Tuesday, December 23, 2014

D.C. Circuit Rejects EPA Regulations Implementing 2008 Ozone Air Quality Standard

On December 23, the D.C. Circuit (Tatel, Srinivasan, Randolph) issued a decision in NRDC v. EPA, a case arising out of EPA regulations implementing its 2008 ozone air quality standard.  NRDC filed a petition for review of the regulations. 

NRDC first challenged EPA’s decision to tie the attainment deadline—that is, the date on which an air quality control region had to reach attainment with the new ozone standard—to the end of the calendar year in which the region was designated as nonattainment under the new ozone standard, rather than the actual date of designation.  The D.C. Circuit panel majority agreed with NRDC, holding that, although the Clean Air Act does not specifically address the attainment deadline for an air quality control region designated as nonattainment under a revised air quality standard, the Act consistently ties compliance deadlines to the actual date of designation or classification.  Indeed, in its regulations implementing the 1997ozone air quality standard, EPA had interpreted the Clean Air Act to require such an approach. 

NRDC’s second argument challenged EPA’s decision to revoke requirements regarding transportation conformity—essentially, a Clean Air Act requirement that regions ensure that new transportation projects will not interfere with the region’s timely attainment of air quality standards—under the prior 1997 ozone standard.  Again, the court agreed with NRDC, holding that EPA lacked authority under the Clean Air Act to revoke the transportation conformity requirements under the 1997 standard.  The court explicitly left open the possibility that EPA could revoke the 1997 standard altogether, as the agency has proposed to do.

Judge Randolph dissented.  As to the deadlines, he believes the statute is ambiguous and EPA’s interpretation is reasonable.  As to the transportation conformity requirements, he believes NRDC waived any argument that EPA lacks the authority to revoke the requirements without revoking the entire 1997 standard.  According to Judge Randolph, NRDC did not raise such an argument until its reply brief.  Even if the merits of that issue were before the court, Judge Randolph believes the Clean Air Act allows EPA to revoke transportation conformity requirements for prior air quality standards.

—Todd Aagaard

December 23, 2014 | Permalink | TrackBack (0)

D.C. Circuit Upholds EPA Decision Declining to Regulate Spent Lead Ammunition under TSCA

On December 23, the D.C. Circuit (Tatel, Millett, Pillard) issued a decision in Trumpeter Swan Society v. EPA.  In 2010, five environmental organizations petitioned EPA to regulate spent lead bullets and shot under Toxic Substances Control Act (TSCA) § 21, 15 U.S.C. § 2620, which allows “[a]ny person” to petition for a rulemaking proceeding.  In this case, the environmental organizations alleged that spent lead bullets and shot constitute “chemical substances” that “present an unreasonable risk of injury to health or the environment” and therefore warrant regulation under TSCA § 6(a), 15 U.S.C. § 2605(a).  EPA rejected that petition on the ground that TSCA § 3(2)(B)(v), which exempts cartridges and shells from the definition of “chemical substance,” deprives the agency of authority to regulate spent bullets and shot as chemical substances.  Six months later, two of the environmental groups joined 99 other environmental groups to petition again to regulate spent lead ammunition as a chemical substance under TSCA.  This time, EPA ruled that the new petition was “not . . . cognizable” under TSCA § 21 because it duplicated the earlier petition, and that in the alternative the agency would deny the petition on the same ground it denied the earlier petition.  The environmental organizations sued EPA, and the district court upheld EPA’s action.  On appeal, the D.C. Circuit held (1) that EPA lacked the authority to classify the petition as non-cognizable merely because it was duplicative; but (2) that EPA correctly determined in the alternative that the petition failed on the merits, given that spent lead bullets and shot cannot be regulated without also regulating cartridges and shells, which TSCA § 3(2)(B)(v) precludes.

—Todd Aagaard

December 23, 2014 | Permalink | TrackBack (0)

Monday, December 22, 2014

Ninth Circuit Upholds Biological Opinion for Central Valley Irrigation Impacts on Endangered Salmon

On December 22, the Ninth Circuit (Tallman, Rawlinson, Rice (by designation)) issued a decision in San Luis & Delta-Mendota Water Authority v. Locke.  In 2009, the National Marine Fisheries Service (NMFS) issued a Biological Opinion for Central Valley Project/State Water Project operations in California’s Central Valley, requiring the Bureau of Reclamation to change its operations to avoid jeopardizing populations of endangered Salmonids.  Irrigation districts, who would be adversely impacted by the changes in operation, sued.  The district court found for the plaintiffs, concluding that NMFS had acted arbitrarily and capriciously in developing the BiOp. 

