Posted on February 9, 2017
Earlier this week, the Climate Leadership Council rolled out The Conservative Case for Carbon Dividends (note the absence of the “T” word in that title!). It’s a serious proposal and, if we lived in a world of facts, rather than alternative facts, it would be a useful starting point for a discussion.
Here are the highlights:
- A gradually increasing carbon tax, starting somewhere around $40/ton.
- Return of all revenue from the tax to citizens through dividend checks. The CLC predicts that the 70% of Americans with lowest income would receive more in dividends than they would pay in taxes.
- Border carbon adjustments.
- Elimination of existing carbon regulations. It’s not clear what this would cover, but it would include at least the Clean Power Plan. It would also include elimination of tort liability (presumably limited to tort liability related to claims concerning climate change).
I’d sign up for this today, but I’m not exactly one of the people that needs convincing. According to GreenWire (subscription required), former Secretary of State James Baker, who led the public presentation of the report, acknowledged that attaining enactment of the proposal would be an “uphill slog.” I think that’s putting it mildly. The CLC members are basically a who’s who of the old-line GOP mainstream – precisely the types that President Trump appears to have consigned to the dustbin of history.
Nonetheless, hope springs eternal and we have to start somewhere.
Posted on January 30, 2017
With GOP control of Congress and the White House, conservatives appear to have Chevron deference in their crosshairs. Put simply, I don’t get it. There are at least two good reasons why conservatives should prefer Chevron deference to no deference.
First, the alternative is for courts to decide all questions of agency authority. But haven’t conservatives railed against unelected judges for years? Bureaucrats are unelected, but at least they work for the elected President. Isn’t EPA more likely to be responsive to President Trump than federal judges would be?
Second, the EDFs and NRDCs of this world would laugh hysterically at the notion that they have more sway with EPA than the regulated community. Anyone ever heard of “Regulatory Capture”?
The argument in support of Chevron was made cogently by Ed McTiernan in a recent blog post, but the strength of the argument was really brought home by the decision this past week in Catskill Mountains Chapter of Trout Unlimited v. EPA, in which the 2nd Circuit Court of Appeals – to fairly wide surprise – reversed a district court decision that had struck down EPA’s “water transfer” rule.
The rule was much favored by the regulated community, but there were very good jurisprudential reasons to affirm the District Court. Indeed, the decision was 2-1 and even the majority opinion repeatedly noted that, were it writing on a blank slate, it might well prefer an interpretation that would strike down the rule.
Why, then, did the Appeals Court reverse the District Court and affirm the rule? Chevron deference, of course.
Conservatives, be careful what you wish for.
Posted on January 17, 2017
Last week, the 6th Circuit Court of Appeals reversed – for the second time – a District Court decision granting summary judgment to DTE Energy in the United States’ case alleging that DTE Energy had violated EPA’s NSR regulations. According to the 6th Circuit, EPA has authority to bring an enforcement action against DTE Energy, notwithstanding that the regulations don’t provide for EPA review of DTE Energy’s emissions projections prior to construction and also notwithstanding that the project did not in fact result in a significant net emissions increase.
One might well be surprised by the result, but the result itself is not the most surprising part of the case at this point. What’s really surprising is that the United States won the case even though only one of the three judges on the panel agreed with EPA’s position.
How could such a thing happen, you might ask? Here’s the best I can do. Judge Daughtrey, author of the panel opinion, believes that EPA has the authority to second-guess DTE’s estimates if they are not adequately explained. Judge Rogers disagreed and dissented. Judge Batchelder also disagreed with Judge Daughtrey’s views, pretty much in their entirety. However, Judge Batchelder concluded that she had already been outvoted once, in the first 6th Circuit review of this case and she felt bound to follow the decision in DTE 1. The law remains an ass.
Even were Donald Trump not about to nominate a Supreme Court justice, I’d say that this case is ripe for an appeal to the Supreme Court and, if I were DTE, I’d pursue that appeal vigorously and with a fairly optimistic view of my chances.
And once again, I’ll suggest that the very fact that the NSR program can repeatedly thrust such incomprehensible cases upon us is itself reason to conclude that the entire program is ripe for a thorough overhaul – or perhaps elimination.
Posted on January 12, 2017
As the Obama Administration comes to an end and the Trump Administration is about to begin, I want to reflect on the current relationship between EPA and state environmental agencies. I have been active in the environmental law arena for over 30 years, in private practice, in the Office of General Counsel at EPA, and for the past six years as a state environmental commissioner. In addition, for four of the past six years, I served as an officer for the Environmental Council of States (ECOS). In each of those roles, I have witnessed the give and take relationship between EPA and state environmental agencies.
This has not been a static relationship. Over the past few years, the working relationship between state agencies, ECOS, and EPA has improved substantially - even when strong differences concerning particular regulatory initiatives or policies exist. For example, even those states opposed to EPA’s Clean Power Plan rule readily acknowledge that EPA’s outreach to stakeholders, and especially their state partners, was unprecedented. In many other cases, Administrator McCarthy and her team worked collaboratively as partners with states in addressing an issue. Indeed, it has become the way to do business. This change in culture across EPA is due in large part to the efforts of EPA Administrator Gina McCarthy, and current and former Deputy Administrators Stan Meiburg and Bob Perciasepe. Together they reached out to states, brought them to the table and found committed, willing partners in ECOS members. They listened and treated states as equal partners. Their leadership made clear that all parts of EPA should follow that partnership model.
Truly, the relationship between EPA and the states has matured to a working relationship of joint governance. One of my state colleagues has commented that if you said “co-regulator” to EPA ten years ago, they would flinch. Today, states and EPA leaders use that term freely and are engaged in many projects together as partners to protect public health and the environment in an efficient and cost effective way. We have moved from a parent- child relationship to equal partners. This has been a positive both for state and federal entities, but also for regulated industry, environmental organizations, and the public.
As Administrator McCarthy and her leadership team prepare to depart, it’s clear that the new Administration will have different policy goals. That is the consequence of elections and change of Administrations. Regardless of the substantive policy decisions that will be confronted in the days ahead, I hope the efforts made over the past few years by Administrator McCarthy and her team to foster a more collaborative approach between EPA and the states will continue.
Posted on January 3, 2017
I first began to focus on the need to protect our environment in the 1960’s, starting with Rachel Carson’s indictment of one particular pollutant, the pesticide DDT in her seminal work, “Silent Spring.” As the decade of the ‘60’s proceeded, environmental protection began to focus on the local release/discharge of contaminants into the air, ground and water. Each state dealt with these problems in a scattershot manner until the EPA was formed in 1970 to administer laws passed by Congress to be uniform – commonly called “command and control.”
On Wednesday, October 17, 1973, the Arab-dominated Organization of Petroleum Exporting Countries (“OPEC”) decided to reduce the exports of the most basic transportable fossil fuel – oil - to the United States and other countries who aided Israel during the Yom Kippur. This was commonly called the “OPEC Embargo” and exposed our national dependence on Mideast oil.
Against this backdrop, on Monday, October 15, 1973, I left my corporate law practice and took my “Hamiltonian shot,” becoming EPA Region 3’s general counsel. I joined the newly created EPA under Administrator Russell Train to implement, apply and enforce the new environmental statutes - the Clean Water Act (CWA–1972), Clean Air Act (CAA-1970) and National Environmental Policy Act (NEPA-1969). Instead, because of the OPEC embargo, I was processing CAA variance requests to burn wood chips in furnaces in Philadelphia and fill my gas tank on alternative weekdays. When the embargo ended the following year, we went about achieving EPA’s mission to protect the environment and coordinate the three E’s – the economy, ecology and energy – focus on the latter would grow in importance – and argument – in the years to come.
I left my position in October 1975 and started a private practice in environmental law and later began to teach environmental law. Along came the Safe Drinking Water Act, the Resource Conservation and Recovery Act (“RCRA”), and on the eve of President-Elect Ronald Regan’s inauguration, the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”). The federal government was clearly on track to achieve its mission.
