November 01, 2015

In Brief

Theodore L. Garrett

CERCLA

ASARCO, LLC v. Celanese Chemical Co., 792 F.3d 1203 (9th Cir. 2015).
The Ninth Circuit rejected an argument by ASARCO that the Superfund statute of limitations for contribution claims could be restarted by ASARCO’s subsequent bankruptcy settlement. ASARCO’s predecessor owned a smelter in California and leased a portion of the property containing a sulfur dioxide plant to CNA Holdings, LLC’s predecessor. In 1989, ASARCO settled a cost-recovery lawsuit by a subsequent purchaser who incurred response costs, Wickland Oil Company, and also with the California Lands Commission in its capacity as a former owner of part of the site. Some 19 years later, in 2008, ASARCO agreed to pay $33 million to the state of California as part of a compromise of claims asserted by the State in ASARCO’s bankruptcy proceeding. Three years later ASARCO filed a contribution claim pursuant to CERCLA section 113(f), seeking to recover some of its costs for the same site from others including CNA. The Ninth Circuit affirmed the district court’s decision dismissing ASARCO’s 2011 contribution suit, stating that “ASARCO’s new contribution claim via the 2008 Bankruptcy Settlement is for exactly the same liability ASARCO assumed in the 1989 Wickland Agreement, and is therefore time barred.” The court noted that if ASARCO could restart the statute of limitations through a bankruptcy settlement, ASARCO “would receive a benefit that it had not paid for in that bankruptcy settlement” and such a ruling “would encourage tardy parties to use bankruptcy to revive their expired claims.”

Air quality

EME Homer City Generation L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015).
The D.C. Circuit remanded the Cross-State Air Pollution Rule (Transport Rule) emissions budgets for 13 states to EPA. The court, however, rejected a number of other challenges to the Transport Rule, upholding the sulfur dioxide and nitrogen oxides emissions trading program. The panel concluded that the 2014 emission budgets for sulfur dioxide are invalid because they require upwind states to reduce emissions more than needed to allow downwind states to meet regulatory standards for ozone, and the emissions budgets for nitrogen oxides were invalid because the downwind states could comply even with no additional emissions limitation imposed on the upwind states. The court rejected EPA’s argument that imposing less stringent budgets on upwind states would be contrary to the rationale underlying EPA’s uniform cost thresholds, stating that “EPA’s uniform cost thresholds have required States to reduce pollutants beyond the point necessary to achieve downwind attainment.”

Sierra Club v. EPA, 793 F.3d 656 (6th Cir. 2015).
The Sixth Circuit vacated EPA’s decision to approve three state requests to redesignate portions of the Cincinnati-Hamilton area from nonattainment to attainment for fine particulates because the state plans did not include reasonably available control technology (RACT) for industrial sources. The court held that plans to demonstrate attainment of EPA national ambient air quality standards must include RACT “even if those measures are not strictly necessary to demonstrate attainment” of the pollutant standards. However, the court rejected the Sierra Club’s argument that states may not use cap-and-trade programs to satisfy the requirement that emissions controls be permanent and enforceable. The opinion states that the “heart of this dispute is really where the sources that reduce their emissions must be located,” holding that EPA has discretion to conclude that permanent emissions reductions in a state implementation plan will be achieved from a regional cap-and-trade program in a broader geographic area.

Water quality

Florida Wildlife Federation, Inc. v. EPA, No. 14-10987,2015 WL 4081495 (11th Cir. July 7, 2015) (per curiam) (not for publication).
The Eleventh Circuit upheld a consent decree regarding Florida’s criteria for nutrients in regulated waterways under the Clean Water Act, rejecting environmentalists’ claim that the trial court abused its discretion by modifying the terms of a consent decree. Environmentalists initiated a lawsuit in 2008 seeking greater federal oversight of regulated waters and obtained a consent decree requiring EPA to promulgate strict numeric nutrient limits for Florida. After various appellate challenges, the original consent decree was later modified to reflect less stringent rules developed by the state and accepted by EPA. “[I]f the conservationists had wanted to challenge EPA’s determination that the regulations do satisfy the CWA, the proper way would have been in a proceeding under the Administrative Procedure Act,” the opinion states.

