2008) to be codified at 40 C.F.R. 260-261


On October 30, 2008, the EPA revised the definition of solid waste to exclude certain recycled materials under RCRA. The purpose behind this change is twofold: first is to respond to a series of decisions by the U.S. Court of Appeals for the DC Circuit and second is to clarify the RCRA concept of "legitimate recycling."   The EPA estimates that 5600 facilities in 280 industries in 21 economic sectors may be affected by this revision and expects that the revision will encourage recycling of additional hazardous secondary materials. Exclusion of certain hazardous secondary materials from the definition based on how they are reclaimed should result in resource conservation, as well as cost savings to those who engage in beneficial recycling/reclamation in accord with the new rules.


Under the new rule, hazardous secondary materials that are legitimately reclaimed may be excluded from regulation as hazardous waste. The new rule excludes certain hazardous secondary materials, such as RCRA-listed sludges, listed by-products, and spent materials that are generated and legitimately reclaimed under the control of the generator. Only those hazardous secondary materials that are handled in non-land based units, e.g., tanks, containers, or containment buildings, are excluded. This exclusion does not apply to hazardous secondary materials that are inherently waste-like, that are used in a manner constituting disposal or used to produce products that are applied to or placed on the land, or that are burned to recover energy or used to produce a fuel or are otherwise contained in fuels. The following activities fall within the exclusion: recycling on-site at the generating facility, recycling off-site within the same company, and recycling through a tolling agreement. Additionally, the rule contains a petition procedure for a generator to obtain a non-waste determination that its recycled hazardous secondary material is not discarded, making it exempt from hazardous secondary materials regulation. Intermediate facilities and recyclers/reclaimers also must comply with provisions of the rule to receive and recycle/reclaim exempt hazardous secondary materials and must meet the financial assurance requirements. Generators who ship to such intermediate facilities or recyclers/reclaimers must make "reasonable efforts", as defined by the new rules, to ensure proper management and legitimate recycling of the exempt materials prior to shipping, and must document their investigatory efforts addressing specific issues defined in the new rules.


To be excluded from hazardous secondary materials regulation, the recycling of the hazardous secondary material must be legitimate. Legitimacy of the recycling relies on the following mandatory factors: (1) the hazardous secondary material provides a useful contribution to the recycling process or product and (2) the recycling process produces a valuable product or intermediate. The EPA will also consider two other factors, which are not mandatory: (1) the hazardous secondary material should be managed as a valuable commodity and (2) the final product of the recycling cannot contain significantly higher levels of hazardous constituents than are in analogous products.


The EPA received hundreds of comments on the long-awaited new rule (first proposed five years earlier), raising multiple issues, including the scope of the new rule and whether the EPA had the legal authority to make these changes. In particular, the EPA received many comments from environmental groups and the waste treatment and recycling industry regarding the EPA's authority to define when recyclable hazardous secondary materials are solid wastes and how. Other commenters argued that the EPA needed stronger conditions to protect human health and the environment before it could lawfully claim that excluded materials are not discarded. Additionally, the hazardous waste generating industry disputed the EPA's authority to promulgate the new rule, arguing that the EPA has no authority to regulate such recycling. 


The EPA also received extensive comments requesting that the scope of the rule be expanded to include hazardous secondary materials used in a manner constituting disposal and hazardous secondary materials burned for energy recovery. The EPA maintains, however, that these are outside the scope of the solid waste exclusion's focus on reclamation. 


Additionally, most states, the environmental community, and the waste management industry argued that all four of the legitimacy factors should be mandatory requirements for a recycling activity to be considered legitimate recycling. Industry, however, had some commenters who supported the proposed structure and others who preferred that the factors be balancing factors. The EPA compromised between the two approaches, instituting two mandatory requirements and two non-mandatory factors.


The revised "solid waste" definition provides opportunities to recycle hazardous secondary materials but also includes many details that regulated industries will need to be aware of and implement to ensure their recycling of hazardous secondary materials falls within the newly crafted exception to hazardous secondary materials regulation.

