Energy and Environment Monitorwww.eem.jacksonkelly.com

Supreme Court Strikes Down Programmatic Challenge on Basis of Standing

            In a March 3, 2009 decision, the United States Supreme Court has limited environmental groups’ challenge of federal agency regulations based upon the standing of those groups to bring a civil action. Summers v. Earth Island Institute, No. 07-0463 (Mar. 3, 2009). The case challenged rules issued by the Forest Service under its Decisionmaking and Appeals Reform Act which exempts certain agency projects from public notice, comment, and administrative appeal procedures. The plaintiffs initially challenged the rules as applied to a specific project in the Sequoia National Forest.  They settled that claim, but sought to pursue a facial challenge in the case to the rules themselves. The federal district court and Ninth Circuit Court of Appeal agreed that the plaintiffs, lead by the Earth Island Institute, had standing to pursue its facial challenges to the rules notwithstanding the settlement to the as-applied challenge. One such basis of standing was an alleged procedural injury arising from the groups’ inability to provide comments to Forest Service plans.

            In an opinion authored by Justice Antonin Scalia, the Supreme Court reversed by a vote of 5-4. Because the underlying project-specific challenge was settled, the Court held that affidavits submitted by Earth Island failed to establish that any of its members would imminently suffer a concrete and specific injury-in-fact – a mandatory requirement for Article III standing. In order to demonstrate standing, plaintiffs’ claim of procedural harm (e.g., lack of appeal rights to certain projects), must be coupled with an unambiguous, and actual or imminent harm that was subject to a project under the challenged regulations. The decision has implications well beyond these specific Forest Service rules.  The programmatic nature of the Forest Service rules under challenge are similar in many respects to the nationwide permits that the Corps of Engineers uses to approve fills constructed as part of coal mining operations.

I.          The Facts of the Case

            The Forest Service Decisionmaking and Appeals Reform Act (ARA), required the Forest Service to establish administrative processes, including notice and comment and rights of appeal, for proposed projects and activities that implement land and resource management plans. The Forest Service published regulations in June 2003 to implement the ARA.  The 2003 Regulations exempted from the ARA’s notice-and-comment and administrative-appeal requirements those projects that were also categorically exempt from review under the NEPA). The Forest Service subsequently established new NEPA categorical exemptions for small-scale post-fire rehabilitation projects and post-fire timber salvage sales. By establishing these NEPA categorical exemptions, the Forest Service also exempted conforming projects from the ARA’s public notice, comment, and appeal requirements under the 2003 Regulations.

            The plaintiffs filed suit in June 2003 challenging both the 2003 Regulations as applied to a specific project and the validity of the 2003 Regulations themselves. To demonstrate standing, Earth Island filed two affidavits alleging that one organization member had repeatedly visited the project site, had plans to do so again, and would be injured if the project went forward without an opportunity for his comment.  Earth Island also filed the affidavit of another member who claimed to have visited numerous National Forests and had plans to visit unidentified National Forests in California and elsewhere later that year. The affidavit further stated that the 2003 Regulations had prevented him from appealing a number of unspecified timber sales.

            The parties settled their dispute regarding approval of the project that was the subject of the “as applied” challenge, and it was dismissed with prejudice. With respect to the remaining facial challenges to the 2003 Regulations, the Forest Service argued that, as a result of the settlement, Earth Island lacked Article III standing because its members were no longer threatened with an injury-in-fact.. Rejecting these arguments, The District Court rejected this defense and invalidated a portion of the 2003 Regulations, including the public notice, comment, and appeal provisions. On appeal, the Ninth Circuit partially affirmed the District Court’s decision. The Ninth Circuit found that Earth Island had standing to pursue its procedural injury claims, even though its “as applied” challenge to the individual project was mooted by the settlement.

II.         The Court’s Decision

            Writing for the Court, Justice Scalia held that Earth Island lacked standing to pursue its facial challenges to the 2003 Regulations. The Court specifically held that neither of the affidavits established a concrete and particularized injury. To satisfy Article III standing requirements, the Court repeated what are now familiar requirements of standing.  A plaintiff must demonstrate that it has suffered an injury-in-fact that is concrete, specific and actual or imminent. The injury must be fairly traceable to the challenged action.  It must be likely that the injury will be redressed by the requested relief. Organizations can satisfy the “concrete and particularized injury” requirement by demonstrating that the recreational or aesthetic interests of one of its members will be affected.

