"We All Let the Citizens of Flint Down"

Posted on February 4, 2016 by Alexandra Dapolito Dunn

With busloads of concerned citizens from Flint and nearby cities gathered around the Rayburn House Office Building on February 3, environmental regulators and science experts appeared before the U.S. House Committee on Oversight and Government Reform (Committee) to give testimony regarding lead contamination in Flint, Michigan’s public drinking water.  As detailed in this recent NPR podcast, well worth the 40 minute listen, between 6,000 and 12,000 children are estimated to have elevated blood lead levels following the City’s drinking water source change from Detroit water to water from the Flint River in 2014. 

How could a crisis like this have happened? While at first water policy groups were quick to highlight the nation’s aging water infrastructure and investment gap – EPA’s most recent estimate is that $384 billion is needed to assure safe drinking water from 2013 to 2030 – and certainly lead pipes to homes in older communities is a costly replacement problem – at the root of Flint was classic government dysfunction combined with assessments of safety that make sense to regulators but perhaps not to everyday people. At the hearing Joel Beauvais, acting Assistant Administrator for the U.S. Environmental Protection Agency’s Office of Water faced questions from Committee members about the Agency’s delayed response to the situation, while the Michigan Department of Environmental Quality’s acting Director Keith Creagh was to explain why state officials did not act to address contamination immediately. Both officials attributed the crisis to breakdown in communication between the agencies that inhibited officials’ swift action. What happened in Flint “was avoidable and should have never happened,” according to Beauvais; while Creagh’s testimony stated that “[w]e all share responsibility in the Flint water crisis, whether it’s the city, the state, or the federal government… We all let the citizens of Flint down.”

The hearing ultimately took on a forward look, noting a reaffirmed commitment to protecting public health. “We do have clear standards. We do have clear accountability, so we have a clear path forward, said Creagh. “We are working in conjunction with the city, the state and federal government to ensure it doesn’t happen again.”  Beauvais noted “it is imperative that Michigan, other states, EPA and drinking water system owners and operators nationwide work together and take steps to ensure that this never happens again.”

EPA and Michigan state and local officials are now in non-stop mode to ensure that prompt, concerted efforts are taken to address public health hazards. Members of Congress are introducing bills to fund Flint’s systems and to aid the affected citizens.  Even philanthropic groups are stepping in.  EPA’s Inspector General is doing a deep dive into the Agency’s response, Michigan Governor Snyder is seeking answers, and even the Federal Bureau of Investigation is looking into criminal aspects of the matter. Flint’s drinking water will get better – and yet the affected population may never fully recover from their excessive lead exposures.  

The #FlintWaterCrisis is a sober reminder of the need to keep the nexus between environmental quality regulation and public health protection very tight.  As professionals in the environmental field, we cannot fear having frank conversations in the open about risks – and the importance of taking precautionary steps – when human health is at issue.  

EPA Has Surprisingly Broad Authority to Regulate GHGs

Posted on January 28, 2016 by Michael Gerrard

Our friend Seth Jaffe wrote a very interesting blog on January 20, “Does the Paris Agreement Provide EPA With Authority Under the CAA to Impose Economy-Wide GHG Controls? Count Me Skeptical.”  It took issue with a paper that I co-authored with several other colleagues in academia in which we argue that Section 115 of the Clean Air Act provides the EPA with broad authority to implement a multi-state, multi-source, multi-gas regulatory system to reduce greenhouse gases.  

The blog post agreed with our paper that it would be great if Section 115 provided this authority because it means EPA could implement an efficient, flexible, cross-sectoral approach to reducing greenhouse gases (GHGs).

However, Seth questioned our conclusion that Section 115 provides such authority because, in his view, courts are likely to conclude the “reciprocity” requirement in Section 115 could not be satisfied by the nonbinding emissions reduction commitments countries made in the Intended Nationally Determined Contributions (INDCs) they submitted for the Paris agreement concluded at the United Nations climate conference in December.  In the words of blog post, “I think most judges would interpret the word ‘reciprocity’ in a statute to mean something that is legally-binding; otherwise, it doesn’t mean anything.”  For several reasons, we disagree.

First, a reviewing court does not need to interpret what the word “reciprocity” means in Section 115, because Congress has explicitly defined it.  Reciprocity is the title of Section 115(c), which provides:

"This section shall apply only to a foreign country which the Administrator determines has given the United States essentially the same rights with respect to the prevention or control of air pollution occurring in that country as is given that country by this section."

The only right given to a foreign country by Section 115 is a provision in Section 115(b) that states a foreign country affected by air pollution originating in the U.S. “shall be invited to appear at any public hearing” associated with the revision of a relevant portion of the state implementation plan to address the pollutant.  In short, Section 115 specifies that reciprocity means the foreign countries in question need to have given the U.S. “essentially the same rights” as are given by Section 115, and the only right provided in Section 115 is the procedural right to appear at a hearing. 

Understanding the legislative history helps explain why the focus of the reciprocity requirement is on a procedural right.  As we explain in detail in the paper, Section 115 was a procedural provision when it was first enacted in 1965:  if pollution from the U.S. was endangering other countries, the other countries had a right to participate in abatement conferences where potential responses would be discussed, not a right to insist on actual emission reductions.  Although Congress amended the provision in the 1977 Clean Air Amendments to replace the abatement conference with federal and state action through the Section 110 state implementation plan process, the reciprocity language in Section 115(c) was not changed, leaving it with its procedural test.     

Second, we note in our paper that the Paris agreement contains a new set of procedures through which countries that join the agreement will be able to review and provide input on each other’s respective emissions reductions plans.  To the extent a court might conclude that such procedural rights must be "legally binding," then the Paris agreement satisfies that test because although the emission reduction targets themselves that were submitted in the INDCs will not be legally enforceable by other countries, the procedural elements of the Paris agreement will be binding international law.  

We note in the paper that although Paris provides a strong basis to satisfy Section 115 reciprocity, that reciprocity could also be satisfied by other international arrangements that the United States has with a variety of countries, particularly Mexico and Canada, the EU, and China.

Third, the blog post does not engage the issue of procedural reciprocity; rather it focuses on a substantive view of reciprocity (i.e. that reciprocity requires that other countries are actually reducing emissions of GHGs) and asserts that substantive reciprocity requirement could not be met by the internationally non-binding commitments made in the INDCs.  Although we believe that the correct reading of Section 115 is that it only requires procedural reciprocity, we recognize that a court could conclude that Section 115 also implicitly includes a substantive reciprocity requirement.  In the first instance, we noted that this requirement might be met by the international law principle sic utere tuo ut alienum non laedus, which directs nations to avoid causing significant injuries to the environment of other nations, most recently explained in the International Court of Justice’s Pulp Mills case.  

The author skips over this element to focus his skepticism that the reciprocity requirement could be satisfied by non-binding commitments in the INDCs.  But actually the U.S. and other countries have made reciprocally non-binding commitments in their INDCs.  That is, the U.S. has made an international political commitment to reduce emissions a certain amount, and has received essentially the same rights in the non-binding international commitments from other countries to reduce emissions.  

Someone could argue that the U.S. INDC may be non-binding, but Section 115 is domestic law in the U.S. and substantive reciprocity cannot exist unless other countries also have domestic laws requiring emission reductions.  If this is the test, however, it can also be met.  In fact, the INDCs submitted by other countries identified the binding domestic laws through which the INDCs would be implemented.  We did not focus on this aspect in our paper, but some examples are: (1) the United States identified the Clean Air Act and other laws and regulations “relevant to implementation” of the U.S. commitment; (2) China identified the measures that had been incorporated into domestic law and regulation through previous five-year plans, and outlined a variety of policies and strategies that would be incorporated into subsequent five-year plans to implement their emissions commitment; and (3) the EU noted that the necessary legislation to implement its target was being introduced to the EU parliament in 2015 and 2016.  Therefore, if “legally binding” domestic laws are required to find reciprocity under Section 115, EPA could reasonably examine the legally binding provisions in other countries’ domestic systems to find that reciprocity.

To summarize, our view is that Section 115 likely requires only procedural reciprocity.  If a court concluded Section 115 required substantive reciprocity, then EPA could reasonably find that requirement met through the reciprocal political commitments that the U.S. and other countries made in Paris as well as through the binding domestic laws and regulations in the U.S. and other countries that will implement the commitments.

We look forward to further dialog on this topic, which we think is an important part of unlocking this powerful, untapped tool that the EPA possesses to design an efficient and flexible system to reduce GHGs.

Judicial Review When a New Administration Changes Course: The Surprising Supreme Court Decision that Saved Countless Lives

Posted on January 27, 2016 by Robert Percival

In an excellent December 21st blog post (“Are Obama’s Climate Pledges Really that ‘Legally Durable’?”) Richard Stoll questions two of the premises behind my assessment of the legal durability of U.S pledges at the recent Paris climate conference. In particular he challenges my conclusions that EPA’s Clean Power Plan is likely to survive judicial review and that its repeal by a new president would require a lengthy rulemaking process that could be rejected on judicial review.