Cut the Sprawl, Cut the Warming

Posted on October 7, 2008 by Jeff Thaler

For years, while Washington slept, most of the serious work on climate change has occurred in the states, and no state has worked harder than California. The latest example of California’s originality is a new law — the nation’s first — intended to reduce greenhouse gas emissions by curbing urban sprawl and cutting back the time people have to spend in their automobiles.

Passenger vehicles are the biggest single source of carbon dioxide in California, producing nearly one-third of the total. Meanwhile, the number of miles driven in California has increased 50 percent faster than the rate of population growth, largely because people have to drive greater distances in their daily lives.

The new law has many moving parts, but the basic sequence is straightforward. The state’s Air Resources Board will determine the level of emissions produced by cars and light trucks, including S.U.V.’s, in each of California’s 17 metropolitan planning areas. Emissions-reduction goals for 2020 and 2035 would be assigned to each area. Local governments would then devise strategies for housing development, road-building and other land uses to shorten travel distances, reduce driving and meet the new targets.

One obvious solution would be to change zoning laws so developers can build new housing closer to where people work. Another is to improve mass transit — in woefully short supply in California — so commuters don’t have to rely so much on cars.

The bill contains significant incentives, including the promise of substantial federal and state money to regions whose plans pass muster. In addition, and with the consent of the environmental community, the state will relax various environmental rules to allow “infill” — higher-density land use in or near cities and towns.

The bill’s architect, State Senator Darrell Steinberg, worked closely with developers and environmental groups like the Natural Resources Defense Council. The measure is the latest in a string of initiatives from the California Legislature, including a 2002 law that would greatly reduce carbon emissions from automobiles, and a 2006 law requiring that one-fifth of California’s energy come from wind and other renewable sources.

Given California’s size, these and other initiatives will help reduce global greenhouse gas emissions. Even more progress would be made if others follow. New York and 15 other states have already said they will adopt California’s automobile emissions standards when the federal government gives them the green light — which the Bush administration has stubbornly refused to do.

There is, of course, no substitute for federal action or for American global leadership on climate change, both of which the next president will have to deliver.


Posted on July 18, 2008 by Jarred O. Taylor, II

Alabama joined a number of other states dealing with environmental covenants when it enacted the Alabama Uniform Environmental Covenants Act, effective January 1, 2008. Ala. Code§35-19-1 et seq. (“Act”).The Alabama Department of Environmental Management (“ADEM”) has been working on implementing regulations, which are expected to mimic the Act and be released in the next few months. ADEM will also charge a fee for implementation and oversight of the program and covenants.

For those not familiar with the concept, in many situations environmental contamination cannot be completely addressed by total removal (clean closure) of the offending soil or remediation of the groundwater to a level allowed for unrestricted use.  Some amount or concentration of contamination must be left behind. In those situations, EPA and ADEM will require additional measures, such as land use controls or continuing monitoring and maintenance. The idea is that if property has contamination on it unsuitable for a residential housing development or the construction of a school, those interested in buying or developing the property are put on notice of the limit of the property to commercial or industrial use.  These controls and obligations are often embodied in deed restrictions or recorded declarations which could be terminated by various common law mechanisms; therefore, the Uniform Environmental Covenants Act was created to provide a mechanism by which environmental covenants and land use restrictions survive the potential fatal operations of the common law. States were encouraged to adopt the uniform act, and Alabama has now done so.

An “Environmental Covenant” is defined as “[a] servitude arising under an environmental response project that imposes activity and use limitations.” Ala. Code § 35-19-2(5). Such “environmental response projects” can arise under state or federal hazardous waste cleanup laws, such as CERCLA, RCRA, or Alabama’s version of brownfields.

