ENVIRONMENTAL LEGAL BLOGS

EPA ESTABLISHES GUIDANCE PORTAL

    Pursuant to President Trump's Executive Order (No. 13891), the EPA has announced that it is establishing a new internet guidance portal to provide public assess to the agency's guidance documents.  On October 31, 2019, the Office of Management and Budget set deadlines for setting up a searchable and indexed online data base for these guidance documents. 

   The portal is not fully set up as yet, although at https://www.epa.gov/guidance you can find links to guidance documents published by various environmental agencies.

EPA MUST CONSIDER COSTS OF REGULATING NEW SOURCES OF POLLUTION

The Environmental Protection Agency's Mercury and Air Toxics Standards (MATS) placed national limits on mercury and other toxic emissions from power plants. The agency projected MATS to prevent 11,000 premature deaths, 4,700 heart attacks and 130,000 asthma attacks each year.

What the EPA didn't project, however, was the cost effectiveness of enforcing MATS.

Twenty-three states and other petitioners challenged the Agency's refusal to consider costs of emissions reduction in a Washington D.C. circuit court, which sided with the EPA, then again at a D.C. Appellate Court which upheld the lower court's decision. But last week, the U.S. Supreme Court (SCOTUS) sided with the petitioners in Michigan v. Environmental Protection Agency, and remanded the case back to the Court of Appeals to reconsider its decision in light of SCOTUS guidance.

Cleanup Costs

The central question in this case pertains to the federal Clean Air Act, as amended in 1990. One of the amendments directs the EPA to study public health hazards caused by power plant emissions and to determine whether or not these facilities should be subject to regulation.  The Agency must then decree certain floor standards for emissions based on the type of facility in question and on the top-performing 12 percent of those facilities in the category. Section 7412(d)(2) of the Act clearly directs the EPA to consider the costs of reducing emissions.

In 2000 the EPA concluded coal and oil burning power plants need regulation, and reaffirmed this decision in 2012. It issued a Regulatory Impact Analysis, estimating costs of regulation at $9.6 billion per year for the power plants, but did not fully estimate the benefits of emission reduction, which it estimated at $4-6 million.

The EPA found collateral benefits for regulation of the power plants, which would reduce particulate matter and sulfur dioxide in emissions. The Regulatory Impact Analysis estimated those benefits to fall between $37 and $90 billion per year – but these substances aren't covered under the Clean Air Act, and the Agency did not base its decree for regulation on these additional benefits.

SCOTUS's 5-4 Opinion

The Supreme Court's close decision centered on the sometimes ambiguous, yet sometimes particular, wording of the Clean Air Act. On the ambiguous side, §7412(n)(1)(A):

Congress instructed EPA to add power plants to the program if (but only if) the Agency finds regulation "appropriate and necessary"…. One would not say that it is rational, never mind "appropriate," to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits."

More to the point, SCOTUS cited this:

Congress called for two additional studies. One of them, a study into mercury emissions from power plants and other sources, must consider “the health and environmental effects of such emissions, technologies which are available to control such emissions, and the costs of such technologies.” §7412(n)(1)(B)          

The EPA made several arguments, one being that the Agency shouldn't have to consider cost when first deciding whether to regulate power plants – costs become a factor in deciding how much regulation is necessary. SCOTUS responded, "By EPA’s logic, someone could decide whether it is “appropriate” to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system."            Respondents in Michigan asked the Court to consider the potentially $90 billion in collateral benefits EPA published in the Regulatory Impact Analysis, but SCOTUS refused to do so, saying the Court could only consider the "grounds on which the agency acted."    

Significance

Court analysts can and will draw various lessons from the SCOTUS decision.  First, some will argue that this shows the Court majority is returning to a literal reading of statutes and following that literal approach despite policy arguments that administrative flexibility is needed (the above quote from the Clean Air Act says EPA must consider “the costs of such technologies”).  However, it is arguably hard to square such a broad conclusion after the Court, in a majority opinion by Justice Roberts, virtually admitted one could, for policy reasons, ignore the plain language of the Affordable Care Act stating that subsidies would only be available for an exchange set up by “the states”, not the federal government.

Perhaps a more accurate interpretation of the Court’s approach is that the Court’s conservative majority has decided the Court has historically given substantial deference to EPA and the agency needs a shot across the bow to force he agency to proceed more cautiously and not assume it can count on such judicial deference in the future.