First, he correctly notes that “EPA’s authority to regulate GHG emissions is not at issue in the challenges now pending in the D.C. Circuit.”  But my belief that the Obama administration’s Clean Power Plan ultimately will be upheld in the Supreme Court is not founded principally on the Court’s repeated affirmation of Massachusetts v. EPA.  My reasons for believing the Clean Power Plan ultimately will be upheld are discussed in detail here. I agree that it will be close, probably 5-4, with Justice Kennedy likely casting the deciding vote.

Second, Stoll argues that a new administration is free to reverse course and that there is no heightened scrutiny from reviewing courts when it seeks to do so.  I agree entirely.  In fact, that is precisely what the Supreme Court held in Motor Vehicle Manufacturers Ass’n v. State Farm, the case cited in my initial posting.  In fact, State Farm is the very case the D.C. Circuit relied on when it applied those long-settled principles in National Association of Home Builders v. EPA, the case Stoll cites.

But the State Farm case also provides a powerful lesson that a new administration must have a good reason for changing course beyond knee-jerk opposition to federal regulation.  In State Farm the new Reagan administration sought to rescind a regulation by the National Highway Transportation Safety Administration (NHTSA) that required passive restraints in new automobiles.  Like the Clean Power Plan, the regulation had been the subject of considerable political controversy and it was bitterly opposed by the auto industry.  Chrysler CEO Lee Iacocca had famously endorsed the notion that air bags were more suited to serve as a method of capital punishment than as safety devices.  The Supreme Court later observed that “the automobile industry waged the regulatory equivalent of war against the airbag and lost.” 

Less than one month after taking office, the Reagan administration reopened the passive restraint rulemaking.  Two months later it postponed the effective date of the passive restraint regulation and proposed its rescission.  The White House Press Office announced the decision, describing it as part of a package of “economic recovery” measures.  After a six-month rulemaking, NHTSA rescinded the passive restrain regulation, despite the agency’s previous estimate that it would save 12,000 lives per year and prevent more than 100,000 serious injuries annually.    

When NHTSA’s decision was challenged in the D.C. Circuit, the prevailing assumption was that “arbitrary and capricious” review was so toothless that it rarely could be used to overturn an agency’s decision.  Instead, the D.C. Circuit panel struck down the rescission decision by announcing a new standard of judicial review – that sudden reversals of course by an agency required heightened judicial scrutiny.  [State Farm Mutual Automobile Insurance Co. v. Department of Transportation, 680 F.2d 206 (D.C. Cir. 1982), affirmed on other grounds 463 U.S. 29 (1983)].

The Supreme Court then granted review.  The Justices unanimously rejected the D.C. Circuit’s conclusion that a new administration’s sudden change of course required heightened judiciary scrutiny. But the Court surprised most observers by declaring NHTSA’s rescission of the rule to be arbitrary and capricious. In an opinion by Justice White, the Court held that NHTSA had “failed to present an adequate basis and explanation for rescinding the passive restraint requirement . . .” 

What State Farm powerfully illustrates is that a new administration cannot simply impose its ideological preference for less regulation to quickly rescind a rule as the Reagan administration tried to do to eliminate passive restraint requirements.  The auto industry then was as vehement in its opposition to air bags as states opposing EPA’s Clean Power Plan are now.  But because the record supported the extraordinary life-saving potential of airbags, the Court held that the regulation could not be repealed without the agency coming up with a new record or a better explanation for doing so.  Due to this surprising Supreme Court decision hundreds of thousands of lives have been saved and millions of serious injuries prevented.

To be sure, the Supreme Court did not order that air bags be required.  Rather it required the agency to offer more than ideological opposition to regulation as a justification for repealing the rule.  Archival research I conducted in the papers of the late Justice Thurgood Marshall revealed a memorandum from Justice White stating that for at least one aspect of its decision he doubted that NHTSA on remand “would find it too difficult to cover its tracks based on the present record.”  I agree with Stoll that a new administration could repeal the Clean Power Plan.  But State Farm cautions that it should not act too hastily if it wishes such a decision to withstand judicial review.

In the wake of the State Farm decision both President Reagan and Lee Iacocca eventually changed their minds about the merits of air bags. The fascinating story of how Transportation Secretary Elizabeth Dole helped persuade President Reagan that air bags should be required is told in Michael R. Lemov, Car Safety Wars: One Hundred Years of Technology, Politics and Death (2015). Perhaps today’s fierce opponents of EPA’s Clean Power Plan ultimately will have a similar epiphany concerning the merits of the Clean Power Plan and the transition to a greener energy infrastructure.

Does the Paris Agreement Provide EPA With Authority Under the CAA To Impose Economy-Wide GHG Controls? Count Me Skeptical

Posted on January 20, 2016 by Seth Jaffe

In a very interesting article, Michael Burger of the Sabin Center and his co-authors suggest that, following the Paris climate agreement, § 115 of the Clean Air Act provides authority for EPA to develop economy-wide GHG emissions reduction regulations that would be more comprehensive and efficient than EPA’s current industry-specific approach.  And what, you may ask, is § 115?  Even the most dedicated “airhead” has probably never worked with it.

Section 115 provides that, where EPA determines that emissions from the US are endangering public health or welfare in a foreign country, it may require SIP revisions sufficient to eliminate the endangerment – but only so long as there is “reciprocity”, i.e., the foreign country:

"has given the United States essentially the same rights with respect to the prevention or control of air pollution occurring in that country as is given that country by this section."

I love the idea.  An economy-wide regime would be much more efficient.  I wish that the argument made sense to me, but it does not.

The authors state that a global treaty could provide reciprocity, but then argue that “less binding commitments, including political commitments, should also suffice.”  Thus, they conclude, the “Intended Nationally Determined Contributions”, or INDCs, which are the basis of the Paris Agreement, can provide reciprocity.  Can you say “ipse dixit“?

They provide no precedent for this, because, as they acknowledge, § 115 has never been used.  EPA started to use it once, and the authors provide two letters from then-Administrator Costle, suggesting that legally binding reciprocity is not required.  However, EPA dropped the plan and the two letters were not finally agency action and were never subject to judicial review.  Otherwise, the arguments simply seems to be that EPA can cloak itself in Chevron deference and that that is the end of the story.

Sorry, I don’t buy it.  We’re talking about the law here.  I think most judges would interpret the word “reciprocity” in a statute to mean something that is legally-binding; otherwise, it doesn’t mean anything.  I don’t think it’s even a close enough question that Chevron deference will get EPA over the finish line.

The illogic of the authors’ argument seems to me to be demonstrated by their own words, when they argue reciprocity can’t mean a legally binding agreement, because that would mean that the foreign nations would be able to go to court to ensure that the US also meets its commitments under the Paris agreement, and the US would never allow that.  But that’s precisely the point!  Because there is no treaty, and the US would not let other nations try to enforce the US commitments under Paris, we cannot enforce theirs, and there is no reciprocity.

I wish it were otherwise.

ipse dixit

After 15 Years, EPA Finally Moves to Ban Brain-Damaging Pesticide Chlorpyrifos

Posted on December 4, 2015 by Peter Lehner

Nearly 15 years have passed since the EPA effectively banned the residential use of the pesticide chlorpyrifos (often marketed under the name Dursban), which causes brain damage in children. Kids were exposed at home when they played on pesticide-treated rugs, or hugged pets wearing flea collars containing chlorpyrifos. Yet the agency’s decision left farmworkers and children in rural areas unprotected, as chlorpyrifos was still allowed in agriculture (often marketed under the name Lorsban). This organophosphate pesticide was, and still is, one of the most widely used in agriculture.

Last month, after a decision by the 9th Circuit Court of Appeals that called the EPA's delay "egregious," the EPA at last proposed to ban most agricultural uses of this toxic pesticide.  If the ban on food use applications is finalized -- and it will surely be fought by the agricultural industry-- it will be a major victory for public health and farm communities.

Back in 2007, Earthjustice (which under full disclosure is my employer) began legal action to protect children, farmworkers, and rural communities from chlorpyrifos. Despite the clear evidence of harm, more than five million pounds of toxic chlorpyrifos were still being sprayed every year on soybeans, fruit and nut orchards, and other crops, putting hundreds of thousands of people at risk of exposure. Farmworkers who handled chlorpyrifos, even with safety gear, had been poisoned. (The new farmworker protection standards, which required more vigilant training and monitoring, among other things, should reduce such harms.)  Their children risked exposure at home, as chemicals can linger on clothing. Not only farmworker communities, but anyone living downwind of farms could be exposed when the wind carried the toxic spray into their neighborhoods. Community monitoring even found chlorpyrifos in schoolyards. 

The EPA was failing to protect children from pesticide drift; nor did the agency recognize the growing body of peer-reviewed, published research that found children exposed to the pesticide in the womb had serious brain impairments, including lower IQs and attention deficit disorder.

Over the next nine years, the EPA repeatedly missed deadlines to respond to the petition, and it relied on a questionable exposure model created by Dow, the manufacturer of the pesticide. (In 1995, Dow was fined $732,000 by the EPA for concealing more than 200 reports of poisoning related to chlorpyrifos.)