Before the Act was passed, ADEM still required a restrictive covenant or deed of some kind when contaminants were being left behind, but it was never sure what might happen to the restriction upon a subsequent sale of the property because it had no enforcement authority. If the property changed hands several times, there was no manner by which ADEM could require the Seller and the Buyer to maintain that restriction as a part of the sale. With the Act, there is a “holder” of the covenant which can enforce the covenant, and ADEM has enforcement power even if it is not a holder. A holder can be any person, a governmental agency (such as ADEM), an environmental group, or a unit of local government. The interest of a holder is considered to be an interest in real property; however, the Department’s interest in a covenant, unless it becomes a holder, will not be considered to be an interest in real property. There are certain elements that each covenant must meet in order to be effective, and those are clearly set out in the Act. Importantly, each environmental covenant requires at least one holder, and a holder can be the fee simple owner and/or the grantor of the covenant.

If, at the time an environmental covenant is recorded or registered, the Act does not abrogate the common-law doctrine of “first in time, first in right” as it relates to prior and valid property interests. If there are other interests in the subject real property with priority over the covenant, unless the prior interest in the property is made subordinate to the covenant by the owner of such interest, then the prior interest is not affected.

The grantor of an environmental covenant has a statutory responsibility to notify certain persons or entities of the covenant. Specifically, the grantor must provide a copy of the covenant to (i) each person signing the covenant; (ii) each person with a “recorded interest” in the subject property; (iii) each tenant or person in possession of the subject property; and (iv) each county or municipality in which the real property is located (normally the county or municipal office where deeds are recorded, such as the probate office). You also have the option of filing the covenant with ADEM (it keeps a registry), and then filing a notice with the county probate office in lieu of the entire covenant.

Environmental covenants are perpetual although there are exceptions set out in the Act, such as if the covenant itself has a specified length of time, a condition allowing termination is satisfied, or a court is petitioned for its modification. Of course, one always has the option of conducting additional remediation of the property to reach unrestricted use standards, which would then allow for termination of the covenant.

The author wishes to acknowledge the contributions made to this article by Bryan Nichols of Maynard, Cooper & Gale, P.C.


Posted on May 8, 2008 by Brian Rosenthal

Broad statement of underlying support cannot sustain EPA regulatory definition of navigable waters [1]

 EPA’s broad regulatory reach on navigable waters is rejected by the United States District Court for the District of Columbia. 

Setting aside the EPA’s regulatory definition of navigable waters, the D.C. Circuit Court  found the EPA’s definition was inadequately explained in light of recent United States Supreme Court cases. Oil producing facilities that add pollutants to navigable waters were required to develop spill prevention, control and counter measure plans under a Clean Water Act regulation that broadly defined navigable waters. Affected industry participants and associations successfully challenged the regulation.  

The question became whether in promulgating a regulation in an area where there has been recent Supreme Court activity whether the EPA considered all the relevant factors. If it did not, plaintiffs argued the EPA’s decisions were arbitrary and capricious or a clear error of judgment. The EPA argued while concise, its explanation was adequate. Its explanation came in a response to a comment and provided in part: “The case law supports a broad definition of navigable waters, such as the one published today, and that definition does not necessarily depend on navigability in fact.”[2]

The court could not reconcile, however, recent cases, that do not define navigable waters as broadly as in the EPA’s expansive rule. Noting recent courts have reined in the reach of the definition of navigable waters to not reach the fullest extent of the commerce clause, the court found inadequate EPA’s brief comment statement. Thus, the court agreed the EPA rule was not the product of reasoned decision making and struck it.

[1] American Petroleum Ind. v. Johnson, No. 02-2247 (D.D.C. March 31, 2008) (LEXIS 24963). 

[2] 2002 SPCC Rule, 67 Fed. Reg. at 47,075.

Acknowledging under an EPA review, the agency’s explanation must only be concise and general, the court noted that an explanation still must be provided showing that the relevant factors are considered. The EPA’s broad statement regarding case law support offered few clues as to which cases were used for reliance; thus, while the EPA’s statement was concise and general it did not provide sufficient support for the regulation. 

