Posted on April 13, 2017
On Tuesday, the Court of Appeals for the District of Columbia vacated EPA’s final rule governing reporting of air releases from animal feeding operations. The Court found that EPA had no statutory authority to exempt AFOs from the reporting regulations.
The decision is also important because it is another in a recent line of cases regarding the extent of agency authority to interpret statutes. The issue was whether EPA had authority to exempt smaller AFOs from reporting requirements, on the ground that it could not:
foresee a situation where [it] would take any future response action as a result of such notification[s].
Although EPA did not explicitly justify its rule on de minimis grounds, the Court understood EPA to be making a de minimis argument and analyzed the rule in that context. The Court concluded that EPA had not justified a de minimis exception, because:
an agency can’t use it to create an exception where application of the literal terms would “provide benefits, in the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged benefits are exceeded by the costs.”
Here, the Court found that there were benefits to requiring reporting without a de minimis exception. That was enough to vacate the rule.
It is worth noting the concurrence from Judge Janice Rogers Brown, who agreed that EPA had overstepped, but was concerned about the panel opinion’s summary of Chevron as being focused on whether the agency’s interpretation is “reasonable.” Stoking the anti-Chevron flames, Judge Brown wrote to make clear that the “reasonableness” inquiry does not apply at step one of Chevron. Ever-vigilant, she wants to be certain that courts do not abdicate their duty to state what the unambiguous language of a statute means.
I don’t have any problem with that. Phase I of Chevron is an important bedrock principle. If there’s no ambiguity, there’s no deference. However, it’s worth noting that Judge Brown also stated that:
an Article III renaissance is emerging against the judicial abdication performed in Chevron’s name.
Notwithstanding the congressional discussion of this issue, I remain skeptical that any such “Article III renaissance” is occurring. One concurrence from one appellate judge who happens to be named Gorsuch does not a renaissance make.
Of course, the really important part of Judge Brown’s concurrence was her citation to Luck Be a Lady, from Guys and Dolls, the greatest musical of all time.
Posted on April 11, 2017
Bob Sussman is a former high-ranking Obama and Clinton EPA official with a stellar academic and professional background. He recently published in Inside EPA a thought-provoking piece entitled “Trump’s Tortured Maneuvering on Climate Change.”
No matter what your views on climate, Bob’s piece is worth reading. I find much to agree with in Bob’s observations, but would respectfully disagree with one.
Focusing on the president’s March 28 Executive Order (EO), Bob raises the valid question of why Mr. Trump touted it on job-saving, energy independence grounds. Bob makes a strong case (as if he really needed to) that coal mining jobs are dwindling due to market forces and that the U.S. energy outlook is just fine.
Bob posits that Trump’s job-energy independence focus reveals a divide and major discomfort within the Administration on whether and how much to deny that humans are involved with climate change. He notes that the March 28 Order side-steps any position on both the “Endangerment Finding” and the Paris Accords.
So far so good. My respectful disagreement relates to Bob’s argument that the Trump EPA would have a difficult time sustaining major cutbacks to the Obama Clean Power Plan (CPP) on judicial review. He speculates that a new Trump CPP might simply retain “building block 1” (plant efficiency improvements) from the 3-block “beyond-the-fenceline” Obama CPP. He argues that “the courts may well balk at this approach as a contrived effort to duck the challenge of climate change by taking refuge in narrow legal arguments.”
Here is why I disagree:
a. Following the 2007 Supreme Court Massachusetts ruling and EPA’s subsequent Endangerment Finding, EPA is not required by the Clean Air Act (CAA) to issue GHG rules with any particular degree of stringency – EPA must just issue rules.
b. The “beyond-the-fenceline” features of the Obama CPP are based upon truly adventurous interpretations of the words of the CAA. There is certainly nothing in the CAA that requires those interpretations. (Recall the U.S. Supreme Court has taken the unprecedented step of staying the Obama CPP throughout the entire judicial review process.) Even if the D.C. Circuit were to uphold these interpretations, it would only be upholding the Obama EPA’s discretion to adopt them; the Court could not rule that such interpretations were mandated by the CAA.
c. The Supreme Court and D.C. Circuit case law are clear on the following points:
i. A new administration is free to reverse rules issued by a prior administration based entirely upon policy preferences, even where there are no new facts or information, so long as the new administration adequately explains the basis for the reversal;
ii. There is no heightened standard of judicial review when an agency reverses course; and an agency need not convince the court that the reasons for the new policy are better than the reasons for the rejected one.