Only in response to multiple lawsuits, and a court decision that set a mandatory deadline for response, did the EPA at last take action. The public comment process and the finalization of the rule still remain, but at least the process has started. This is a great step forward. Moreover, the EPA is also reviewing all organophosphate pesticides, which are used in the United States and worldwide on a wide variety of crops from corn to cotton to nuts. The decision on chlorpyrifos should set a strong example. 

Qué SRRA SRRA

Posted on December 3, 2015 by Kenneth Mack

Now six years old, the New Jersey Site Remediation Reform Act, (“SRRA”) was intended (among other things), to privatize most site remediation in the State.  To that end, it empowers private, licensed individuals called “Licensed Site Remediation Professionals” (“LSRPs”), to conduct most site remediations and issue the administrative imprimatur of remediation completion (“Response Action Outcomes” or “RAOs”), without prior New Jersey Department of Environmental Protection (“NJDEP” or “DEP”) approval.  Before SRRA was enacted, such certification was the exclusive province of the NJDEP. 

The SRRA mandates LSRPs “exercise individual professional judgment”, which, in the view of LSRPs, actually empowers them to use such judgment.  Underlying DEP regulations, however, require persons responsible for conducting remediations (i.e., the LSRP’s clients) to follow “any available and appropriate technical guidance concerning site remediation issued” by NJDEP, or provide a “written rationale and justification for any deviation from guidance.”  In a blog posted June 20, 2013 dealing with a then-newly issued, quite prescriptive vapor instrusion guidance, I raised concerns that that guidance could indicate DEP was seeking to limit the ability of LSRPs to exercise professional judgment, by invoking the regulatory requirement to follow “guidance” (See A Case of the Vapors – Does New Jersey’s Newest Vapor Intrusion Technical Guidance Foreshadow a Return to the “Old Days” of Environmental Regulation in New Jersey?).  Although detailed “guidance” is not promulgated by DEP in accordance with the same notice and comment process as are regulations – it can nonetheless constrain LSRPs from following the SRRA’s individual judgment mandate.

Unfortunately, more recent events seem to indicate NJDEP is, in fact, following such a restrictive policy.  Whether it is doing so wittingly is open to question.

In fact, the DEP has found new ways to circumscribe the ability of LSRPs to perform remediations that do not follow DEP’s preferred script.  For example, many remediated sites in New Jersey are subject to “restricted use” remedies which, most often, bar residential and similar uses of a site, in return for lesser cleanup standards.  Such restrictions are most often accompanied by an “Institutional Control” containing a “use” prohibition and, often entail an “Engineering Control”, such as a cap.  Both Institutional and Engineering Controls must be embodied in “deed notices” which must be filed in local property records.  Ostensibly to ensure continuation of funding for such controls, SRRA established a requirement for obtaining Remedial Action Permits for soil, groundwater, or both, as a pre-condition to issuance of an RAO for the remedial action selected by the LSRP.  Recently however, it appears that DEP has adopted a policy which holds that it must examine the entire remedy of a site for which controls are required before such permits will be issued, notwithstanding the fact that such sites will be the subject of an RAO provided by the LSRP.  Such a review of remedies selected by the LSRP for RAOs on every site for which a Remedial Action Permit is required is antithetical to both the letter and spirit of the SRRA: it simply reproduces the pre-SRRA DEP way of doing things for such sites. 

The LSRP community perceives this course of conduct by DEP as undermining LSRPs’ ability to exercise professional judgment, one of the key aspects (to them) of LSRP rights under the SRRA.  Thus, there is talk of seeking the State legislature’s consideration of passage of an SRRA “2.0” that will curb these and other contrary policies initiated by the DEP.  But the problem would seem to be one that cannot be addressed by legislation alone.  That is, one wonders how any legislation, however mandatory or precise, can negate what is essentially an (understandable) antipathy by DEP personnel to a law that curbs their power and threatens to render many aspects of their programs superfluous. 

One of the goals of the SRRA was to ameliorate the injury done to New Jersey’s image by the perception that the DEP was a rigid, unreasonable, and delay-ridden institution, constituting one reason why the State’s business climate has often been annually ranked at or near the bottom when compared to other states.  Any return to the DEP’s prior “command and control” site remediation regime is contrary to that goal; but the old system is not going away gently, if it is going away at all.

Some Hard Truths About Addressing Climate Change

Posted on December 2, 2015 by Seth Jaffe

Last week, the Boston Globe had an op-ed by Joshua Goldstein and Steven Pinker concerning some “Inconvenient truths for the environmental movement.”  I’m sorry to say that I agree with pretty much every word of it.  Why am I sorry?  Because Goldstein and Pinker make clear – even though they don’t mention his name – that the Pope was completely wrong in his prescription for addressing climate change.  How so?  It’s really pretty straightforward.

People want more economic development, not less.  They want more markets, not less.  It may be that some wealthy societies could still have a relatively smooth transition to renewable fuels without sacrificing economic growth.  Unfortunately, that’s not where we have to address the demand for fossil fuels.  We have to do so in China and India and other developing countries.  I’m sorry, but I’ve seen the projected demand for fossil fuels outside the US and Europe and it’s not pretty.  Anyone who thinks that we can quickly and easily eliminate fossil fuel use in those countries and still allow them the economic growth that their citizens demand is delusional.

Which brings us to Goldstein’s and Pinker’s second inconvenient truth; nuclear power has to be a large part of the solution.  And I’m afraid that’s probably the end of the conversation for many of my environmental friends, so I’ll cut this short.

I’m still an optimist.  I believe that we can still solve climate change.  We can do so however, with more use of markets, not less.  And we must do so with more economic growth, not less, because the rest of the world won’t be satisfied with less.

What Do Opponents of the Clean Power Plan and the Oklahoma Sooners Have In Common?

Posted on October 23, 2015 by Seth Jaffe

So the Clean Power Plan has been published in the Federal Register.  For those who cannot get enough, you can find all of the important materials, including EPA’s Technical Support Documents, on EPA’s web site for the CPP. 

Not surprisingly, given the number of suits brought before the CPP was even finalized, opponents were literally lining up at the courthouse steps to be the first to sue.  West Virginia apparently won the race and is the named plaintiff in the main petition filed so far. 

Perhaps because Oklahoma has been one of the most persistent, and vocal, opponents of the CPP, this called to mind the origin of the Sooner State’s nickname – which seems particularly apt, since Oklahoma was one of the states that couldn’t wait for the rule to be promulgated to sue.

Sooners

Oklahoma is not actually among the plaintiffs in the West Virginia suit.  Oklahoma filed its own petition today.  One wonders whether Oklahoma was banished from playing with the other states as a result of its impatience.  Unlikely, since most of those in the West Virginia suit also filed early, but it did call to mind that other famous event in the history of the west, as recorded in Blazing Saddles.

Curiouser and Curiouser: Sixth Circuit Not Sure of Jurisdiction but Stays WOTUS Rule Anyway

Posted on October 9, 2015 by Rick Glick

Does this make sense to you?  Eighteen states petitioned the Sixth Circuit to challenge the new rule adopted by EPA and the Corps of Engineers defining “waters of the United States” under the Clean Water Act.  Then the petitioners move the court to dismiss their own petition for lack of subject matter jurisdiction, but at the same time request a stay of the rule.  And then, the court acknowledges it may not have jurisdiction but issues the stay anyway!  That is exactly what Sixth Circuit did in the case published today.  

This case is among many seeking to block the rule.  The Clean Water Act confers original jurisdiction upon the circuit courts for challenges to “effluent limitations or other limitations.”  But as reported earlier in this space, thirteen states convinced a federal district judge in North Dakota that he had jurisdiction because the WOTUS rule is merely definitional, and neither an effluent nor other limitation. 

The court concluded that petitioners have a good chance at prevailing on the merits, that the rule exceeds “guidance” given by the Supreme Court in extending CWA jurisdiction too broadly.  The court also indicated that the final rule may have strayed too far from the notice given in the proposed rule in its definitions of jurisdictional waters.

The majority was not troubled by the fact the parties are still briefing subject matter jurisdiction, finding that it had plenty of authority to preserve the status quo pending a jurisdictional determination.  The dissent took the view that the proper sequence is to first decide jurisdiction, then decide on a national stay of a rule years in the making.  Pants first, then shoes.

Did the majority consider the situation an emergency that required immediate action?  No, the court found that petitioners were not persuasive that irreparable harm would occur without a stay, but neither could the court find any harm with freezing implementation of the rule.  The reasoning seems to be that we’ve muddled through so far, let’s take a step back and consider all the implications before implementation. 

Why do the states prefer to go after the rule in the district courts instead of the circuit courts of appeal?  Maybe they believe they can forum shop to find conservative judges and build a favorable body of case law before appealing.  Or maybe they believe they can more directly attack the science underlying the rule or otherwise augment the administrative record.  Whatever the reasons, the ultimate return of this issue to the Supreme Court will be delayed and the law dealing with regulation of wetland fills will remain as confused as ever.

