September 10, 2018

In Brief

John R. Jacus


Genuine Parts Co. v. EPA, Nos. 16-1416, 16-1418 (D.C. Cir. May 18, 2018).
The U.S. Circuit Court of Appeals for the D.C. Circuit rejected an EPA listing of a potential Superfund site on the National Priorities List (NPL) as arbitrary and capricious. Two potentially responsible parties, the owner of a former auto parts remanufacturing, degreasing, and industrial waste property, and the owner of a shopping center where dry cleaning solvents were discharged into a leaky sewer line, challenged EPA’s final agency action in placing the affected site on the NPL due to putative drinking water contamination. In assessing the site’s upper and lower aquifers, EPA determined that the aquifers were interconnected and treated them as a single hydraulic unit when applying the Hazard Ranking System (HRS) for possible NPL listing of the site. If EPA treated the aquifers as separate unconnected water bearing zones, then the final HRS score would not have qualified the site for NPL listing. EPA’s own studies, however, demonstrated that the aquifers were separated by a “confining layer” of materials with lower hydraulic conductivity that water cannot easily move through. Upon review, the D.C. Circuit vacated the NPL listing and held that EPA ignored substantial evidence and acted arbitrarily and capriciously in relying on portions of studies that supported its position regarding the interconnectivity of the aquifers, while ignoring cross sections in those studies that did not. The court also noted that while EPA’s listing decisions are highly technical and entitled to “significant deference,” conclusory explanations where there is considerable evidence in conflict do not suffice to meet the deferential standard of review.

Bartlett v. Honeywell Int’l, Inc.No. 17-1907 (2nd Cir. May 25, 2018) (per curiam). |
The U.S. Circuit Court of Appeals for the Second Circuit summarily affirmed the dismissal of a complaint brought by residents living near a waste disposal area at the Onondaga Lake Superfund site in New York. The court held that it had subject matter and diversity jurisdiction and that the plaintiffs’ state tort law claims were preempted by the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Conflict preemption applied because the state tort law claims conflicted with the intent of Congress in promulgating CERCLA and with the obligations of Honeywell International (Honeywell) in complying with a CERCLA remediation plan enforced by a federal consent decree. Plaintiffs argued that under state law Honeywell should have departed from the consent decree’s terms by conducting additional or different remedial actions such as containing contaminants in a closed system, selecting a different perimeter air monitoring system due to alleged deficiencies, etc. The court agreed that CERCLA’s provisions prohibit any potentially responsible party, like Honeywell, from commencing any remedial action except for those expressly authorized in the consent decree. The court also noted that the federal remedy was “comprehensive, but flexible and dynamic,” meticulously negotiated and resulting from over “two decades of legal and technical efforts, including public notice and comment and extensive supervision by a federal court and state and federal expert agencies….” Accordingly, the court found that CERCLA preempted the residents’ claims because the allegations amounted to “nothing more than a belated challenge to the adequacy of the consent decree itself,” rather than Honeywell’s failure to comply with or properly implement the consent decree.

Clean Air Act

NRDC v. EPA, No. 16-1413 (D.C. Cir. July 20, 2018).
The U.S. Circuit Court of Appeals for the D.C. Circuit rejected two environmental organizations’ challenge to a 2016 rule defining a “natural event” under EPA’s exceptional events rule, which allows states to not report exceedances of the national ambient air quality standards that are caused by “exceptional events.” At issue was whether some human activity might contribute to an otherwise “natural event” under the exceptional events rule. The court reviewed EPA’s definition of natural event in the 2016 rule under the two-step analysis required by Chevron USA, Inc. v. NRDC, 467 U.S. 837 (1984). At step one, the court considered the plain meaning of “natural event,” which does not seem to accommodate a human-caused contribution, but then acknowledged that “the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” In so reading the term “natural event,” the court observed that “[t]he point at which human contributions convert a natural event into one caused by human activity is blurry at best,” and concluded that “EPA must draw that line, and the Act provides little guidance beyond establishing that the distinction exists.” Thus, in step two of its Chevron analysis, the court held that Congress left a gap for EPA to fill in a reasonable fashion. After considering the petitioners’ concerns, the court found that, while some risk that “extreme and unforeseen applications of the rule may have problematic results” likely remained, the rule was reasonable and the definition of natural event therein was permissible under the Clean Air Act.