In January 1981, however, President Regan determined to “reverse” environmental protection by the federal government and return it to “state control,” welcoming to this cause a number of inexperienced, unqualified and hostile political friends to dismantle the federal program. The result – James Watt left his Secretary of the Interior post in disgrace on October 10, 1983; EPA Administrator Anne Gorsuch resigned in disgrace on March 9, 1983; Rita Lavelle, the EPA Assistant Administrator for Hazardous Waste and Superfund, wound up serving prison time for lying to Congress; and at least one Regan appointed EPA regional administrator was thrown out of office.
During the twenty-eight Bush/Clinton/Bush/Obama scandal free years, EPA went about its business of environmental protection, leading up to the presidential election of October 2016. The near unanimous global and scientific recognition that climate change was happening led to efforts to reign in carbon emissions primarily from the burning of fossil fuel (coal and oil), culminating this fall in the Paris Agreement. President Obama and Secretary of State John Kerry led the successful fight to get the requisite number of countries to sign on with the United States. Environmental protection became a global need, no longer a local problem.
And then came November 8, the election of Donald Trump.
As he proceeded to name the people he wanted to make up his cabinet, speculation began as to whether as President-Elect he would actually activate his campaign attacks on environmental protection. Now almost a month before his inauguration, he has actualized his campaign promises. First, he selected Oklahoma attorney general Scott Pruitt as EPA Administrator, a climate change denier who led the attack in court on President Obama’s Clean Power Plan (the vehicle US planned to use to reduce carbon emissions from fossil fuel in fulfillment of its Paris Agreement commitment). Second, he tapped Rex Tillerson, the CEO of ExxonMobil, the world’s largest fossil fuel producer and defendant in NY v. Exxon, to be his Secretary of State. Third, for Energy Secretary, he has designated Texas Governor Rick Perry, the man who in his 2011 campaign famously forgot that the third federal agency he would abolish was the Department of Energy. Finally, with these selections, he has made it abundantly clear that he meant what he said about reeling in the EPA.
Will he succeed during his administration or will he fail in his efforts to reprise the Reagan assault. Some of the big differences between the 1980’s and today are (1) environmental degradation is now understandably global, not just local, (2) the rest of the world is similarly impacted and is watching us, and (3) the stakes are much higher. Will Congress permit a legislative dismantling of the statutory structure it put together over the past 45 years? Will the myriad environmental NGOs be strong enough (and sufficiently funded) to take these attacks to court? Will EPA be able to preserve its regulatory program to implement environmental protection? Will the courts uphold these executive anti-environmental attack efforts or stop them? And in that regard, who will be Trump’s selection of SCOTUS Justice #9?
We wonder. Many of us worry. And all of us wait.
Posted on December 2, 2016
Let’s face it – most seasoned bureaucrats (I confess I am one) often don’t react well to change. Over time, there just seems to be an intrinsic inertia that builds in all bureaucracies. Federal and state environmental agencies are, unfortunately, no exception. While we in government do strive to avoid this inherent danger (problem?), the comfort of a routine can sometimes be the enemy of innovation. The catchphrases getting a lot of attention, and gaining some real traction, in government circles these days are “process improvement” and “performance measurement”.
Many state environmental agencies and the US EPA have undertaken a variety of self-examination techniques which fall under the general rubric “business process improvement” (BPI), including Lean, Six Sigma, and Kaizen to name just a few. The articulated objective is to examine key functions and processes with a view towards achieving a host of goals such as reducing costs to the agency, optimizing agency resources, and realizing better value for the agency’s “customers”. BPI may also help transform an organization’s culture to help embrace change and communicate better with the regulated community, the public, and other governmental partners. The Environmental Council of the States (ECOS) recently released a report entitled “State Environmental Agency Business Process Improvement Activity 2010-2016,” which accompanied the launch of an online database describing state BPI activities.
Applying process improvement goals in a meaningful way and tracking performance measurement through metrics helps agencies answer the question, “How are we doing?” Performance metrics can track costs and time saved, and identify areas needing improvement. It is not measuring for the sake of measuring, but rather measuring progress toward achieving identified performance goals, such as issuing an air quality permit or awarding grants within a specified period of time.
While the decision to engage in BPI may come as a top-down mandate, the implementation of actual techniques used to arrive at new goals will have to be tailored to each program’s process and appears in practice to be largely collaborative and creative, encouraging a “think outside the box” mindset. There will always be challenges—that’s probably inherent in the nature of government with the prospect of new leadership every four years or so. Process improvement and performance metrics won’t automatically diffuse the inertia in an organization. Change just for the sake of changing isn’t all that appealing without seeing real progress towards a goal. Working together, however, initiatives borrowed from business may foster an institutional culture and organizational climate in government where personnel are more willing to accept change and perhaps come up with innovative ideas of their own.
(The author is Legal Counsel for the Nebraska Department of Environmental Quality.)
Posted on November 28, 2016
Speculation about the environmental implications of the impending Trump presidency is running rampant. That was the case as well when Ronald Reagan was elected President. I served as an attorney in EPA Region 4 during his administration so I have a sense of dynamics that will be in play at the regional offices during the Trump administration. With this historical perspective, I offer the following thoughts on the potential impact of the Trump administration on EPA enforcement at the regional level.
· Initial Frontal Assault – The early years of the Reagan presidency were marked by a robust and concerted effort to declaw EPA, largely carried out through political appointments at Headquarters and at the Regional Administrator level (the oft-repeated refrain was “doing more with less”). Based on his condemnation of the “Department of Environmental Protection” during the campaign, I’m inclined to expect the same from President-elect Trump. However, the list of names currently being floated for the positions of EPA Administrator and Assistant Administrator ranges widely from a climate denier to well-respected former program managers at EPA. So, at this point, the jury is out on whether President-elect Trump will follow the Reagan administration’s lead or, like the George W. Bush administration, take a more restrained approach to regulatory implementation and enforcement, while recognizing the Agency’s fundamental legitimacy.
· Effectiveness of a Frontal Assault – The efforts of the Reagan administration were largely unsuccessful and relatively short-lived. At the regional level, this was due in no small part to muted but resolute resistance to those efforts from career employees. If the Trump administration pursues similar goals, I would expect similar results. I anticipate that rank-and-file enforcement personnel in the regional offices will continue to pursue and prosecute instances of statutory/regulatory noncompliance (consistent with budgetary constraints). In light of the largely completed trend of delegating environmental programs to the states, enforcement actions undertaken these days by the EPA regional offices frequently involve allegations of significant regulatory noncompliance that state programs are unable (or unwilling) to address effectively. Regional political appointees will be hard-pressed to halt or forestall meritorious enforcement actions. In addition to wanting to avoid any appearance of impropriety, those appointees will be subject to an NGO watchdog network that is considerably more developed and vibrant than it was during the Reagan years. If EPA doesn’t enforce, the NGOs will.
· Times Have Changed – Like me, today’s regulatory enforcement landscape bears little resemblance to what it looked like 36 years ago. I can well recall spirited conversations in the late 70’s/early 80’s with reluctant program managers for some of the Region 4 states concerning the states’ adoption and enforcement of a regulatory framework that mimicked the basic structure of the major federal programs (air, water, and waste). Those days are long gone, and I would anticipate that any efforts to suppress enforcement at the federal level will have minimal impact in those authorized states that have active enforcement programs. Also, while some NGOs (e.g., NRDC, Sierra Club, Environmental Defense Fund) were quite active during the Reagan administration, particularly in high profile enforcement matters, the proliferation since that time in the number and variety of well-financed NGOs at the national, regional, and state level will likely compensate for any decrease in EPA enforcement that may occur under President Trump. Ironically, what we may see in some cases is initiation of enforcement actions by EPA that blunt the use of citizen suits by NGOs, followed by settlements on terms considered less stringent than the NGOs would prefer.
Given President-elect Trump’s penchant for unpredictability and the current uncertainties surrounding the ultimate composition of the Trump environmental team, I’m not confident in my predictive powers, other than to say that we are about to embark on what I will gently call an interesting time in the history of environmental regulation. Whether it proves to be déjà vu remains to be seen.
Posted on November 15, 2016
What will a Trump Presidency mean for environmental law? I’m not sure my crystal ball is better than anyone else’s, but here are a few quick thoughts:
- It’s still going to be difficult to amend the key statutes, unless the GOP goes nuclear with the filibuster rules. I don’t see Clean Air Act amendments happening. Significant amendments might be possible to the Endangered Species Act and Superfund.
