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 Instead, EPA proposed the draft guidance and allowed public comment.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
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.
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.
by John Andren, Washington Legal Foundation*
It’s not often that a court decision like Waldburger, et al. v. CTS Corporation comes along, one which is interesting not only because of its potentially broad impact, but also because of the case’s intriguing ancillary characteristics. The case featured plaintiffs (represented by law students) arguing for federal preemption so they could bring their state law nuisance claim; a defendant and the U.S. government opposing preemption; and a deeply divided 2-1 outcome in the U.S. Court of Appeals for the Fourth Circuit, where all three judges were Obama appointees.
Waldburger was at its core a case about statutory interpretation and the crucial distinction between statutes of limitations—laws barring claims brought after a certain amount of time has elapsed since either the tortious or criminal act was committed or the claim was discovered—and statutes of repose—which bar claims brought later than a (typically longer) set number of years after the date of the defendant’s last action regardless of when any claim was discovered.
Plaintiffs in the case, who were represented at oral argument by a third-year law student from Wake Forest University, sought compensation for real property damage from CTS Corporation for the alleged dumping of toxic chemicals by one of CTS’s subsidiaries almost 30 years ago. CTS argued that CERCLA’s statute of limitations provision did not preempt North Carolina’s 10-year statute of repose, and since the defendant’s last actions were well over 20 years ago, plaintiff’s claims were barred. Interestingly, the Department of Justice shared time with CTS at oral argument to argue against preemption. DOJ is involved in an Eleventh Circuit case where the United States is the defendant and is opposing application of CERCLA’s limitations provision. Continue reading
by Taylor Darby, a 2013 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech School of Law.
Methane emissions, and their contribution to climate change, are one of the many reasons environmental activists routinely offer as support for banning oil and gas extraction techniques such as hydraulic fracturing. Several recent developments call into question the viability of this argument. First, in April, the Environmental Protection Agency reduced its estimate of how much methane is emitted during natural gas production. Second, on June 14, a federal district court judge rejected activists’ efforts to block oil and gas leases on public land based on alleged harm from methane emissions.
The suit brought by Montana Environmental Information Center, Earthworks Oil and Gas Accountability Project, and WildEarth Guardians has put the pursuit of domestic energy on nearly 80,000 acres of land on hold for over two years. Their federal environmental law weapon of choice: the National Environmental Policy Act (NEPA), under which the Bureau of Land Management (BLM) must assess the environmental impact of the oil and gas lease sale. BLM did the assessment, but of course the plaintiffs felt it was inadequate. The groups alleged that BLM “fail[ed] to adequately consider climate change, global warming, and greenhouse gases before it approved the lease sales.”
Plaintiffs challenging government assessments under NEPA must first, of course, prove they have Article III standing to sue. The groups asserted that “the release of methane gas being emitted from the oil and gases leases at issue . . . will cause global warming and climate change, which, in turn, will present a threat of harm to [the environmental groups’] aesthetic and recreational interests in lands near the lease sites by melting glaciers, warming streams and promoting beetle-killed forests.” Continue reading