March 02, 2020

In Brief

John R. Jacus

Administrative Procedure Act, emerging contaminants

Plymouth Village Water & Sewer District v. Scott, No. 217-2019-CV-00650, 2019 N.H. Super. LEXIS 18 (N.H. Super. Ct., Nov. 26, 2019). 
The New Hampshire Superior Court enjoined the New Hampshire Department of Environmental Services’ (DES) new standards for per- and polyfluoroalkyl substances (PFAS) in drinking water, finding that the plaintiffs’ claim that DES had not quantified the benefits of such standards under the New Hampshire Administrative Procedure Act was likely to succeed on the merits. The court ruled against the plaintiffs’ other claims, including that the regulations constituted an unfunded mandate and that DES failed to give fair notice and an opportunity to comment on the final standards. Plaintiffs, a municipality, water treatment providers, and a PFAS manufacturer, asserted that DES failed to comply with the legislature’s mandate that, when DES adopted PFAS regulations, it had to consider the costs and benefits of the regulations. Plaintiffs argued that when DES adopted a more stringent standard than originally proposed for levels of certain PFAS compounds in drinking water that increased the estimated compliance costs by a factor of 30 to 60, the agency provided no estimate of the benefits of the stronger standards. DES acknowledged that it did not assess the benefits of the new regulations because not enough was known about the benefits to allow them to be estimated. The court described DES’ cost-benefit analysis as “cursory consideration” with no quantification of the level of harm caused by PFAS at different levels of exposure and no explanation of the benefits expected from imposing different PFAS drinking water standards and their correlative levels of cost. The court concluded that DES had “failed to comply with the statutory requirement that it give consideration” to the “costs and benefits to affected parties that will result from establishing the standard” for PFAS in drinking water. The court stayed its injunction for a month to give the parties time to appeal to the New Hampshire Supreme Court.

Clean Air Act

California v. United States Envtl. Prot. Agency, No. 18-CV-03237-HSG, 2019 WL 5722571, 2019 U.S. Dist. LEXIS 192206 (N.D. Cal. Nov. 5, 2019).
The U.S. District Court for the Northern District of California denied a motion by the U.S. Environmental Protection Agency (EPA) to modify a 2016 summary judgment and order concerning the implementation of Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills that became effective in October 2016 (2016 Rule). The court had held that EPA had failed to develop a federal plan by the regulatory deadline and ordered EPA to develop a federal plan by November 6, 2019. Since the judgement in 2016, EPA had made progress in reviewing state plans and had proposed a federal plan. In August 2019, EPA had made final revisions to the 2016 Rule in which it pushed back the deadlines by which states must submit plans and by which EPA must develop a federal plan for regulating landfill emissions when states fail to do so (2019 Rule). The revisions in the 2019 Rule formed the basis for EPA’s Rule 60(b)(5) motion to vacate the court’s prior summary judgment and order. EPA asked the court to reconsider its prior judgment, citing the changed circumstances of new deadlines under the 2019 Rule. The court denied EPA’s motion, distinguishing the case authority cited by EPA in which changes in law constituted “changed circumstances,” since those cases were brought by a non-party to the action in which the prior judgment was issued. In this case, EPA changed its regulations to push back the deadlines by more than two years.

The court observed that EPA’s action would “only delay EPA’s obligations, rather than changing them,” and that “this action sidesteps the Court’s order, delaying EPA’s fulfillment of unchanged obligations with no guarantee that this precise situation will not occur again in two years’ time.” The court also observed that the other circumstances on which the court’s prior order was based did not indicate that imposition of the order would be inequitable, specifically noting that “[g]iven EPA’s significant progress and the limited work remaining on the federal plan, the record does not establish that the Court-imposed six-month deadline is no longer equitable.” The court stayed its judgment for 60 days to allow EPA to appeal the decision.

