March 08, 2019

In Brief

John R. Jacus

Clean Air Act, preemption

State of Minnesota v. Volkswagen AG, No. A18-0544, 2018 WL 6273103 (Minn. Ct. App. Dec. 3, 2018).
A Minnesota Court of Appeals panel majority has held that Clean Air Act (CAA) claims by the state of Minnesota against Volkswagen for illegally installing emissions-control-defeating software in both new and used vehicles sold to consumers within the state were conflict preempted. The majority held that a conflict-preemption determination was appropriate because EPA has substantial authority to regulate motor vehicle manufacturers’ conduct nationwide, even after the vehicles are sold to the end user. Minnesota had argued that states retain authority under the CAA to regulate motor vehicles in use, while the federal government exclusively regulates new vehicles, but the court disagreed. The dissenting opinion agreed with the state, asserting that state governments retain their authority to regulate used vehicles, including the installation of defeat devices therein, citing the CAA’s preemption and savings clauses.

In re Anadarko Uintah Midstream, LLC, NSR Appeal No. 18-01, 17 E.A.D. 656 (Nov. 15, 2018).
The Environmental Appeals Board (EAB) of the U.S. Environmental Protection Agency (EPA) denied a petition by an environmental nongovernmental organization challenging EPA Region 8’s issuance of six synthetic minor, new source review permits to Anadarko Uintah Midstream, LLC (Anadarko). The permits were for six natural gas compression facilities within the boundaries of the Uintah and Ouray Indian Reservation, in Uintah County, Utah. Petitioners argued that EPA had improperly failed to require an air quality impact analysis (AQIA) under applicable regulations. EPA issued the permits pursuant to the Federal Minor New Source Review Program in Indian Country, 40 C.F.R. §§ 49.151–.161. Anadarko requested the permits in order to incorporate the requirements of its 2008 Clean Air Act Consent Decree with EPA into the six federally issued permits, so that the decree may then be terminated as to the facilities in question. Because the facilities were operating pursuant to the 2008 Consent Decree, which effectively limited the facilities’ potential to emit to below major source levels, EPA treated the facilities as existing synthetic minor sources. On appeal, petitioner WildEarth Guardians argued that EPA violated the Tribal Minor New Source Review rules by inappropriately concluding that issuance of the six permits did not constitute permitting actions warranting an AQIA pursuant to 40 C.F.R. § 49.154(d). EPA concluded that the transfer of emissions and operational requirements from the 2008 Consent Decree to minor source permits for the six facilities did not result in any construction or modification, and thus section 49.154(d) was not applicable, and in any event, is permissive, so EPA had discretion to determine that an AQIA was not warranted for these facilities. Thus, because the petitioner did not demonstrate clear error or an abuse of discretion in the EPA’s determination not to require an AQIA for these facilities, the EAB denied the petition.

Climate change litigation

Juliana v. United States, No. 6:15-CV-01517-AA, 2018 WL 6303774 (D. Or. Nov. 21, 2018); Juliana v. United States, 18-73014 (9th Cir. Nov. 8, 2018); In re United States, 139 S. Ct. 452 (2018).
There are several recent decisions regarding this long-pending case awaiting trial before the U.S. District Court for the District of Oregon, the most successful of numerous climate change suits filed by (and on behalf of, children and young adult plaintiffs) Our Children’s Trust against the federal and state governments on various theories, including the public trust doctrine. Based on a 2016 ruling by the U.S. District Court for the District of Oregon denying the federal government’s motions to dismiss filed on the ground that there is no constitutional right to a pollution-free environment, and on political question and foreign policy grounds, this case was pending a trial scheduled for October 29, 2018, until interlocutory appeals were again sought by the federal government. Those appeals included a decision of the U.S. Supreme Court lifting an administrative stay it had issued last October 19, 2018, 10 days before trial was scheduled to begin. In re United States, No. 18A410 (U.S. Nov. 2, 2018). The federal government had requested a full stay of the trial proceeding and sought a writ of mandamus directing the federal district court to dismiss the suit. The Supreme Court denied the petition and lifted the administrative stay briefly imposed, noting that the petition for mandamus did not have a fair prospect for success since the relief being sought may still be available from the U.S. Court of Appeals for the Ninth Circuit. Although the Ninth Circuit had previously denied the government’s petitions for mandamus, it did so without prejudice.