See my recent ACOEL blog for the citations to the cases.
d. Because the statutory interpretations supporting beyond-the-fenceline requirements are so adventurous (and stayed by the Supreme Court), it should be easy for the Trump EPA to defend a new CPP as a matter of policy based on CAA interpretations that are far less adventurous.
e. If and when the new CPP reaches the Supreme Court, it is difficult to see the Court departing from the precedents of the cases cited in my ACOEL blog, particularly with Justice Gorsuch filling Justice Scalia’s seat.
Posted on April 6, 2017
Earlier this week, the 9th Circuit Court of Appeals rejected challenges to the Federal Implementation Plan EPA promulgated after finding that Arizona’s regional haze State Implementation Plan was inadequate. I think that the result is both correct and unsurprising.
However, one part of the opinion – a recitation of black-letter law – caught my eye. In discussing the standard of review, the court noted that the arbitrary and capricious standard is “highly deferential.” No surprise there. It also noted that courts are particularly deferential when reviewing agency scientific determinations. Also no surprise.
What happens if EPA eliminates all of its climate science expertise, and then eliminates the Endangerment Finding? Certainly, a court could still recite the traditional level of deference, but then note that “deference is not abdication” and rule that EPA’s decision must be reversed even under the deferential threshold.
What happens if the Trump administration repeatedly makes regulatory decisions based on a “scientific” viewpoint that is so broadly rejected by the scientific community that “scientific” must be put in quotation marks? Might courts at some point conclude that EPA has forfeited the deference normally given to agency scientific decisions?
Just asking. It’s purely a hypothetical, of course.
Posted on April 5, 2017
Since the election of President Trump and appointment of EPA Administrator Pruitt, more than a few articles and blogs have been written about the new administration’s plans to dismantle EPA, including the proposal to cut EPA’s budget by almost one third. Even if one agrees that EPA needs to be “down-sized,” the massive cuts proposed by the Trump Administration are counter-productive. If EPA fires thousands of environmental professionals, who will be left to repeal or revise unnecessary or unduly burdensome regulations? Unlike Executive Orders, regulations cannot be rescinded or revised with the stroke of a pen.
The hazardous waste regulations adopted to implement RCRA provide a case in point. The Obama EPA adopted the final Hazardous Waste Generator Improvements Rule (discussed by a recent blog by Donald Stever) at the end of last year, acknowledging that the RCRA regulations are in many cases ambiguous, contain inconsistencies, and lack flexibility. EPA took a year to address more than 200 comments before it finalized the rule. Other aspects of the RCRA regulations also need to be modernized to encourage, rather than discourage, the reuse of materials derived from waste.
Just one example involves the recycling of mercury-containing lamps, which have been regulated as Universal Waste since 1995. Although fluorescent lamp manufacturers have reduced the amount of mercury in their lighting over time, such lamps are regulated as Universal Waste because many lamps exhibit the toxicity characteristic for mercury; and thus, would be classified as D009 hazardous waste. While the Universal Waste Rules simplify the management of mercury containing lamps, the hazardous waste regulations and longstanding EPA interpretations of these rules impede the reuse of materials recovered through the recycling of universal waste lamps.
Two of the primary materials produced through lamp recycling are calcium phosphate powder and crushed glass. Calcium phosphate powder removed from fluorescent lamps contains mercury at levels below the hazardous waste threshold, and the amount of mercury in such powder is typically further reduced by a retorting process. Significantly, the phosphate powder also contains several rare earth elements, including Europium, Terbium and Yttrium, which are considered strategic materials by the United States Government, because of the need for such elements in many military and high-tech commercial products, such as cell phones, computer hard drives and other electronic equipment, and precision-guided munitions.
China controls about 95% of the production of rare earth elements. Therefore, recycling calcium phosphate powder to produce rare earths provides a sustainable, domestic source of rare earths needed in the U.S. economy. Unfortunately, as a waste derived material, regulators have limited the ability of businesses to stockpile calcium phosphate powder for future recycling, and much of this material is currently being disposed of in landfills, rather than being reserved for the recovery of rare earths.
Similarly, the crushed glass produced by lamp recycling has characteristics that make it a useful substitute for sand and other materials used in construction operations, such as for road sub-base and pipe bedding materials. EPA’s view, however, is that since Universal Waste lamps would be considered D009 hazardous waste, glass produced as part of the recycling process is in the same hazardous waste treatability group as the initial universal waste lamps, and therefore, is subject to the Land Disposal Restrictions (LDR) for D009 –non-wastewaters. Thus, the glass must be tested to demonstrate compliance with the LDR standard of 0.025 mg/l for mercury using the TCLP test (designed to assess leachate in a landfill environment), before the glass can be used on land as a substitute for other products. While the glass from lamp recycling typically complies with the LDR standard, the additional regulatory process discourages the reuse of this glass as a substitute for raw natural resources.