While expert agencies deserve deference and a “law review article” basis is not required for support, the court found the particular issues in this case provided a “unique burden” based on the recent Supreme Court case law that addressed the very issue.[1] 

At the very least, the court found recent case law established the Clean Water Act jurisdiction is not as broad as the limits of the Commerce Clause. In essence, the court concluded while the EPA may have taken a look at the factors, it could not conclude the look was reasoned enough to sustain the regulation. 

Therefore, the regulatory definition of navigable waters was set aside and vacated as arbitrary and capricious. 

The case has a nice overview of organizational and individual standing and ripeness. It also contains an interesting analysis of available remedies, discusses the reopening doctrine and the administrative review standard for cases in the D.C. Circuit. 

[1] Rapanos v. United States, 547 U.S. 715, 126 S. Ct. 2208 (2006); Solid Waste Agency of N. Cook County v. U.S. Army Corp of Engr’s, 531 U.S. 159, 121 S. Ct. 675 (2001).

California v. U.S. EPA--Fighting for the Last Word on Mobile Source Greenhouse Gas Emissions

Posted on January 8, 2008 by Michèle Corash

Following the United States Supreme Court’s landmark decision in Massachusetts v. EPA, deciding that greenhouse gases are a pollutant under the Clean Air Act, a federal-state skirmish has emerged in the climate change arena over mobile source emissions. The United States Government estimates that the transportation sector accounts for approximately one-third of all greenhouse gas emissions in the U.S. Over the past months, the question of how to reduce those emissions has evolved into a dramatic political and legal battle, pitting California’s Governor Arnold Schwarzenegger against U.S. President George Bush. 

The stage for this tussle was set long ago when Congress adopted the federal Clean Air Act and included in the law a special provision for California. Specifically, Section 209(a) of the Clean Air Act prohibits individual states from adopting emission standards for new motor vehicles. However, in recognition of California’s unique smog problems, a subsection (b) was added to enable California to adopt standards more stringent than federal standards so long as it applies for and obtains a waiver from the U.S. EPA. As one court recently explained, under Section 209(b), “Congress has essentially designated California as a proving ground for innovation in emission control regulations.” Other states are then free to adopt California’s standards pursuant to Section 177 of the Clean Air Act, so long as the standards are adopted at least two years before the model year that they regulate. 

In 2002, California invoked its unique Clean Air Act authority to address greenhouse gas emissions from mobile sources. In particular, the State passed AB 1493 requiring the California Air Resources Board to develop and adopt regulations for the greenhouse gas emissions of passenger automobiles and light duty trucks. In September of 2004, the Air Resources Board adopted standards that apply to such vehicles beginning with model year 2009. As required by the Clean Air Act, California then requested a waiver from the U.S. EPA so that the standards could enter into force. While the waiver request was pending, no less than sixteen other states lined up to adopt California’s standards—for all practical purposes, the California standards were poised to become the de facto national standard.  

Automobile manufacturers challenged those regulations in federal courts in both Vermont and California, arguing that the state automobile emission standards for greenhouse gases constituted fuel efficiency standards, and that fuel efficiency standards are exclusively regulated by the federal government under the Environmental Policy and Conservation Act (“EPCA”).[1] Both courts rejected the manufacturers’ challenges, deciding that federal law did not preempt California’s ability to affect fuel economy through the regulation of greenhouse gas emissions from automobiles, so long as the U.S. EPA granted a waiver under the Clean Air Act—the stage was set for a showdown between California and the U.S. EPA.

The U.S. EPA played its hand slowly. During the summer of 2007, the U.S. EPA held hearings on California’s waiver request. Perhaps foreshadowing its upcoming decision on the request, the U.S. EPA then announced in the fall that it would begin its own “Rulemaking To Address Greenhouse Gas Emissions From Motor Vehicles,” planning for the adoption of federal regulations by October 2008. Finally, the shot was fired on December 19, 2007, when Stephen Johnson, the U.S. EPA Administrator, held a press conference announcing his agency would not grant a waiver to California’s regulation. At the same time, President Bush signed a new energy bill, the Energy Independence and Security Act of 2007, requiring a fleet average of thirty-five miles per gallon by 2020 and an annual production of thirty-six billion gallons of renewable fuels by 2022.[2] In making the announcement, Johnson specifically cited Bush’s recent signing of the bill and said, “The Bush administration is moving forward with a clear national solution, not a confusing patchwork of state rules. I believe this is a better approach than if individual states were to act alone.”