- Changing regulations is more difficult than one might think. As has already been noted, the Bush administration did not fare too well with judicial review of its efforts to roll back some Clinton environmental initiatives. For example, I still think that the new ozone standard should survive and I think that courts would take a dim view of EPA efforts to raise it. The Clean Power Plan is another matter. All Trump needs there may be a new Supreme Court Justice.
- The easiest target is executive orders. The social cost of carbon? Toast. Guidance on incorporating climate change into NEPA? Toast.
Trying to keep things light, I’ll close with a summary in haiku, which often takes nature as its subject.
Deep-six the Clean Power Plan
Goodbye to winter
Posted on October 26, 2016
ECOS – the Environmental Council of States – I suspect that most of you have heard of it, but what do you really know about ECOS? And, why should you care? As the current Past President of ECOS, I acknowledge upfront that I might be biased – but consider the following. ECOS is the national non-profit, non-partisan association of state and territorial environmental agency leaders. ECOS was founded in late 1993 at a time when the relationship between states and the EPA was strained. As Mary A. Gade, then director of the Illinois Environmental Protection Agency, put it: “The times called for states to assume primary responsibility and leadership for environmental protection. As individual states began to articulate this new perspective, state commissioners realized the need to band together for information-sharing, strength, and support.”
Today, reflected in the ECOS 2016-2020 Strategic Plan, much of ECOS’ original purpose remains: “To improve the capability of state environmental agencies and their leaders to protect and improve human health and the environment of the United States of America. Our belief is that state government agencies are the keys to delivering environmental protection afforded by both federal and state law.”
While the purpose remains consistent, how ECOS achieves it has evolved.
One example lies in the ECOS-organized forums where states and EPA meet to discuss - and often debate - environmental concerns and our respective roles in implementing and enforcing environmental programs. While the early ECOS years were not without success working with EPA, the tenor of the overall relationship with EPA was uneven. Today, ECOS has a productive relationship with EPA. We still discuss, debate, and disagree, but in a much more constructive way. EPA representatives at all levels routinely attend and engage in the spring and fall ECOS meetings, as well as other ECOS conferences. ECOS members have been invited to internal EPA budget meetings to share our budget concerns and needs. ECOS and EPA have worked on several joint-governance projects, including the creation of E-Enterprise for the Environment. Through E-Enterprise, state, EPA and tribal representatives work to streamline environmental business processes and share innovations across programs to improve environmental results, and enhance services to the regulated community and the public by making government more efficient and effective.
ECOS is fast becoming the “go-to” organization for Congress, the White House, federal agencies, national organizations, and the media to learn about state issues, concerns, positions, innovations and ideas regarding environmental matters. Through engagement with senior government officials, testimony before Congress and many position letters, ECOS has expressed state perspectives on key legislative and regulatory issues, like reform of the Toxic Substances Control Act, funding for state environmental programs and water infrastructure, increased authority over coal combustion residual sites, workload flexibility in state-EPA agreements, enforcement training, expediting federal facility cleanups, and environmental justice tools.
ECOS has developed relationships with the Department of Energy and the Department of Defense: these agencies regularly participate in ECOS. ECOS’ Legal Network brings state environmental agency counsel together with EPA counsel and DOJ’s Counselor, to explore lessons learned from successful enforcement and compliance initiatives, and to discuss best practices and enhanced collaboration.
So, how about the relationship among the states themselves? ECOS has also become a venue for states to explore differences in positions and ideas. Not surprising, membership within ECOS is politically diverse. ECOS has recognized and embraced this diversity by creating a space for states to express their opinions and positions, encouraging members to learn from each other, to reach “across the aisle” to understand differing perspectives, to compromise where needed and to develop strong and lasting relationships. ECOS will pull in experts from within the states and from other organizations to provide valuable and sometimes critical perspectives and analyses on important issues, so that state environmental leaders can better understand the complexities and impacts of environmental programs and initiatives. The lawyers of ACOEL are one source of that expertise, and they have provided valuable legal analyses to ECOS and its members on the Clean Power Plan and WOTUS. ECOS is even reaching across state agency lines, as shown by this spring’s Memorandum of Agreement with ECOS, EPA, and the Association of State and Territorial Health Officials to advance cooperative initiatives pertaining to environmental health, acknowledging that the public health and well-being of U.S. citizens relies on the condition of their physical environment.
So, why should you care about ECOS? Because the vast majority of day-to-day environmental program adoption, implementation and enforcement is done by the states. As Mary A. Gade said when ECOS was first created: “Charged with advancing a state’s environmental agenda, state commissioners strategize daily with governors, state and national legislators, and local government officials to accomplish their goals. State environmental commissioners have political access, substantive expertise and, most importantly, legislative combat experience.” When you organize a group of battle-ready commissioners who lead state environmental programs, and who meet and work together on a regular basis, wouldn’t you want to know what they are doing? My advice: check out http://www.ecos.org and find out what you are missing.
Posted on October 4, 2016
More about that title later, but first let me set the stage. On September 27, 2016, the D.C. Circuit, sitting en banc, heard argument in West Virginia v. EPA, in which state, industry, and labor petitioners challenge EPA’s Clean Power Plan (CPP, the Plan, or the Rule). The Plan regulates carbon dioxide emissions from existing power plants under Clean Air Act (CAA) §111(d). I will refrain from addressing issues on which the trade and mainstream press have opined at length (e.g., the judges’ frustration at being asked to make policy decisions because Congress has failed to act and that participants – judges, lawyers, parties, reporters, the public – had to sit through almost 7 hours of argument in one day, in addition to the hours many spent waiting in line). Instead, I offer an ACOEL-centric tour, in non-chronological order, of the five “segments” of the September 27 argument.
Argument Segment #2: The Battle Between CAA §§112 and 111(d). Aficionados of the College’s 2014 white paper on EPA’s §111(d) regulatory authority will recall the difference of opinion over whether – under the 1990 Amendments to the CAA – EPA is prohibited from regulating power plants under CAA §111(d) if EPA already regulates power plants under CAA §112. Plan challengers point to the plain meaning of §111(d)(1)(A) as it appears in the U.S. Code. Plan supporters point to the existence of a “conforming amendment” to §111(d)(1)(A) found in the Statutes at Large but omitted from the U.S. Code, and they argue that EPA’s approach is a valid attempt to reconcile that amendment with the U.S. Code. After listening to the judges express frustration at not being able to satisfyingly reconcile the two versions, I recalled D.C. Circuit Judge Leventhal’s concurring opinion in Citizens to Save Spencer County v. EPA, in which he concluded that contradictory CAA provisions should be viewed as “countermanding.” Quoting from Eugene Field’s poem “The Duel” – about the fight between the gingham dog and the calico cat – he summed up the irreconcilable differences as follows: “The tension between the two animals culminates in these final lines of doggerel: ‘The truth about the cat and pup is this, They ate each other up.’ ”
Argument Segment #3: Constitutional Issues. If forced at knife-point to articulate the first portion of this argument, which began at 2:35 p.m., right after the lunch break, I would be unable to do so, other than to say that the word “commandeering” cropped up a lot. More interesting was how the second advocate for petitioners on this point – Professor Laurence Tribe of Constitutional law fame – was able to expand his separation-of-powers argument into a further analysis of issues argued during the morning session.
Argument Segments #4 and #5: Notice and Record-Based Issues. At the end of a very long day, the panel heard arguments on (a) whether EPA’s standards are “achievable” and whether parts of the Plan’s approach have been “adequately demonstrated” under §111; and (b) whether the final rule is so different from what was proposed that the public lacked notice and an opportunity to comment. Petitioners arguing the former point (the unachievability of program requirements) faced a weary panel, which pondered what the options for state and source relief would be if the Rule is upheld but later turns out to be a train wreck.