Yet perhaps a third conclusion is simply that the Court is severely split, roughly 5-4, between conservatives and liberals.  The decisions referenced above were decided by one or two votes, with a conservative Justice or two occasionally swinging over to vote with the liberals.

Whatever the analysis, it does seem that EPA regulation may have entered a new era in which more restrictions are placed upon the agency’s scope of action.

 

EPA IN RETREAT

Nothing lasts forever, which is what the federal Environmental Protection Agency may be finding out.  Formed in the very early 1970’s under President Richard Nixon, EPA for the last 45 years has become a sacrosanct agency, revered by environmentalists and feared by industry as ever tightening environmental regulations have taken hold.  The agency truly has been on a par with the IRS and the Pentagon as a heavyweight exemplar of federal power.

           

Now, however, the era of EPA primacy, if not coming to an end, is threatened both in the corridors of the law and the riverbeds of Colorado and New Mexico.  The first blow to EPA’s power came from the United States Supreme Court in Michigan v. Environmental Protection Agency, decided on June 29, 2015.  In this case, the EPA enacted regulations under the Clean Air Act to govern coal- and oil-burning power plants, with a view to reducing pollution emanating from such plants.

           

EPA announced that its new regulations would benefit society from a reduction in regulated chemicals to the tune of about $4.6 billion a year.  However, the cost of regulation would be about double that—some $9.6 billion a year.

           

EPA’s position before the Court was that the agency did not need to consider costs vs. benefits when deciding whether to regulate an industry.  Rather, the agency argued, it needed to factor in costs only as a guide as to how much regulation to impose.

           

The Court, in a 5-4 decision, rejected this argument, saying "By EPA’s logic, someone could decide whether it is ‘appropriate’ to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system."  While the vote was close, this was a stunning legal loss for EPA—an agency unaccustomed to losing battles in the courts over the its authority.

           

If that were not bad enough, last week an EPA-supervised response to waste from mining activity in Colorado went awry when an impound holding back contaminated water burst and dumped 1 million gallons of mustard-colored, metal-waste contaminated water into a tributary of the Animas (aka Animus) River.  The flood of contaminated water has continued to the present, with over 200 gallons per minute pouring into the tributary, the river and it is feared ultimately downstream through towns all along the river in Colorado and New Mexico.  The consequences are dramatic—the towns along the river rely on the Animas for drinking water and farms along the river’s route rely on the river for irrigation water.           

The affected communities are furious; and EPA has reacted, understandably, with embarrassment.  To quote from an article on The Guardian newspaper website, “ ‘First off, I’d like to just say I’m sorry for what’s happened,’ David Ostrander, the EPA’s head of emergency management told a standing-room-only crowd in Durango, Colorado Friday afternoon. ‘This is a huge tragedy, and it’s hard being on the other side of this, in terms of being the one who caused this incident.…We usually respond to emergencies, we don’t cause them,’ said Ostrander.” http://www.theguardian.com/us-news/2015/aug/07/toxic-mine-water-epa-colorado-animas-river

The Supreme Court decision and the Animas River incident has given renewed ammunition to critics of the EPA, who contend that the agency has too much unchecked power and that the folks running the agency are not any smarter than the industries allegedly suffering from overregulation.  Whatever the merit or lack thereof of those criticisms, the fact is that this is not EPA’s finest hour and for the first time in its history the agency risks losing that which it must have to keep its primacy—public confidence.

 

This column originally appeared in the Valley News Group of papers (west San Fernando Valley, California).

GABELLI V. SECURITIES EXCH. COMM'N.

  In this decision (No. 11-1274.) , issued February 27, 2013, the U.S. Supreme Court found that the Commission was subject to the general statute of limitations (5 years) for bringing civil actions for alleged fraud violations of federal statutes.  The Court rejected the Commission's argument that there should be a delayed limitation where the Commission did not discover the fraud until after the normal limitations period has run.

While the fraud exception to limitations may be applicable to a private plaintiff, who is ordinarily not on the lookout for violations, the Commission as a government agency is specifically charged with discovering violations and thus no compelling fairness consideration exists which calls for giving the Commission extra time.  Or so concluded the Court.

The Gabelli decision on its facts applies only to the Commission.  However, the principle articulated in the case would seem to have equal applicability to other government entities such as the EPA.  One can, in any event, certainly expect environmental civil-case defendants from now on so to argue.