Retaliation came swiftly. Little more than two weeks after Johnson’s announcement, California, along with 15 other states and five environmental groups, petitioned the Ninth Circuit on January 2, 2008, for review of the waiver denial.  In the lawsuit, California will need to make the case that its regulation under Section 209 was necessary to “meet compelling and extraordinary conditions.”  As a coastal state with limited fresh water resources, the effect of climate change on California may indeed be severe, involving rising sea levels, a reduction in the Sierra snow pack, and higher temperatures that would exacerbate the state’s ozone nonattainment problem, which is already the worst in the nation. A recent Stanford University study added fodder to this argument when it found Californians’ health will be disproportionately affected by greenhouse gas emissions, because the state is home to six of the most polluted cities in the United States. California will also need to make the case under section 209, that its standards “will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.” To that end, the California Air Resources Board released a January 2, 2008, assessment that concludes the federal law, even when fully implemented, will not be as effective as California’s standards at reducing greenhouse gas emissions from new vehicles. Even if California is successful, California’s regulation will have to be modified as it was to apply to 2009 model cars—models that will shortly be coming to market. 

The EPA’s first legal maneuver in response to California’s petition may be to request a transfer from the Ninth Circuit to the more agency-friendly D.C. Circuit. Most challenges of EPA regulations must be filed in the D.C. Circuit—the relevant jurisdictional trigger being whether the action has “nationwide scope or effect.”  While the issue of the waiver makes its way through the courts, the U.S. EPA’s rulemaking will also go forward. To meet its goal of final action by October 2008, the U.S. EPA will have to move quickly, with the public comment period coming by summer 2008 at the latest. 

As these battles are fought, looming on the horizon is a general election in November, and a new federal administration beginning in January of 2009. If the U.S. EPA adopts regulations in October 2008 that do not go as far as the California standards, yet another legal challenge seems almost inevitable, if for no other reason than to stall any final rule until the administration changeover. When the dust does settle, presumably in 2009, the road to mobile source emission reductions will finally be paved.

Michèle Corash is a partner in the international law firm of Morrison & Foerster LLP and a member of the firm’s environmental law practice group. She served as General Counsel of the United States Environmental Protection Agency (EPA) from 1979 to 1982 and previously as Deputy General Counsel for the U.S. Department of Energy and Special Assistant to the Chairman of the Federal Trade Commission. Ms. Corash has consistently been listed in American Lawyer’s Corporate Counsel among the “Best Lawyers in America for Environmental Law” and in numerous other publications as being at the top of her field. She represents companies on a broad range of state, national and international environmental issues and claims regarding exposure to toxic substances. With the experience of being a former General Counsel of the EPA, Ms. Corash is well versed, and has been for many years, in the evolving area of clean technology, renewable resources and climate change. She advises clients on the many issues now facing corporations as they face the challenges of new technologies, infrastructures, markets and regulatory regimes.

Contact information: mcorash@mofo.com or (415) 268-7124

[1] Adopted in 1975, EPCA provides for the establishment of national corporate average fuel economy (“CAFÉ”) standards that apply to all passenger automobiles and light duty trucks.

[2] Coincidentally, at the same time, the European Commission adopted a proposal for legislation to dramatically reduce the average carbon dioxide (“CO2”) emissions of new passenger cars by 2012. If adopted by the European Parliament, the proposal requires, by 2012, a fleet average of 130 grams of CO2 emissions per kilometer, with another 10 grams per kilometer reduction from alternative sources such as biofuels and more efficient air-conditioning. Considering Europe’s cars currently emit on average 160 grams of CO2 per kilometer, this represents an almost twenty percent reduction of CO2 emissions in four years.