Featured Expert Column – Environmental Law and Policy
by Samuel B. Boxerman, Sidley Austin LLP
On February 12, 2014 the Environmental Protection Agency (EPA) published a notice that the agency was releasing an interpretive memorandum and technical recommendations for the use of “diesel fuels” in hydraulic fracturing. N1 The guidance is another step in the direction of increased EPA regulation of oil and gas development, a regulatory area long the province of state governments.
In the Energy Policy Act of 2005, Congress had largely exempted hydraulic fracturing from the Underground Injection Control (UIC) program of the federal Safe Drinking Water Act (“SDWA”). EPA did retain some authority to regulate, however, as Congress amended the SDWA to provide that “underground injection … means the subsurface emplacement of fluids by well injection;” but excludes “the underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities.” (emphasis added). N2
EPA’s “Diesel Guidance” N3 has been in the works at the agency since well before it was first proposed in May 2012. N4 EPA has claimed, but not exercised, a right to regulate hydraulic fracturing fluids that included diesel fuels, in part because as industry pointed out, Congress did not define the phrase “diesel fuels” in the SDWA. EPA first sought to pursue this authority by quietly publishing a change in policy on its website, but that effort was challenged and the agency withdrew that posting. Instead, EPA proposed the draft guidance and allowed public comment. N5 The documents were before the Office of Management and Budget (OMB) for many months, before OMB released them shortly after President Obama’s State of the Union.
The Diesel Guidance consists of three separate documents: EPA’s “Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels: Underground Injection Control Program Guidance #84 (Feb. 2014) (“EPA Guidance #84), a Memorandum to the agency’s Regional Administrators and State/Tribal UIC program directors, N6 and a response to public comments. N7 In these documents, EPA essentially does three things: Continue reading
One of our speakers, Troutman Sanders’ Peter Glaser, and his authoring of WLF’s amicus brief in Utility Air Group v. EPA, were referenced in a New York Times story on the case.
Attendees of the briefing received printouts of the following WLF Supreme Court-related resources:
That special-interest activism has negative consequences is a message Washington Legal Foundation has been communicating for 35 years.
The consequences are sometimes subtle or only become clear over time. In other instances like the outcome we write about here, the consequences are immediately obvious. On January 29, Royal Dutch Shell PLC, citing a January 22 U.S. Court of Appeals for the Ninth Circuit decision as a last straw, announced it would indefinitely put on hold plans to drill for oil beneath Alaska’s Chukchi Sea.
Shell has reportedly invested over $6 billion in its quest to become the first company to extract some of the possibly 27 billion barrels of oil from that offshore location. The leases it obtained from the federal government cost $2.6 billion alone. Over the last eight years, Shell has had to endure delay after delay as a cadre of activist groups—let’s call them collectively Environmentalists for Foreign Energy Dependence—filed lawsuit after lawsuit to slow final approval. A Legal Pulse post from July 2012 details several of these actions, which attacked, among other things, EPA’s emissions permits, Shell’s oil spill plan, and the Bureau of Ocean Energy Management’s (BOEM) environmental impact assessment supporting the lease sale. Continue reading
Featured Expert Column
by Samuel B. Boxerman, Sidley Austin LLP
*This is Mr. Boxerman’s inaugural post as The Legal Pulse‘s Featured Expert Columnist on environmental legal and policy issues.
In Robinson Township v. Commonwealth, the Pennsylvania Supreme Court weighed in on shale gas development policy in Pennsylvania by striking down aspects of the state legislature’s revisions to the state’s oil and gas law known as “Act 13.” As the Court did not issue a majority opinion, the precedential value of the court’s 162-page opinion remains to be seen, including whether the plurality’s reasoning on a “public trust” theory will extend to other jurisdictions.
Background – Act 13. Over the past decade, shale oil and gas development has supported economic growth across the U.S. Pennsylvania has been at the forefront, with production from the Marcellus Shale play. This development has created jobs and economic growth, as well as controversy, as opponents object to costs imposed on local governments and alleged risks to the environment. In response, some local governments have banned or otherwise restricted development. In Pennsylvania, to preempt a growing patchwork of local rules, the legislature enacted Act 13. The law established statewide rules, including state permits and setback requirements, while simultaneously preempting local zoning laws and other local rules that would impact such operations. As part of this package, the legislature also imposed impact fees on developers that would be shared with localities once they adopted conforming local ordinances.
Challenge and Rulings. Several municipalities, interest groups, and individuals challenged the law. The Pennsylvania Commonwealth Court rejected most contentions, but held that the Act 13 provisions requiring uniformity among local ordinances regulating oil and gas development violated substantive due process. N1 The parties cross appealed and the Supreme Court struck down portions of the Act, while remanding others. Continue reading
Washington Legal Foundation and its Legal Pulse blog welcome you to 2014.
