News & Developments
September 2009
The Eleventh Circuit issued an opinion in Sierra Club v. Johnson, 07-11537 upholding the ability of Title V permit issuing authorities to issue operating permits without incorporating terms to address unproven allegations of noncompliance even where the permittee is the subject of a pending Clean Air Act (“CAA”) enforcement action. The court’s decision contrast with the Second Circuit's opinion in NYPIRG v. Johnson, 427 F.3d 172 (2d Cir. 2005).
August 2008
The United States Supreme Court has agreed to take another environmental case, Winter v. National Resources Defense Council et al, 07-1239. The Ninth Circuit affirmed an injunction by the district court blocking the Navy from conducting training activities off the California coast that involve the use of high intensity and mid frequency sonar. NRDC and other groups argued that the Navy violated the National Environmental Policy Act (NEPA) because it failed to prepare an Environmental Impact Statement (EIS). The sonar allegedly could harm marine animals and whales.
The Supreme Court also agreed to hear the case of Summers v. Earth Island Institute, 07-463. Earth Island and other groups filed suit against the United States Forest Service for approving the sale of timber from a burnt area of the Sequoia National Forest without providing for any notice or comment or an appeal. Although the parties reached a partial settlement and the Forest Service rescinded its decision, the groups went ahead with their lawsuit. The Ninth Circuit upheld a nationwide injunction against the Forest Service. One of the key issues in the case is whether plaintiffs have standing.
These cases are in addition to the two environmental cases before the Supreme Court, as reported previously, Entergy Corp v. EPA, 07-588 (consolidate with other cases) and Couer Alaska v. Southeast Alaska Conservation Council, 07-984.
August 2008
In Sierra Club v. EPA, 04-1243, the United States Court of Appeals for the District of Columbia struck down USEPA's 2006 rule prohibiting states from establishing their own air pollution monitoring requirements. The court did so based on language under the Clean Air Act that "each permit must include adequate monitoring requirements." For each permit, the court held, the agency must gather emission limits and determine appropriate monitoring requirements.
August 2008
The USEPA is launching an interim policy that offers incentives to new owners who correct environmental violations at recently acquired regulated facilities. Under the interim policy, new owners may receive lower penalties than long-time owners. Under the current USEPA Audit Policy, the agency offers reduced penalties to companies that self-audit their facilities, promptly disclose and correct any violations discovered, and take steps to prevent future violations. Under the interim policy announced today, an owner who acquires a new facility may get additional penalty reductions from disclosing an even greater range of violations.
The new interim policy will be in effect immediately and EPA will accept public comment until October 30, 2008. The policy may change in light of these comments. The significance of this change is that buyers of properties and facilities that may be contaminated or have significant ongoing permit compliance issues will have incentives to report those problems promptly to get reduced penalties. This may be a significant benefit to buyers, and they should be aware of this opportunity. On the other hand, sellers should be aware that their shortcomings may or will be brought to the attention of the regulatory agencies soon after closing, and there is no relief for them. Any seller contemplating a transaction in the near future should be conducting (or updating) compliance assessments and correcting those problems that can be corrected before closing. For those that cannot be corrected right away, seller should seek a compliance order/agreement or negotiate with the buyer to reduce this risk.
EPA also announced a pilot project that allows regulated facilities nationwide to self-disclose environmental violations in a secure environment on EPA’s Website under the Agency's audit policy. This electronic self-disclosure system, or eDisclosure, should reduce transaction costs for companies by ensuring that each disclosure contains complete information. Under the pilot, regulated facilities nationwide will be able to use eDisclosure to disclose violations of the Emergency Planning and Community Right-to-Know Act (for example, failure to submit toxic chemical release forms to EPA’s Toxic Release Inventory). Regulated facilities located in Arkansas, Louisiana, New Mexico, Oklahoma and Texas will be able to disclose violations of all environmental laws. Based on the results of the pilot, EPA will consider expanding eDisclosure to other states in the near future.