Environmental Legal Blogs - Now on YouTube

Have you seen our Environmental Legal Videos on YouTube? Here's one, regarding how you should react if a government agency or individual makes an environmental claim against you or your business:

More Environmental Legal Blogs videos are available by clicking the link to YouTube, on the left.

BATTLE IN FEDERAL COURT OVER EPA EXPERIMENTATION

    EPA is conducting tests on human exposure to fine particulate matter (PM2.5) at the University of North Carolina at Chapel Hill.  The American Tradition Institute, a conservative legal action group, has field suit to block the testing (ATI v. EPA) in the federal district court for the Eastern District of Virginia.  ATI is also seeking an immediate restraining order prohibiting the continuance of the testing pending trial on the merits.

    The Department of Justice, on behalf of EPA, is resisting ATI's efforts to block the testing.  DOJ says, among other things, that test participants are fully informed of the risk of inhaling the PM2.5 used in the tests and that the tests are properly designed to enable EPA to develop rules to protect people against too much PM 2.5 exposure.

    The court is scheduled to hear argument today on ATI's request for a restraining order.  DOJ contends that ATI filed its suit in the wrong court, saying that the suit should have been filed either in Washington DC (home of EPA) or in North Carolina (where the tesing is taking place).  If the court agrees with DOJ, the restraining order request could be denied on the basis of incorrect venue alone.

 

Recent losses for EPA in the Courts

An earlier post on the US Supreme Court’s decision in Sackett v. EPA, wherein the Court said that parties facing administrative orders under the Clean Water Act had the right to an immediate judicial hearing if the parties were challenging the jurisdiction of EPA to issue the orders.  Recently, on March 26, 2012 has come another blow to EPA jurisdiction from the federal 5^th Circuit Court of Appeals.

 In Luminant Generation Company, et al. v. US Environmental Protection Agency, the State of Texas had issued a permit covering a number of different emissions-producing entities on the basis that the entities all emitted the same type of pollutants and that these emissions, even when lumped together, did not exceed the National Ambient Air Quality Standards (the “Standards”) set by the federal Clean Air Act.  None of the entities receiving the benefit of the permit were, on an individual basis, a “major” source of air pollution (“major” being defined as an entity emitting 100 tons or more or 250 tons or more of a regulated pollutant, depending on the source).

 EPA refused to approve the State’s decision to issue the permit, contending that the Clean Air Act authorized EPA to require the State to measure pollutant emissions on the basis of narrowly-defined emission sources (e.g., a specific industry) rather than on the basis of emission types (e.g., different industries emitting the same type of pollutant).  Along with Texas, some of the affected entities, including power companies and a mining company, filed suit, claiming that EPA had no authority under the Clean Air Act to limit the State’s decision as to how to issue permits so long as the permits were not issuing to any individual major source of pollution and so long as the effect was to keep overall emissions within the Standards. 

 The 5^th Circuit agreed, stating that the Clean Air Act limits EPA’s review of State permits in minor-source cases, leaving the agency “with no discretion to do anything other than ensure that a state’s submission meets the [Act’s] requirements” [on limiting overall pollution] and, if it does, approve it….”  The 5^th Circuit also found that, while the Clean Air Act required EPA to approve or disapprove of Texas’regulatory scheme within 18 months after submission of the regulations to the agency, here EPA had issued its disapproval fully 2 years after that 18-month deadline had passed.  The Court thus invalidated the EPA’s own invalidation of the Texas regulations and sent the matter back to the agency with the direction to reconsider the regulations in accordance with the Court’s opinion.

The Luminant and Sackett cases have been joined by yet a third opinion, Mingo Logan v. EPA, in which the federal Court of Appeals for the DC Circuit recently ruled that the agency had illicitly barred a coal company from using 2 streams as discharge sites.   The Court found that the EPA’s action was inconsistent with a US Army Corps of Engineers action; the Corps of Engineers had years earlier given permission to the company to use the rivers for discharge.

This recent trio of decisions may mark a turning point in EPA jurisprudence. Traditionally, the agency has been given by the Courts broad, almost unquestioned discretion in decisions about how to pursue and regulate alleged polluters/alleged infringements on natural resources.  Now the agency has faced real scrutiny as to how far its jurisdiction extends and even as to how decisions are made within
that jurisdiction. 