Nat’l Envtl. Dev. Ass’n’s Clean Air Project v. EPA, No. 16-1344 (D.C. Cir. June 8, 2018) (NEDACAP II).
In NEDACAP II, the U.S. Circuit Court of Appeals for the D.C. Circuit denied a petition from environmental organizations seeking review of EPA amendments under the Clean Air Act regarding inter-circuit non-acquiescence by EPA when federal court decisions regarding locally or regionally applicable actions may affect its application of national programs, policy, and guidance. The EPA amendments were promulgated in response to a prior case, NEDACAP I, 752 F.3d 999 (D.C. Cir. 2014), which granted a petition for review because EPA’s then-effective regulations precluded inter-circuit non-acquiescence by EPA. The petitions for review were prompted by the U.S. Circuit Court of Appeals for the Sixth Circuit’s decision in Summit Petroleum Corp. v. EPA, 609 F.3d 733 (6th Cir. 2012), wherein the Sixth Circuit Court rejected EPA’s interpretation of the word “adjacent” when treating multiple pollution-emitting activities under common control as a single stationary source under the Clean Air Act. In evaluating the updated regulations under the Clean Air Act in NEDACAP II, the court determined that the Clean Air Act only requires uniformity regarding delegation of the EPA Administrator’s powers and does not address court-created inconsistencies. Instead, inter-circuit inconsistency is an “inevitable consequence” of the Clean Air Act’s bifurcated system of requiring review of “nationally applicable” regulations to the D.C. Circuit or the U.S. Supreme Court and directing review of “locally or regionally applicable” regulations to the appropriate regional circuit. In the concurring opinion, Senior Circuit Judge Silberman noted that in cases like Summit, the congressional scheme would be followed if the EPA Administrator declared the issue national and channeled any appeal to the D.C. Circuit.

Sierra Club v. EPA, No. 15-1487 (D.C. Cir. July 6, 2018).
The U.S. Circuit Court of Appeals for the D.C. Circuit considered petitions for review of EPA’s rule entitled “NESHAP for Brick and Structural Clay Products Manufacturing; and NESHAP for Clay Ceramics Manufacturing,” (the Brick/Clay Rule) for alleged violations of the Clean Air Act. In the rule, EPA set (a) Maximum Achievable Control Technology (MACT) standards to regulate heavy metal emissions from kilns and (b) health thresholds to regulate their acid gas emissions. The court addressed separate challenges to the Brick/Clay Rule brought by environmental and industry groups and ultimately granted the petitions for review of all but one of the issues raised by the environmental groups while denying all the industry petitions. The D.C. Circuit reviewed EPA’s action under the Chevron process, Chevron U.S.A., Inc. v. NRDCInc., 467 U.S. 837 (1984), noting that if the statute is silent or ambiguous on an issue, the court will defer to EPA’s interpretation of the statute, so long as it is reasonable. The court granted the petitions of the environmental groups on multiple issues, including: (1) EPA acted unreasonably by concluding that it is “established” that the acid gas pollutants pose no cancer risk, (2) EPA acted unreasonably in finding that the non-carcinogenic health threshold for hydrogen chloride was established, without providing a supporting basis, (3) EPA did not adequately explain how a hydrogen fluoride emissions limit based on an “established health threshold” can permit potential health risks from acute exposure, (4) EPA did not meet the Clean Air Act requirement to include an ample margin of safety in the health threshold for the acid gases, and (5) EPA’s provision of alternate emissions standards is contrary to the statutory requirement of a standard based on the “best” performing sources. Finally, while the court did find that EPA had sufficiently explained the upper prediction limit to small data sets, it granted the petition relating to five cases where EPA failed to explain adjustments made to individual upper prediction limit calculations. Regarding the Brick Industry Association’s petition, the court found that (1) EPA did not violate the Clean Air Act by using emissions data from synthetic minor sources to set the MACT floor for particulate matter and non-mercury metal emissions for brick plant major sources, (2) EPA was not arbitrary or capricious when it used data from kilns that did not use fabric filters to set the MACT floor for particulate matter emissions, and (3) EPA relied on substantial evidence to conclude that technological controls are available to achieve the MACT floor without raw material substitution and made a reasoned decision not to subcategorize based on the mercury content of raw materials.