EPA’s audit policy provides incentives to companies that voluntarily discover, promptly disclose and correct and prevent future environmental violations. EPA may reduce or waive penalties for violations if the facility meets the conditions of the policy. EPA will not waive or reduce penalties for repeat violations, or violations that resulted in serious actual harm. Since 1995, more than 3,500 companies have disclosed and resolved violations at nearly 10,000 facilities under the audit policy.
August 2008
In Mather v. Willet, 07-3454, the Second Circuit held that plaintiffs waived their claims under the Clean Water Act before 1999 regarding large scale dairy operations that were alleging discharging hazardous pollutants. The court also held that the CWA permit shield prohibited claims between 1999 and 2006. And the court held that plaintiffs' RCRA claims were prohibited under the statutes non-duplication provision.
July 2008
The United States Supreme Court will review a decision from the United States Court of Appeals for the Ninth Circuit that barred discharge of liquefied gold mining waste into an Alaskan mountain lake. The underlying cases are Coeur Alaska Inc. v. Southeast Alaska Conservation Council, No. 07-984 and Alaska v. Southeast Alaska Conservation Council, No. 07-990. The state of Alaska and Coeur Alaska Inc., a gold mining company, are seeking to reopen Alaska's Kensington Gold Mine. The Ninth Circuit overturned a permit issued by the U.S. Army Corps Of Engineers under Section 404 of the Clean Water Act that allowed the company to dump dredged waste from the mine into the Lower Slate Lake in the Tongass National Forest. The Southeast Alaska Conservation Council and others filed a lawsuit objecting to the permit. They argued that the Corps violated Sections 301(a), 301(e), and 306(e) of the CWA by issuing a permit for the discharge of process wastewater from a "froth-flotation mill" into a body of water protected by effluent limits promulgated by EPA. The petitioners assert that the case has both economic and administrative law importance whereby the economic benefits of mining to a region must be considered in evaluating environmental concerns.
July 2008
A panel of the Ninth Circuit imposed joint and several liability upon Shell Oil Company, which sold chemicals to the defunct facility owner, and two railroad companies that owned part of the land that was contaminated. United States v. Burlington Northern, 2008 WL 763257 (9th Cir. Mar. 25, 2008). Rejecting a district court's 191-page opinion apportioning liability based on years of ownership and the percentage of the facility owned by the railroads, the panel stated that the proper time to focus on such factors is at the contribution phase, not the liability phase. The panel affirmed the finding of joint and several arranger liability of Shell for chemicals that were spilled on the site by the buyer of Shell's product, which was shipped by a common carrier F.O.B. delivery point. Eight circuit judges dissented from the order denying rehearing en banc, stating that the district court's reliance on percentage and time of ownership finds support in the Restatement and other circuits, and that the panel's interpretation of CERCLA arranger liability creates intra and inter circuit conflicts and imposes liability on a defendant that lacked control over products spilled following sale.
July 2008
In North Carolina v. Environmental Protection Agency, No. 05-1244, the U.S. Court of Appeals for the District of Columbia Circuit vacated EPA's Clean Air Interstate Rule, finding "more than several fatal flaws." The rule was to use an emissions trading plan to reduce ozone and fine particle pollution from power plants that is transported across state boundaries and was to help so-called downwind states attain EPA air quality standards for ozone and fine particles. The D.C. Circuit struck down the agency's method for allocating emissions allowances for upwind states and its interpretation of protections for downwind states, leading the judges to vacate the entire rule.
May 2008
Piney Run v. County Commissioners
In Piney Run v. County Commissioners, 523 F.3d 1299 (Apr. 28, 2008), the 4th Circuit held that a citizens' group could not sue the County for alleged Clean Water Act violations because the State Department of the Environment was diligently prosecuting the matter pursuant to a Consent Judgment with the County.