The Ninth Circuit reversed, holding that the district court had failed to give NMFS sufficient deference and that the BiOp—when reviewed under the proper standard—was valid.  Among the more notable rulings in its lengthy opinion addressing numerous issues, the court of appeals held (1) that the district court erred by supplementing the administrative record with dozens of extra-record declarations; and (2) that NMFS was not required to show how each of the requirements it imposed was “essential to avoid jeopardy” or to address non-jeopardy factors.  The court of appeals also rejected the plaintiffs’ cross-appeals.  The court’s reasoning frequently relied on its recent decision in San Luis & Delta-Mendota Water Authority v. Jewell, 747 F.3d 581 (9th Cir. 2014), which addressed a 2008 BiOp regarding irrigation impacts on the threatened Delta Smelt.

—Todd Aagaard

December 22, 2014 | Permalink | TrackBack (0)

Wednesday, December 17, 2014

Fifth Circuit Denies Rehearing—Over Strong Dissent—in ESA Whooping Crane Case

Back on June 30, a Fifth Circuit panel (Jones, Smith, Garza) reversed a district court judgment, following an eight-day bench trial, in favor of The Aransas Project against directors of the Texas Commission on Environmental Quality.  Aransas Project v. Shaw, 756 F.3d 801, 805 (5th Cir. 2014).  Aransas’s suit had alleged that the Commission violated the Endangered Species Act by allowing excessive water withdrawals from rivers that feed the estuary where whooping cranes live during winter.  The Fifth Circuit panel, in reversing, faulted the district court’s finding that the Commission’s actions had caused the deaths of twenty-three whooping cranes in 2008-2009.  According to the panel, the district court “either misunderstood the relevant liability test or misapplied proximate cause when it held the state defendants responsible for remote, attenuated, and fortuitous events following their issuance of water permits.”  756 F.3d at 817.

On December 15, the Fifth Circuit denied Aransas’s petition for rehearing en banc by an 11-4 vote.  Judge Prado, joined by Judges Dennis and Graves, issued a strongly worded dissent from the denial, accusing the panel of engaging in a de novo reweighing of the evidence inappropriate for appellate review.  Judge Prado characterized the panel’s “reweighing of facts” as “particularly egregious” in light of what he regards as a gross mismatch between the credibility of Aransas’s expert witnesses, with credentials that included a Nobel Prize and MacArthur Fellowships, and the intervenor-defendants’ expert witnesses, whom he characterizes as having “limited experience and insignificant expertise.”  In addition, contrary to the panel’s conclusion regarding proximate causation, Judge Prado regards the causal connection between the Commission’s permitting decisions and the death of the whooping cranes as “straightforward” and “foreseeable.”

—Todd Aagaard

December 17, 2014 | Permalink | TrackBack (0)

Seventh Circuit Upholds EPA Redesignations of Milwaukee, Chicago, and St. Louis as in Attainment with Ozone Air Quality Standard

On December 16, the Seventh Circuit (Flaum, Kanne, Sykes) issued a decision in Sierra Club v. U.S. EPA, a case challenging EPA’s 2012 decision redesignating the Milwaukee-Racine, Greater Chicago, and Illinois portion of St. Louis areas as in attainment with the 1997 National Ambient Air Quality Standard (NAAQS) for ozone.  Sierra Club argued that, contrary to the requirements of Clean Air Act § 107(d)(3)(E)(3), 42 U.S.C. § 7407(d)(3)(E), the observed improvements in air quality in the areas at issue were not “due to permanent and enforceable reductions in emissions.”   The Seventh Circuit first held that the Sierra Club had established its Article III standing by virtue of showing that EPA’s redesignation led to less stringent regulation than would have been in place had the areas remained designated as nonattainment for ozone.  As to the merits, Sierra Club had argued (a) that EPA, before attributing improved air quality to regulation, should have given greater consideration to whether the improvements were caused by the economic recession, fuel prices, weather, or other temporary conditions; (b) that EPA inappropriately used actual emissions data from power plants, rather than maximum permitted emissions, in its modeling; and (c) that EPA erred in relying on the effects of a NOx emissions regulation program that allows trading within a region.  The court of appeals, citing the deferential standard of review, held that EPA reasonably modeled the effects of regulation to conclude that regulation caused the observed air quality improvements.  Accordingly, the Seventh Circuit denied Sierra Club’s petition for review.

