A Court-Side Seat: Coal-Fired Limitations, the Search for a Venue Climate Change and New Agency Rules that May or May Not Stick Around

Pillsbury - Gravel2Gavel Construction & Real Estate Law

This is a brief review of recent significant environmental and administrative law rulings and developments. With the change in presidential administrations, the fate of at least some of the newly promulgated rules is uncertain.

THE U.S. SUPREME COURT

BP PLC v. City and County of Baltimore
On January 19, 2021, the Court heard oral argument in BP PLC v. City and County of Baltimore. The respondents filed a Greenhous Gas Climate Change lawsuit in state court, alleging that BP, like other energy companies, is liable for significant damage caused by the sale and promotion of petroleum products while knowing that the use of these products and the resulting release of greenhouse gases damages the environment and public property. Several similar lawsuits have been filed in state courts, pleading common law violations as well as trespass and nuisance law violations The energy companies have tried, unsuccessfully to date, to remove these cases to federal court. The petitioners argue that the federal removal statutes allow the federal courts of appeal to review the lower court’s remand, thus opening the possibility that some of the issues presented in these cases can be tried in federal court, presumably a friendlier forum. A decision on this procedural issue should be rendered in a few months.

The Court has also agreed to hear two new environmental law cases this term, from the Tenth Circuit (HollyFrontier Cheyenne v. Renewable Fuels Association—involving EPA’s administration of the renewable fuels waiver program) and Guam v. U.S. (involving CERCLA’s statute of limitations in a case where Guam is facing a potential Superfund liability in the hundreds of millions of dollars.)

THE FEDERAL APPELLATE COURTS

The District of Columbia Circuit

American Lung Association v. EPA
On January 19, 2021, the DC Circuit decided this very important Clean Air Act case. The opinion is very long (185 pages) and deals with EPA’s fundamental powers under the Clean Air Act to regulate greenhouse gas emission rules affecting existing coal-fired power plants, a major source of greenhouse gas emissions, which contribute to worldwide climate change. In 2015, EPA promulgated the Clean Power Plan (CPP), which imposed strict emissions limits on coal-fired power plants that generate electricity. The plan was based on a reading of the agency’s authority under Section 7411 of the Act, and had the effect of mandating the use of non-coal fired sources such as natural gas-fired plants. This has been described as an “outside the fence line” option, and it was immediately challenged. The Supreme Court, somewhat surprisingly, granted a stay of this rule, and it never went into effect. The new administration, in 2019, issued a replacement rule, the Affordable Clean Energy Rule, which took issue with the CPP’s approach and determined that CAA Section 7411 did not, as a matter of law, permit it to be used as it was. The DC Circuit reversed, holding that the 2019 rule was the product of a fundamental misconstruction of the statute, and vacated and remanded the 2019 rule to the agency for a fresh look. However, there was a partial dissent, with Judge Walker holding that, in his view, neither rule could be promulgated because Section 7412 had earlier been invoked to regulate these stationary sources, and 7412 expressly exempts the use of 7411 in these instances. It would not be surprising to see an appeal made to the Supreme Court, although the new administration may not do so.

AirCraft Service International, et al., v. FERC
On January 22, 2021, the court decided the case of AirCraft Service International, et al., v. FERC. The petitioners are several airlines flying out of Tampa, Fla., and they argue that FERC’s determination that the aircraft fuel transported to the Orlando airport was not moving in interstate commerce resulted in there being no rate regulation whatever. This was mistaken they argued, but the court disagreed. The continuity of interstate movement was interrupted by these local actions, and the court upheld the agency’s determination that it had power to impose rate regulation. Agency precedent held that what might be interstate transportation of fuel becomes intrastate commerce because the fuel was stored for a week or so before it was distributed locally.

U.S. Court of Appeals for the Fifth Circuit

Prentil, et al. v Arkema, Inc.
On January 22, 2021, the Fifth Circuit Court decided that the lower court had not properly invoked the class action determination of Rule 23 of the Federal Rules of Civil Procedure this case. Arkema operates a chemical plant in Crosby, Texas, that suffered extensive flooding damage as a result of the 2017 Hurricane Harvey storm. The plaintiffs, residing in homes near the facility, filed a class action against Arkema, alleging that the unlawful and toxic chemical releases and explosions at the plant damaged their health and property, and they invoked RCRA, CERCLA and other causes of action in their lawsuit. Arkema opposed the class certification, and the appeals court agreed with Arkema. “We find the Certificate Order wanting in its answers to Arkema’s arguments that a trial of class claims would devolve into individualized inquiries on causation, injury and damages.” The case was returned to the trial court for additional review.

NEW FEDERAL RULES

This is a short list of a few new agency rules.

On January 6, 2021, EPA published a rule “Strengthening Transparency in Pivotal Science Underlying Significant Regulatory Actions.” (See 86 FR 469.) The aim of this rule is to govern the way the agency will consider “dose-response data” underlying significant EPA rulemaking actions. The agency believes that science that can be independently validated and when it is publicly available, this will guarantee the reliability of the process.

On January 13, 2021, the U.S. Army Corps of Engineers reissued and modified 12 existing nationwide permits (NWP), and issued four new nationwide permits in accordance with recent legislation. (See 86 FR 2744.) The advantage of a project whose dredge and fill operations trigger Section 404 of the Clean Water Act (or the Rivers and Harbors Act) is that an NWP can take as few as 45 days to obtain, while an individual 404 permit will take, on average 264 days. NWP 12 has often been controversial, and the Corps has modified its ESA conditions which can apply to any NWP, including NWP 12. The rule will be effective on March 15, 2021.

Another interesting rule was promulgated by the Department of the Interior regarding the Department’s interpretation and criminal enforcement of the Migratory Bird Treaty Act. (See 86 FR 1134 (January 7, 2021).) The prohibition against “taking” a bird protected by the Act will be limited to those instances where the intent of the action was to take the protected species, and not to an “incidental take.” The rule will be effective on February 8, 2021.

The fate of these rules may depend on whether the new administration will subject them to the provisions of the Congressional Review Act (CRA), as the Trump Administration did in its early days. The cutoff date for the use of the CRA has been determined by some authorities to be August 21, 2020. If so, literally hundreds of new federal rules may be covered. The process can be arduous, as both houses of Congress must pass the required Resolution, and if they do, other conditions of the CRA are triggered. In the meantime, the new administration, as is customary, has asked all federal agencies to freeze working on many ongoing projects until the administration has an opportunity to review them. In addition, scores of Executive Orders have been issued terminating or reversing the presidential policies of the former administration.

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