A colleague describes as follows the situation that gives rise to parties complaining that they had no notice of what a final rule would require because EPA’s proposal was so different: “EPA may propose an apple and finalize an orange. That’s OK; they’re both fruits. What EPA may not do (and what petitioners argue EPA has done here) is to propose an apple and finalize a pork chop.” Dick Stoll passionately argued – in his June 7, 2016 post for ACOEL – that previous 3-judge panels in the D.C. Circuit have not properly dealt with this lack-of-notice issue. Those panels refused challengers’ attempts to overturn pork chops, saying challengers of pork chops must first file administrative petitions for review under CAA §307(d)(7)(B) and then wait (for what could be years, if ever) for EPA to act on those petitions. Dick argued that the only way the previous 3-judge panel decisions would ever be overturned was by action of the entire court, sitting en banc. I cannot promise Dick the entire court will overturn the previous panels’ reading of §307(d)(7)(B), but I can say that Tom Lorenzen teed up the issue. When asked by Judge Griffith whether this argument appeared in petitioners’ briefs, Lorenzen said it did not because when petitioners wrote their briefs, the case was going to be heard by a 3-judge panel. But said Lorenzen, looking up at Judge Griffith, “Now we are here.” To which Judge Griffith replied, “And who else to ask but an en banc court?” “Exactly,” said Lorenzen.
Argument Segment #1: Core Legal Issues. Although I visit Argument Segment #1 last, the fate of the Clean Power Plan may well rest on how the panel addresses the issue raised at the very beginning of the day: whether or not the Plan is “transformative.” The Supreme Court, in UARG v. EPA, held that EPA cannot engage in a “transformative expansion” of its regulatory authority absent “clear congressional authorization” to do so. Petitioners argue that EPA’s Clean Power Plan amounts to a transformative expansion of EPA’s explicit regulatory authority and thus is illegal. EPA argues the program is not “transformative”; indeed, says EPA, the Rule is very similar to other CAA programs that the D.C. Circuit has upheld. So, is the Rule “business as usual” or is it “transformative”?
And so we return to the title of this post. I cannot predict what the D.C. Circuit will decide, but I think its determination will revolve around how the en banc panel answers the following question about the Clean Power Plan: Is You Is or Is You Ain’t Transformative? And that question prompts me to offer these final lines of doggerel in memory (and honor) of Judge Leventhal:
To predict the end here, it’s informative
To know if C-P-P is transformative.
To prevail in this Court,
One must prove that the sort
Of change caused by that Rule is enormative.
Posted on September 30, 2016
The Environmental Protection Agency’s use of its Clean Water Act 404(c) authority has received a fair amount of attention of late. Congressional hearings, court cases, media attention and, of course, Erik Fjelstad’s recent ACOEL blog.
EPA used this authority in the Mingo Logan coal mining-related situation after a 404 permit had been issued and the permit-regulated dredge and fill activities had been underway for some time. There is no doubt, as Erik points out, that uncertainty on the durability of a permit for a continuing dredge or fill activity, whether it be for coal mining or something else, is not ideal.
That said, there should be a way to revisit a permit if the impact of a continuing dredge or fill activity is severe and was not fully appreciated at the time of permitting. This is one situation that Congress sought to address in 404(c), and, in my opinion, without it, the integrity of the Clean Water Act to achieve its purpose of protecting waters of the United States would be at risk. Indeed, without such authority, those 404(c) permits for ongoing activities would look a lot like property rights. At the same time, this is not a common situation: EPA has finalized only two post-permit 404(c) actions.
Most common, though still rare, is EPA’s use of 404(c) authority to place restrictions on a 404 permit while the U.S. Army Corps of Engineers is processing a 404 permit application. In this time window, permit applicants know that there is uncertainty regarding whether and how their projects might go forward. EPA initiated the 404(c) process 29 times during the Corps’ permitting process, resolved eighteen without need for final 404(c) action, and came to final 404(c) action eleven times.
The final time window in which EPA can exercise its 404(c) authority occurs before a landowner or project proponent applies for a 404 permit. In one case EPA was confronted with a landowner who had three parcels of land in the Florida Everglades which he was planning on filling. As a start, he applied to the Corps for a 404 permit for two of those parcels. Using its 404(c) authority, EPA precluded the applied-for fill activity on all three parcels. Additionally, in the Mingo Logan example first introduced above, EPA not only addressed the existing permits in its decision, but noted that no future and similar 404 permits should subsequently be issued for those waters.
There is also one pending 404(c) action covering this pre-permit time window. It concerns the headwaters of Bristol Bay, Alaska, where a mining company has explored the copper, gold and molybdenum “Pebble” ore deposit. This large ore deposit underlies the largest wild salmon fishery in the world, which has supported the subsistence activities and culture of local people for thousands of years, a commercial fishery for over 130 years (in which the 2 billionth fish was caught this summer!), and a “bucket list” sport fishery. In this instance, EPA has proposed salmon-protective restrictions for 404 permits related to the mining of this ore deposit.
Should EPA finalize the Bristol Bay-related 404(c) proposal, the mining company could expect to get a 404 permit only if it included EPA’s restrictions. In this context, the mining company would have certainty before it applies for a 404 permit as to the applicability of those restrictions to its fill activity. Some have complained that EPA is overreaching in proposing to exercise this authority in advance of a permit application. For my part, this seems like the most ideal time for all interested parties – local people and the mining company most of all – to find out about such restrictions.
For what it is further worth, EPA has revisited some of those final 404(c) actions to allow for some dredge and fill activities. And notably, eleven of the thirteen final 404(c) actions occurred during Republican administrations (Reagan – 9, Bush I – 1, Bush II – 1). So if politics was involved in the actions, it didn’t fit the stereotype.
Disclosure: Bessenyey & Van Tuyn, L.L.C. represents a client that supports EPA 404(c) action to protect Bristol Bay’s wild salmon from the proposed Pebble mine.
Posted on September 21, 2016
On Monday, EPA promulgated amendments to its “Exceptional Events” Rule. The rule is important, particularly in the Western states, and most particularly in connection with EPA’s latest iteration of the ozone NAAQS. EPA’s most significant revision was to eliminate the requirement that state air agencies demonstrate that, “but for” the exceptional event, the state or relevant area would have complied with the applicable NAAQS. The change is important for two reasons. First, on the merits, EPA noted that:
"the “but for” criterion has often been interpreted as implying the need for a strict quantitative analysis to show a single value … of the estimated air quality impact from the event. As a result, some air agencies began using burdensome approaches to provide quantitative analyses in their exceptional events demonstrations to show that the event in question was a “but for” cause of a NAAQS exceedance or violation in the sense that without the event, the exceedance or violation would not have occurred. In many cases, the “but for” role of a single source or event is difficult to determine with certainty and it is more often the case that the impact of emissions from events and other sources cannot be separately quantified and distinguished."
I think that EPA got this exactly right. As tort professors have always known, how a burden of proof is allocated is often outcome-determinative.
Which brings me to the second reason why the change is important – at least to me. Just hearing the words “but for” causation triggers an uncontrollable wave of nostalgia. In 1996, my client, New England Telephone, was awarded summary judgment in a CERCLA contribution case. It was then the first – and may still be the only – case in which a defendant who admittedly sent hazardous substances to a site was awarded summary judgment on the ground that its wastes had not caused the incurrence of any response costs.
I like to think that NET prevailed due to the fine lawyering of its counsel, but I have always known in my heart of hearts that the identity of the judge may have had something to do with the result. The case was heard by Robert Keeton, distinguished judge, Harvard Law professor and – importantly – one of the authors of Prosser and Keeton on Torts.
At the summary judgment hearing, Judge Keeton did not want to hear from me, even though it was my motion. He did not really even want to hear from the plaintiffs’ counsel. Instead, he launched into an approximately 30-minute lecture on the role of causation in tort law, including, of course, a discussion of “but for” causation. When he finished the discussion from Prosser and Keeton about the so-called “Minnesota fire cases”, Judge Keeton paused, looked up, smiled broadly, and said: “I wrote that part.”
It was the best summary judgment argument I ever gave. I never said a word.
Posted on September 8, 2016
Ever since EPA began considering how BACT analysis would be applied to greenhouse gas emissions, there has been concern that EPA would use its BACT authority to “redefine the source” – with the particular concern that BACT for a coal plant would now be to burn natural gas instead. In Helping Hands Tools v. EPA, the 9th Circuit Court of Appeals this week gave some protection to biomass plants from such redefinition of the source. However, other types of facilities will get no comfort from the decision.
