March 01, 2014

In Brief

Theodore L. Garrett

Constitutional law

The ethanol and crude oil provisions in California’s low carbon fuel standard do not violate the Commerce Clause of the U.S. Constitution, a divided panel of the Ninth Circuit held. Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013), rehearing en banc denied, ___F.3d ___, 2014 U.S. App. LEXIS 1149 (Jan. 22, 2014). Reversing a district court ruling, the majority rejected plaintiffs’ claim that the standard is inherently discriminatory against out-of-state ethanol, stating that they would not “block California from developing this innovative, nondiscriminatory regulation to impede global warming.” The court did not rule on the issue of whether the California regulations are preempted by two federal laws, namely the federal Renewable Fuel Standard and the Energy Independence and Security Act of 2007, and remanded the lawsuit to the district court for further proceedings.


The Second Circuit held that a state’s installation of pollution control equipment to address groundwater contamination was not barred by the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) statute of limitations for remedial actions. New York v. Next Millenium Realty, 732 F.3d 117 (2d Cir. 2013). Although the state referred to the equipment as interim “remedial” measures in the record of decision, the court was willing to assume that the state may have been using that term in a general sense as addressing both emergency and long-term conditions. The court concluded that the efforts in question were measures in response to immediate concerns with the municipal water supply and were thus governed by the CERCLA statute of limitations for removal actions.

Air quality

The Ninth Circuit upheld the Environmental Appeals Board’s rejection of a challenge to an oil exploration permit, issued by EPA under the Clean Air Act (CAA), which was not accompanied by an analysis of the potential incremental impact of an offshore drilling vessel. Alaska Wilderness League v. EPA, 727 F.3d 934 (9th Cir. 2013). The court of appeals found that the CAA provision was ambiguous, and therefore deferred to EPA’s conclusion that the Prevention of Significant Deterioration (PSD) program did not require an “increments” analysis because it was not required by the state implementation plan and the source is not a major emitting facility under the CAA. The Ninth Circuit also upheld EPA’s exemption of a 500-meter radius surrounding the vessel from ambient air quality standards.

The Tenth Circuit upheld EPA’s rejection of a petition objecting to the issuance of a Title V permit by the Colorado Department of Public Health and Environment for a coal-fired power station. Wildearth Guardians v. EPA, 728 F.3d 1075 (10th Cir. 2013). Petitioner claimed that PSD requirements applicable to major modifications had been triggered, relying on a notice of violation issued by EPA. Unpersuaded by a contrary Second Circuit decision, the court in Wildearth Guardians deferred to EPA’s position that a party cannot rely solely on the existence of a notice of violation to demonstrate noncompliance, noting that such a notice reflects only the beginning of a process designed to test the accuracy of the agency’s initial conclusions. The court also found that petitioner’s evidence of annual emissions failed to demonstrate that a major modification had occurred.

Water quality

The Eleventh Circuit upheld a U.S. district court’s dismissal of a Clean Water Act citizen suit against a mining company that allegedly violated new source performance standards. Black Warrior Riverkeeper, Inc. v. Black Warrior Minerals, 734 F.3d 1297 (11th Cir. 2013). The plaintiffs provided notice of alleged violations of both its National Pollutant Discharge Elimination System permit and new source performance standards and then filed suit alleging violations of only the new source performance standards before the 60-day waiting period in section 1365(b) of the act expired. The state then sued Black Warrior for violations of its permit. The Eleventh Circuit found that the citizen suit was “a thinly veiled attempt to beat the State of Alabama to the courthouse” in order to avoid being barred from bringing suit. Although section 1365(b) does not apply to suits concerning new source performance standards, the Eleventh Circuit held that 60 days’ notice was required to prevent an exception from swallowing the general rule: “To allow a citizen to evade the 60-day waiting period by suing a permit holder for alleged violations of the new source performance standards without regard to the conditions of the discharger’s permit would both undermine the overarching permitting scheme and nullify the statutory preference for governmental enforcement.”

The Fifth Circuit vacated a civil penalty award of $6 million against a petroleum company. United States v. CITGO Petroleum, 723 F.3d 547 (5th Cir. 2013). The district court found that the cost savings to CITGO from foregoing certain maintenance projects that would have prevented a spill were almost impossible to determine, and provided a range rather than quantifying the specific economic benefit. The Fifth Circuit held that the district court erred in failing to make a finding on the amount of economic benefit, though “admittedly difficult,” and remanded the matter for further proceedings.


The D.C. Circuit ruled that the Maryland Department of the Environment (MDE) must make a decision on a CAA permit application for a natural gas compressor station. Dominion Transmission, Inc. v. Summers, 723 F.3d 238 (D.C. Cir. 2013). The company received a certificate of public convenience and necessity from the Federal Energy Regulatory Commission (FERC), but MDE twice refused to process the company’s application for an air quality permit because the applicant had not shown that the project received approval from local zoning authorities as required by the Maryland code. The court noted that state and local regulations are preempted by the Natural Gas Act to the extent that they would delay the construction of facilities approved by FERC. On remand, the state must either process the application for an air quality permit or identify non-preempted zoning or land use requirements that the applicant has not complied with.

Theodore L. Garrett

Theodore L. Garrett is a partner of the law firm Covington & Burling LLP in Washington, D.C. He is a past chair of the Section and is a contributing editor of Trends.