—Todd Aagaard

December 17, 2014 | Permalink | TrackBack (0)

Tuesday, December 16, 2014

Ninth Circuit Upholds California Timber Thinning Project

On December 16, the Ninth Circuit (Thomas, O’Scannlain, McKeown) issued a decision in Conservation Congress v. Finley.  Two environmental groups—Conservation Congress and the Environmental Protection Information Center—sued the Forest Service and Fish and Wildlife Service, alleging that the agencies’ approval of the Beaverslide timber thinning project in Trinity County, California, violates the Endangered Species Act, NEPA, and National Forest Management Act because of the project’s potential impacts on endangered Northern Spotted Owls.  The Forest Service, with the Fish and Wildlife Service’s concurrence, issued a Biological Assessment concluding the project “may” but is “not likely to adversely affect” the Northern Spotted Owl.  The district court granted summary judgment to the government, and Conservation Congress appealed. 

The Ninth Circuit affirmed, holding (a) that Conservation Congress, although it could have been more specific, provided sufficient notice of its intent to sue under the Endangered Species Act; (b) that a new consultation between the Forest Service and Fish and Wildlife Service did not moot Conservation Congress’s claims, because the new consultation focused only on the effects of a critical habitat redesignation; (c) that the Forest Service did not violate consultation requirements by not reinitiating consultation upon the release of a 2011 Recovery Plan for the Northern Spotted Owl; (d) that the Forest Service and Fish and Wildlife Service used the best scientific data available to reach their conclusions; and (e) that the Forest Service’s Environmental Impact Statements adequately discussed the project’s short-term effects on Northern Spotted Owls.

—Todd Aagaard

December 16, 2014 | Permalink | TrackBack (0)

Monday, December 8, 2014

Government to Seek Certiorari in FERC Demand Response Case

On Friday, the Solicitor General indicated that the government will be filing a petition for certiorari to the Supreme Court in Electric Power Supply Association v. FERC.  The government’s cert petition will ask the Supreme Court to review a May 23, 2014, decision from a divided panel of the D.C. Circuit that invalidated FERC’s Order 745.

Order 745 directs Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) to establish rules that compensate demand response resources at the wholesale market price—the same rate that electric power suppliers receive for selling electricity.  A group of organizations affiliated with generators of electricity sued FERC, alleging that Order 745 had overstepped the agency’s authority.  A majority of the D.C. Circuit panel (Brown, Silberman) agreed, holding that Order 745 exceeds FERC’s jurisdiction over wholesale electricity markets under the Federal Power Act, 16 U.S.C. § 824.  The panel majority reasoned that, because demand response involves decisions by end users regarding their energy use, it is inherently “part of the retail market.”  Judge Edwards dissented.

Demand response and other smart grid technologies raise challenging legal questions, because they are upending assumptions about how the grid and electric power markets work.  Just as distributed generation is integrating generation resources at places in the electric power grid that traditionally involved only distribution to end users, demand response resources are being aggregated and coordinated in ways that allow them to compete effectively in wholesale markets.

Characterizing demand response as merely a decision not to purchase electricity in the retail market, as the panel majority did, fails to appreciate the important functions that demand response resources play in contemporary electric power markets.  Demand response, for example, can provide effective frequency regulation that helps to stabilize the grid, and frequency regulation is an ancillary service procured through wholesale power markets. 

FERC’s jurisdiction is determined by statute, and the agency cannot rewrite its authority merely because times have changed.  But courts need to understand the context in which FERC is operating and should not apply outdated and rigid assumptions about how electric power markets should operate.  Hopefully the Supreme Court will grant certiorari in this case and give FERC the flexibility it needs to apply its existing authority in the context of changing technologies and markets.

—Todd Aagaard

December 8, 2014 | Permalink | TrackBack (0)

Friday, December 5, 2014

D.C. Circuit Rejects FERC Order Denying Refunds to Louisiana Utilities

On December 5, the D.C. Circuit (Rogers, Wilkins, Williams) issued a decision in Louisiana Public Service Commission v. FERC, the latest in a string of decisions arising out of cost allocations amongst .  Entergy Corporation, through six operating subsidiaries, sells electricity in Arkansas, Louisiana, Mississippi, and Texas.  The six subsidiaries own their generation and transmission facilities individually, but operate jointly as a single system.  Because of this joint operation, the six subsidiaries share production costs pursuant to a FERC-approved System Agreement.  In 1995, the Louisiana Public Service Commission complained that the allocation of capacity costs under the System Agreement was unjust and unreasonable, in violation of the Federal Power Act.  After much litigation, remands, and rehearings, FERC eventually agreed with the Louisiana Public Service Commission that the costs were unjust and unreasonable but declined to order refunds of the misallocated costs.  Unlike excessive rates, FERC reasoned, misallocated costs involve a zero-sum game where the system overall has not over-recovered.  The D.C. Circuit granted Louisiana’s petition for review, holding that FERC had failed to justify its decision not to order a refund of the misallocated costs.  The court noted that FERC does not follow a strict policy against refunds of misallocated costs, and so had to explain why the particular circumstances in this case did not warrant a refund.