Two days after the Supreme Court lifted its prior administrative stay of the Juliana case, the Ninth Circuit partially granted another petition by the federal government and issued a stay of the case while it considers a renewed petition for a writ of mandamus directing the Oregon federal district court to dismiss the action, and granting the plaintiffs below 15 days to respond to the renewed government petition. The Ninth Circuit panel gave the federal district judge in the case the same time to respond to the petition, if desired. The Ninth Circuit also urged the district judge to promptly resolve pending government motions to reconsider her prior decisions not to certify for interlocutory appeal her denial of the government’s motion to dismiss in 2016, and her October 2018 denial of motions for summary judgment and judgment on the pleadings. On November 21, Judge Aiken issued an order certifying the case for interlocutory appeal to the Ninth Circuit, reconsidering her prior denial of such certification in light of the recent rulings by the Supreme Court and the Ninth Circuit.

Sinnok v. State, No. 3AN-17-09910 Cl (Alaska Super. Ct. Oct. 30, 2018).
Minor children plaintiffs filed a petition with the Alaska Department of Environmental Conservation requesting that it issue regulations aimed at creating a stable climate system. The agency denied the petition on September 27, 2017. The plaintiffs then filed suit challenging the denial of their petition for proposed regulations as a violation of Alaska’s Administrative Procedure Act (APA), and seeking injunctive relief ordering the state to prepare an accounting of carbon emissions and create a climate recovery plan, as well as a declaratory ruling that the state’s actions violated the plaintiffs’ fundamental rights to a stable climate system. The state of Alaska moved to dismiss on political question and prudential grounds, relying on the holding in Kanuk v. State Department of Natural Resources, 335 P.2d 1088 (Alaska 2014). Although plaintiffs attempted to distinguish the holding in Kanuk because they were challenging the state’s affirmative energy policy, the court disagreed, noting that the plaintiffs had failed to cite any specific state energy policy that has directly contributed to climate change and did not show how the permitting of oil and gas development and fossil fuel use in general are evidence of any breach of legal duty on the part of the state. Since plaintiffs’ requested injunctive relief would create a policy where none now exists, granting it would violate the separation of powers, so the court dismissed the action as involving nonjusticiable political questions. Also, the court ruled that plaintiffs failed to support their position that individuals have a constitutional right to a stable climate system, noting that neither the Alaska Supreme Court nor the U.S. Supreme Court had issued such a holding, and in the absence of such recognition of the alleged constitutional right, there is not a definite and concrete controversy to be adjudicated. Finally, with respect to the Alaska APA claim, the court held that the agency had timely responded to each point raised by plaintiffs in their petition for rulemaking, and supplied well-reasoned analysis with supporting citations to explain why it could not implement plaintiffs’ proposed regulations. Accordingly, the court granted the state’s motion to dismiss.

Colo. Oil & Gas Conservation Comm’n v. Martinez, 2019 CO 3, 433 P.3d 22 (Jan. 14, 2019).
A unanimous Colorado Supreme Court reversed a decision of the Colorado Court of Appeals that the Colorado Oil & Gas Conservation Commission (Commission) had improperly denied a petition to adopt new climate change–related regulations. In 2013, minor children filed the petition to adopt regulations that would have precluded issuing permits to drill oil and gas wells unless it could occur in a manner that does not contribute to climate change and does not cumulatively with other actions impair Colorado’s environment and adversely impact human health. Following extensive public comment and a hearing, the Commission unanimously decided not to engage in rulemaking on the petition. The Commission reasoned, among other things, that the proposed rule would be inconsistent with its authority under the Colorado Oil and Gas Conservation Act (the “Act”), that it was already working with the Colorado Department of Public Health and Environment (CDPHE) to address the issues raised, and other Commission priorities took precedence over the proposed rulemaking. The child petitioners appealed the Commission’s action to state district court and the Commission was upheld. The plaintiffs then appealed the district court ruling and a majority of the appellate panel reversed the district court, focusing on particular language in the Act’s legislative purpose, which referred to fostering the development of oil and gas “in a manner consistent with” protecting public health and the environment. Martinez v. Colo. Oil & Gas Conservation Comm’n, 2017 WL 1089556 (Mar. 23, 2017). The Commission appealed to the Colorado Supreme Court, which reversed the appellate court, finding that (1) review of a denial of petition for rulemaking is limited and deferential, (2) the language of the legislative declaration did not override the clear balancing of interests required of the Commission by the Act, including the continued development of oil and gas resources and the protection of public health and the environment, and (3) the Commission’s denial of the petition for rulemaking was based on a proper understanding of its statutory authority and was amply supported by the Commission’s findings, and, therefore, did not constitute an abuse of discretion.