LOOK AT WHAT JOHN ROCKEFELLER STARTED

Posted on September 15, 2015 by Michael Hardy

Few recognize Ohio’s pivotal role in the development of the oil and gas industry in the United States.  John D. Rockefeller amassed fortunes in Cleveland with his oil refining business (until Uncle Sam broke up the monopoly).  Since then, there have been a number of different oil and gas booms in the state, for example in the mid-1960’s north of Columbus, then again in deeper sandstone formations in suburban areas of Cleveland approximately 10 years ago, and now, the whopping Utica shale play primarily in eight counties in eastern Ohio at depths over 8000 feet below ground surface and horizontal laterals extending a mile or more.  The Ohio Department of Natural Resources (“ODNR”) has issued over  2000 Utica drilling permits, and there are approximately 1000 wells in production or drilling (costing millions to complete).  Hydraulic fracturing (“fracking” its critics pejoratively call it) has been around a long time, but only recently has it been the focus of media and regulatory scrutiny.  All of these historical booms going back to the mid-1960’s have forced the Ohio General Assembly to enact and update  comprehensive statutes that regulate drilling activities.  

Those in the industry were successful in having the General Assembly confer “sole and exclusive authority” to the ODNR “to regulate the permitting, location, and spacing of oil and gas wells and production operations.”  But what about the longstanding, traditional “home rule powers” that the Ohio Constitution conferred on municipalities to take care of health, safety and land-use matters within their jurisdictions?  The juxtaposition of the two came to a head in a case that ironically does not deal with the massive Utica shale wells, but more modest gas wells in a shallower formation in a suburb in Northern Ohio. 

The ODNR had issued a drilling permit to Beck Energy to drill a well in Munroe Falls in 2011.  But Munroe Falls obtained a local trial court injunction prohibiting the permitted drilling until Beck Energy complied with all local ordinances, including the payment of a fee, the posting of a bond, and the holding of a public meeting.    Despite having the state’s authorization to proceed, Munroe Falls prohibited the drilling until it issued its zoning certificate, which it would not do (if at all) for at least one year after Beck met the other pre-conditions.  

The dispute found its way to the Ohio Supreme Court, which issued a “plurality” opinion (4-3) in favor of Beck Energy (and the ODNR).  State ex rel. Morrison v. Beck Energy Corp. The City argued that the state statute regulates the technical aspects of oil and gas drilling while the municipal ordinances address traditional local zoning concerns.  The majority seemed troubled by the scope of the “sole and exclusive” language, but seemed content to defer this policy question to the General Assembly.   Because the traditional  Home Rule powers have enjoyed longstanding and wide ranging judicial respect, the majority in the Beck Energy  case limited the decision to the Munroe Falls ordinances before the Court, presumably leaving open some future role for local zoning ordinances.   

The initial reaction of the bar was to focus on the separate concurring opinion of Justice O’Donnell, who was reluctant to displace local zoning authority in favor of sweeping state regulatory authority.  In his view, the “sole and exclusive” authority was intended to preempt a patchwork of local laws related to the technical and safety aspects of drilling and not to divest local governments of their traditional authority to promulgate zoning regulations that ensure land-use compatibility, preserve property values, and foster long-term community development plans.  The dissenting Justices, along with Justice O’Donnell, noted the troubling omission of the word “zoning” when the General Assembly spoke to “exclusivity.”  That is to say, if the General Assembly really meant to displace local zoning practices, it could have clearly said so, as it has done with other licensing statutes. 

The Ohio Supreme Court’s decision has not put an end to the hotly contested question of the scope of pre-emption.  For example, an activist group in suburban Broadview Heights has filed a putative class action lawsuit claiming that the City’s Community Bill of Rights supersedes state laws.  And recently, the Ohio Secretary of State refused to certify county-wide ballot initiatives that sought to prohibit fracking and/ or drilling in their respective jurisdictions. 

So after I finish this blog tonight, I will drive down Rockefeller Drive, pass the remains of the old Standard Oil refinery, and wonder what John D would have thought of this tension between state preemption and local health and safety regulations. 

Chicken Little Cannot Compare to the Opponents of the Clean Power Plan

Posted on September 10, 2015 by Seth Jaffe

On Wednesday, the D.C. Circuit Court of Appeals dismissed the latest effort to stay EPA’s Clean Power Plan before it has even been promulgated in the Federal Register.  The Court simply stated that “petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action.”

Really?  Tell me something I did not know.

I’m sorry.  The CPP is a far-ranging rule.  There are strong legal arguments against its validity.  Those arguments may prevail.  I see it as about a 50/50 bet.  This I do know, however.  The sky isn’t falling. The sky won’t fall, even for West Virginia, if the rule is affirmed and implemented. Those opposed to regulation have made these arguments from time immemorial – certainly no later than when Caesar tried to regulate the amount of lead in Roman goblets.  And if I’ve got that one wrong, at least no later than Ethyl Corporation v. EPA, when opponents of EPA’s rulemaking on leaded gasoline thought that the rule would mean the end of western civilization.

I’m not naïve.  I understand that these arguments are political as well as legal.  I just think that opponents of EPA rulemaking undermine their own political position in the long run by repeatedly predicting catastrophe, even though catastrophe never arrives.

sky is falling

THE TIMES THEY ARE A CHANGING FOR CALIFORNIA’S PROPOSITION 65

Posted on September 9, 2015 by Robert Falk

California’s “Proposition 65” warning requirements have long been a major concern for businesses that want their products offered for sale in the State’s large marketplace.  Businesses whose products contain even a detectable amount of any one of more than 900 chemicals often face enforcement lawsuits brought by for-profit plaintiffs unless their products contain a “clear and reasonable” Proposition 65 warning.  Short of eliminating the chemical entirely, the only way for businesses to immunize themselves from such claims has been for companies to label or display their products with a generic warning based on language set forth in the original Proposition 65 regulations.  It usually states: “WARNING:  This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm.” 

Three new developments threaten to make Proposition 65 less predictable and more difficult. 

1)      New Proposition 65 Warning Regulations Proposed for Adoption:  Earlier this year, the California Office of Environmental Health Hazard Assessment (“OEHHA”) formally proposed an extensive set of new rules concerning the requirements for Proposition 65 warnings to be deemed “clear and reasonable.”  While Proposition 65’s current regulations allow for compliance with its warning requirements through the type of generic, one sentence statement appearing above, the proposed regulations will, among other things, require:

a.       use of a yellow triangle pictogram containing an exclamation point;

b.      a more unequivocal warning statement indicating that the product “can expose” a user to chemicals known to the State to cause cancer and birth defects or other reproductive harm;

c.       listing particular chemicals if they are among a group of twelve which are the most frequent targets of Proposition 65 litigation;

d.      adding a URL to all warnings linking a public website that OEHHA will operate to provide information supplementing the warning for those so interested (see below); and

e.       presentation of the warning in languages in addition to English if the product label otherwise uses languages other than English.

The proposed new Proposition 65 warning regulations specify alternative and additional requirements for certain types of products, including for food, restaurants, and several products or facilities that have previously been the subject of enforcement litigation.  They also adopt revised and more onerous requirements for warnings for “environmental exposures,” such as for air emissions that arise from the operation of facilities or equipment within the State.  As proposed, businesses will have two years from the adoption of a final rule to transition their warnings to meet the requirements of the new regulation, after which they can face enforcement actions and citizen’s suits for products in the California market that still bear the old (or no) warnings.

2)      New Proposition 65 Website-Related Requirements Proposed for Adoption:  Although not contemplated by the voters when they approved Proposition 65 over twenty-five years ago, OEHHA is also proposing that it operate a website to provide information to the public to supplement and explain the basis for the Proposition 65 warnings given by businesses.  Information to be provided on this website may include the routes or pathways by which exposure to a chemical from a product may occur, OEHHA’s quantification of the level of exposure to a chemical presented by a product, and other information that may be of interest to plaintiffs as well as to sensitive consumers and other members of the public. 

Significantly, in addition to its potential public education function, the proposed website regulations also empower OEHHA to require that manufacturers, importers, and distributors of products bearing a Proposition 65 warning provide the agency with information if so requested.  Such information may include the identities of the chemicals in the product for which a warning is being given, the location or components of a product in which such chemicals are present, the concentration of those chemicals, and “any other information the lead agency deems necessary.”  While trade secret protection may be asserted in some circumstances, the requirement to provide information to OEHHA will be enforceable by public prosecutors, including the California Attorney General and District Attorneys.  

3)      Potential Changes Relative to Proposition 65’s “Safe Harbor” Levels for Chemicals Listed for Reproductive Effects:   Lead has been the focus of the vast majority of all Proposition 65 enforcement actions to date and resulted in hundreds, if not thousands, of settlements with national and international implications over the past two decades.  Cases have included those concerning trace levels of lead in ceramic tableware, water faucets, candy, mini-blinds, toys, and a wide array of other consumer products and foods.  However, in 2013, a trial concerning lead in 100% fruit juices, packaged fruits, and baby foods resulted in a highly significant Proposition 65 defense verdict based on a judge’s finding that the trace levels of lead exposure presented by each of these products was less that the State’s published “safe harbor” warning threshold for lead of 0.5 “micrograms/day.”  A California Court of Appeal decision published earlier this year sustained, among other things, the trial court’s finding that it was permissible for defendants’ experts to construct a daily average level of exposure based on real world data concerning the frequency of the consumption of the products at issue over a fourteen day time period.   Environmental Law Foundation v. Beech-Nut Corporation, et al., 325 Cal.App.4th 307 (2015). 