Yet another test awaits the EPA in these regards.  The DC Circuit has recently heard arguments challenging the agency’s implementation of rules regulating carbon-dioxide emissions (Coalition for Responsible Regulation v. EPA).  The challenge comes from a wide variety of industries including coal, steel, cement, homebuilding and agricultural.

 The challengers, among other things, dispute the agency’s authority to implement a so-called “tailoring rule”, requiring only the largest CO2 emitters (over 100,000 tons per year) to obtain permits.  The argument here, somewhat like the argument in the Texas case above, is that the Clean Air Act nowhere contains a provision authorizing the EPA to regulate only such large sources of CO2 emissions to the exclusion of the other six-million or so smaller sources that emit the same pollutant. Were the challenge validated by the DC Circuit, EPA would be forced to regulate the emissions of such small emissions sources as churches and small businesses, probably making the regulations wildly unpopular and in need of further reform (which is what the industries want).

To the extent this line of decisions continues and thus constrains EPA, look for the individual States to step in using their own best judgment as to what environmental regulations to pass and implement.

From my column, "Legal News You Can Use", published inm the Valley News Group (San Fernando Valley California) newspapers.

A shrinking EPA?

Recently, there have been several court decisions that have gone against the EPA in the agency’s efforts to enforce environmentalregulations.  Now, in anpther matter, EPA has withdrawn its claim even before a court has had the chance to make a ruling.

Range Resources had begun drilling for natural gas in Parker County, Texas; based on neighbors’ complaints, the EPA concluded that the drilling may have resulted in underground contamination of the water supply and had ordered Range to stop the drilling and to provide uncontaminated drinking water to the affected residences.  Range challenged the order in the United States Court of Appeals for the 5^th Circuit.

While the litigation was pending, however, the EPA withdrew its demands, saying that resolving the litigation with Range “allows EPA to shift the agency’s focus in this particular case away from litigation and toward a joint effort on the science and safety of energy extraction….”  EPA and Range are now jointly going to study the situation and attempt cooperatively to institute remedies, if any appear necessary.

Since the 5^th Circuit is one of the more conservative federal appellate courts, EPA may not have wanted to have risked yet another adverse court decision.  The withdrawal of the claim adds to the impression that, for the first time in the agency’s approximately 40-year existence, the courts are elevating their scrutiny of the agency’s actions.

From my column, "Legal News You Can Use", published inm the Valley News Group (San Fernando Valley California) newspapers.

The United States of EPA-from the Wall Street Journal

The EPA heaved its weight against another industry this month, issuing a regulation to sharply increase fuel economy. Under this new rule, America's fleet of passenger cars and light trucks will have to meet an average of 54.5 miles per gallon by 2025, a doubling of today's average of about 27 mpg. By the EPA's estimate the rule will cost $157 billion, meaning the real number is vastly greater.

The fuel-economy rule is classic Obama EPA. Until this Administration, fuel standards were the remit of Congress, via its Corporate Average Fuel Economy (CAFE) program. In 2007, the legislative branch raised those standards with a bill requiring the U.S. fleet to hit 35 miles per gallon by 2020, a 40% increase. The industry is struggling to keep pace with those steep requirements.

-Wall Street Journal editorial

Apparently, Congress is so busy not making decisions about the Budget that the legislative branch no longer has time to notice its powers are slipping away. Whether one agrees or disagrees with EPA's action, shouldn't Congress have a say?

There are now only 2 ways to curb EPA's own appetite for power--court challenge or Congress reasserting its prerogatives by overruling the agency. Since the Administration still controls a major part of the automobile manufacturing in this country, however, don't count on that industry to make the challenge. The challenge is likely to come, if at all, if as and when there is a change of power in DC after next year's election.

Energy Experts Say EPA Regs Will Shut Down Coal Plants [Michigan Capitol Confidential]

The Institute for Energy Research projected that coal plants in Lansing, Litchfield and Holland would “likely” be shut down due to U.S. Environmental Protection Agency regulations by 2016. The three Michigan plants were part of a nationwide look at coal plants expected to be impacted by new regulations recently enacted or proposed by the EPA.

Ten percent of the country’s coal energy capacity is expected to go offline by 2016, according to the Institute for Energy Research.

via www.michigancapitolconfidential.com