Clean Water Act

Sierra Club v. Con-Strux, L.L.C., 911 F.3d 85 (2d Cir. 2018).
The Sierra Club brought an action under the Clean Water Act (CWA) against a recycler of demolished concrete, asphalt, and other building materials salvaged from demolition debris.  Plaintiff alleged that defendant Con-Strux, LLC (Con-Strux) was engaged in industrial activity that is subject to CWA permitting and that defendant had obtained no such permit. The district court granted defendant’s motion to dismiss on the ground that one Standard Industrial Classification (SIC) code not within the scope of industrial activity subject to CWA permitting that applies to Con-Strux predominated over another SIC code that also admittedly applied to Con-Strux and is included within the scope of industrial activity requiring CWA permits. Sierra Club, Inc. v. Con-Strux, L.L.C. 2017 WL 6734184 (E.D.N.Y. Dec. 29, 2017). On appeal, the U.S. Court of Appeals for the Second Circuit reversed the district court, holding that although certain brick, stone, and construction material wholesalers covered by SIC code 5032, which code is not included in the scope of “industrial activity” subject to CWA permitting, that noncoverage did not mean that the defendant’s business involving scrap and waste materials and their sorting and wholesale distribution under a separate SIC code 5093 was excused from compliance with CWA permitting requirements. Accordingly, the court of appeals reversed and remanded for further proceedings.

Prairie Rivers Network v. Dynegy Midwest Generation, LLC, No. 18-CV-2148, 2018 WL 6042805 (C.D. Ill. Nov. 14, 2018), appeal pending, No. 18-3644 (7th Cir.).
The U.S. District Court for the Central District of Illinois dismissed the claims of an environmental nongovernmental organization alleging that defendant Dynegy Midwest Generation’s (Dynegy) Vermilion Power Station was violating the Clean Water Act (CWA) because pollutants in its fly ash waste disposed in permitted ponds at the facility were seeping into groundwater and from there on to a navigable riverbank. The plaintiff brought a CWA citizen suit against Dynegy relying on conditions in the facility’s CWA discharge permit establishing specific outfalls that did not include the areas of asserted seepage and prohibiting the entry of sludges and other wastes into waters of the state. Dynegy filed a motion to dismiss for lack of subject matter jurisdiction relying on Village of Oconomowoc Lake v. Dayton Hudson Corp., 24 F.3d 962 (7th Cir. 1994) (Oconomowoc), in which the U.S. Court of Appeals for the Seventh Circuit ruled that the CWA does not regulate discharges of pollutants to groundwater. The district court rejected plaintiff’s attempt to distinguish Oconomowoc, holding that discharges from artificial ponds into groundwater are not governed by the CWA, even if there is a hydrological connection between the groundwater and navigable waters of the United States. Plaintiff’s further attempt to retain its claim of alleged permit violations was also rejected by the district court, which observed that plaintiff could not “bootstrap a complaint into federal court” for a discharge not within the scope of the CWA simply by alleging that a discharge violates a permit condition.

Editor’s note:

The U.S. Supreme Court granted certiorari to review a Ninth Circuit decision holding that discharges to groundwater that was hydrogeologically connected to a navigable water could be regulated by the Clean Water Act. The case is: County of Maui v. Hawai’i Wildlife Fund, No. 18-260, cert. granted 2.19.2019. The case will likely be heard in the Court’s October 2019 Term.