In anticipation of this type of appellate decision, earlier this year, one of the most historically active Proposition 65 plaintiff’s groups, the Mateel Environmental Justice Foundation, filed a lawsuit seeking a writ of mandate and declaratory relief challenging the 0.5 microgram/day “safe harbor” for lead.  Mateel contends that California’s published threshold for lead was not set consistently with Proposition 65’s 1,000-fold safety factor requirement for reproductive toxicants.  It therefore argues that this longstanding Proposition 65 safe harbor threshold should be declared illegal and inoperative despite it having been published more than 25 years ago and relied on for thousands of settlements and warning decisions.  Mateel further argues in its case that OEHHA should be ordered to promptly establish a dramatically more stringent safe harbor level for lead based on updated science concerning trace level exposures to lead.  It also seeks to have OEHHA ordered to adopt a rule precluding the averaging of exposure across multiple days in relation to the lead safe harbor level.  A second prominent citizen’s group, the Center for Environmental Health, which also focuses on Proposition 65 enforcement, submitted an administrative petition to OEHHA in early July seeking relief parallel to that sought by Mateel, regardless of the outcome of the lawsuit. 

OEHHA has just announced that, in response to this petition, it will soon initiate a rulemaking to update the existing Proposition 65 safe harbor for lead and several related Proposition 65 regulations.  The proposals include several major changes in the way the extent of exposure is calculated and how Proposition 65’s regulatory exemption for “naturally occurring” exemption for foods is determined.  OEHHA’s new proposals essentially seek to nullify the important Beech-Nut precedents and will likely make it even more difficult for businesses to defend Proposition 65 claims about lead and the nearly 300 other chemicals listed for reproductive effects, especially those that may be present as trace contaminants in food products.  OEHHA’s proposals include the following four elements:

A.      Revised Safe Harbor for Lead and Other Chemicals.  OEHHA proposes to repeal the current safe harbor level for lead (the Maximum Allowable Dose Level or MADL).  In its place, OEHHA proposes multiple levels that depend on the frequency of exposure, from exposure once per day to once every 116 or more days.  OEHHA asserts that the once-per-day figure should be reduced from 0.5 to 0.2 micrograms/day and that the existing 0.5 microgram/day level should instead apply only to exposures that occur no more than once every third day.  For exposures that would occur only once every 6 to 9 days, the lead safe harbor figure would rise to 1.0 microgram/day and to higher amounts as exposure intervals become more infrequent.  Plaintiffs’ groups contend that the lead safe harbor should be an order of magnitude lower at 0.03 micrograms per single day and do not want any alternative levels based on frequency of exposure over time.  Despite its proposal for lead, as to all other chemicals listed for reproductive effects OEHHA proposes to eliminate any consideration of the frequency of exposure when safe harbor levels are applied. 

B.      Naturally Occurring Allowances for Lead and Arsenic in Some Foods.  OEHHA also proposes to adopt specific naturally occurring allowances for lead and arsenic (but not other chemicals such as cadmium) in some specific types of food ingredients/products.  The allowances for arsenic are 60 ppb and 130 ppb for white and brown rice respectively.  For lead, they are 8.8 ppb for raw leafy vegetables and 6.2 ppb for raw non-leafy vegetables, fruit, meat, seafood, eggs, and fresh milk.  The agency bases its proposal on data regarding background levels of lead in soil in California as well as rates of uptake by relevant plants. 

C.      Averaging of Product Samples.  OEHHA further proposes to expressly prohibit averaging lead or other contaminant levels across different lots of a food product in the final form it will be purchased by a consumer.  It would instead require that the level of a contaminant in a lot of food be determined by “representative sampling” from within a particular lot.  OEHHA also would define a “lot” on a production basis, apparently by reference to date or production codes, which could significantly increase the amount of testing required.  Testing on this scale may be infeasible for most businesses.

D.      Average Rate of Exposure.  Finally, OEHHA proposes to dictate that, as to any Proposition 65-listed chemical (lead or otherwise), the “average rate of exposure” must always be calculated based on the arithmetic mean and not a geometric mean or some other measure of the central tendency of a data set.  OEHHA’s proposal flies directly in the face of the scientific testimony that prevailed in Beech-Nut and the prior position of the California Attorney General’s office on this issue.

OEHHA has scheduled public hearings to further discuss its new proposals on October 14 and 19, 2015.  It is also inviting written public comment on the lead safe harbor issue until October 28, 2015, and on the averaging issues until November 2, 2015.

Whole Lot of Craziness Going On

Posted on September 2, 2015 by Richard G. Stoll

A whole lot of craziness is going on in federal district and appellate courts all over the country right now.  About what?  About judicial review of EPA’s recent “WOTUS” rule under the Clean Water Act (CWA).  So I can avoid wheel re-invention, see the very recent ACOEL blogs by Seth Jaffe and Rick Glick.

So what’s the problem?  You might find a lot to hate about the Clean Air Act, the Resource Conservation Act, the Safe Drinking Water Act, and I could name a few others, but at least they all have one good thing going for them:  they all provide in a crystal clear manner that judicial review of EPA’s national rules under those statutes will lie exclusively with the D.C. Circuit.  No ifs, ands, buts, or maybes.

For reasons I have never understood (and I have been trying since the 1970s), Congress in its infinite wisdom chose a different path in the CWA.  In Section 509, they listed seven types of actions that must be reviewed in a federal Court of Appeal (not necessarily the D.C. Circuit) and left any other type of action to be reviewed initially in federal district court.

Over the years, a lot of mixed case law has developed regarding EPA’s CWA rules that don’t fit neatly within one of the seven types of actions Section 509 has specified for Court of Appeals review.  Quite predictably, as reflected in Seth’s and Rick’s recent blogs, three district courts last week reached conflicting results over whether WOTUS fits within the seven types.  In its WOTUS preamble, EPA included a discussion about confusion in the courts over the issue and took no position on whether WOTUS should initially be reviewed in a district court or Court of Appeals.

So how crazy is this:  right now, we have (1) a ruling from one district court judge in North Dakota finding he has jurisdiction and enjoining EPA from enforcing WOTUS; (2) a statement from EPA saying the agency will honor his injunction only in the 13 States that were plaintiffs in that action; (3) an order from that judge directing the parties to brief the issue of whether EPA has authority to honor his ruling in only those states; (4) decisions from two other federal district judges holding WOTUS judicial review must be brought only in a Court of Appeals; (5) numerous cases filed in several circuit Courts of Appeals that have been transferred (at least for now) to the 6th Circuit; (6) an almost certain EPA appeal to the 8th Circuit in attempt to reverse the North Dakota judge’s injunction; and (7) WOTUS review cases filed in numerous other federal district courts by lots of parties with various motions still pending.

This is early September, and I can’t imagine how this won’t get a lot crazier over the next few months.  Congress in its infinite wisdom!

First Blood: North Dakota Federal Court Strikes WOTUS Rule

Posted on August 31, 2015 by Rick Glick

With so many challenges filed in so many venues to EPA’s Waters of the United States or WOTUS rule, it seemed inevitable that some plaintiffs somewhere would find a sympathetic court.  And so it is that thirteen states found U. S. District Judge Ralph R. Erickson to preliminarily enjoin the “exceptionally expansive view” of the government’s reach under the Clean Water Act.

This case is interesting from a couple of perspectives.  First, Congress conferred original jurisdiction for challenges to EPA “effluent limitations or other limitations” and for permit decisions upon the Circuit Courts of Appeal.  In the past two days, district court judges in West Virginia and Georgia concluded they lacked jurisdiction over challenges to the WOTUS rule on that basis.  Judge Erickson, however, did not feel so constrained. 

The judge found that the WOTUS rule is simply definitional, and neither an effluent limitation nor an “other limitation” on states’ discretion.  Further, the judge found that the rule “has at best an attenuated connection to any permitting process.”   The conclusion states’ discretion is not affected is a bit odd in that the judge later concludes that the state plaintiffs satisfied all the criteria for a preliminary injunction, including irreparable harm caused by the rule. 

Second, Judge Erickson plays on an internecine dispute between EPA and the Army Corps of Engineers in an unusual way.   In my first sentence I refer to the WOTUS rule as EPA’s, although the rule was jointly adopted by EPA and the Corps.  However, recently leaked internal government memoranda indicate that the Corps disavows much of the technical support and policy choices underlying the rule.  Judge Erickson obliquely references these memoranda and seems to rely on them to conclude that plaintiffs are likely to succeed on the merits of their challenge. 

