FDA’s Proposed Regulation of Brewers’ Spent Grains is All Wet

spent brewing grains

spent brewing grains

During his February 5, 2014 appearance at a House Energy and Commerce Committee hearing, Food and Drug Administration (FDA) Deputy Commissioner Michael Taylor stated that “the whole goal of [the Food Safety Modernization Act (FSMA)] is to achieve the food safety goal without imposing regulations, just for the sake of regulation.” Dr. Taylor must have been unaware of his agency’s proposal to require that brewers, distillers, and vintners develop extensive hazard analysis and control plans before selling or donating their spent grains or grape pomace to farmers for livestock feed. This proposal seems to be the epitome of regulating for the sake of regulating.

Farmers have been procuring and feeding their livestock spent brewing grains and grapes for centuries. These livestock “happy hour” arrangements advance environmental sustainability, engender bonds among local businesses, and financially benefit both parties. Farmers get low cost whole grain feed packed with fiber, protein, and, of particular importance to livestock in arid climates, moisture. Alcohol makers save millions by not having to landfill the by-products.

FSMA Section 116 exempts activities at facilities which “relateto the manufacturing, processing, packing, or holding of alcoholic beverages.” In a proposed animal food safety regulation, FDA essentially nullifies this statutory exemption. The agency “tentatively concludes” that when brewers or distillers go through the “mashing” process—soaking grains in hot water—and then offer the by-product to farmers, they suddenly become food producers. The same goes for winemakers and their grape pomace. FDA’s conclusion has sparked a deserved firestorm of opposition from the affected industries as well as members of Congress. Continue reading

EPA and the Army Corps’ “Waters of the U.S.” Proposal: Will it Initiate Regulatory Overflow?

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP with Lisa Jones, Sidley Austin LLP

On March 25, 2014, the Environmental Protection Agency (EPA) and the United States Army Corps of Engineers (Corps) (“the Agencies”), released a long-awaited Proposed Rule defining the scope of “waters of the United States” governed by the Clean Water Act (CWA or Act). Since its release, the proposal has been praised by some, questioned by many others, and already was the subject of hearings on Capitol Hill. If finalized, the proposal will most likely end up in court—and if it were allowed to stand as is, would most certainly cause significant impacts across multiple sectors of our economy, from agriculture to housing to energy.

Decades in the making, the Proposed Rule would supersede existing agency guidance, and replaces the Obama Administration’s previous effort to issue its own “waters of the United States” guidance. The 370-page notice proposes to define “waters of the United States” by regulation, after allowing agency guidance documents and various Supreme Court decisions* to define the phrase on a case-by-case basis since 1975. The definition is critical, because the scope of the “waters of the United States” is the cornerstone of the Clean Water Act; it sets the parameters of the jurisdiction Congress established in the Act. Thus, the breadth of this definition will determine when EPA and the Corps may regulate all manner of development under the Act. Continue reading

Department of Energy Task Force Issues Report on FracFocus

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP with Ben Tannen, Sidley Austin LLP

The scope and extent of disclosure of hydraulic fracturing fluids continues to be an issue with which regulators are wrestling on both the state and federal levels.  In the most recent addition to the discussion, on February 24, 2014, the U.S. Department of Energy’s (DOE) Secretary of Energy Advisory Board (SEAB) N1 released its Task Force Report on FracFocus 2.0 (“Report”).  This Report makes recommendations related to FracFocus, the web-based, publicly available national hydraulic fracturing chemical constituent registry, on topics ranging from trade secret claims to future funding.  The Report was developed in response to a November 2013 request by Secretary of Energy Ernest J. Moniz asking SEAB to create a task force to focus on seven discrete issues related to FracFocus.  N2  In 2011, a SEAB subcommittee had previously studied the potential environmental impacts of unconventional gas production.  N3

FracFocus, operated by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission, started in April 2011.  N4  In its first year of operation, it publicized information on over 14,000 wells from 231 companies.  N5  Since then, the number of wells registered on the website has more than quadrupled, to over 62,000.  N6  By the end of 2013, 14 states required some sort of disclosure on FracFocus, while companies located in other states voluntarily disclosed information on the site.  N7  According to the Report, “FracFocus has greatly improved public disclosure quickly and with a significant degree of uniformity.”  N8

The issue the Report examines most closely is the extent to which companies rely on the trade secret exemption in making disclosures on FracFocus.  The current FracFocus disclosure exemption is based on an OSHA regulation.  N9  The task force asserted its belief that, as a general principle, “full disclosure of all known constituents added to fracturing fluids is desirable.”  N10 Continue reading

EPA Releases Final Guidance for the Use of Diesel Fuels in Hydraulic Fracturing

sboxermanFeatured 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

WLF Briefing Focuses on U.S. Supreme Court at its Mid-Term Point

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:

Environmentalists for Foreign Energy Dependence Strike Again

california_expensive_gas_200That 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

Will Pennsylvania High Court’s Ruling Expose State’s Hydraulic Fracturing Rules to “Public Trust” Challenges?

sboxermanFeatured 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

California County Drug Disposal Program Unconstitutional

alameda countyCross-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

Ninth Circuit: Citizen Group Cannot Sue to Force State Greenhouse Gas Regulation

svendbeGuest Commentary

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

High Court Fails To Act On Major Business Case Cert Petitions

supreme courtCross-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.