Emergency Planning and Community Right to Know Act

Don’t Waste Arizona, Inc. v. Hickman’s Egg Ranch, Inc., No. CV-16-03319-PHX-GMS, 2018 WL 6629657 (D. Ariz. Dec. 19, 2018).
Plaintiff filed a citizen suit in U.S. District Court for the District of Arizona under the Emergency Planning and Community Right to Know Act (EPCRA) against the defendant Hickman’s Egg Ranch alleging failure to report emissions of ammonia to the environment from poultry waste. Although recent farm legislation eliminated the need for the defendant to report such emissions under EPCRA after 2018, it was undisputed that reports were not filed as required for prior years, and were then submitted late. Despite the defendant’s clear liability, and several years of time out of compliance with the reporting requirements for two different facilities, the district court chose not to impose the maximum penalty of $25,000 per facility. Instead, the court imposed $1,500 per facility in penalties, in light of (1) the lack of impact on emergency responders from the failure to report, (2) the defendant’s history of compliance, (3) the absence of economic benefit from failing to report the emissions, (4) the defendant’s much earlier one-time notice to EPA of the emissions, and (5) the defendant’s inability to pay substantial penalties and remain in business, among other factors. Subsequent to this decision, plaintiff filed a motion for reconsideration which was granted in part in an amended decision, resulting in revised findings of fact and conclusions of law, and the entry of judgment in plaintiff’s favor, but leaving the penalty at $3,000 for the two facilities.

Endangered Species Act

Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 139 S. Ct. 361 (2018).
The U.S. Supreme Court vacated a U.S. Court of Appeals for the Fifth Circuit’s decision involving the U.S. Fish and Wildlife Service’s (FWS) designation of critical habitat for the endangered dusky gopher frog. The Fifth Circuit had affirmed FWS’ decision to protect from development a 1,500-acre area in Louisiana owned by Petitioner Weyerhauser and others by designating it as “critical habitat,” holding that the term “critical habitat” contained no habitability requirement, and that FWS’ decision not to exclude the property in question from the habitat designation was committed to agency discretion and, therefore, unreviewable. The Supreme Court rejected the Fifth Circuit’s ruling on the issue of habitability, holding that only habitat of a species at the time of listing may be subject to such designation by FWS, and remanding to the Fifth Circuit for further consideration of arguments contingent upon the term “habitat,” which is not defined in the Endangered Species Act. The Court then noted the Administrative Procedure Act’s presumption of reviewability and, relying on Bennett v. Spear, 520 U.S. 154 (1997), held that the Secretary of the Interior’s ultimate decision to designate or exclude property from critical habitat, which must consider economic and other impacts, is reviewable for an abuse of discretion. The Court therefore remanded the question of whether FWS’ assessment of the costs and benefits was flawed in a way that rendered its decision not to exclude the property at issue arbitrary, capricious, or an abuse of discretion.

FLPMA, standing, ripeness

Southern Utah Wilderness Alliance v. Burke, 908 F.3d 630 (10th Cir. 2018).
The U.S. Court of Appeals for the Tenth Circuit has held that an appeal by the state of Utah of a federal district court’s approval of a Federal Land Policy and Management Act (FLPMA) settlement between certain environmental nongovernmental organizations (NGOs) and the U.S. Bureau of Land Management (BLM) was not ripe for review, and dismissed the case for lack of subject matter jurisdiction. At issue was a settlement resulting from the NGOs’ prior challenge of six resource management plans and associated travel management plans adopted by BLM. Utah intervened in the federal district court action and alleged that the settlement between plaintiff NGOs and BLM illegally codified interpretative BLM guidance, impermissibly bound the BLM to a past administration’s policies, infringed on valid property rights on federal lands, and violated a prior BLM settlement, but the district court approved the settlement. Utah appealed to the Tenth Circuit alleging that the settlement conflicts with a prior BLM settlement, currently pending litigation and several federal statutes, including FLPMA and the Administrative Procedure Act. The Tenth Circuit did not address the merits of Utah’s allegations. Instead, the Court held that Utah’s claims were premature because the settlement merely provided criteria for BLM to consider as it develops plans in a complex regulatory scheme that may or may not create de facto wilderness or may impermissibly consider guidance that has been rescinded or ignore future substantive rules. Thus, only when BLM finalizes plans covered by the settlement may a court address the substantive legal arguments raised by Utah.

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