December is a busy time for many people, so you may have missed some of the important Litigation and Legal Studies Division activities that kept WLF busy last month. A few links to late-December Legal Pulse posts are included as well.
Litigation Division filings
In re: FTC Investigation of Patent Assertion Entities (comments applauding the FTC’s decision to investigate the activities of Patent Assertion Entities (PAEs) in the wireless communications sector)
Utility Air Regulatory Group v. EPA (amicus brief urging the U.S. Supreme Court to reject the Environmental Protection Agency’s (EPA) purported authority to embark on an ever-expanding program to regulate greenhouse gases)
Mingo Logan Coal v. EPA (amicus brief asking the U.S. Supreme Court to review, and ultimately reject, the Environmental Protection Agency’s (EPA) purported authority for revoking a Clean Water Act discharge permit years after it was issued)
Legal Studies Division papers
No Going Back: Strategies For Opposing Remand Under CAFA’s Exceptions by Timothy J. Coughlin and Barbara A. Lum, Thompson Hine LLP
The Impact Of Individual Damages Issues On Class Certification After Comcast Corp. v. Behrend by Felix Shafir, Horvitz & Levy LLP
Legal Pulse Posts
The Meningitis B Outbreak: Heavy Doses of Government Can Be Costly
Two More Food Labeling Class Action Rulings: Harbingers of the New Year?
Proxy Advisory Services: Making Glass (Lewis) Transparent—and ISS Too
Cross-posted at WLF’s Forbes.com contributor page
Instead of “The Golden State,” perhaps California should be known as “The Precautionary State.” California state, city, and county governments routinely take the maxim “better safe than sorry” to an extreme. Proposition 65 and San Francisco’s “cell phones cause cancer” warnings are two that we’ve addressed before here at The Legal Pulse. To that list one can now add Alameda County’s “Product Stewardship Program,” which aims to prevent pharmaceutical products from entering the water supply, something even the hyper-cautious World Health Organization believes isn’t a significant or current problem. Worse yet, because the program imposes the burden of running and paying for disposal entirely on out-of-state drug manufacturers, the county ordinance in question is also unconstitutional.
Cost and Burden Shifting. Alameda County had operated a pharmaceutical product disposal program itself for several years. But in 2011, light bulbs went on in county supervisors’ minds: instead of making taxpayers pay for this program (despite the fact that they benefit from medicines and their “proper” disposal), let’s make those who sell the products pay. The original plan called for both local pharmacies and pharmaceutical manufacturers to pay, but the pharmacies flexed their political muscles and in the end the ordinance exempted them from the program. So the program now benefits local interests at the expense of drug makers who do not manufacture in Alameda County.
Commerce Clause Challenge. Trade associations representing branded and generic drug makers sued Alameda County in federal court, arguing that the ordinance unconstitutionally regulated and burdened interstate commerce. On August 28, Judge Richard Seeborg of the Northern District of California denied the associations’ summary judgment motion, ruling that the ordinance neither discriminated against interstate commerce nor favored local interests over out-of-state ones. The associations have appealed to the Ninth Circuit. Last week, Washington Legal Foundation, on behalf of itself and the California Healthcare Institute, filed an amicus brief supporting the appeal. Continue reading
by Svend Brandt-Erichsen, Marten Law PLLC*
A U.S. Court of Appeals for the Ninth Circuit panel ruled last month in Washington Environmental Council v. Bellon that environmental plaintiffs do not have standing to bring a citizen suit under the federal Clean Air Act to force state agencies to regulate greenhouse gas (GHG) emissions from five oil refineries in the State of Washington. The district court had granted summary judgment to the environmental groups, holding that air agencies were required to regulate GHG emissions under a Washington regulation that requires existing sources to employ reasonably available control technology (RACT).
On appeal, the Ninth Circuit concluded that the environmental groups had not established standing to pursue their claims. Applying the federal three-part standing test, the court assumed (without deciding) that the environmental groups had shown injury-in-fact from GHG emissions due to climate change, but concluded that they had failed to establish a causal link between GHG emissions from the five refineries and the claimed climate change injuries, or that a court order requiring regulation of the refineries’ GHG emissions would redress their claimed injuries. A Ninth Circuit vote on whether the panel’s decision should be reviewed en banc is pending.
To establish the first standing element (injury-in-fact), members of the environmental groups had submitted declarations attesting to recreational, aesthetic, and economic injuries that they have experienced and attribute to climate change impacts in Washington. The Ninth Circuit panel stated that it would assume, without deciding, that the declarations provided the sort of evidence of immediate and concrete injuries necessary to satisfy the first standing element of injury-in-fact. Continue reading
Cross-posted at Forbes.com’s WLF contributor page
Washington Legal Foundation, along with other organizations, business, and individuals with an interest in the Supreme Court and free enterprise cases before it, watched with great anticipation this morning as the justices issued their first new list of certiorari grants since the Court adjourned last June (the so-called Long Conference). We came away from the big cert grant morning, as likely did many other interested parties, wanting more.