Clean Water Act

United States v. HVI Cat Canyon, Inc., 314 F. Supp. 3d 1049 (C.D. Cal. 2018).
The United States and California state agencies filed suit against an oil and gas production company (Greta), claiming that a series of oil spills violated the Clean Water Act, the Oil Pollution Act (OPA), and California state law. The court granted in part and denied in part the United States’ motion for partial summary judgment and determined that the government’s removal costs were reasonable and incurred in good faith. The court also held that the narrowly construed third-party defense under OPA did not apply because the defendant could not show that vandalism from a third party solely caused the spill, which was also due to failure of an injunction pump and a failure by defendant to take proper precautions to prevent a release from vandals or otherwise.

Defendant did not contest that the 12 spills at issue constituted an unpermitted discharge of oil from a point source as defined by the Clean Water Act, but claimed that it could not be liable under the act because the oil did not discharge into “navigable waters” protected under the act.  Relying on Ninth Circuit Court of Appeals’ precedent, United States v. Robertson, 875 F.3d 1281 (9th Cir. 2017), and its interpretation of the U.S. Supreme Court’s decision in Rapanos v. United States, 547 U.S. 715 (2006), the district court applied Justice Kennedy’s “significant nexus” test to determine whether the tributaries at issue are navigable waters within the meaning of the Clean Water Act. The court held that the test applies to wetlands and tributaries and is a “flexible ecological inquiry” that may be supported by “quantitative or qualitative evidence.” Additionally, per Robertson, the court considered the existence of an ordinary high water mark (OHWM) as “one factor” in its significant nexus analysis. Regarding discharges into three tributaries at issue, the court concurred with the opinion of the government’s expert witness and found that these water bodies possessed OHWMs and had documented hydrological connections and water flow that significantly affected the “physical, biological and chemical integrity of a downstream [traditional navigable water (“TNW”)].” Conversely, the court found that the defendant’s expert report did not address these facts and his criticisms were not supported by authority. Additionally, the court held that the presence of OHWMs, low water flow, and a long distance to navigable waters do not defeat a “significant nexus” to a TNW finding. Citing Justice Kennedy in Rapanos, the court noted that to find otherwise, particularly in the western part of the country, would make “little practical sense in a statute concerned with downstream water quality.” Accordingly, the court granted the government partial summary judgment regarding the “significant nexus” of these tributaries to TNW.

Ohio Valley Envtl. Coalition (OVEC) v. Pruitt, 893 F.3d 225 (4th Cir. 2018). 
The U.S. Circuit Court of Appeals for the Fourth Circuit reversed summary judgment based on allegations that EPA failed to perform a nondiscretionary duty to promulgate total maximum daily loads (TMDLs) for biologically impaired waters in West Virginia. Pursuant to the Clean Water Act, each state must develop TMDLS for impaired waters that it places on the “303(d) list” of impaired waters. A state must submit TMDLs to EPA “from time to time,” and according to the impaired water body’s “priority ranking.” Once a state submits a TMDL, EPA must approve or disapprove the state’s TMDL within 30 days and, if disapproved, EPA must develop and finalize its own TMDL 30 days after a disapproval. In 2012, West Virginia enacted a state law to delay the development of TMDLs for biologically impaired waters. In 2014, responding to pressure from plaintiffs and EPA, West Virginia projected specific dates for developing ionic toxicity TMDLs from 2020 to 2025 for the 573 waters at issue. Based on the state’s delay, plaintiffs brought suit, claiming EPA’s duty was triggered due to West Virginia’s “constructive submission” of no TMDLs. Relying on significant precedent from other circuits, the court held that the constructive submission doctrine was inapplicable here because the doctrine only applies when a state “clearly and unambiguously” expresses a decision not to submit TMDLs and has no plan to remedy the situation. As of now, West Virginia is still within the 8–13 years set out in EPA guidance to develop TMDLs, is making a good-faith effort to comply with its state law and has submitted a “credible plan” with EPA to produce those TMDLs.

