The U.S. Department of Justice (DOJ) is in the midst of a comprehensive policy review regarding the use of Supplemental Environmental Projects (SEPs) in settlements of environmental enforcement actions. This review could potentially have far-reaching implications for companies that seek to settle such actions brought by either the federal government, or in the case of a citizen suit, a non-governmental organization (NGO). It remains to be seen if the ongoing SEP policy review will result in additional limits on the use of SEPs in settlement, thus limiting the flexibility in achieving penalty mitigation that has been a hallmark of environmental enforcement case resolutions for nearly three decades. Continue Reading DOJ Policy Review of SEPs May Have Big Implications for Company Environmental Settlements
Informal guidance memos can be a powerful tool — allowing agencies to quickly pivot following a change in administration, avoiding the time and expense associated with the notice and comment process. But whether new guidance memos benefit or harm industry, they can often raise as many questions as they answer, with businesses left to wonder what legal effect an agency policy statement has and whether it can be challenged in court. These questions can hamper long-range planning by increasing regulatory uncertainty. Two recent cases help clarify when agency guidance should be considered a “final agency action” and how and when guidance can be challenged in court. Continue Reading Don’t Miss the Memo: Recent Cases Clarify When Agency Guidance Documents Can be Challenged
On August 9, 2019, the EPA plans to publish a proposed rule to codify the current interpretation of New Source Review (NSR) Project Emissions Accounting. The rule would explicitly allow consideration of emissions decreases from a project, alongside any emissions increases, when determining whether the project causes a significant emissions increase from the source. Historically, many state regulators, and even certain EPA applicability determinations, have suggested that only emissions increases (and not decreases) should be considered. Considering emissions decreases in this analysis allows more projects to avoid triggering NSR.
Regulated companies need to understand what material courts can consider when they review administrative decisions. The Administrative Procedure Act generally allows courts to consider only the existing administrative record when reviewing agency decision-making to determine whether agency decisions are arbitrary and capricious. But the Supreme Court recently reminded us that this rule is not absolute by looking beyond the record in Dep’t of Commerce v. New York to block an agency decision that it found to be based on a “contrived,” pretextual rationale.
Regulated companies may be able to ask courts to consider information beyond the administrative record if they can show that the agency acted in bad faith or exhibited improper behavior. A company’s ability to present the court with information beyond a record carefully constructed by an agency can be a powerful tool. Continue Reading Going Beyond: When Can Courts Look Past the Record in an APA Review?
New York Governor Andrew Cuomo just signed into law an ambitious statewide climate change agenda – the Climate Leadership and Community Protection Act (CLCPA). The CLCPA focuses on greenhouse gas (GHG) reduction through adoption of renewable energy and energy sector mandates for GHG reductions, although the legislation leaves open the exploration of other means of GHG reduction and the expansion to economy-wide regulation. The legislation also focuses on adaptation mechanisms, including hardening infrastructure to withstand disasters. Commercially, the CLCPA goals present massive investment opportunities to help fund and develop this transformation. But investors are looking for incentives, and it remains unclear how future regulations will encourage future investments, rather than mandate them. Continue Reading New York’s Landmark Climate Bill Creates Massive Investment Opportunities but with Few Details for Businesses
A key building block of U.S. government is how administrative agencies interpret their own regulations. Because this question is so fundamental to the entire regulated community, we have blogged about administrative deference generally and the Kisor case specifically. The Supreme Court affirmed the long-standing judicial tenet of administrative deference to agencies’ interpretation of their own regulations this week. In doing so, however, the majority cautioned against a laissez faire application of deference, emphasizing that courts must carefully and explicitly consider the specific criteria established under Auer v. Robbins before deferring to an agency’s interpretation of its own regulation. Continue Reading Supreme Court Punts Larger Key Administrative Deference Issues Until Later
Everyone knows that environmental cleanups are complicated. Sites can be geographically vast and varied, involve operations that have released chemicals over decades, and goal posts for how and what should be investigated, characterized, and – if necessary – remediated can change over time. The U.S. Supreme Court recently granted certiorari in a case that could potentially throw remediation efforts at Superfund sites around the country – as Atlantic Richfield (the petitioner) put it – into “chaos.” Continue Reading SCOTUS Will Review EPA’s Authority to Control Superfund Cleanups at Company’s Request
The EPA announced its final rule for power plant greenhouse gas (GHG) emissions, culminating often rancorous discussion and litigation over the EPA’s authority to regulate GHG emissions from existing coal-fired electricity generating sources. Under the new Affordable Clean Energy (ACE) rule, the states, not the federal government, are now responsible for driving down GHG emissions from power plants. Specifically, the EPA now requires unit-specific standards of performance to be developed by the states using its new emission guideline that details the “best system of emission reduction.” Continue Reading EPA’s Final Power Plant Greenhouse Gas Rule Shifts Emissions Regulation to States
As investors become more interested in incorporating sustainability into investment portfolios, many project proponents find that incorporating ESG into infrastructure planning provides a “leg up” in securing investors and financing. An ESG disclosure, or an “environment,” “social,” and “governance” framework designed to disclose risk, makes it easier for investors to match projects with their own sustainability goals. Continue Reading Project Proponents: Five Tips to Use ESG Criteria in Drawing More Infrastructure Investors
The D.C. Circuit handed down an opinion in Sierra Club v. EPA last month that tossed the Sierra Club’s challenge of a U.S. Environmental Protection Agency (EPA) rule from the Obama Administration. The result may be greater flexibility and reduced public oversight in state ambient air quality monitoring. Continue Reading D.C. Circuit Court Decision Signals Reduced Public Oversight in Air Quality Monitoring