A Little Late . . . or Just In Time?

On June 29, 2015, the Supreme Court issued its latest opinion in an environmental rule challenge, this to the Mercury and Air Toxics Standard, or MATS.  Michigan et al. v. EPA¸ Slip Opinion, No. 14-46, U.S. (June 29, 2015).  The Court held that EPA had not reasonably considered cost in the “capacious” “appropriate and necessary” standard when determining to regulate power plant mercury emissions.  The Court reversed the D.C. Circuit’s decision in White Stallion Energy Center, LLC v. EPA, 748 F. 3d 1222 (2014) (per curiam) and remanded the proceeding, stating that EPA must factor cost into its “appropriate and necessary” determination.  The Court passed no judgment on whether EPA can meet that burden.  The D.C. Circuit will issue a remand order that will provide further guidance to the regulated community, including a schedule for EPA to re-issue its “appropriate and necessary” justification, possibly including a stay or vacature of the existing rule. Continue Reading

Consent Decrees May Not Preclude Certain Claims in Citizen Suits

On June 17, 2015, an Ohio district court ruled that a consent decree in a separate Illinois action did not preclude certain claims asserted in a citizen suit under the Clean Air Act (CAA).  Graff v. Haverhill N. Coke Co., No. 1:09-cv-670 (S.D. Ohio June 17, 2015).  Generally, a consent decree precludes citizen suit plaintiffs from pursuing separate claims.  The idea is that the claims were previously litigated under the doctrine of res judicata.  However, in Graff the court permitted citizen plaintiffs to continue pursuing claims that the government did not allege or specifically address in a consent decree.

In 2009, the citizen plaintiffs originally filed suit in relation to the defendants’ operation of a coke processing plant near the citizen plaintiffs’ property.  However, in 2013, the U.S. EPA, the State of Illinois and the State of Ohio (the Governments) filed a separate action in Illinois for CAA violations against some of the same defendants.  U.S. v. Gateway Energy & Coke Co., LLC, No. 3:13-cv-616 (S.D. Ill.).  The parties in the Illinois action ultimately entered into a consent decree, which dealt in part with the defendants’ coke processing plant in Ohio. Continue Reading

FERC Eliminates Paper Copy Requirement for Trial Exhibits

On June 18, 2015, the Federal Energy Regulatory Commission eliminated the requirement in Rule 508 of the Commission’s Rules of Practice and Procedure, 18 CFR 385.508, that paper copies be provided of all exhibits introduced as evidence in Commission trial-type evidentiary hearings.  The final rule eliminating this requirement was issued as Order No. 811 in Docket RM15-5-000, Revised Exhibit Submission Requirements for Commission Hearings.  The elimination of the paper copy requirement for exhibits is designed to facilitate a shift toward electronic hearing procedures, increase efficiency, reduce costs associated with providing paper exhibits and facilitate compilation and transmittal of the hearing record to the Commission in electronic format. Continue Reading

EPA Finds No Widespread Drinking Water Impact from Hydraulic Fracturing

On June 4, the Environmental Protection Agency (EPA) released a draft of its landmark study to assess the impact of hydraulic fracturing on drinking water.  U.S. EPA Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources (External Review Draft), EPA, Washington, DC, EPA/600/R-15/047, 2015.  Continue Reading

Murray Energy Decision Requires the Energy World to Wait

In a much-watched case, on June 9, 2015, the D.C. Circuit Court of Appeals issued an opinion denying the petition of Murray Energy for an extraordinary writ that would have stopped EPA from promulgating its Carbon Pollution Standards.  Murray Energy had based its petition on two sections of the Clean Air Act, Sections 111(d) and Section 112.  Murray Energy argued that EPA was prohibited from regulating greenhouse gas pollution from power plants under Section 111(d) because EPA was already regulating other kinds of pollutants from those plants under Section 112.  Because the rule is still a proposal, the Court held, as many expected, that the action was premature.  The Administrative Procedure Act and the Clean Air Act prohibit judicial challenges until a rulemaking is final.  EPA had argued that it could change the basis for the rulemaking based on comments received and that the Court should not pre-judge the issue.  The Court agreed that no grounds existed to “circumvent bedrock finality principles.” Continue Reading

EPA Attempts to Clarify “Waters of the United States”

On May 27, 2015, the EPA  and the U.S. Army Corps of Engineers issued their final version of the Clean Water Rule, which clarifies federal jurisdiction over bodies of water under the Clean Water Act (CWA).[1] More specifically, the rule clarifies the scope of “waters of the United States”, sometimes referred to as “WOTUS,” under the CWA. The final rule will become effective 60 days after it is published in the Federal Register.

