September 01, 2014

In Brief

Theodore L. Garrett

CERCLA

Toxic tort claims arising from releases of hazardous substances may be barred by state statutes of repose despite Superfund’s preemption of state statutes of limitation. CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014). Owners of property formerly owned by CTS Corporation claimed damages from contaminants stored by CTS. The district court granted CTS’s motion to dismiss based on a state statute of repose barring suit more than 10 years after the defendant’s last culpable act, but the Fourth Circuit reversed based on the Comprehensive Environmental Response, Compensation, and Liability Act’s (CERCLA’s) preemption of state statutes of limitation. 42 U.S.C. § 9658. The Supreme Court noted that the term “statute of limitations” appears four times in CERCLA § 9658 while “statute of repose” does not appear at all. The opinion concluded that statutes of limitation and statutes of repose have different purposes, and it is proper to conclude that Congress did not intend to preempt statutes of repose.

Air quality

U.S. Environmental Protection Agency (EPA) regulations making stationary sources subject to the Prevention of Significant Deterioration (PSD) and Title V programs on the basis of their potential to emit greenhouse gases were upheld in part and reversed in part by the Supreme Court. Util. Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014). EPA lacked authority to “tailor” the Clean Air Act’s unambiguous numerical thresholds of 100 or 250 tons per year to accommodate its greenhouse-gas-inclusive interpretation of the permitting triggers. Justice Antonin Scalia criticized EPA for asserting “newfound authority to regulate millions of small sources” and to decide “without regard for the thresholds prescribed by Congress, how many of those sources to regulate. We are not willing to stand on the dock and wave goodbye as EPA embarks on this multiyear voyage of discovery.” However, the opinion concludes that the PSD and Title V programs are designed to apply to, and cannot rationally be extended beyond, a relative handful of large sources capable of shouldering heavy substantive and procedural burdens. Thus, the Clean Air Act can be reasonably interpreted to require large sources that would otherwise need PSD or Title V permits based on their emissions of non-GHG pollutants to comply with Best Available Control Technology (BACT) for greenhouse gases. Important limitations on BACT may work to mitigate concerns about “unbounded” regulatory authority, the opinion states.

The D.C. Circuit held invalid a 2012 EPA memorandum to EPA regional air directors limiting the scope of a Sixth Circuit decision that narrowed the grounds for aggregating sources of emissions for purposes of Title V or new source review. Nat’l Envtl. Dev. Assn’s Clean Air Project v. EPA, 752 F.3d 999 (D.C. Cir. 2014). In Summit Petroleum Corp. v. EPA, 690 F.3d 733, the Sixth Circuit rejected EPA’s “functional interrelatedness” criterion, holding that the test for aggregation is whether facilities are physically proximate. The D.C. Circuit vacated EPA’s memo limiting the Summit Petroleum decision to the four states within the Sixth Circuit, holding that EPA’s memo is contrary to EPA’s regional consistency regulations, 40 C.F.R. 56.3, and noting that EPA refrained from seeking Supreme Court review of the Summit Petroleum decision.

The Fifth Circuit dismissed a company’s pre-enforcement challenge to a PSD notice of violation (NOV) alleging major modifications of the company’s coal-fired power plants. Luminant Generation Co. v. EPA, No. 12-60694, 2014 WL 3037692 (5th Cir. July 3, 2014). The court held that NOVs fail to qualify as “final agency action” that may be challenged under section 307(b)(1) of the Clean Air Act. The Fifth Circuit’s opinion distinguishes the Supreme Court’s decision in Sackett v. EPA, 132 S. Ct. 1367 (2012) on the grounds that, unlike an order, issuing a NOV “does not create any legal obligation, alter any rights, or result in any legal consequences.”

Water quality

Wastewater from a county treatment plant discharged by four injection wells into groundwater without a National Pollutant Discharge Elimination System (NPDES) permit was held to violate the Clean Water Act. Hawaii Wildlife Fund v. County of Maui, No.12-00198, 2014 WL 2451565 (D. Hawaii May 30, 2014). In that case, three to five million gallons per day of treated effluent travels 200 feet underground to a shallow groundwater aquifer, and a tracer dye study conducted by EPA and the Hawaii Department of Health showed that effluent pumped into two of the wells eventually found its way to the Pacific Ocean. The district court granted summary judgment to plaintiffs, reasoning that although groundwater, without more, is not part of the waters of the United States, the discharge of a pollutant that migrates to navigable water through groundwater as a conduit requires a permit under the Clean Water Act. The court also concluded that the county was liable, under the alternative post-Rapanos test for jurisdictional waters, because the discharge significantly affected the ocean’s physical, biological, and chemical integrity due to elevated levels of nitrogen and phosphorus, acidification, reduced oxygen, and elevated water temperature.