Helping Hands Tools involved a challenge to a PSD permit issued to Sierra Pacific for a cogeneration plant to be located at one of its existing lumber mills. Under EPA’s BACT Guidance, Sierra Pacific stated that the purpose of the CoGen plant was to use wood waste from the mill and nearby facilities to generate electricity and heat. Relying in part on the 7th Circuit decision in Sierra Club v. EPA, which held that it would impermissibly redefine the source to require a mine-mouth coal generating plant to consider different fuels in its BACT analysis, the 9th Circuit found that EPA was reasonable in determining that, because a fundamental purpose of the CoGen plant was to burn wood waste, it would impermissibly redefine the source to require Sierra Pacific to consider solar power as part of its BACT analysis.
Importantly, the Court also rejected the plaintiffs’ request that Sierra Pacific consider greater use of natural gas. The Court concluded that very limited use of natural gas for the purposes of startup, shutdown, and flame stabilization did not undermine the fundamental purpose to burn wood waste. This is critical to source-located biomass facilities, because EPA’s GHG Permitting Guidance specifically says that greater use of an existing fuel should be considered in the BACT analysis:
"unless it can be demonstrated that such an option would disrupt the applicant’s basic business purpose for the proposed facility."
Unfortunately, the language of the decision appears to me to give EPA substantial leeway in future BACT analyses to redefine the source in other cases. It seems to me that, building on the 7th Circuit decision, the Court has simply created an exception to potential source redefinition in circumstances where the location of the facility justifies a very narrow fuel selection. If a coal plant intends to burn coal from the mine next door, ok. If a lumber mill intends to burn its own wood waste, ok. Otherwise, however, all bets are off.
What is particularly troubling was the Court’s acknowledgement that the GHG BACT guidance is vague, and its deference to EPA’s application of its own vague guidance. This is precisely the concern I noted when the Guidance was first issued. Time will tell, but I foresee some fairly extreme BACT determinations being blessed by some very deferential courts.
Posted on August 30, 2016
Many, many years ago, when I was a staff lawyer at EPA headquarters, my duties included advising the program that implemented and enforced the Noise Control Act of 1972. My last involvement, though, was to help dismantle the program. In one of the more curious footnotes to the deregulatory wave that swept EPA in the early years of the Reagan administration, EPA axed the program – sort of. Leaving behind a regulatory ghost town, EPA revised its noise regulations to leave standing the bare structure of federally preemptive rules, while clearing the building of its regulatory and enforcement staff. In effect, EPA took itself out of the picture, morphing the noise regulations into a self-certification program for manufacturers.
And there, in 40 CFR Parts 201 through 211, the rules have resided (quietly) for the last 34 years – noise standards for rail equipment, trucks, and portable air compressors, as well as labeling requirements for hearing protectors. (But not garbage trucks. EPA promulgated final noise standards for those, but revoked the regulations on the eve of the DC Circuit argument in which EPA was to defend the rule. Think about that next time you hear the hydraulics whining outside your bedroom window at 5:00 a.m.)
Ah, but did the noise program really end? As one of my EPA supervisors quipped at the time, the noise program is like a spider you’ve stepped on: you think it’s dead, but then its leg starts twitching. Today’s twitch comes from the New York congressional delegation, specifically Congresswoman Grace Meng (D-NY), whose district lies in the flight path of LaGuardia Airport, and New York’s democratic senators, Chuck Schumer and Kirsten Gillibrand. Together, they have introduced “The Quiet Communities Act of 2016.” The bills (H.R.3384 and S.3197) would bring back EPA’s Office of Noise Abatement and Control. The legislation focuses on aircraft noise (regulation of which has, since the early 1980s, rested solely in the hands of the FAA), and it’s fairly modest in scope, authorizing a program of studies and grants, not a return to command-and-control regulatory efforts. However, both bills include a charge to EPA to “assess the effectiveness of the Noise Control Act of 1972” – kind of like checking on the Betamax hiding in your garage closet.
Let’s not get carried away by the imminent descent of the “cone of silence” over our nation, though: www.govtrack.us gives the legislation a 2 percent chance of being enacted. But hey, you never know. All eyes on the spider!
Posted on August 23, 2016
One of the interesting questions that emerged in the strategic planning process for the Environmental Law Institute is whether ELI could offer more support in the development and/or administration of supplemental environmental projects, or “SEPs”.
Having played a role in the birthing of the original SEP framework in the early 1990s while at EPA, and through my own experience as a practitioner, I am convinced that penalty mitigation through the performance of SEPs can come as close to a win-win as is possible in the enforcement context. Rather than having penalties, payable as they are only to the U.S. Treasury, lose their site-specific identify and value, SEPs allow diversion of some of those resources to projects geared toward environmental or process improvements that not only achieve compliance, but also provide discrete and measurable environmental benefits.
Development and implementation of a suitable SEP can at times be challenging. For these reasons, companies sometimes opt in favor of paying a large penalty rather than a reduced penalty with a SEP. Meanwhile, the government appears to be keener than ever about utilizing this tool. EPA’s draft Environmental Justice Plan 2020 Action Agenda, for example, observes that “when these types of projects are feasible, they can play an important role in cases that raise environmental justice concerns. Thus, EPA is setting the goal of increasing the number of SEPs and mitigation projects affecting overburdened communities.”
So here’s the thought. Perhaps to lighten the SEP load for defendants and government alike, an entity like ELI could help in the conceptualization and, in appropriate cases, the administration of SEPs. As it happens, ELI already has experience in this area. For example, in the context of settlement negotiations between a state environmental regulatory agency and a defendant (I’ll not disclose identities here), ELI was brought in to help shape and then implement a SEP to develop a training module on the regulations at issue in the case. Under the SEP, in addition to developing the training materials, ELI is to deliver at least two in-person classes to targeted audiences comprised of manufacturers and/or consumers, and to make these informational briefings more broadly available online (via, e.g., webinars, and audio-video recordings suitable for posting, including on the ELI website).
And this SEP is not a one-off. As a research and education institute, a convener experienced in community outreach and engagement, and a non-partisan presence having affinities with both regulators and the business community, ELI is well-suited to work with companies and their representatives to craft and execute approvable SEPs. These range from education of stakeholders about regulatory requirements and measures that go beyond compliance; to research, analysis, and publication of information on best practices for compliance and beyond; to monitoring and evaluating the success of on-the-ground SEPs undertaken by other organizations. Also, it probably goes without saying, but because we’re a non-profit, we can and must do our work on a cost-basis. In other words, we’re cheap.
Just a thought to tuck away for the next time a SEP enters your or your client’s equation.
Posted on August 5, 2016
In Mingo Logan Coal Company v. EPA, the D.C. Circuit recently upheld EPA’s use of its “veto” authority over an Army Corps of Engineers permit to fill jurisdictional waters for the Spruce Mine in West Virginia. Section 404(c) of the Clean Water Act provides EPA authority to “deny or restrict the use of any defined area for specification (including the withdrawal of specification).” This authority was described by the court in Mingo Logan as “a mighty power and its exercise will perhaps inevitably leave a permittee feeling as if the rug has been pulled out from under it.”
The salient facts in Mingo Logan involved a Section 404 permit for a “mountaintop removal” coal mine. After a 7-year EIS, the Corps issued the permit in 2006. EPA expressed reservations with the permit, but communicated to the Corps that it “had no intention of taking [its] Spruce Mine concerns any further from a Section 404 standpoint.” But times change – and so do administrations – and in 2009 EPA asked the Corps to suspend, revoke, or modify the permit. After the Corps refused to do so, EPA began the 404(c) process, which led to a final decision in January 2011 to withdraw the specification for two (of three) disposal sites covered under the permit.
On appeal, Mingo Logan argued that EPA did not consider the company’s sunk reliance costs (a point EPA conceded). Even though 404(c) does not explicitly denote costs as a factor in EPA’s decision-making, the court stated that an agency “should generally weigh the costs of its action against its benefits.” Unfortunately for Mingo Logan, the court found that the company had not appropriately raised the issue of reliance costs before EPA or the district court.
The Mingo Logan decision is a bitter pill for developers, interjecting an additional element of uncertainty into a Section 404 regulatory process that is already challenging and subject to shifting political winds. As noted at this site, the agencies and courts have struggled with the jurisdictional reach of Section 404 and when a party can challenge the government’s actions. Key take-aways from Mingo Logan include:
First, 404(c) battles are not for the faint of heart. EPA has successfully used the authority twelve times since the passage of the CWA. Every attempt to stop EPA through litigation has ultimately failed.