As we noted in our post last year about the proposed version of the rule, the agencies and courts have struggled to interpret the scope of WOTUS since the Supreme Court’s 4-4-1 Rapanos decision.[2] The result of that decision has often been the use of what some have criticized as an unclear and inconsistent “significant nexus” test to determine federal jurisdiction on a case-by-case basis. With the newly announced rule, however, the agencies have attempted to clarify the scope of WOTUS, in part to limit the use of the “significant nexus” test and case-by-case determinations. Continue Reading

EPA Announces Long-Awaited Renewable Volume Obligations

On May 29, the United States Environmental Protection Agency (EPA) proposed long-delayed Renewable Fuel Standard (RFS) volume requirements for 2014, 2015, and 2016. Despite significant efforts to promote the use of renewable fuels, real-world limitations, such as the slower than expected development of the cellulosic biofuel industry, less growth in gasoline use than was expected when Congress enacted these provisions in 2007, and constraints in supplying certain biofuels to consumers, have made Congress’ original RFS goals for 2014, 2015, and 2016 effectively beyond reach.  Congress established the RFS program in 2005 (42 U.S.C. § 15801) and expanded the program in 2007 (EISA, P.L. 110-140), when it set specific volume production goals.  The program, according to EPA, is designed to promote energy security by increasing the percentage of domestic renewable fuels used in transportation. The RFS program has played a key role in the emergence of the biofuels industry but has been insufficient to overcome challenges such as the declining demand for gasoline, insufficient infrastructure capacity to transport the fuels, high cost associated with producing some renewable fuels, and limitations on how much renewable fuel can be blended with conventional fuels. As production of renewable fuels lagged, EPA failed to use its discretion to waive the Congressionally-authorized goals. Continue Reading

EPA Issues Final SSM SIP Call and Finalizes Revised SSM Policy

On May 22, 2015, the U.S. Environmental Protection Agency (EPA) finalized a rule requiring 36 states to revise their regulations governing emissions from sources during startup, shutdown and malfunction (SSM) periods, thus issuing a “SIP call” for each of those 36 states.  EPA’s 554-page notice was issued in a final action triggered by litigation brought by the Sierra Club and filed with the EPA Administrator on June 30, 2011. Continue Reading

CERCLA Divisibility Defense Is Alive and Well

On May 15, 2015, the United States District Court for the Eastern District of Wisconsin held that a defendant successfully established a divisibility defense in a government enforcement action dealing with the cleanup of the Fox River Superfund Site in northeastern Wisconsin (the Site).  United States v. NCR Corp., No. 10-C-910 (E.D. Wis. May 15, 2015).  The ruling appears to be the first district court decision to uphold a divisibility defense under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) since the Supreme Court’s 2009 decision in Burlington Northern.  It remains to be seen whether this is an indication of how courts will address divisibility going forward. Continue Reading

CFTC Proposes to Reduce Reporting and Recordkeeping Obligations for Commercial End Users of Trade Options

On April 30, 2015, the U.S. Commodity Futures Trading Commission (CFTC) issued a Notice of Proposed Rulemaking that would have the effect of reducing reporting and recordkeeping requirements for trade option counterparties that are neither swap dealers nor major swap participants (Non-SD/MSPs), including energy companies, agricultural producers, and other commercial end users.

The proposals are part of an ongoing effort by CFTC Chairman Timothy Massad to reduce regulations on end users that rely on the derivatives market in order to hedge their business risks.  The proposed rulemaking, which will be open for public comment for 30 days after publication in the Federal Register, includes the following actions: Continue Reading