If President Trump were truly interested in alleviating “unnecessary regulatory burdens placed on the American people”, EPA needs the resources to review specific regulations and identify those regulatory changes that will accomplish the President’s goals. Slashing EPA’s budget, before identifying and promulgating the regulatory changes, will likely result in missed opportunities for improving environmental regulations. Instead, massive reductions in staff and efforts to rescind many regulations without careful consideration will lead to mistakes and litigation, which is in no one’s interest. Businesses need certainty, and the approach outlined by President Trump’s Executive Orders will instead result in more confusion and uncertainty.
Posted on April 3, 2017
Regardless of political leanings or perspectives held regarding this President and his administration or the likely effectiveness of tariffs in global trade, we likely agree that creating more good American jobs is a positive thing. If his plan is successful, Donald Trump and this administration will, in part through the use of tariffs, reinvigorate domestic manufacturing.
If willing to think more broadly, this may be achieved while at the same time improving (and setting the stage to further improve) the global environment and international worker safety. These objectives need NOT be mutually exclusive.
Both the Republican and Democratic primaries featured unique candidates with compelling messages of creating and protecting jobs for Americans. The Republican candidate survived his primary and went on to win the election, so let's consider the relevant promises and pronouncements of candidate, now president, Trump. His overarching refrain has been to "make America great again". Consistent with this message, he has repeatedly assured the American public that he will promote, and ultimately increase, domestic manufacturing. His vision is that this manufacturing, and the related jobs, will improve the lot of American workers. While offering limited specifics, he has been unwavering in his commitment to level the economic playing field by imposing significant tariffs on goods and services manufactured abroad.
If President Trump is correct relative to the effectiveness of a tariff and willing to adjust this blunt tool to incorporate concerns for the global environment and humane working conditions, he can provide a path that leads to greater domestic manufacturing and jobs, as well as unparalleled international leadership with respect to the environment and worker safety. This is possible provided President Trump is willing to leverage the appetite of overseas manufacturers to sell goods and services to Americans in return for a more level manufacturing playing field, as well as enhanced international Environmental Health and Safety (EHS) protections and benefits.
Assuming this administration does, in fact, look to tariffs as a means to stimulate domestic manufacturing, the following offers a path to proceed with the stated agenda while establishing a program designed to employ even more well trained Americans and improve the global environment:
1. TARIFFs could be structured to afford the impacted offshore manufacturer with the following option: (A) PAY THE FULL TARIFF. This option would presumably level the economic playing field between the offshore and domestic manufacturer of goods or provider of services; or (B) PAY A REDUCED TARIFF and EXECUTE AN EHS INSPECTION/ENFORCEMENT AGREEMENT. This option would achieve not only the U.S. manufacturing and jobs agenda, but also would drive international EHS benefits. A significant portion of the REDUCED TARIFF could be used to directly fund an environmental, health and safety inspection corps (EHS Corps). This EHS Corps would be comprised of appropriately educated and trained American workers. Notably, these EHS positions would be in addition to our domestic manufacturing jobs and represent even more American jobs for those with science, engineering, operations, and business and legal degrees. THE INSPECTION/ENFORCEMENT AGREEMENT would also call for the participating company to submit to regular inspections, an enforcement regime and an administrative/judicial process similar to our federal template. This Agreement would further level the manufacturing playing field while improving the global environment and driving international EHS performance to levels comparable to our federal programs.
2. The EHS Corps would regularly inspect REDUCED TARIFF participants using a straightforward template approximating the United States federal EHS regulations. This approach would not only compel offshore participants to achieve environmental protection and worker safety objectives similar to their U.S. counterparts, but also cause them to incur the same or similar resource and financial burdens to comply with this template or suffer enforcement consequences if they fail. This compliance mandate when combined with the payment of the REDUCED TARIFF, would further level the playing field between offshore and domestic manufacturers. Should a participant be a repeat or willful violator, then beyond the sanctions available within the REDUCED TARIFF inspection and enforcement regime, the U.S. would reserve the right to re-impose the FULL TARIFF or consider other import/export sanctions.
3. Strategically, the differential between the FULL TARIFF and the REDUCED TARIFF should motivate responsible corporations and businesses to elect the REDUCED TARIFF. Beyond this, the REDUCED TARIFF should generate adequate revenue to fund the training and deployment of the EHS Corps as well as the inspection/enforcement process.