—Todd Aagaard

December 5, 2014 | Permalink | TrackBack (0)

Tenth Circuit Issues Decision Regarding Claims to R.S. 2477 Rights-of-Way over Federal Lands

On December 2, the Tenth Circuit (Kelly, Bacharach, Phillips) issued a decision in Kane County v. United States, the latest in a series of cases involving challenges to federal title under Revised Statute 2477. This case is part of an ongoing dispute between Kane County, in southern Utah, and the federal government, in which the County has sought to establish rights-of-way in and across federal lands to allow off-road vehicle use in areas that would otherwise be subject to closure or restrictions under federal law. Kane County filed this action in 2008, seeking to quiet title to portions of 15 roads under Section 8 of the Mining Act, commonly referred to as Revised Statute 2477, or “R.S. 2477.”  R.S. 2477 was repealed by the Federal Land Policy and Management Act in 1976, except as to “valid existing” R.S. 2477 rights.  The government moved to dismiss the County’s claims on the basis that a jurisdictional trigger in the Quiet Title Act – disputed title – was lacking.  The district court disagreed.  On appeal, the Tenth Circuit reversed, establishing, for the first time, that only unambiguous and consistent assertions of title by the federal government are sufficient to create a title dispute.  In other words, “actions of the United States that merely produce some ambiguity regarding a plaintiff’s title are insufficient to constitute ‘disputed title’” and prevent the court from exercising jurisdiction.  With respect to the individual roads at issue in the case, the court held that the district court erred in asserting jurisdiction over a handful, but affirmed jurisdiction over several others.  The court also addressed a statute of limitations argument under the Quiet Title Act for one of the road sections traversing a Wilderness Study Area, holding that federal designation of the WSA was not sufficient to give notice to the county of federal ownership of the roads because it was not an adequate assertion of “exclusive control” by the federal government.  Finally, the court reaffirmed its rule regarding the scope of an R.S. 2477 right-of-way: once established, an R.S. 2477 road can be widened in a “reasonable and necessary manner”, but only in light of pre-1976 uses of the road.

—Hillary Hoffmann

December 5, 2014 | Permalink | TrackBack (0)

Thursday, December 4, 2014

Smart Grid and Climate Change

Earlier this week I attended the National Summit on Smart Grid and Climate Change, organized by the Association for Demand Response & Smart Grid.  The conference addressed ways that smart grid technologies, including demand response and energy efficiency, can be used as climate mitigation and adaptation tools, including as means of complying with EPA’s forthcoming Clean Air Act 111(d) rule for existing power plants (also known as the Clean Power Plan).  Takeaways from the conference included:

  • As increases in distributed generation and renewable energy entail decreased centralized control over power generation, there is a need for a compensating increased centralized control over demand for power (load).  Smart grid and demand response technologies help to fill that need, thereby facilitating integration of distributed generation and renewable energy into the grid.  In addition, some of the concerns about the unpredictability of distributed resources (both generation and demand response) can be addressed by aggregating and coordinating distributed resources, to operate them as a “virtual power plant.”
  • The 111(d) rulemaking process is inducing a convergence of energy and environmental regulation.  Utility regulators and air regulators are meeting and starting to attempt to coordinate in ways they have never done before.  That being said, there is clearly a lot more work to be done in this area.
  • Demand response measures and smart grid technologies have benefits independent of emissions reduction.  EPA’s 111(d) rule will have important impacts on the energy sector, including creating strong incentives for increased utilization of smart grid and demand response technologies.  Thus, the 111(d) rule may have significant benefits beyond emissions reduction, especially if EPA, FERC, state energy and air regulators, and the energy sector can work together to create synergies between 111(d) compliance and grid modernization.
  • Smart grid technologies and distributed generation are causing forward-thinking people and entities in the energy sector to rethink electric power distribution systems.  Peter Fox-Penner of the Brattle Group, for example, advocates moving distribution systems toward open access platforms for a variety of grid services.  Many speakers expressed interest and excitement about the New York State Public Service Commission’s Reforming the Energy Vision (REV) initiative as an example of a promising forum for such forward thinking.