            The Court first held that the affidavit submitted to establish standing as to the specific project did not establish an injury-in-fact to a programmatic challenge. The Court noted that “injury in fact with regard to that project has been remedied” in light of the settlement with Earth Island.  The Court further stated: “We know of no precedent for the proposition that when a plaintiff has sued to challenge the lawfulness of certain action or threatened action but has settled that suit, he retains standing to challenge the basis for that action … apart from any concrete application that threatens imminent harm to his interests. Such a holding would fly in the face of Article III’s injury-in-fact requirement.”

            The majority next disagreed with Earth Island's contention that the second affidavit testifying to a future intent to visit unspecified Forest Service locations established a concrete-and-specific injury. The Court first noted that the second affidavit failed to identify any specific timber sales that were subject to the 2003 Regulations. The affidavit also failed to identify concrete and specific plans to visit National Forest areas that would be impacted by such projects. According to the majority, without such specification, a court is unable to tell what projects are unlawfully subject to the regulations and whether the affiant may suffer a recreational or aesthetic injury by encountering them during visits to National Forests. “Accepting an intention to visit the National Forests as adequate to confer standing to challenge any Government action affecting any portion of those forests would be tantamount to eliminating the requirement of concrete, particularized injury in fact.”

            The Court next rejected the Ninth Circuit’s determination that Earth Island had standing based on an alleged procedural injury. Earth Island contended that, as a result of the 2003 Regulations, it was denied the opportunity to comment on certain Forest Service projects. The Ninth Circuit agreed, holding that the “preclusion from participation in the appeals process may yield diminished recreational enjoyment of the national forests.” The Supreme Court, however, held that “deprivation of a procedural right without some concrete interest that is affected by the deprivation – a procedural right in vacuo – is insufficient to create Article III standing.”

            In his majority opinion, Justice Scalia explicitly rejected a test for standing proposed by Justice Breyer in his dissent, describing it as “a hitherto unheard-of test for organizational standing: whether, accepting the organization’s self-description of the activities of its members, there is a statistical probability that some of the members are threatened with concrete injury.” While recognizing that it is possible (or even likely) that one of Earth Island's members will suffer an injury-in-fact in the future, Justice Scalia concluded that “speculation will not suffice. Standing … is not an ingenious academic exercise in the conceivable … [but] requires … a factual showing of perceptible harm.”

III.       Observations

            The Supreme Court said little in the Earth Island decision that is new.  What is interesting about the case, however, is the Court’s insistence that standing is a flexible concept that adjusts according to the nature of the claim asserted.  Accordingly, there was no question that the Plaintiff’s affiant who alleged injury based on the specific project that was challenged and settled had standing as to that project.  The same facts that provided standing as to the specific project challenged, however, were insufficient to create standing to challenge the rule generally. Moreover, the facts alleged in the second affidavit regarding the “procedural injury” were considered too speculative to establish any concrete injury to any specific person who was a member of the plaintiff group.

            Much of the Clean Water Act litigation over the last decade has been comprised of programmatic challenges parading as challenges to specific individual permits or authorizations.  Although standing affidavits can frequently be crafted by counsel for plaintiffs to meet the requirements of the injury claimed, the Earth Island opinions acts as a reminder that “a factual showing of perceptible harm” still remains the standard by which standing is judged.  Moreover, the broader the claim of injury – such as the inability to provide comment on an agency action - the more difficult it may be to describe with particularity the concrete injury that an affiant suffers.

             This article was authored by Blair M. Gardner, Jackson Kelly PLLC. For more information on the author see here.

Supreme Court Strikes Down Programmatic Challenge on Basis of Standing

            In a March 3, 2009 decision, the United States Supreme Court has limited environmental groups’ challenge of federal agency regulations based upon the standing of those groups to bring a civil action. Summers v. Earth Island Institute, No. 07-0463 (Mar. 3, 2009). The case challenged rules issued by the Forest Service under its Decisionmaking and Appeals Reform Act which exempts certain agency projects from public notice, comment, and administrative appeal procedures. The plaintiffs initially challenged the rules as applied to a specific project in the Sequoia National Forest. They settled that claim, but sought to pursue a facial challenge in the case to the rules themselves. The federal district court and Ninth Circuit Court of Appeal agreed that the plaintiffs, lead by the Earth Island Institute, had standing to pursue its facial challenges to the rules notwithstanding the settlement to the as-applied challenge. One such basis of standing was an alleged procedural injury arising from the groups’ inability to provide comments to Forest Service plans.