May 2008
The United States Department of Interior listed the polar bear as a "threatened" species under the federal Endangered Species Act. While such a listing would typically create review requirements only for projects in Alaska, in this case the listing was made to address the impacts of global warming. At least theoretically, any "major federal action" in the US needed to approve a new source of greenhouse gas emissions would have to conduct an ESA review to determine the impact on polar bears prior to receiving approval. To protect against this result, the Secretary of DOI announced:
To make sure that the Endangered Species Act is not misused to regulate global climate change, I will take the following specific actions:
First, to provide clarity and certainty to those regulated under the Endangered Species Act, the Fish and Wildlife Service will propose what is known as a 4(d) rule that states that if an activity is permissible under the stricter standards imposed by the Marine Mammal Protection Act, it is also permissible under the Endangered Species Act with respect to the polar bear. This rule, effective immediately, will ensure the protection of the bear while allowing us to continue to develop our natural resources in the arctic region in an environmentally sound way.
Second, Director Hall will issue guidance to Fish and Wildlife Service staff that the best scientific data available today cannot make a causal connection between harm to listed species or their habitats and greenhouse gas emissions from a specific facility, or resource development project, or government action.
Third, the Department will issue a Solicitor’s Opinion further clarifying these points.
Fourth, the ESA regulatory language needs to be clarified. We will propose common sense modifications to the existing regulation to provide greater certainty that this listing will not set backdoor climate policy outside our normal system of political accountability.
May 2008
US District Court for the Western District of Pennsylvania
In this case, Sierra Club and other environmental groups sued the owners of a proposed power plant alleging that the company had failed to commence construction within 18 months after receiving a PSD permit. Pennsylvania DEP, however, had issued the company a letter acknowledging that construction had commenced. The court dismissed the claims (and other related counts), for lack of subject matter jurisdiction finding that the suit constituted a collateral attack on the agency's decision over which the court had no jurisdiction.
April 2008
The U.S. Supreme Court agreed to hear three cases consolidated for appeal, including the case of Entergy Corp. v. EPA, et al. The issue presented is whether power plants must use the best available technology to prevent aquatic life from being sucked into cooling water intake pipes or whether the plants can compare costs with benefits. The Second Circuit held that EPA could only take cost into account when the competing technologies had identical results but different costs.
March 2008
On February 26, 2008, the Inupiat Eskimo Village of Kivalina, Alaska sued twenty-three oil companies and power companies in the U.S. District Court for the Northern District of California for damages caused by climate change. The Complaint alleges that global warming is destroying Kivalina through the melting of Arctic sea ice that formerly protected the Village from winter storms. The Complaint seeks the costs of relocating the Village, among other things. While the Complaint alleges typical causes of action for public nuisance and private nuisance, it also includes a cause of action for civil conspiracy. In that cause of action, the Village alleges that some of the defendants "participated and/or continue to participate in an agreement with each other to mislead the public with respect to the science of global warming and to delay public awareness of the issue—so that they could continue contributing to, maintaining and/or creating the nuisance without demands from the public that they change their behavior as a condition of further buying their products."
March 2008: New Jersey v. Delaware
In New Jersey v. Delaware, decided March 31, 2008, the United States Supreme Court held that Delaware had the right to refuse a permit to BP Unit Crown Landing LLC to build a liquefied natural gas (LNG) facility on the New Jersey side of the Delaware River. The Court held that a 100 year-old compact between the two states did not provide New Jersey with exclusive jurisdiction over shore side improvements but instead that jurisdiction was shared when the improvements were "extraordinary." The two states have "overlapping authority to regulate riparian structures and operations of extraordinary character extending outshore of New Jersey's Domain into territory over which Delaware is sovereign."
February 2008: Court Overturns EPA’s Decision to “Delist” EGUs
The United States Court of Appeals for the District of Columbia Circuit struck down EPA’s regulations for mercury emissions from coal- and oil-fired electric utility steam generating units (“EGUs”). In New Jersey, et al. v. Environmental Protection Agency, the Court overturned EPA’s decisions to “delist” EGUs from stringent regulation under section 112 of the Clean Air Act (“CAA”) and to promulgate the Clean Air Mercury Rule (“CAMR”) cap-and-trade program under section 111 of the CAA.