Typically, courts are loathe to rely on internal documents of uncertain provenance, as they prefer to leave the government room to openly discuss policies under development without fear its deliberations would be disclosed.  But in this case, Judge Erickson notes that he has not been presented with the full record for the WOTUS rulemaking, and so felt justified in citing the Corps memos. 

As Seth Jaffe has observed, it seems likely that Judge Erickson’s jurisdictional determination will not stand, and his reliance on the confidential exchanges between the Corps and EPA is a little disturbing.  However, his order highlights EPA’s poor management of this rulemaking, which has led to challenges from states, property rights advocates and environmentalists—a kind of anti-EPA trifecta. 

As previously noted, EPA released its draft WOTUS rule before the work of the Science Advisory Board was complete, thus raising questions as to the rule’s scientific objectivity.  Then EPA seemingly disregarded the technical concerns raised by its rulemaking partner, the Corps.  Any WOTUS rulemaking would be controversial, but EPA has unnecessarily raised the bar for public acceptance.

Two Days, Three Decisions, One Big Mess: Welcome to Judicial Review of the Waters of the United States Rule

Posted on August 28, 2015 by Seth Jaffe

On Wednesday, Judge Irene Keeley of the Northern District of West Virginia held that district courts do not have jurisdiction to hear challenges to EPA’s rule defining waters of the United States, because courts of appeal have original jurisdiction over “any effluent limitation or other limitation.”  Yesterday, Judge Lisa Wood of the Southern District of Georgia agreed.

Later yesterday, Judge Ralph Erickson of the District of North Dakota disagreed.  Finding that a definitional rule is not an effluent limitation and is not any “other limitation”, because it “places no new burden or requirements on the States”, Judge Erickson concluded that the district courts do have jurisdiction.  Addressing the merits, Judge Erickson concluded the states were likely to prevail, and would suffer irreparable harm in the absence of an injunction.  He thus enjoined enforcement of the rule in the 13 states involved in the case before him.

I’ll go out on a limb and assert that Judge Erickson’s decision is not likely to survive.  Why not?

  • Both the Georgia and West Virginia opinions cogently explain why the WOTUS rule is an “other limitation under existing CWA cases.
  • Judge Erickson was clearly trying to have his cake and eat it, too. It is, to put it mildly, internally inconsistent for Judge Erickson to conclude that he had jurisdiction to hear the case, because the “rule places no new burden or requirements on the States”, while ruling on the merits that the States will suffer irreparable harm if the rule goes into effect.  If they will suffer harm, it is precisely because the rule will limit them in new ways – which is pretty much what his own opinion says. 
  • As Judge Keeley noted, providing consolidated jurisdiction over all challenges to the rule in one court of appeals furthers

“the congressional goal of ensuring prompt resolution of challenges to EPA’s actions.”  That scheme would be undermined by … a “patchwork quilt” of district court rulings.

Based on these three decisions in just the last two days, it would seem that truer words were never spoken.

 

CERCLA Financial Assurance Update: Section 108(b) Remains Stalled, But New EPA Guidance for Settlement Agreements and UAOs

Posted on August 7, 2015 by Charles Efflandt

Earlier this year, I posted in this blog a discussion of EPA’s 35 year – and still unfinished – journey toward full implementation of the financial assurance (“FA”) mandate of CERCLA Section 108(b). Section 108(b) obligates EPA to identify “classes of facilities” that will be required to demonstrate financial ability to respond to future releases of hazardous substances and to promulgate rules establishing those FA requirements. Inexplicably, Section 108(b) remained dormant for 28 years. Litigation initiated by NGOs in 2009 and 2010 prompted the agency to identify the hardrock mining and several other industries as priority targets for regulation. The task of developing the FA requirements for those industries, however, remained a work-in-progress.

Ever vigilant, environmental advocacy groups filed a Petition for Writ of Mandamus in August 2014 taking EPA to task for its delays and inaction. The theme of the litigation is that (1) Section 108(b) is a critical component of CERCLA’s overall scheme, (2) EPA’s failure to issue FA rules has resulted in cleanup delays, funding shortfalls and increased public health risks, and (3) EPA’s inaction cannot be justified by competing priorities within the agency. In May of this year, the D.C. Circuit Court of Appeals issued an order requiring EPA to expedite implementation of Section 108(b) to the greatest extent possible, update its rulemaking schedule for the identified industries, and disclose to the litigants the regulatory “framework” for the hardrock mining industry, which EPA acknowledged had been completed. EPA’s website suggests that it will publish the hardrock mining rule in August 2016.

In short—the more things change, the more they stay the same. Perhaps the low priority assigned to this CERCLA provision suggests that the cleanup response track-record of even the priority industries may not justify a need to regulate under Section 108(b) - a process that will involve complex issues with significant financial consequences. Nevertheless, Section 108(b) remains the law of the land. Congress must either follow-through with its periodic efforts to amend Section 108(b) or EPA must finish this long journey. No benefit inures to the public, affected industries or the agency from the existing uncertainties and delays.

EPA’s foot-dragging in implementing Section 108(b) is in contrast with its recent action emphasizing FA as an enforcement priority in CERCLA settlement agreements and UAOs. The agency’s April 2015 Guidance to Regional Counsel is touted as the first comprehensive document issued by EPA to assist with the development of FA requirements and provide transparency in the use of its Superfund authority. Space limitations do not permit a detailed review of this 22 page guidance, which includes modified model FA language and sample documents. Some take-aways from a first read of the guidance:

  • The Guidance does not address future Section 108(b) requirements.
  • It is suggested that the EPA Regions have flexibility to include or exclude certain FA mechanisms at specific sites, BUT headquarters consultation and approval is often necessary.
  • The financial test and corporate guaranty mechanisms are perceived by EPA as having a higher risk of not achieving FA objectives and imposing increased administrative burdens on the Agency; therefore, it is suggested that those mechanisms should be used with caution.
  • The Guidance recognizes the complications arising at sites involving numerous, dissimilar PRPs, with a preference for requiring jointly-funded versus separate FA mechanisms.
  • The Guidance emphasizes the need for agency diligence in the ongoing evaluation of site conditions and costs, with increases in the initial FA amount to be required as appropriate.
  • Practical considerations for evaluating the financial test and guaranty FA options are addressed in an appendix.

Notwithstanding suggestions of flexibility in the use of FA tools on a site-by-site basis, this comprehensive new guidance does not appear to include much good news for the settling PRP. In fact, EPA’s stated concerns on the use of the financial test, corporate guaranty and insurance policy FA mechanisms could further complicate an already contentious issue in CERCLA settlement negotiations. What impact the guidance may have on FA negotiations as new sites arise, of course, remains to be seen.

EPA Hubris, July 2015 Edition

Posted on July 31, 2015 by Seth Jaffe

Anyone who reads this blog must have seen the explosion of reports in the trade press that EPA ignored significant criticism from the Army Corps of Engineers in promulgating its Waters of the United States rule. (For a useful summary of the rule and an analysis of some of the legal issues that might be raised in potential litigation, see Susan Cooke’s post from earlier this month.)  I have not seen the memoranda, but, based on the press reports, it appears that EPA ignored criticism both that it was too stringent in some areas and that it was not sufficiently stringent in others.  If EPA’s purpose wasn’t simply to make the rule more – or less – stringent, why did it ignore the Corps and try to bury the disagreement?

How about hubris?

I noted earlier this year and as far back as 2010, EPA’s tendency towards self-righteousness.  I also pointed out how counterproductive that self-righteousness is; it makes it more difficult for EPA to achieve its goals.  While I still think that EPA is self-righteous, hubris seems the apt description today.

IT’S BEEN A LONG TIME COMING… 27 Year Old RCRA Underground Storage Tank Rules Get a Facelift

Posted on July 20, 2015 by Karen Crawford

I remember as though it were yesterday when the Underground Storage Tank (UST) regulations were finalized in 1988, requiring owners and operators to register existing as well as new tanks, then ensure prevention, detection and remediation of releases into the environment.   Owners and operators were also required to perform release detection inspections and demonstrate financial responsibility for cleaning up releases.   New tanks were required to meet certain design, construction and installation requirements aimed at preventing releases.  While technology for meeting those requirements has evolved over the ensuing 27 years, no significant regulatory changes have been implemented – that is, until this week. 

Many owners and operators decided to pull or close USTs in lieu of meeting those regulatory requirements but, because certain tanks are underground for safety reasons, that was not always a viable alternative.  Because I was new to private practice and saw an opportunity, I set out to become the “Queen of USTs" in the Carolinas.  These days, I still help clients on remediation projects involving releases from USTs and review due diligence reports on real estate where USTs are or have been used, but it has been a long time since I gave a speech or wrote an article about UST regulation. 

On July 15, 2015, EPA promulgated a final rule modifying the 1988 UST regulations implementing requirements for secondary containment and operator training applicable to both new and existing USTs, implementing key provisions of the Energy Policy Act of 2005 (which modified Subtitle I of the Solid Waste Disposal Act) and fulfill objectives in EPA’s August 2006 UST Tribal Strategy ensuring parity in program implementation among states, territories and in Indian country.  Citing two peer-reviewed but unpublished studies of causes for releases from USTs, along with statistics showing there are still as many as 6000 releases from USTs discovered each year, and touting development of new, the 2015 changes to the original regulations are aimed at ensuring the USTs are still working as intended, by focusing on operation, maintenance and training requirements. 