—Todd Aagaard

December 4, 2014 | Permalink | TrackBack (0)

D.C. Circuit Dismisses PURPA Case for Lack of Jurisdiction

On December 2, the D.C. Circuit (Garland, Griffith, Williams) issued a decision in Midland Power Co-op. v. FERC.  This case arose out of a dispute between Gregory and Beverly Swecker, who own and operate a wind turbine on their Iowa farm, and Midland Power Cooperative, an Iowa electric utility.  The Sweckers’ wind turbine is a qualifying facility under § 210 of the Public Utility Regulatory Policies Act of 1978 (“PURPA”), 16 U.S.C. § 824a–3.  PURPA requires utilities to purchase power from qualifying facilities at “avoided cost.”  When the Sweckers decided that Midland was not paying them a rate that reflected avoided cost, they stopped paying Midland for the power they used.  Midland responded by disconnecting the Sweckers, which had the effect of preventing the Sweckers from buying retail power from Midland and stopping Midland’s purchases of power from the Sweckers’ wind turbine.  FERC issued an order under PURPA requiring Midland to reconnect with the Sweckers’ turbine, and Midland filed a petition for review.  Midland invoked Federal Power Act § 313(b), 16 U.S.C. § 825l(b), which as codified provides that “[a]ny party to a proceeding under this chapter aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the United States court of appeals.”  Since PURPA § 210 is codified in the same chapter as the Federal Power Act, Federal Power Act § 313(b) would seem to create jurisdiction.  The D.C. Circuit, however, observed that as enacted § 313(b) actually referred to “a proceeding under this Act,” with “this Act” meaning the Federal Power Act, and PURPA § 210 is not part of the Federal Power Act.  Accordingly, Midland could not sue under Federal Power Act § 313(b).  Nor, the court of appeals held, did FERC’s order create a new rule regarding disconnections of retail service for customers’ nonpayment in a way that might trigger jurisdiction under PURPA § 210(h), 16 U.S.C. § 824a–3(h).  Citing its precedent, the D.C. Circuit noted that enforcement of PURPA § 210 is generally vested exclusively in district courts, not courts of appeals.

—Todd Aagaard

December 4, 2014 | Permalink | TrackBack (0)

Ninth Circuit Dismisses Clean Air Act Citizen Suit Seeking to Compel New Ozone PSD Regulations

On December 1, the Ninth Circuit (Canby, Fletcher, Watford) issued a decision in WildEarth Guardians v. McCarthy.  WildEarth Guardians, Midwest Environmental Defense Center, and Sierra Club sued EPA under the Clean Air Act's citizen suit provision, 42 U.S.C. § 7604, in an attempt to force EPA to issue revised regulations for ozone under its Prevention of Significant Deterioration (PSD) program, which regulates emissions in areas that are in attainment of the National Ambient Air Quality Standard.  Clean Air Act § 166(a) requires EPA to issue regulations implementing the PSD program, initially within two years after 1977 and then, “[i]n the case of pollutants for which national ambient air quality standards are promulgated after August 7, 1977, [EPA] shall promulgate such regulations not more than 2 years after the date of promulgation of such standards.”  The plaintiffs’ suit was premised on an interpretation of this sentence that would require EPA to issue new PSD regulations within two years of any revision of a NAAQS—here, EPA’s 2008 revision of the ozone NAAQS.  EPA interprets Clean Air Act § 166(a) to require new PSD regulations only for newly regulated pollutants, not NAAQS that merely revise the standard for an already regulated pollutant.  The Ninth Circuit, without reaching the question whether EPA’s interpretation is correct, held that Clean Air Act § 166(a) was sufficiently ambiguous that it could not support the existence of a nondiscretionary duty that would form the basis for a citizen suit against EPA.  Under Ninth Circuit precedent, a citizen suit alleging EPA has violated a nondiscretionary duty must allege that EPA has violated a “specific, unequivocal command” in the relevant statute. 

—Todd Aagaard

December 4, 2014 | Permalink | TrackBack (0)

All your favorite ELC hits together on one album

I hope you enjoyed our November (or has we call it here in Buffalo Snowvember) essays examining the latest IPCC report. Hopefully, they helped you frame some ideas and provided some context for the current discussions in Lima. A big thanks to Environmental Law Profs Blog for hosting the Environmental Law Collaborative yet again. The ELC is an evolving group of environmental law scholars that meets in person every other year to discuss thorny environmental law problems and strategize responses. These essays are only one way in which we seek to disseminate our work and further the discussion. These essays will be appearing in print in ELR early next year, and you can download them in one document on SSRN starting today. 

Feel free to direct any comments on this specific project on on the ELC generally my way.

- Jessie Owley

December 4, 2014 | Permalink | TrackBack (0)