Section 112(c) required EPA to “list” specific categories of major sources of pollutants by 1991 and establish emission standards for each category based on EPA’s determination of the Maximum Achievable Control Technology (“MACT"). Under Section 112(n), EPA was to study EGU mercury emissions and adopt regulations if “appropriate and necessary.” In December 2000, EPA listed EGUs for regulations under section 112 but did not adopt any regulations. In 2005, EPA reversed its “appropriate and necessary” finding and “delisted” EGUs from mercury regulation under Section 112. Instead, it promulgated the CAMR cap-and-trade program under the more flexible section 111. EPA also established stringent mercury emission limits for new EGUs.
Fifteen states, as well as various environmental groups, challenged EPA’s delisting and CAMR rules. The Court held that Section 112(c)(9) establishes standards EPA must meet for a delisting. EPA did not apply these standards in its EGU delisting, taking the position that it didn’t have to do so because it had inherent authority to correct the “mistake” it made in the original December 2000 listing decision. The Court ruled, however, that even if EPA thinks it made a mistake in December 2000, it still has to follow the Section 112(c)(9) standards to delist. In addition, to striking down the delisting decision, the Court overturned the CAMR rule itself. Listed sources can only be regulated under section 112. Since CAMR was promulgated under section 111, the Court ruled that CAMR has no legal basis.
February 2008: Southeastern Federal Power Customers, Inc. v. Geren
The U.S. Court of Appeals for the District of Columbia Circuit in Southeastern Federal Power Customers, Inc. v. Geren reversed a lower court ruling approving a settlement agreement among Georgia, the U.S. Army Corps of Engineers, and federal power customers in the Southeast that would have reallocated one-fifth of the water in Atlanta’s Lake Sidney Lanier to municipal and industrial use. The court reversed the U.S. District Court for the District of Columbia’s approval of the agreement because the agreement created major operational changes in the use of water from Lake Lanier that must be approved by Congress under the Water Supply Act.
January 2008: California Sues the EPA
California sued the U.S. Environmental Protection Agency (EPA) on January 2, 2008 regarding EPA's denial of California’s request for a waiver under the Clean Air Act (CAA) to set stricter vehicle emissions standards than required under federal law. Suit was filed in Ninth Circuit and alleged that EPA failed to make a "finding of nationwide scope and effect," as provided for in Section 307(b)(1) of the CAA.
January 2008: New Jersey in NJDEP v. Exxon Mobil Corp.
Judge Jacobson of the Superior Court of New Jersey in NJDEP v. Exxon Mobil Corp., rejected New Jersey's natural resources damages formula for groundwater resources because of the lack of evidence supporting the formula. This decision was and remains of great interest to stakeholders in the metropolitan area.
January 2008: 4th Circuit Court of Appeals Rules Against TVA’s Motion to Dismiss Nuisance Suit
A three-judge panel of the U.S. 4th Circuit Court of Appeals ruled against the Tennessee Valley Authority’s motion to dismiss North Carolina’s nuisance suit against TVA regarding emissions from its coal-fired power plants. As a result, the case should go to trial later this spring as discovery has been completed. North Carolina sued the TVA in 2006, claiming that North Carolina residents suffered ill health from pollutants from TVA’s 11 coal-fired power plants in Alabama, Kentucky and Tennessee and harmed the environment and economy. TVA claims that is complying with federal air pollution laws and has spent almost $5 billion in the past 30 years to reduce emissions. TVA claimed that, as a federal agency, it has immunity from nuisance lawsuits. Nineteen states, including New York, California, Ohio and South Carolina, and the American Lung Association, joined North Carolina in opposing TVA’s appeal.