While certain waste water treatment facility and nuclear power facility partial or complete deferrals are continued, this regulation removes deferrals set forth in 1988 for field-constructed tanks, airport hydrant fuel distribution systems that meet the UST definition, and UST systems storing fuel solely for use by emergency power generators.  Hospitals, airports, communications providers and utilities should particularly take note of these changes.

This blog would grow to an article if it addressed in detail all of the technical requirements of this 117-page regulation, but there are some that take effect immediately and require attention.  For example, regulations disallowing flow restrictors in vent lines to meet the overfill prevention requirement at new installations, and also triggered when an existing flow restrictor is replaced, apply immediately on the effective date of this final regulation, July 15, 2015.  Also, testing following a repair is required on the effective date of the regulation.  Most of the other implementation deadlines for notification, testing, inspection, recordkeeping, demonstrations of financial responsibility compatibility and required technology upgrades are set at three years after the effective date of the final 2015 UST regulation or July 15, 2018. 

There is one exception to the deadline for compliance being either immediately or in 3 years.  The secondary containment requirement is implemented for all new UST systems 180 days after the effective date of the rule, and tanks and piping installed or replaced after April 11, 2016 must be secondarily contained and use interstitial monitoring per the regulation.  EPA explains that 180 days allows owners and operators to adapt plans for new systems.       

Training of owners and operators (definitions for three classes are set out in this regulation) must be completed within the three years after the effective date of this regulation.   EPA explained that requirements for implementing walkthrough inspections and release detection equipment testing were adjusted to correspond to the training deadline so inspectors and testers will better understand what to look for.  Apparently, many of the deadlines and implementation requirements were adjusted by EPA in response to comments on the proposed rule.

Conversely, in response to comments regarding the potential costs on small business owners, EPA responded that it carefully considered such potential impacts of the proposal; EPA declined to implement recommendations of a small business advocacy review panel under the Regulatory Flexibility Act as some commenters suggested.  Finally, while EPA’s final rule allows records to be maintained on paper or electronically, in keeping with the move to electronic filings and submittals, the agency encourages owners and operators to maintain electronic records to “simplify compliance” and utilize “21st century technology tools.”

Can the Majority and the Dissent Both Be Wrong? The Supreme Court Remands the MATS Rule

Posted on June 30, 2015 by Seth Jaffe

In Jonathan Cannon’s excellent post on Monday’s Supreme Court decision in Michigan v. EPA, he noted that the majority and the minority aren’t actually that far apart in their views on whether EPA must consider costs in this rulemaking.  I have a slightly different take:  They may not be that far apart, but they’re both wrong.  

In fact, the issue in Michigan v. EPA seems so simple that the MATS rule could have been affirmed in a two-page opinion.  Judge Scalia notes that the word “appropriate” – on which the entire 44 pages of the majority, concurring, and dissenting opinions focus – is “capacious”.   I agree.  If so, and if Chevron means anything, “appropriate” is surely capacious enough to allow for an interpretation that does not include cost considerations.  That should have been the end of the case.

I do feel compelled to note, however, that Justice Kagan’s dissent also got it wrong, in at least three ways:

  • I think she’s flat wrong to suggest that, because the MATS “floor” is based on the top 12% of facilities already in operation, that means that establishment of the floor already takes cost into account. As Justice Scalia cogently notes, those existing facilities may well have been under their own regulatory duress – a duress that may not have considered cost.
  • Justice Kagan confuses cost-benefit analysis and cost-effectiveness analysis. For any given goal sought by EPA, the various options provided by the MATS rule may allow power generators to attain the goal in the most cost-effective means possible, but if even the most cost-effective approach were to yield $10B in costs and $10M in benefits, that would fail the cost-benefit test for most people.
  • Finally, and most importantly, Justice Kagan got the consequences wrong. Instead of suggesting, as she did, that the majority decision,
 "deprives the American public of the pollution control measures that the responsible Agency, acting well within its delegated authority, found would save many, many lives,"  
she should have made the point that the majority decision will have no impact on EPA or the MATS rule.  The Supreme Court did not vacate the rule; it merely remanded the rule to the Court of Appeals.  Justice Kagan’s position should have been that EPA still has sufficient discretion, even on the existing record, to defend the MATS rule within the confines of the majority opinion.  Instead, Justice Kagan gave ammunition to those who oppose the rule, by suggesting that it cannot be saved.

A pox on both their houses.

Do Climate Change and Same-Sex Marriage Have Anything in Common?

Posted on June 29, 2015 by Seth Jaffe

Recent events have me pondering this question.

Most notably, in two court decisions last week, courts ordered the State of Washington and the government of the Netherlands to take more aggressive action against climate change.  In the Washington case, in response to a complaint from eight teenagers, a trial court judge has ordered the Washington Department of Ecology to reconsider a petition filed by the teenagers requesting reductions in GHG emissions.  Similarly, in the Netherlands, a court ordered the government to reduce GHG emissions by 25% within five years.  The Dutch case was brought under human rights and tort law, not under existing Dutch environmental laws.

I have been very skeptical of the use of nuisance-type litigation to require more aggressive government regulatory efforts.  I still think comprehensive market-based regulation is the best approach.  However, in the absence of aggressive action in the United States and world-wide, these suits are going to increase in number.

So, how are they similar to the same-sex marriage issue?  First, as noted in Obergefell, courts were initially – and for some time – not just unfriendly to litigation efforts in support of same-sex marriage, they were positively dismissive.  Second, there is the gradual increase over time in the litigation.

Next, there is also the change over time in the scientific understanding of the issues.  While same-sex marriage has always been, on both sides, primarily a moral issue, it would be wrong to ignore the role that an increasing understanding of the genetics of sexual preference has played in the debate.  Similarly, the move towards an overwhelming weight of evidence, not just that climate change is occurring, but that it is anthropogenic, has obviously been important to the climate change debate.

Finally, while the moral issues in same sex marriage may seem to distinguish it from the climate issue, the recent papal encyclical makes clear that there are moral aspects to the climate change debate as well.

I have no crystal ball.  I do not know whether we are going to see a groundswell, and then, perhaps, a tidal wave that will somehow overcome the gridlock in United States and world politics on climate change.  There are differences in the two issues, most obviously in the short-run economic costs of addressing climate change.  Nonetheless, I do know that it wouldn’t surprise me if the tidal wave comes, and relatively soon.

GayMarriage-Court_jpg_800x1000_q100

Climate-change-how-does-it-work

If Congress Wants to Limit EPA’s Discretion, Perhaps It Should Do a Better Job Legislating

Posted on June 5, 2015 by Seth Jaffe

Earlier this week, the D.C. Circuit Court of Appeals rejected both industry and environmental group petitions challenging EPA’s determination of what is a solid waste in the context of Clean Air Act standards for incinerators and other combustion units.  It wasn’t actually a difficult case, but it does provide a lesson for Congress.  When the technical nature of EPA’s decisions was layered on top of the fundamental deference given EPA’s interpretation of the statute under Chevron, the petitioners were never going to prevail:

We afford great deference to EPA’s determinations based on technical matters within its area of expertise.

Scrap_Tires

The crux of the environmental petitioners’ case was that certain of the materials, such as scrap tires, exempted by EPA from the definition of solid waste, are unambiguously “discarded” within the meaning of RCRA, so that EPA did not have discretion to exempt them.  Unfortunately, as the Court noted:

the term “discarded” is “marked by the kind of ambiguity demanding resolution by the agency’s delegated lawmaking powers.”

In other words, given the current state of decrepitude of the non-delegation doctrine, when Congress enacts legislation using words as vague as “discarded”, it is essentially telling EPA to figure out what Congress meant to say.  And when EPA does figure out what Congress meant to say, the Courts are not going to disturb EPA’s interpretation.

For those in Congress who don’t like the way EPA implements statutes for which it is responsible, they might learn a lesson from Pogo.

EPA Is Not an Expert in Determining Electric System Reliability

Posted on May 7, 2015 by Seth Jaffe

The D.C. Circuit Court of Appeals just reversed and remanded EPA’s rule allowing backup generators to operate for up to 100 hours per year as necessary for demand response. It’s an important decision that could have lessons for EPA and the regulated community across a wide range of circumstances, including eventual challenges to EPA’s proposed GHG rule.

demand response

EPA said that the rule was necessary to allow demand response programs to succeed while maintaining grid reliability.  Commenters had argued that, by encouraging greater use of uncontrolled backup generators, EPA’s rule makes other generators less economic, thus creating a negative feedback loop, with less and less power generated by controlled units, resulting in greater and greater need for uncontrolled backup generators. Here’s what the Court concluded:

  1. EPA failed adequately to respond to the commenters’ arguments. Noting that “an agency must respond sufficiently to “enable [the court] to see what major issues of policy were ventilated,” the Court instead found that EPA “refused to engage with the commenters’ dynamic markets argument."
  2. To the extent EPA did respond, it was “self-contradictory”, arguing that it was not justifying the regulation on reliability grounds, even though the final rule said that it was based on reliability concerns.
  3. The 100-hour rule was based on faulty evidence. EPA relied on evidence that backup sources had to be available at least 60 hours to participate in a PJM “Emergency Load Response Program.”  However, PJM itself noted that this minimum does not apply to individual engines.
  4. Finally, and perhaps most importantly, while EPA justified the rule on reliability grounds, the Court stated that:

grid reliability is not a subject of the Clean Air Act and is not the province of EPA.