City of Taunton, Mass., v. EPA, No. 16-2280 (1st Cir. July 9, 2018).
The U.S. Circuit Court of Appeals for the First Circuit affirmed EPA’s decision to impose a limit, through the National Pollutant Discharge System (NPDES) permit, on the amount of nitrogen discharged from the City of Taunton, Massachusetts’ wastewater treatment plant (City). Applying the Administrative Procedure Act (APA) and deference due to the “scientific and technical nature of EPA’s decision-making,” the court found that EPA’s permitting decision was based on a reasonable interpretation of the Clean Water Act and was not arbitrary and capricious. The court declined to reopen the administrative record pursuant to section 509(c) of the Clean Water Act. The court found the section inapplicable because the public hearings regarding NPDES permits need not be “on the record” and are therefore informal agency adjudication under the APA. EPA regulations require that a draft NPDES permit include a fact sheet that “briefly” sets forth the significant facts, methods, and policies considered in preparing the draft permit. In this instance, the fact sheet identified the datasets and studies relied upon and sufficiently described why it was necessary to include an effluent limit in the draft permit because the City’s nitrogen discharges had a “reasonable potential” to violate the applicable water-quality standards. Regarding the City’s substantive challenges, the court found that EPA properly determined that the Taunton Estuary was nutrient impaired and that nitrogen discharges from the City caused or contributed to “cultural eutrophication” in violation of Massachusetts’ narrative water quality criterion. To translate the narrative criteria into a numeric water quality criterion, EPA relied on a state report and a three-year water quality monitoring study and properly used a “reference-based” approach to determine the target nitrogen concentration.

Climate change litigation

City of Oakland v. BP PLC, No. 3:17-cv-06012-WHA (N.D. Cal. June 25, 2018).
The U.S. District Court for the Northern District of California dismissed a suit by California cities who sued major oil and gas companies in a nuisance action under federal common law. The cities, alleged that defendants’ sale of their fossil fuels while knowing they contribute to climate change and rising oceans constitutes a nuisance and sought billions of dollars to abate the local effects of rising sea levels in Oakland and San Francisco. As the district court observed at the outset, plaintiffs’ action rests on the “sweeping proposition that otherwise lawful and everyday sales of fossil fuels, combined with an awareness that greenhouse gas emissions lead to increased global temperatures, constitute a public nuisance.” Applying the Restatement (Second) of Torts § 821B(1) (1979)(Restatement), the court observed that a successful public nuisance claim requires proof that a defendant’s activity unreasonably interferes with the use or enjoyment of a public right and thereby causes the public-at-large substantial and widespread harm. The court found that where the alleged interference is intentional, “it must also be unreasonable,” and this determination involves “the weighing of the gravity of the harm against the utility of the conduct” under sections 826 through 831 of the Restatement. In so doing, it is necessary to consider the extent and character of the interference, the social value that the law attaches to it, the character of the locality involved, and the burden of avoiding the harm placed upon members of the public. In making that consideration, the court acknowledged that carbon dioxide released from fossil fuels has caused (and will continue to cause) global warming, but also observed that our industrial revolution and the development of our modern world has literally been fueled by oil and coal, without which “virtually all of our monumental progress would have been impossible.” The court found that the cities’ allegations that the sale of fossil fuels is a nuisance is equally displaced by the Clean Air Act. Turning to the plaintiffs’ allegations regarding international sales of fossil fuels, beyond the displacement reach of the act, the court then reasoned that these claims are foreclosed by the need for federal courts to defer to the legislative and executive branches when it comes to such international problems.