NEPA, Clean Water Act

Ctr. for Biological Diversity v. U.S. Army Corps of Engineers, 941 F.3d 1288 (11th Cir. 2019).
The U.S. Court of Appeals for the Eleventh Circuit rejected the appeal of an environmental group claiming that the U.S. Army Corps of Engineers (Corps) should have considered the impacts of phosphogypsum byproduct production arising from the expansion of phosphate mining operations in the course of its issuance of a Clean Water Act (CWA) section 404 permit. The phosphate produced through such mining is used in fertilizer production. The court held that while phosphogypsum might be related to the mining due to its generation from processing of the phosphate for fertilizer production, the National Environmental Policy Act (NEPA) does not require the Corps to analyze the impacts of phosphogypsum, noting that other agencies were responsible for regulating the radioactive byproduct. The Center for Biological Diversity challenged the section 404 permit for the South Pasture Mine Extension of Mosaic Fertilizer, Inc. (Mosaic), one of four mine-related projects Mosaic is pursuing. The Corps evaluated all four projects under an area-wide environmental impact statement. The reviewing panel’s majority held that the Corps had a straightforward obligation to consider the reasonably foreseeable impacts of granting a permit for discharging materials into wetlands, but that obligation did not include analyzing the impacts of a byproduct “distant in time and place from the wetland discharges accompanying phosphate mining.” The panel majority said the phosphogypsum impacts are only “tenuously” caused by the Corp’s decision to grant the permit. The dissent observed that phosphogypsum and phosphate mining are intertwined and that “Mosaic would produce millions of tons of phosphogypsum byproduct as a result of the dredging and filling permit for its phosphate mine.” The dissent also noted that since the CWA provides the Corps with the power to deny a permit based on “general environmental concerns” that outweigh benefits, the agency did have the authority to act.

NEPA

WildEarth Guardians v. Bernhardt, No. 19-CV-001920-RBJ, 2019 WL 5853870, 2019 U.S. Dist. LEXIS 194323 (D. Colo. Nov. 8, 2019).
The U.S. District Court for the District of Colorado enjoined the expansion of a Colorado coal mine, finding that the U.S. Department of the Interior Office of Surface Mining Reclamation and Enforcement (OSM) had violated NEPA. First, the court found that OSM had failed to examine alternatives to the venting from new methane drainage wells that would result from the mine’s expansion. The plaintiff environmental groups argued that flaring of the methane gas would reduce the amount of greenhouse gas emissions released. The court agreed that the methane flaring alternative fit the OSM’s objective of evaluating the environmental effects of coal mining. The court found that OSM’s March 2019 record of decision approving the project improperly relied on the U.S. Forest Service’s 2017 supplemental final environmental impact statements (2017 EIS) for the project. The court also found that OSM violated NEPA by failing to undertake a new study based on new information about the mine’s impact on perennial streams that “directly contradicted” findings in the 2017 EIS. The court rejected the plaintiffs’ arguments that the federal agencies also failed to account adequately for the cumulative impacts of the mine’s expansion on climate change. The court held that plaintiffs failed to prove the project would result in “significantly different environmental effects” than those already considered in the Forest Service’s 2017 EIS. The court remanded OSM’s record of decision to the agency for further proceedings, vacated the entire mining plan and the agencies’ finding that NEPA requirements were satisfied, and enjoined project proponents from proceeding with the project.

Safer Chemicals, Healthy Families v. U.S. Envtl. Prot. Agency, 943 F.3d 397(9th Cir. 2019).
The U.S. Court of Appeals for the Ninth Circuit ruled that EPA’s Toxic Substances Control Act (TSCA) rule implementing the 2016 amendments to the act (Risk Evaluation Rule) was deficient in disregarding risks associated with chemical uses that are no longer common. Petitioner environmental groups and labor unions challenged EPA’s definition of “conditions of use” and assertion of broad discretion to determine what constitute conditions of use. EPA argued that TSCA only requires it to assess current or planned uses of a chemical during a risk evaluation. The unanimous panel disagreed, holding that TSCA intends the assessment of legacy uses since they may still pose a risk. The court also held that EPA risk evaluations must consider how materials from legacy uses, such as asbestos in insulation, are disposed. The court further noted that because asbestos is “known to be used” in insulation materials within the meaning of that phrase under TSCA, insulation is a “condition of use” of asbestos. The court concluded that “EPA’s exclusion of legacy uses and associated disposals from the definition of ‘conditions of use’ [in the challenged rule] is therefore unlawful.” The court rejected petitioners’ other arguments that legacy disposals should be part of the EPA’s risk evaluation, and that the Risk Evaluation Rule improperly gave the agency the power to assess risk based on individual conditions of use, as opposed to requiring a holistic evaluation of all uses. Petitioners had separately challenged another TSCA rule that outlined how EPA will prioritize which chemicals to evaluate (Prioritization Rule), but the court held that such arguments were identical to those in the instant case, and stated the court’s Risk Evaluation Rule findings will apply to the Prioritization Rule.