A coal-mine owner may not assert a “permit shield” defense for discharges of selenium when it failed to disclose the presence of selenium during the permit application process, a court of appeals ruled. S. Appalachian Mountain Stewards v. A & G Coal Corp., No. 13-2050, 2014 WL 3377687 (4th Cir. July 11, 2014). The environmental groups brought a citizen suit for injunctive relief and penalties after sampling of two ponds showed the presence of selenium that was not authorized in the mine’s permit. The coal mine owner appealed the district court’s grant of summary judgment to the environmental groups, arguing that it complied with its legal obligations by disclosing the pollutants that it knew or had reason to believe were present and identifying its operations or processes. The Fourth Circuit noted that the permit application instructions required an analysis of selenium, that the regulations require the applicant to state whether it knows or has reason to believe that selenium and other listed pollutants are being discharged, and that the company’s position “encourages willful blindness” and prevents permit writers “from receiving the information necessary to effectively safeguard the environment.” A general description of the plant’s operations did not provide the permit writer with adequate information about discharges to qualify for the permit shield.

RCRA

The D.C. Circuit vacated EPA rules that excluded two types of synthetic fuels from regulation by the Resource Conservation and Recovery Act (RCRA). In Sierra Club v. EPA, No. 08-1144, 2014 WL 2895930 (D.C. Cir. June 27, 2014), the court vacated an exemption for hazardous waste residuals from petroleum refining that are inserted into gasification units to produce “synthesis gas,” which is a type of fuel that may be burned for the recovery of energy. In Natural Resources Defense Council v. EPA, No. 98-1379, 2014 WL 2895943 (D.C. Cir. June 27, 2014), the court vacated EPA’s exemption for fuels derived from hazardous waste deemed comparable to non-hazardous-waste-derived fossil fuel. The court concluded that the plain meaning of RCRA section 3004(q) requires EPA to establish rules to protect human health and the environment “applicable to all fuel derived from hazardous waste.” EPA’s rule exempted facilities that produce hazardous-waste-derived fuels, facilities that burn any such fuels for the purposes of energy recovery, and the distribution or marketing of any such fuels. But the court held: “The EPA cannot carve out of RCRA one of the very activities that Congress commanded it to regulate.” “Congress directed the EPA to promulgate those standards that the EPA reasonably determines ‘may be necessary to protect human health and the environment,’” and thus EPA still “retains the ability to regulate such wastes in a manner that promotes goals like efficient resource recovery and reuse as long as it also comports with Congress’s protective command.”

NEPA

A federal court enjoined mining companies from construction in the Sunset Roadless Area in Colorado pursuant to an exploration plan approved by the U.S. Forest Service and the Interior Department that failed to comply with the National Environmental Policy Act. High Country Conservation Advocates v. U.S. Forest Service, No. 13-01723, 2014 WL 2922751 (D. Colo. June 27, 2014). The agencies argued that it was impossible to evaluate the impact of greenhouse gas (GHG) emissions from the mine, but the court concluded that a tool was available, namely the Social Cost of Carbon interagency protocol. It was arbitrary and capricious for the agencies to quantify the anticipated benefits of the lease modifications, the court ruled, while incorrectly claiming that it was impossible to quantify the costs. The court further found that the environmental impact statement also failed to disclose the GHG emissions resulting from the combustion of coal mined pursuant to the leases, stating that the reasonably foreseeable effect of burning coal that otherwise would have been left in the ground must be analyzed even if its precise effect is uncertain.

Energy

The New York Court of Appeals held that towns may ban oil and gas production activities, including hydraulic fracking, within municipal boundaries through the adoption of local zoning laws. In Matter of Wallach v. Town of Dryden, 2014 N.Y. slip op. 04875 (Ct. App. June 30, 2014). Norse Energy Corporation USA began acquiring oil and gas leases from landowners in Dryden, which is within the Marcellus Shale Formation. In response, the Town of Dryden amended its zoning ordinance to specify that oil and gas exploration and extraction activities were not permitted in Dryden. The ordinance was challenged by Norse, arguing that the supersession clause in the statewide Oil, Gas and Solution Mining Law preempts local zoning laws that curtail energy production. The court of appeals held that the statute does not preempt the home rule authority vested in municipalities to regulate land use in order to preserve the existing character of their communities, finding no inconsistency between the preservation of local zoning authority and the statute’s policies of preventing “waste” and promoting a “greater ultimate recovery of oil and gas.”

The D.C. Circuit held that EPA’s guidance document for permitting mining operations under the Enhanced Coordination Process between EPA and the Army Corps of Engineers is not final action subject to pre-enforcement review. Nat’l Mining Ass’n. v. McCarthy, No. 12-5310, 2014 WL 3377245 (July 11, 2014). Reversing the district court’s grant of summary judgment, the court of appeals concluded that the EPA guidance document imposes no obligations or prohibitions on regulated entities, and state permitting authorities are free to ignore it. The court also held that the Enhanced Coordination Process is a procedural rule that did not alter the rights of the parties and did not require notice and comment.

Public nuisance

The Seventh Circuit affirmed the dismissal of a lawsuit by five states bordering the Great Lakes alleging that the U.S. Army Corps of Engineers and other agencies failed to protect the Great Lakes from an invasion of Asian carp. State of Michigan v. U.S. Army Corps of Engineers, No. 12–3800, 2014 WL 3401174 (7th Cir. July 14, 2014). The states’ complaint does not plausibly argue that the government agencies are creating a nuisance by their manner of operating the waterway system. To the contrary, the Seventh Circuit held that the allegations in the complaint tend to show that the Corps is taking the problem of the invasive species carp seriously, and the complaint does not present facts that, if believed, would show that hydrological separation is the only way to prevent the spread of Asian carp.

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.