President Trump and his administration can be true to their stated commitment to increase domestic manufacturing jobs through a more aggressive tariff while going one important step beyond, establishing the U.S. as an architect and catalyst for an improved, and more internationally uniform, approach to environmental, health, and safety concerns.
NOTE: THE CONCEPT OUTLINED ABOVE IS NOT AN ENDORSEMENT OF TARIFFS, BUT A REFLECTION OF ATTY. PHILLIPS BASED ON THIS ADMINISTRATION’S PRONOUNCEMENTS. THIS IS NOT THE PRODUCT OF HIS LAW FIRM OR THE UNIVERSITY AT WHICH HE TEACHES.
Posted on March 31, 2017
Make no mistake, the Executive Order signed by President Trump at EPA yesterday is a big deal. Time will tell whether the Administration’s U-turn on the Obama rules currently in litigation, such as the Clean Power Plan and the rule on fracking on federal lands will make any difference to judicial review of those rules. There are plenty of states and NGOs ready to step into EPA’s and BLM’s shoes to defend those rules.
Regardless, though, it’s important. Social cost of carbon? Poof. Gone. Climate Action Plan? Gone. Consideration of climate change in environmental impact reviews? Gone.
We already know all this, though. I’d like to focus on a few details concerning the EO that might have gone unnoticed.
- The order states that development of domestic natural resources “is essential to ensuring the Nation’s geopolitical security.” I found this statement interesting in light of the recent statements by Secretary of Defense Mattis, who very clearly stated that climate change is real and is itself an important security risk.
- The order states that environmental regulations should provide “greater benefit than cost.” I found this statement somewhat odd, given that the President’s prior EO known as the 2-for-1 order, essentially requires agencies to ignore the benefits of regulations and focus solely on the costs that they impose.
- Similarly, the Order requires agencies, in “monetizing the value of changes in greenhouse gas emissions resulting from regulations,” ensure that their analyses are consistent with OMB Circular A-4, issued in 2003. The Order states that Circular A-4 embodies “best practices for conducting regulatory cost-benefit analysis.”
I’d be interested in knowing if a single one of the authors or peer reviewers of Circular A-4 have anything nice to say about the 2-for-1 Order?
Posted on March 27, 2017
On March 16th, Reuters reported that President Trump’s administration has proposed a 31 % cut to EPA’s budget, explaining: “Consistent with the President’s America’s First Energy Plan, the budget reorients the EPA’s air program to protect the air we breathe without unduly burdening the American economy.” In this time of change and uncertainty, perhaps more than ever, there is a need for a measured dialog among diverse viewpoints.
With over 130,000 participants attending last year’s Earth Day Texas celebration in Dallas, its organizers decided a Legal Symposium of prominent representatives from environmental organizations, business, academia and the government might help policy makers grapple with fundamental environmental issues such as how best to balance economic development with environmental protection. Several members of the College assisted the organizers in the development of that symposium.
On April 20-21, that Symposium will bring together those thought leaders to discuss: (1) how to integrate science into regulatory decision making; (2) how to reconcile energy and economic development with protection of public health and the environment; (3) how to facilitate environmental dispute resolution; and (4) how to integrate sustainability and ethical considerations into corporate decision-making.
Consistent with the objective of having diverse viewpoints represented, the Thursday evening keynote speaker will be General Wesley K. Clark, discussing Climate Change as a Major Security Concern, and the Friday luncheon keynote speaker will be EPA Administrator Scott Pruitt, discussing the new administration’s objectives and goals. For further information and to register, go to http://earthdaytx.org/legal-symposium/.
Posted on March 23, 2017
The news flies fast and heavy from Washington almost daily on the fate of every manner of environmental program, rule or regulation. An exciting time to be an environmental lawyer. The latest entrant into the “what’s next” sweepstakes came from the Tenth Circuit just a few days ago.
The Court of Appeals sent a pointed inquiry to the newcomers at the Department of Justice about the future of the federal government’s (recent) historic efforts to curb hydraulic fracturing:
Given the recent change of Administration and the related personnel changes in the Department of Justice and the Department of Interior, the Court is concerned that the briefing filed by the Federal Appellants in these cases may no longer reflect the position of the Federal Appellants. By statement filed electronically on or before March 15, 2017, the Federal Appellants are asked to confirm whether their position on the issues presented remain the same, or have now changed.