Water resources, tribal water rights

Baley v. United States, 942 F.3d 1312 (Fed. Cir. 2019).
The U.S. Court of Appeals for the Federal Circuit ruled against a coalition of southern Oregon and northern California farmers who claimed they were not adequately compensated when the federal government declined to release water to them from the Klamath Project on the Oregon and California border in 2001. The unanimous panel affirmed the lower court decision, holding that the Klamath Tribes and other tribes with treaty fishing rights had priority over plaintiff-appellant farmers for water when the federal government halted or curtailed water releases to those farmers so as to maintain water levels and protect fish listed under the Endangered Species Act (ESA). The Klamath Tribes, Yurok Tribe, and Hoopa Valley Tribe of Native Americans have rights to fish dating back to when their reservations were created in treaties with the United States. The court held that the tribes’ treaty fishing rights “entitle them to the government’s compliance with the ESA in order to avoid placing the existence of their important tribal resources in jeopardy.” The federal government had analyzed the Klamath Project’s water use on three protected species of fish in early 2000 and found that diverting water for irrigation could lower levels too much and threaten those species. The court rejected plaintiffs’ argument that their water rights had been taken without just compensation and in violation of a prior agreement, and that the tribes were only entitled to catch enough to “support a ‘reasonable livelihood,’” among other arguments. The court held that the tribes’ treaty fishing rights “include the right to prevent appropriators from utilizing water in a way that depletes adjoined water sources below a level that damages the habitat of the fish they have a right to take.”

Climate change litigation, securities fraud

People by James v. Exxon Mobil Corp., 65 Misc. 3d 1233(A) (N.Y. Sup. Ct. 2019).
The Supreme Court of the State of New York held that the State of New York failed to prove that Exxon Mobil Corporation made any material misstatements or omissions about the risks posed by climate change to its business that misled any reasonable investor, and dismissed the state’s climate change–based securities fraud case after a three-week bench trial. The trial was the first that squarely addressed U.S. fossil fuel companies’ understanding of the impacts and risks posed by climate change to their businesses in a securities disclosure context. Plaintiff New York claimed Exxon gave false and misleading statements to investors that regulatory policies enacted to combat climate change did not pose a significant risk to its oil and gas business, and privately used financial assessments that underestimated climate-related costs compared to assessments it made available publicly. The court noted that New York failed to provide testimony from any investors that they had been misled by Exxon. The court also found that Exxon disclosed its use of two different metrics to measure climate-related risks no later than 2014, but that its disclosure had no market impact and was ignored by investors. The court also noted that nothing in its ruling is “intended to absolve ExxonMobil from responsibility” for contributing to climate change through the production of fossil fuels, “[b]ut ExxonMobil is in the business of producing energy, and this is a securities fraud case, not a climate change case.”

Climate change litigation, standing

Juliana v. United States, No. 18-36082, 2020 U.S. App. LEXIS 1579 (9th Cir. Jan. 17, 2020).
The U.S. Court of Appeals for the Ninth Circuit reversed the U.S. District for the District of Oregon’s interlocutory orders in an action brought by an environmental organization and individual plaintiffs against the federal government. The plaintiffs alleged climate change–related injuries caused by the federal government continuing to “permit, authorize, and subsidize” fossil fuel production and use. The court remanded the case to the district court with instructions to dismiss for lack of Article III standing. This long-pending case had been the most successful of numerous climate change suits filed by and on behalf of children and young adult plaintiffs by Our Children’s Trust against the federal and state government on various theories including the public trust doctrine. The case was pending trial scheduled for October 29, 2018, until the federal government again sought interlocutory appeals. On November 24, 2018, the district court issued an order certifying the case for interlocutory appeal to the Ninth Circuit, having reconsidered its prior denial of such a certification considering rulings by the U.S. Supreme Court and the Ninth Circuit. See In Brief, Mar.-April 2019. In considering the three requirements for whether plaintiffs had Article III standing to pursue their constitutional claims, the panel majority held that the district court correctly found that plaintiffs claimed concrete and particularized injuries and that the Article III causation requirement satisfied for purposes of summary judgment because there was at least a genuine factual dispute as to whether a host of federal policies were a “substantial factor” in causing the plaintiffs’ injuries. However, the panel majority held that plaintiffs’ claimed injuries were not redressable by an Article III court because it was beyond the power of an Article III court to order, design, supervise, or implement the plaintiffs’ requested remedial plan where any effective plan would necessarily require a host of complex policy decisions entrusted to the wisdom and discretion of the executive and legislative branches of the federal government. A dissenting opinion argued that the case should have proceeded to trial, and that given the gravity of the concerns raised by the plaintiffs, “even a partial and temporary reprieve would constitute meaningful redress,” thereby satisfying the third requirement for Article III standing. The panel also rejected the federal government’s argument that plaintiffs’ claims must proceed, if at all, under the Administrative Procedure Act because the act allows only challenges to discrete agency decisions. The panel held that the plaintiffs were not challenging a discrete agency action, but rather the “totality of various government actions.”

John R. Jacus

John R. Jacus is a senior partner in the Environmental Practice Group 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.