Energy Policy and Conservation Act and Corporate Average Fuel Economy standards

NRDC v. Nat’l Highway Traffic Safety Admin., 894 F.3d 95 (2nd Cir. 2018).
The U.S. Circuit Court of Appeals for the Second Circuit granted in April 2018 various petitions challenging a rule published by the National Highway Traffic Safety Administration (NHTSA) that indefinitely delayed the effective date of a rule adjusting civil penalties that the agency had promulgated several months prior. In its opinion issued after the order granting the petitions, the court noted that NHSTA’s original rule would have increased civil penalties for violations of corporate average fuel economy (CAFE) standards for motor vehicles adopted in 1975 under the Energy Policy and Conservation Act. It then considered NHSTA’s about-face decision to delay that rule. The rule was first frozen pursuant to a memorandum by former White House Chief of Staff Reince Priebus dated January 20, 2017, concerning the imposition of a “regulatory freeze pending review,” and then was the subject of NHTSA’s rule postponing the CAFE standards penalty adjustments indefinitely, referred to as the “suspension rule.” Given Congress’s determination to ensure that civil penalties retain their value over time through regular inflationary adjustments, as reflected in the “highly circumscribed schedule” for the penalty increases Congress imposed, the court concluded that the statute does not authorize NHTSA to indefinitely delay implementation of the penalty increases. And although Congress preserved in the statute a narrow window of discretion for agencies regarding the amount of the initial catch-up adjustment, it afforded no such discretion regarding the timing of the adjustments. The court disagreed with NHTSA’s argument that essentially there is categorical authority for an agency to delay an effective date of an earlier rule pending its reconsideration, noting that a decision to reconsider a rule does not simultaneously convey authority to indefinitely delay the existing rule pending that reconsideration.


W. Org. of Res. Councils v. Zinke, No. 15-5294 (D.C. Cir. June 19, 2018).
The U.S. Circuit Court of Appeals for the D.C. Circuit rejected environmental organizations’ action against the Secretary of the Interior, seeking an order compelling him to update the Federal Coal Management Program’s (Program) programmatic environmental impact statement (PEIS) under the National Environmental Policy Act (NEPA). The Program’s Record of Decision and final rule were promulgated in 1979. The court affirmed the district court’s dismissal, because neither NEPA nor the Department of the Interior’s rules created a legal duty for DOI to update the Program’s PEIS. The court applied the U.S. Supreme Court’s seminal decision in Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004) (SUWA), which examined when a court may compel agency action under section 706(1) of the APA. In response to plaintiffs’ arguments that the existence of new data regarding coal combustion’s impact on greenhouse gases in the atmosphere and the fact that “environmentally significant” decisions remained, the court noted that “as SUWA makes clear, the fact that actions continue to occur in compliance with the Program does not render the original action incomplete.” Accordingly, the court found that DOI’s NEPA obligations for the Program terminated with its adoption in 1979.

South Carolina v. U.S., No. 1:18-cv-01431 (D.S.C. June 7, 2018).
The U.S. District Court for the District of South Carolina granted the state’s preliminary injunction against the U.S. Department of Energy (DOE) and other federal defendants enjoining the federal defendants from terminating the mixed oxide (MOX) fuel fabrication facility project (MOX Facility) currently under construction at the Savannah River Site located in South Carolina. The MOX facility is being constructed to irradiate some of the country’s surplus weapons-grade plutonium in MOX fuel to be used in existing domestic, commercial reactors, pursuant to specific statutory requirements. The federal defendants argued that South Carolina’s claims were not justiciable, and that the statutory certifications required to terminate the project were mere “notifications,” “responses,” and “reports.” The court disagreed, noting that the commitments and certifications required of DOE were much more than a “purely informational” report; rather, they were evidence of final agency action to terminate the MOX Facility. Because that action has significant legal consequences, the State’s claims under the APA were justiciable. Finally, with respect to the issuance of a preliminary injunction, the court found (1) South Carolina did enjoy a “likelihood of success on the merits” because the Secretary of Energy’s purported commitments and certifications have no basis in law or fact, (2) that “irreparable harm” exists when, as in this case, agencies become entrenched in a decision uninformed by the proper NEPA process, (3) that, although issuance of the requested injunction would result in continued expenditures of $1.2 million per day, the balance of equities weighs heavily in South Carolina’s favor, and (4) an injunction preventing the federal defendants from taking any action to terminate the MOX Facility until NEPA compliance can be assured furthers the public interest.

John R. Jacus

John R. Jacus is a partner and the Environmental Practice Group Leader in the law firm of Davis Graham & Stubbs LLP in Denver. He is a past Section Council member and Environmental Committees chair and vice-chair and a contributing editor of Trends.