Second, Mingo Logan clarifies that a Section 404 permit can be withdrawn years after its issuance. The decision will serve to undermine confidence in the integrity of the permitting process in the United States.
Last, Mingo Logan highlights the inherent problems of shared EPA/Corps responsibility. Defenders of 404(c) will note that this “mighty authority” is rarely used. Although true, it misses the point that the effects of 404(c) are, in fact, regularly felt by the regulated community. The ability to say “no” gives EPA significant leverage – behind the scenes -- in the permitting process.
Query whether we would have a better, and more effective, Section 404 permitting process if all of the authority and responsibility for permitting were vested in a single agency – either the Corps or EPA.
Posted on August 4, 2016
This post started as a piece about a recent Fifth Circuit decision: Texas v. EPA. In that case, the state of Texas (and others) challenge EPA’s disapproval of Texas’s (and Oklahoma’s) plans for controlling regional haze and EPA’s decision to impose its own haze-control program instead. To make my drafting process more entertaining (and the task of posting more challenging for our official poster, Colin Gipson-Tansil), I set a goal for myself: to include within my post at least 25 valid links to others’ posts during the past year. Fortunately for me, there is almost nothing in Texas v. EPA that doesn’t link to one or more recent posts.
Jurisdiction and Venue. Many of the past year’s posts point out problems caused by the failure of the Clean Water Act to state unambiguously which federal court has jurisdiction to hear a specific challenge to an EPA action under that statute. Stoll’s 9/2/2015 post, Glick’s 10/9/2015 post, Horder’s 11/3/2015 post, Perdue’s 2/5/2016 post, and Uram’s 4/5/2016 post. Texas v. EPA demonstrates that choice-of-court problems also exist under the Clean Air Act’s judicial review provision, §307(b)(1).
Clean Air Act §307(b)(1) – said the Fifth Circuit – is a two-fold provision: first, it confers jurisdiction on the courts of appeals, and then it delineates whether the appropriate venue for challenges will be the regional circuits (if the challenged action is locally or regionally applicable) or the D.C. Circuit (if the action is nationally applicable). Believing EPA’s disapproval of its regional haze program to be locally or regionally applicable, Texas filed its challenge in the Fifth Circuit. EPA moved to dismiss or transfer the case to the D.C. Circuit based on a separate, not-as-well-known prong of §307(b)(1), which directs that a petition for review of what seems like a non-national action may be filed only in the D.C. Circuit if the action is “based on a determination of nationwide scope or effect and if in taking such action [EPA] finds and publishes that such action is based on such a determination.” After an exhaustive de novo evaluation of that portion of §307(b)(1), the Fifth Circuit determined that because the challenged EPA actions are locally or regionally applicable and because they are not based on any determinations that have nationwide scope or effect, the Fifth Circuit is the appropriate court to hear the case.
But wait. There are other link-worthy aspects of Texas v. EPA, including the following.
Explanations of Decisions to Stay Challenged Actions. During the past year, posts have discussed whether and how much a court needs to explain the basis on which it stays a challenged rule pending completion of litigation concerning that rule’s validity. Jaffe’s 2/10/2016 post, Gerrard’s 2/10/2016 post. If it is a lengthy explanation you seek for when and why a court should stay an EPA action pending completion of litigation, the Fifth Circuit provides that in Texas v. EPA.
Deference. Other recent posts have addressed when deference to an agency interpretation is – or is not – appropriate. Kovar (12/10/2015); Percival (1/27/2016); Field (2/11/2016); Haynes (2/19/2016); May (6/9/2016); Civins (7/5/2016); Jaffe (8/2/2016). In Texas, the Fifth Circuit put clear limits on deference, holding that the level of deference owed to an agency’s conclusions is “substantially diminished when the subject matter in question lies beyond the agency’s expertise.” Thus, while the Fifth Circuit was prepared to defer substantially to EPA’s views on environmental science, it declined to defer to EPA’s views on whether its actions would impair the reliability of the electricity grid. Since “EPA has no expertise on grid reliability” (that is FERC’s domain), the “deference owed to EPA’s assertions about grid reliability [is] diminished and the agency must support its arguments more thoroughly than in those areas in which it has considerable expertise and knowledge.”
That limitation on deference could have an impact on the most talked-about case by ACOEL members this past year: West Virginia v. EPA, in which more than two dozen states and many other parties challenge EPA’s Clean Power Plan. Jaffe’s 9/10/2015 post, Gerrard’s 2/10/2016 post, Jaffe’s 10/23/2015 post, Jaffe’s 12/9/2015 post, Percival’s 12/16/2015 post, Stoll’s 12/21/2015 post, Perdue’s 2/5/2016 post, Jaffe’s 2/10/2016 post, Field’s 2/11/2016 post, Session’s 2/17/2016 post, and Freeman’s 3/2/2016 post. The Fifth Circuit’s limit on deference is the basis of a recent Federal Rules of Appellate Procedure 28(j) letter sent to the D.C. Circuit by the petitioning states in West Virginia. According to those states, the Fifth Circuit’s decision in Texas v. EPA supports, among other things, the petitioning states’ argument that EPA has failed to show that the Clean Power Plan will not detrimentally affect grid reliability.
Perhaps the link in which I take the most pride, though, is this last link – to Seth Jaffe’s October 2, 2015 Brief Rant on Cost-Effectiveness Analysis. In that post, Seth argues that if the purpose of a rule is to improve visibility, EPA should use a measurement of visibility – a deciview (dv) – to assess visibility improvement. Well, in Texas v. EPA, the Fifth Circuit seemed to be heading in the direction of agreeing that in considering the cost of a regional haze program, EPA should use the $/dv metric. Alas, at the last minute, the court pulled back on a complete endorsement of the $/dv metric: because the petitioners had a “strong likelihood of establishing other flaws” in EPA’s actions, the court said it did not need to decide whether EPA “fell short of its obligation to consider the costs of its regulations” by failing to use $/dv metrics. So, Seth may have to wait a while longer before seeing a court mandate for EPA’s use of $/dv metrics to evaluate visibility improvements. I, however, achieved my goal of including a record number of links in this post.
Posted on August 3, 2016
The Environmental Protection Agency is expected to announce its final Cross State Air Pollution Rule (CSAPR) update by the end of summer 2016. But does the update account for the fact that several new regulatory programs that could significantly improve downwind air quality?
In his posts of August 3, 2015and April 30, 2014, ACOEL Fellow Paul Seals likened the voyage of the interstate transport of air pollutants to “Homer’s Odyssey”. He promised us all that the D.C. Circuit decision of June 24, 2015, in the case of EME Homer City Generation, L.P., v. EPA, concerning the CSAPR would not end the voyage of interstate transport – and indeed it has not.
Critical to the development of a rule to address the interstate transport of air pollutants is that the rule not call for emission reductions that are more than necessary to achieve attainment in every downwind state. EPA’s 2017 deadline for attaining the 2008 ozone National Ambient Air Quality Standard (NAAQS) invites the question of what the ozone air quality is likely to be in 2017. EPA’s proposed CSAPR Updateidentified only 4 monitors in the East that it predicted to be in non-attainment with the 2008 ozone NAAQS in 2017.
EPA’s prediction of 2017 air quality, however, did not take into account several new regulatory programs that are either on-the-books or on-the-way. These programs are certain to continue to improve ozone air quality in the East. Among the more significant of these programs are:
- Pennsylvania Reasonably Available Control Technology (RACT) II;
- Ozone Transport Commission Model Rules;
- Connecticut RACT;
- New York High Energy Demand Day (HEDD) controls; and
- Connecticut High Energy Demand Day (HEDD) controls
To illustrate the significance of this point, Alpine Geophysics modeled the impact of only a portion of the Pennsylvania RACT II program on ozone concentrations at the nonattainment monitors downwind of Pennsylvania identified by in the CSAPR proposal. The following results from the Alpine Geophysics report illustrate that even one of these new programs is likely to significantly improve ozone air quality at the critical monitors in the East:
EPA Nonattainment Monitors
Ozone Improvement needed (ppb)
Ozone Improvement Achieved By PA RACT Alone
|Connecticut Fairfield (90013007)
|Connecticut Fairfield (90019003)
|Connecticut New Havens (90019003)
Such improvement - related to only one of the unaddressed programs - raises the question about whether all of the EPA identified nonattainment monitors will, in fact, be in attainment with the 2008 ozone NAAQS when these on-the-books and on-the-way programs are implemented in 2017, even without the CSAPR update.