The orders list is here. The grants include a tax case, United States v. Quality Stores addressing whether severance payments made to employees whose employment was involuntarily terminated are taxable. Two other grants relate to the standard of review the U.S. Court of Appeals for the Federal Circuit uses when assessing a district court’s determination that a case is “exceptional” for purposes of imposing attorneys’ fees and other sanctions. Those cases are Octane Fitness v. Icon Health and Fitness and Highmark Inc. v. Allcare Management Systems Inc.
The final cert grant impacting free enterprise is Petrella v. MGM, which involves the movie Raging Bull and the defense of laches against claims of copyright infringement. Marcia Coyle at National Law Journal discussed the interesting facts of the case in a September 16 story.
The bigger story from the big cert grant morning was which petitions the Court did not act on. WLF filed amicus briefs in support of review in a number of the cases, which we’ll indicate below (all noted on SCOTUSblog’s “Petitions we Are Watching” page).
Failure to act on these and other petitions does not mean that the Court cannot reconsider them in a future “conference,” and it does not mean that they have been denied. The Court will be issuing an order list on First Monday, October 7, but that order traditionally has only contained cert denials.
On September 13, Washington Legal Foundation released a Legal Backgrounder authored by three senior officials from the state of West Virginia: Patrick Morrisey, Attorney General; Randy Huffman, Cabinet Secretary of the West Virginia Department of Environmental Protection; and Elbert Lin, the state’s Solicitor General.
The paper, Last Call For Cooperative Federalism? Why EPA Must Withdraw SIP Call Proposal On Startup, Shutdown & Maintenance, focuses on a proposed Environmental Protection Agency rule which impacts 36 states’ implementation of the federal Clean Air Act. This proposed rule, as the authors explain, reflects two troubling EPA practices: 1) the agency’s retreat from working cooperatively with state environmental regulators and 2) the revision of existing rules or the imposition of new requirements through the settlement of lawsuits brought by private activist groups (aka, “sue and settle”).
The proposed rule involves state regulations that impact emissions occurring during power plant startup, shutdown, and maintenance (“SSM”). Even though EPA formally acknowledges that during SSM, conditions arise that are beyond the plant operators’ control, the proposed rule claims that those 36 states’ rules inadequately address these “excess emissions.” The rule issues what’s known as a “SIP call” (SIP=State Implementation Plan) even though, General Morrisey and his co-authors write, “EPA has not identified any [air quality] violation resulting from an SSM provision in West Virginia’s or any state’s SIP.” The paper goes on to make a compelling legal case why the proposed rule is an unlawful exercise of EPA authority.
The proposal attracted a substantial number of comments, some of which were from state attorneys general and environmental regulators criticizing EPA’s departure from cooperative federalism and its embrace of rulemaking through litigation settlement. West Virginia’s comment can be seen here.
EPA’s sue and settle tactics have been the subject of a recent WLF publication as well as Legal Pulse commentary. In addition, thirteen state attorneys general filed suit against EPA in the Western District of Oklahoma on July 16 seeking information on agency settlements of activist groups’ lawsuits. EPA rejected a February 6 Freedom of Information Act request the attorneys general filed for information on contacts EPA has had with specific activist groups on a specific state-implemented regulation.
In an April Featured Expert Contributor post, Appeals Court Rejects EPA Effort to Avoid Judicial Review Through Guidance Documents, Hunton & Williams’ Allison Wood examined a U.S. Court of Appeals For the Eighth Circuit decision, Iowa League of Cities v. EPA. The court ruled that EPA violated the Administrative Procedures Act when it changed two policies for regulating municipal wastewater treatment plants through letters sent to Senator Charles Grassley. Such changes constituted “rules” for which EPA should have engaged in formal notice and comment rulemaking.
In a July 30 order, the court ordered EPA to pay Iowa League of Cities $526,138.41 in attorneys’ fees. The Eighth Circuit panel had initially rejected the League’s request for fees under Clean Water Act Section 509(b)(3) . The League filed a Petition for Partial Rehearing, which EPA opposed.
The court agreed that the League was a “prevailing party” under the Clean Water Act, and that the lawsuit
assisted in the proper implementation of the CWA by upholding ‘the policy of Congress to recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution’ and by ensuring public participation in the development of effluent limitations.
We’re pleased to see that the cost, and the risk, of avoiding public accountability have just gone up for EPA and other federal agencies.