American Farm Bureau Federation v. EPA, 792 F.3d 281 (3d Cir. 2015).
The Third Circuit upheld EPA’s multistate Chesapeake Bay cleanup plan, rejecting industry challenges to the total maximum daily load (TMDL) plan that included allocations for permitted point sources and nonpoint pollution from sectors including agricultural and urban stormwater. Rejecting the Farm Bureau’s arguments, the court concluded that an interpretation of the Chesapeake Bay TMDL that would prevent EPA from establishing separate TMDL allocations for point and nonpoint sources and requiring “reasonable assurance” that the states will achieve those allocations would frustrate the goals of the Clean Water Act. The court also rejected the Farm Bureau’s argument that the TMDL infringes on state land-use policies, stating that TMDLs “exists within a cooperative federalism framework” and the TMDL plan makes “no actual, identifiable, land-use rule.” The panel concluded that the Farm Bureau’s reading of the act “would shift the burden of meeting water quality standards to point source polluters, but regulating them alone would not result in a clean Bay.”

United States v. Metropolitan Water Reclamation District of Greater Chicago, 792 F.3d 821 (7th Cir. 2015).
A district court’s approval of a settlement agreement to reduce a city’s overflows from a combined sewer and stormwater system over time was upheld on appeal. The Seventh Circuit concluded that the settlement was “reasonable” and that federal water law does not require the elimination of all overflows. Rejecting the claims of environmental groups, the court stated, “The EPA anticipates working out details as time passes and additional reservoir capacity becomes available . . . and if the District does not cooperate the court can afford supplemental relief.”

Energy

Energy and Environment Legal Institute v. Epel, 793 F.3d 1169 (10th Cir. 2015).
The Tenth Circuit rejected a dormant Commerce Clause challenge to Colorado’s renewable energy standard, which requires utilities to obtain 20 percent of their electricity from renewable sources. Plaintiffs argued that the Colorado renewable energy standard limits out-of-state coal-fired utilities plants from selling electricity because Colorado is tied to an electric grid that covers 11 states. The court concluded that the suit was “a novel lawmaking project” and that the Colorado standard was not unconstitutional because “it doesn’t link prices paid in Colorado with those paid out of state, and it does not discriminate against out-of-staters.”

Energy Future Coalition v. EPA, 793 F.3d 141 (D.C. Cir. 2015).
The D.C. Circuit upheld the air regulations that require emission tests for new vehicles utilizing a test fuel that is “commercially available.” This rule was challenged by biofuel producers, who want EPA to approve for test usage a fuel containing 30 percent ethanol, even though this fuel is not “commercially available” as required by the regulations. Petitioners argued that the EPA regulations created a catch-22 because they preclude the sale of any fuel that is not “substantially similar” to a test fuel but it is also illegal to use a test fuel unless it first approved for sale, thus effectively precluding use of the new ethanol blend fuel. The court concluded that the statutory scheme adopted by Congress requires that fuels be tested under “actual current driving conditions … including conditions relating to fuel,” and it was not arbitrary and capricious “for EPA to fulfill that statutory mandate by requiring that test fuels be ‘commercially available.’”

Pesticides and EPA inaction

In Re Pesticide Action Network North America v. EPA, No. 14–72794, 2015 WL 4718867 (9th Cir. Aug. 10, 2015).
The Ninth Circuit issued an order of mandamus requiring EPA to issue a proposed or final revocation of the pesticide cloropyrifos (Dursban) or a final response to the petition filed by environmental groups seeking a ban no later than October 31, 2015. The opinion states that “filibustering…is frowned upon in administrative agencies tasked with protecting human health,” and that EPA’s delay of nearly nine years “is egregious and warrants mandamus relief.”

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.