The answer to this question, and to the merit of any new transport rule, lies with additional air quality modeling of these programs. When EPA announces its final rule on the CSAPR update by the end of summer, we will see whether the agency has taken account of these additional programs and see the future direction of this on-going odyssey.
Posted on August 2, 2016
On Friday, the D.C. Circuit largely upheld EPA’s Boiler MACT rule. The industry challenges were a complete washout. The environmental petitioners won one significant victory and a number of smaller ones.
The environmental petitioners’ one significant victory is important. EPA included within relevant subcategories any source that burns a fuel containing at least 10% of the “subcategory-defining fuel.” However, for defining MACT, EPA included only those sources that burn fuel containing at 90% of the subcategory-defining fuel for existing sources, and 100% for new sources. The Court rejected this approach.
"The CAA, however, demands that source subcategories take the bitter with the sweet. Section 7412 mandates, without ambiguity, that the EPA set the MACT floor at the level achieved by the best performing source, or the average of the best performing sources, in a subcategory. It thus follows that if the EPA includes a source in a subcategory, it must take into account that source’s emissions levels in setting the MACT floor."
Which brings me to my big take-away from this decision. Chevron lives. By my count, The Court cited Chevron 30 times. Chevron pervades the decision. Even in the one big issue that EPA lost, the Court’s decision was based not on a rejection of EPA’s interpretation of an ambiguous provision under step 2 of Chevron, but on a plain meaning interpretation of § 112. EPA defined what a source is, but it then refused to calculate MACT based upon the performance of all of the sources in a given subcategory. The statute simply did not allow EPA that leeway.
Other than EPA’s attempt to avoid taking “the bitter with the sweet”, however, the Court’s deference – by three Republican appointees – to EPA’s technical decisions was notable. Not every case is the Clean Power Plan. Where EPA is not really pushing the boundaries, I don’t see the Supreme Court weakening Chevron any time soon.
Posted on June 7, 2016
Clean Power Plan (CPP) groupies are beside themselves over the D.C. Circuit’s surprise “straight-to-en banc” move for CPP judicial review. The buzz is mostly over the survivability of the CPP’s interpretations of Clean Air Act (CAA) §111(d) in light of the nine judges’ dispositions.
I won’t weigh in on that issue here. My target is another issue, one that has been lurking in the background and has bugged me greatly for the last couple of years. Now that the issue is before an en banc panel, I am fervently hoping the Court will do what only en banc panels can do: declare that a few recent D.C. Circuit rulings are wrong.
The issue involves garden variety adlaw: should the CPP be vacated because EPA failed to propose or adequately foreshadow key elements of the final rule? Parties attacking the CPP have advanced this argument, and EPA has defended on numerous grounds that its notice was adequate.
I won’t opine here on whether EPA’s notice was adequate. My beef is with EPA’s fall-back defense: EPA’s argument that even if there were wholly insufficient notice of the CPP’s final provisions, the Court has no authority to vacate the CPP on those grounds.
EPA’s theory is that since CAA §307(d)(7)(B) provides that only an issue raised in public comments can be raised on judicial review, a final rule that was never proposed cannot be challenged on judicial review because there were no public comments on that provision. Yep, read on.
EPA argues that parties claiming a final rule was never proposed must instead file administrative petitions for review under CAA §307(d)(7)(B) and wait (usually for a few years, if ever) for EPA to act on those petitions. In the meantime, under EPA’s position, regulatory provisions that were never proposed or foreshadowed must go into full force and effect.
This means that EPA can get away with murder, at least in the adlaw context. Just forget the bedrock principle that an agency can impose and enforce only those rules that have first been proposed. Under EPA’s position, the bedrock is blown away by a Richter 8.8 otherwise known as CAA §307(d)(7)(B).
In the last two years, EPA has managed to convince D.C. Circuit panels to accede to this unfair and baseless approach. See my 2015 ACOEL post discussing these opinions. In a piece I published in Bloomberg BNA in 2014, I showed how the D.C. Circuit had never previously interpreted CAA §307(d)(7)(B) in this fashion , and had on many occasions vacated final rule provisions that had never been proposed.
As explained in the above-cited pieces, the absurdity of EPA’s position is that final rules will go into full force and effect against parties because they failed to object to something they could not object to. This just can’t be right. The en banc CPP panel should do the right thing and declare the three most recent decisions to be wrong.
[Mr. Stoll is not representing any party in the pending D.C. Circuit CPP judicial review proceedings.]
Posted on May 4, 2016
You do not have to be a football fan to be aware of the legal battles between NFL Commissioner Roger Goodell and the star quarterback, and perpetual winner, Tom Brady arising out of Brady’s use of deflated footballs at a playoff game. Brady won the round in district court where the judge focused on the merits of the factual case. Goodell recently won on appeal where the court of appeals focused on the fact that the NFL Players Association bargained away the right to challenge Goodell’s decisions on the merits. On appeal, it did not matter whether Brady did anything wrong. All that mattered was that Goodell thought Brady did something wrong.
In recent dealings with EPA on its model Administrative Order on Consent (“AOC”) for Remedial Investigations and Feasibility Studies (“RI/FS”), it seems EPA wants PRPs to make the same mistake the Players Association made: let EPA be judge and jury over any dispute that arises under the AOC. The most troubling language in the model is that EPA’s final decision on the dispute “becomes part of the Order.” While the vast majority of EPA folk I have met are more reasonable than Roger Goodell, RI/FS projects can involve millions of dollars, which sets the table for expensive disputes.
What is a Brady fan to do? First, the model should be changed to allow pre-enforcement review, as pointed out in a recent ACOEL post by Mark Schneider. Second, if the AOC process is otherwise desirable, there are ways to minimize the effect of the model language on at least one category of dispute: work expansion disputes, often the most serious and expensive variety of disputes. A very specific Scope of Work attached to the AOC would minimize the risk of work expansion by EPA through dispute resolution. If a dispute arises that could expand the work, do not invoke dispute resolution. Take the position that the AOC does not apply to EPA’s demand because the demand is beyond the scope of the AOC. If EPA enforces the AOC on this point you can defend without EPA’s position becoming part of the AOC beforehand. Thus, you avoid Brady’s fate—having a good argument and nowhere to go.
Posted on April 28, 2016
In auto racing, the black flag is the ultimate sanction, signaling that a competitor has been disqualified and has to leave the race. That’s what happened to EPA recently, when it withdrew a controversial proposed rule to “clarify” that the Clean Air Act prohibits converting a certified vehicle for racing.
Merits aside, EPA’s start-and-stop performance is an excellent example of notice-and-comment rulemaking gone wrong. The original proposal appeared last July, a brief passage buried in the middle of a 629-page proposed rule on greenhouse gas emissions for medium- and heavy-duty engines and vehicles – hardly the place where one would look for a rule directed at race cars. See 80 Fed.Reg. 40137, 40527, 40552 (July 13, 2016). As should have been expected, EPA’s pronouncement that the Clean Air Act flatly prohibits converting emission-certified vehicles for competition went unnoticed for months. It wasn’t until late December, nearly three months after the close of the comment period, that SEMA (the Specialty Equipment Market Association, the trade group representing the motor vehicle aftermarket industry) discovered the proposed rule.
That’s when the yellow flag came out. SEMA and its members blasted EPA’s interpretation as reversing a decades-old policy that allowed the race-conversion market to flourish, and for hiding the proposal in an inapplicable rule. EPA’s response was to hold to its interpretation and to post SEMA’s comment letter in a “notice of data availability” so that others could comment – not on EPA’s proposal, but on SEMA’s letter. 81 Fed.Reg. 10822 (March 2, 2016).