The DOJ’s response will very likely determine the fate of the Obama era Bureau of Land Management hydraulic-fracturing rule. That rule required drilling operators to follow “ . . . widely-accepted” best practices for preventing environmental or resource harm.
In State of Wyoming et.al v. State of Utah et. al, that rule was set aside and its enforcement enjoined by a Wyoming district court in 2016. The district court set aside the rule, holding that the federal government had no authority to set the standards that federal lessees had to follow when extracting oil and gas from federally owned resources through hydraulic fracturing. The DOJ appealed and the Tenth Circuit subsequently instructed the district court to vacate its preliminary-injunction order.
The DOJ spearheaded the appeal of that ruling, asserting that the district court disregarded a central tenet of administrative law by substituting its own judgment for the government’s about the purview of the BLM’s regulatory reach. The DOJ argued that courts “must defer under Chevron to an agency’s interpretation of a statutory ambiguity that concerns the scope of the agency’s statutory authority.”
So the obvious question of the day is, will the new administration drop the appeal? The newly appointed Interior Secretary Ryan Zinke has stated publicly he supports fracking. With daily pronouncements from the White House about the surfeit of regulations strangling the economic engines of the country, it’s a good bet that the rule has seen its best and last days.
Perhaps more intriguing, should the appeal go forward, will be the somewhat conservative Tenth Circuit’s take on the now “institutional” Chevron deference embedded in countless appellate decisions over the last thirty-four years. As recently posted by ACOEL Fellow Chris Schraff, the views of Tenth Circuit veteran and Supreme Court nominee Judge Neil Gorsuch on the Chevron question could prove central to the concerns of some about the future of the administrative state,.
For those who might not be familiar with Judge Gorsuch’s perspectives on the subject, review again his concurring opinion in Gutierrez-Brizuela v. Lynch. His concurring opinion in that case begins:
There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron and Brand X permit executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design. Maybe the time has come to face the behemoth. . . .
And continues in clearly provocative terms:
Whatever the agency may be doing under Chevron, the problem remains that courts are not fulfilling their duty to interpret the law and declare invalid agency actions inconsistent with those interpretations in the cases and controversies that come before them. A duty expressly assigned to them by the APA and one often likely compelled by the Constitution itself. That’s a problem for the judiciary. And it is a problem for the people whose liberties may now be impaired not by an independent decisionmaker seeking to declare the law’s meaning as fairly as possible — the decisionmaker promised to them by law — but by an avowedly politicized administrative agent seeking to pursue whatever policy whim may rule the day. . .
So, what do we in the environmental business expect the position of the federal government to be going forward? Is federal environment protectionism on its way out of the door? Will the EPA be judicially branded a “politicized administrative agent” by courts across the land and denied deference even if the Chevron doctrine survives? Will the courts and the public allow the progress on cleaner air, water and earth we have all witnessed—and even helped bring about over the last fifty years—to be . . . fracked?
Posted on March 14, 2017
Has it really been 36 years! It seems like I have been here before. In 1981, I was Assistant General Counsel with the Texas Department of Water Resources, a predecessor agency of the current Texas Commission on Environmental Quality. Upon Ronald Reagan’s inauguration as the 40th President, I was appointed Regional Counsel of the Environmental Protection Agency in Dallas.
EPA was on the chopping block with proposals to drastically reduce its budget, positions, and programs. The agency lawyers were an endangered species, targeted for elimination. The agency was reorganized to do away with the Enforcement Division. The administration supported the transfer of the implementation and enforcement of the environmental statutes to the states. This was 1981 not 2017.
The early years of the new administration were filled with much anxiety based in part on proposed budgets that had no relationship to existing staffing. Were we to go through a reduction in force and fire attorneys and staff? Such a RIF was not necessary given the atmosphere and morale within the agency. In early 1983, during a Regional Counsels’ meeting, an informal headcount showed that through attrition there had been over a 30% reduction of attorneys in the regional offices since the inauguration.
The effort to dismantle and defang the agency was met by public outrage, and in the midst of the turmoil, Administrator Anne Gorsuch was cited for contempt of Congress. Shortly thereafter, there was change in the agency leadership with the return of Bill Ruckelshaus, whose helmsmanship righted the agency and successfully refocused the agency’s staff on its critical mission.
What did I learn from this experience? Quite simply, don’t overplay your hand. An election may give the President and a new administration a perceived mandate for change, but that mandate must be tempered with an appreciation of the overwhelming public support for the mission of the agency. As my good friend, mentor, and former Regional Administrator, Dick Whittington, would say: “we must be able to separate the public will from the public whim.”
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.