This last issue is the part of the opinion that could have some bearing on judicial review of EPA’s GHG rule.  The Court noted that there was no evidence that FERC or NERC had participated in the backup generator rule or provided comments to EPA.  When, during the course of the rulemaking, a commenter suggested that EPA work with FERC, this was EPA’s response:

the rulemaking’s purpose was to address emissions from the emergency engines “and to minimize such pollutants within the Agency’s authority under the CAA. It is not within the scope of this rulemaking to determine which resources are used for grid reliability, nor is it the responsibility of the EPA to decide which type of power is used to address emergency situations.”

This statement did not make the Court happy:

EPA cannot have it both ways it [sic] cannot simultaneously rely on reliability concerns and then brush off comments about those concerns as beyond its purview. EPA’s response to comments suggests that its 100-hour rule, to the extent that it impacts system reliability, is not “the product of agency expertise.”

And why is this relevant for the GHG rule?

First, because EPA had better consult with FERC and NERC, so that it can defend any statements it makes in the GHG rule about its impact, if any, on reliability.  Second, it’s clear that the court will not show deference to EPA’s conclusions about reliability, since that is not within the scope of EPA’s expertise.

Where Have all the Buffers Gone?

Posted on May 6, 2015 by Kenneth Warren

When selecting best management practices (BMPs) to protect streams during and following construction, riparian buffers are often considered the most effective option.  These permanently vegetated areas alongside waterbodies can capture, infiltrate and control stormwater flow, filter contaminants, stabilize stream banks and otherwise help protect and restore waterbodies and the ecological functions they support.  Recognizing the particular importance of riparian buffers located adjacent to exceptional value and high quality waters designated for special protection, the Pennsylvania Department of Environmental Protection (PADEP), like many other state environmental regulatory agencies, adopted regulations prohibiting earth disturbance activity within 150 feet of a special protection waterbody.  The regulations further required a property developer to protect or establish a riparian forest buffer under certain circumstances where waters in the project’s watershed fail to attain their designated uses.  

And then along came the Pennsylvania legislature.  Faced with objections from homebuilders and other developers to restrictions on use of their properties, the legislature enacted Act 162 of 2014 to provide developers with additional options.  Under Act 162, a developer who requires an NPDES stormwater construction permit may disturb land within 150 feet of a special protection waterbody if it implements BMPs “substantially equivalent” to a riparian buffer or a riparian forest buffer.  If the earth disturbance would occur in a special protection watershed within 100 feet of a surface water, the developer must also offset any reduction of the total square footage of the buffer zone that would have been utilized as a BMP with a replacement buffer.  The replacement buffer must be created in the same drainage area as the disturbed buffer and be as close as feasible to the area of disturbance at a ratio of one-to-one.  

In response to the passage of Act 162, PADEP recently published interim final guidances on equivalency demonstration and offsetting.  The equivalency demonstration guidance requires each developer disturbing earth within 150 feet of a special protection water to implement BMPs that reduce loadings of pollutants including total suspended solids, total phosphorous and nitrate.  In addition, the developer must show that its BMPs are functionally equivalent to a riparian buffer or forested buffer by providing, among others, habit for wildlife and vegetation, flood attenuation, channel stability and support of aquatic food webs.  Under the buffer offsetting guidance, a replacement buffer should be composed of native, diverse tree and shrub vegetation and preferably be installed at a location that receives runoff with characteristics similar to or more degraded than the runoff that the replaced buffer would have encountered.  

While many regulatory regimes afford environmental agencies discretion to grant waivers and exceptions to buffer protection requirements, Pennsylvania has by statute granted developers the option of using substantially equivalent BMPs, supplemented where necessary by offsetting.  PADEP has drafted guidances with stringent criteria for demonstrating equivalency and offsetting, but the guidances have yet to be finalized let alone judicially reviewed.  Experience in administering Act 162 will reveal whether, under PADEP’s watchful eye, equivalency and offsetting can uniformly serve as effective substitutes for a prohibition on development near special protection waters.  In the meanwhile, some healthy skepticism is in order.  

Perhaps a Corps Jurisdictional Interpretation is Final Agency Action After All

Posted on April 16, 2015 by Seth Jaffe

After Sackett, the question on everyone’s mind was “How far does it go?”  The first test of that question was the decision by the 5th Circuit Court of Appeals – not known as a bastion of liberalism – in Belle Company v. Corps of Engineers, holding that a Corps jurisdictional determination is not final agency action subject to judicial review.  Late last week, however, in Hawkes Co. v. Corps of Engineers, the 8th Circuit disagreed, creating a circuit split.

As we noted at the time, the 5th Circuit decision in Belle focused on the differences between the Sacketts’ position facing an enforcement order and that of Belle Company facing a Corps JD.  As the 5th Circuit emphasized, the JD did not require Belle Company to do anything.  Nor did the JD expose Belle Company to penalties.  Nor did it prejudice Belle Company’s ability to obtain a permit.  Nor did it include a finding of a CWA violation.

The 8th Circuit took a different tack, focusing instead on the one great, glaring similarity between the enforcement order in Sackett and the JD in Hawkes Co. – in both cases, the Corps’ decision, as a practical matter, defined the property owner’s rights and ended the proceeding.

It’s not obvious to me that the Supreme Court will take the case, even with the circuit split.  I don’t think that the Court likes these cases.  On the other hand, it is obvious that the conservative wing of the court sees Sackett as a very important decision and there could well be four votes to decide the issue at this point.

If the Court does take the case, all bets are off.  I think that the 5th Circuit still has the better of the legal argument, and I expect that will be sufficient for all but the most ardent property rights advocates on the Court.  Whether there are five ardent property rights advocates on the Court is what remains to be seen.

Whither TSCA: To Reform or Not to Reform (and if so How) — That is the Question

Posted on March 31, 2015 by Donald Stever

Way back around the turn of the decade from the ‘70s to the ‘80s I was invited by the International Joint Commission to attend a conference in Montreal to discuss whether the Canadians should adopt a statute similar to the Toxics Substances Control Act of 1976 (“TSCA”). The IJC is a largely advisory US-Canadian body whose primary area of interest is the Great Lakes. Also on that delegation was the principal author of the text of TSCA, Clarence (“Terry”) Davies. I did not win many friends on that trip when I argued that TSCA took the wrong approach to regulating chemicals in the stream of commerce and in the environment primarily because it used an inappropriate cost-benefit premised standard of review. I also argued that TSCA’s standards were simultaneously too vague and too complex. I suggested that the Canadians start afresh.

In the years following, Congress ignored repeated calls for significant amendment or replacement of TSCA, including a chorus of suggestions that it be replaced by a statute resembling the European Community’s chemical regulatory regime, REACH. In the meantime, EPA soldiered along, trying to make the best of enforcing an antiquated and fundamentally flawed regulatory statute. 

Now after all these years we have two competing bills in the Senate, each of which purports to “reform” TSCA. On the one hand we have S.697, the “Frank R. Lautenberg Chemical Safety for the 21st Century Act”, an allegedly “bipartisan” effort co-sponsored by Senators Mark Udall (D-N.M.) and David Vitter (R-La.), the first hearing on which was held on March 18th. And from another corner, we have S.725, the “Alan Reinstein and Trevor Schaefer Toxic Chemical Protection Act”, co-sponsored by Senators Barbara Boxer (D-Calif.) and Ed Markey (D.Mass.). At about 175 legislative pages, these bills aren’t capable of being thoroughly analyzed in a blog.

The Udall bill is tepidly supported by the chemical industry and by at least one environmental group, the Environmental Defense Fund. It is opposed by some other environmental and public safety advocacy groups. It would pre-empt state chemical regulatory programs like California’s Proposition 65 and other state-run chemical regulatory programs in California and Washington. The Boxer bill, predictably, because its principal sponsor is from California, preserves state programs. Both bills in one degree or another attempt to address the core problems with TSCA by changing the standard of review to a risk-based standard, overhauling and strengthening EPA’s information gathering authority on hazard, exposure and use data, and prioritizing chemicals for review. The Udall bill throws a bone to the chemical industry by exempting a wide variety of chemicals considered to be of low exposure potential or low risk. 

I confess that, although I am not a policy wonk, I have an interest in these bills partly because if either — or a significant element of either — is enacted into law I will have to re-write an entire chapter of The Law of Chemical Regulation and Hazardous Waste. My guess is that, given Congress’s track record of doing little or nothing over the last few years, I won’t have to worry about getting writer’s cramp any time soon.