SEMA stepped up the pressure with a White House petition that quickly garnered more than 150,000 signatures. Then came a letter to EPA from seven state attorneys general, and bills in both the House and Senate (brilliantly named the Recognizing the Protection of Motorsports Act, or “RPM”) to reverse EPA’s interpretation and codify the race exemption in the Clean Air Act.
On April 15, EPA hit the brakes, announcing that it was withdrawing its proposal. www.epa.gov/otaq/climate/regs-heavy-duty.htm. EPA stated that it never meant to change its policy towards “dedicated competition vehicles,” but admitted that its “attempt to clarify led to confusion.” EPA voiced its support for “motorsports and its contributions to the American economy and communities all across the country.
The checkered flag came out, but EPA had already pulled into the pits.
Posted on February 22, 2016
In my last blog entry, I advocated for the amendment of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) to eliminate the bar on pre-enforcement review as one step toward improving the investigation and cleanup of sediment sites. In this entry, I propose that the U.S. Environmental Protection Agency (EPA) and potentially responsible parties (PRPs) significantly revise the dispute resolution process for EPA Administrative Settlement Agreements and Orders on Consent (“ASAOCs”) to require the resolution of disputes by neutral third parties unaffiliated with EPA or an affected PRP.
The goal of sediment remediation is to protect public health and the environment through prompt and cost-effective remedial action. Unfortunately, this goal has not been met at many sediment sites. At some sites, neither the public nor the PRPs have been served by investigations that have unnecessarily taken decades and wastefed hundreds of millions of dollars to undertake. EPA’s selection of remedies at many sites has been delayed and has not resulted in the selection of protective and cost-effective remedies.
Most sediment cleanups are performed in accordance with consent decrees, which appropriately vest dispute resolution authority in federal district court judges. In contrast, most sediment investigations are conducted under ASAOCs, which vest dispute resolution authority in EPA personnel. While many at EPA with responsibility for dispute resolution have the best of intentions and seek to be objective, the fact that they work for EPA, often supervise the EPA staff who made the decision leading to the dispute, and are often steeped in EPA practices renders most of them unable to serve in a truly independent role. To ensure fairer dispute resolution, ASAOCs should instead vest dispute resolution authority in neutral third parties with no affiliation with either EPA or the PRPs subject to the ASAOC. This would require the amendment of existing ASAOCs and the insertion of new dispute resolution language, which differs from EPA’s model language, in ASAOCs that have not yet been signed.
Additionally, while the dispute resolution official should be deferential to EPA, he or she should not rubber-stamp agency decisions, as currently is often the case. Where investigations have been mired in years of inaction, an independent dispute resolver with a fresh perspective may determine that EPA has sufficient data to make informed cleanup decisions and could compel agency action. At other sites where EPA is requiring PRPs to prepare feasibility studies advocating for remedies that almost certainly will fail, it is essential that a neutral decision-maker act independently to ensure that feasible remedies are selected.
EPA will resist any effort to revise its approach to dispute resolution, and it may require the intervention of elected officials or others to compel such a change. The public, EPA, and affected PRPs would all benefit from it.
Posted on February 22, 2016
As a private practitioner and former trial attorney at the U.S. Department of Justice, I have advocated for timely and cost-effective cleanups that protect public health and the environment. Unfortunately, only a minority of cleanups under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) have met these criteria. Of the many impediments to the thorough, prompt and cost-effective remediation of contaminated sites, and sediment sites in particular, one of the most significant is CERCLA’s bar on pre-enforcement review of the U.S. Environmental Protection Agency’s (EPA) remedial decisions. To promote more effective and timely cleanups of sediment sites, I suggest that CERCLA be amended to eliminate the current bar on pre-enforcement review. By allowing potentially responsible parties (PRPs) to seek and obtain judicial review of EPA decisions or failures to make decisions, more progress would likely be made on more sites.
CERCLA Section 113(h) states that, with limited exceptions, “No Federal court shall have jurisdiction … to review any challenges to removal or remedial action selected under section 9604 of this title, or to review any order issued under section 9606(a) of this title ….” 42 U.S.C. § 9613(h). Despite many challenges, courts have generally upheld the validity of this provision. As a result, PRPs typically cannot challenge EPA's decisions unless EPA has sought to compel performance under an enforcement order or if EPA is acting under a consent decree. As the “opportunity” for challenge may not come until years after EPA has made its cleanup decision, most PRPs are not willing to face the risk of losing a remedy challenge and the potential imposition of treble damages.
CERCLA should be amended to allow parties to challenge agency action or inaction at other times in the process, such as during the preparation of remedial investigations and feasibility studies. At many sediment sites, EPA has delayed remediation and required parties to incur hundreds of millions of dollars during investigations. If PRPs had the opportunity to obtain judicial review of agency action and inaction earlier in the process, they could seek to compel the agency to act in a way that is consistent with CERCLA’s requirements.
Having worked at the Department of Justice when CERCLA Section 113(h) was drafted, I recall my colleagues stating at the time that a bar on pre-enforcement review was necessary to avoid the challenges of having a non-expert federal judge address complex scientific questions and to prevent PRPs from tying up EPA in litigation. I offer three suggestions in response to these concerns. First, if a federal judge were confronted with a particularly complex issue, the court could appoint a special master to handle the proceedings. Second, to encourage PRPs to seek prompt resolutions, a CERCLA amendment could require PRPs to fully comply with an agency’s directives pending resolution of the judicial dispute and impose a penalty on those parties whose challenge of agency action was unsuccessful. Third, agencies could seek an expedited hearing of disputed issues.
While it is very unlikely that Congress would consider a CERCLA amendment to address only this issue, PRPs should raise this issue the next time amendments are being considered. It will succeed only through the concerted efforts of advocates who seek more and better cleanups and those who seek prompt and reasonable government decision-making.
Posted on February 18, 2016
Citizen suits under federal environmental laws have been under fire through criticism of “sue and settle” where agencies, in particular the U.S. EPA, have been accused of intentionally relinquishing statutory discretion for the sake of settling lawsuits without participation by affected third parties. From this perspective, the scope of citizen suits has broadened. However, two recent federal circuit court opinions curb this growth.
On January 6, 2016, the Third Circuit and Sixth Circuit Courts of Appeals issued opinions that underscore certain limitations in the citizen suit provisions. The Third Circuit examined a Clean Air Act citizen suit in Group Against Smog and Pollution, Inc. v. Shenango Inc. (No. 15-2041) (GASP). The Sixth Circuit examined a Clean Water Act citizen suit in Askins v. Ohio Dept. of Agriculture, Ohio Envtl. Prot. Agency, U.S. EPA (No. 15-3147). Both courts affirmed dismissal of the citizen suits by the district courts based on statutory limitations Congress placed in each statute.
These two cases highlight a couple of important components of citizen suits. First, citizen suits are to serve as a backup to the non-discretionary functions and enforcement responsibilities of the States and the EPA. As the U.S. Supreme Court has said, “the citizen suit is meant to supplement rather than to supplant governmental action.” The Sixth Circuit stated, “Paradoxically, [Plaintiffs’] expansive reading of the citizen-suit provision would grant citizen greater enforcement authority than the U.S. EPA. . . . Congress did not intend to give citizens greater and faster enforcement authority against a state than the U.S. EPA.”
The other important component highlighted is the role of the “diligent prosecution bar” against citizen suits. Citizen suits are prohibited if the EPA or State agency “has commenced and is diligently prosecuting” the matter. While most courts seem willing to restrict citizen suits when there is clear prosecution (civil or criminal) in a state or federal court, the answer is less clear when there is no active or concluded matter at the courthouse or the enforcement action is only administrative. In GASP, the Third Circuit slightly tilted the bar in favor of the agency and regulated entity by concluding that if the agency has diligently prosecuted a suit, the presence of a final judgment, consent decree, or consent order and agreement would likely prevent a citizen suit challenge. This is logical given that environmental enforcement proceedings that are filed in court often, if not always, result in a judicially enforceable consent decree or consent order and agreement in which the regulated entity must fulfill specified obligations or be subject to stipulated penalties. It also provides certainty to the agreement reached between the agency and the regulated entity, which benefits all involved.
While these recent decisions were not momentous court opinions, the Third and Sixth Circuits did provide a bit more clarity to the role citizen and how our environmental laws are enforced. In this arena, I think we all would agree that a little clarity can go a long way.