            In an opinion authored by Justice Antonin Scalia, the Supreme Court reversed by a vote of 5-4. Because the underlying project-specific challenge was settled, the Court held that affidavits submitted by Earth Island failed to establish that any of its members would imminently suffer a concrete and specific injury-in-fact – a mandatory requirement for Article III standing. In order to demonstrate standing, plaintiffs’ claim of procedural harm (e.g., lack of appeal rights to certain projects), must be coupled with an unambiguous, and actual or imminent harm that was subject to a project under the challenged regulations. The decision has implications well beyond these specific Forest Service rules.  The programmatic nature of the Forest Service rules under challenge are similar in many respects to the nationwide permits that the Corps of Engineers uses to approve fills constructed as part of coal mining operations.

I.          The Facts of the Case

            The Forest Service Decisionmaking and Appeals Reform Act (ARA), required the Forest Service to establish administrative processes, including notice and comment and rights of appeal, for proposed projects and activities that implement land and resource management plans. The Forest Service published regulations in June 2003 to implement the ARA.  The 2003 Regulations exempted from the ARA’s notice-and-comment and administrative-appeal requirements those projects that were also categorically exempt from review under the NEPA). The Forest Service subsequently established new NEPA categorical exemptions for small-scale post-fire rehabilitation projects and post-fire timber salvage sales. By establishing these NEPA categorical exemptions, the Forest Service also exempted conforming projects from the ARA’s public notice, comment, and appeal requirements under the 2003 Regulations.

            The plaintiffs filed suit in June 2003 challenging both the 2003 Regulations as applied to a specific project and the validity of the 2003 Regulations themselves. To demonstrate standing, Earth Island filed two affidavits alleging that one organization member had repeatedly visited the project site, had plans to do so again, and would be injured if the project went forward without an opportunity for his comment. Earth Island also filed the affidavit of another member who claimed to have visited numerous National Forests and had plans to visit unidentified National Forests in California and elsewhere later that year. The affidavit further stated that the 2003 Regulations had prevented him from appealing a number of unspecified timber sales.

            The parties settled their dispute regarding approval of the project that was the subject of the “as applied” challenge, and it was dismissed with prejudice. With respect to the remaining facial challenges to the 2003 Regulations, the Forest Service argued that, as a result of the settlement, Earth Island lacked Article III standing because its members were no longer threatened with an injury-in-fact.. Rejecting these arguments, The District Court rejected this defense and invalidated a portion of the 2003 Regulations, including the public notice, comment, and appeal provisions. On appeal, the Ninth Circuit partially affirmed the District Court’s decision. The Ninth Circuit found that Earth Iland had standing to pursue its procedural injury claims, even though its “as applied” challenge to the individual project was mooted by the settlement.

II.         The Court’s Decision

            Writing for the Court, Justice Scalia held that Earth Island lacked standing to pursue its facial challenges to the 2003 Regulations. The Court specifically held that neither of the affidavits established a concrete and particularized injury. To satisfy Article III standing requirements, the Court repeated what are now familiar requirements of standing.  A plaintiff must demonstrate that it has suffered an injury-in-fact that is concrete, specific and actual or imminent. The injury must be fairly traceable to the challenged action.  It must be likely that the injury will be redressed by the requested relief. Organizations can satisfy the “concrete and particularized injury” requirement by demonstrating that the recreational or aesthetic interests of one of its members will be affected.

            The Court first held that the affidavit submitted to establish standing as to the specific project did not establish an injury-in-fact to a programmatic challenge. The Court noted that “injury in fact with regard to that project has been remedied” in light of the settlement with Earth Island.  The Court further stated: “We know of no precedent for the proposition that when a plaintiff has sued to challenge the lawfulness of certain action or threatened action but has settled that suit, he retains standing to challenge the basis for that action … apart from any concrete application that threatens imminent harm to his interests. Such a holding would fly in the face of Article III’s injury-in-fact requirement.”

            The majority next disagreed with Earth Island's contention that the second affidavit testifying to a future intent to visit unspecified Forest Service locations established a concrete-and-specific injury. The Court first noted that the second affidavit failed to identify any specific timber sales that were subject to the 2003 Regulations. The affidavit also failed to identify concrete and specific plans to visit National Forest areas that would be impacted by such projects. According to the majority, without such specification, a court is unable to tell what projects are unlawfully subject to the regulations and whether the affiant may suffer a recreational or aesthetic injury by encountering them during visits to National Forests. “Accepting an intention to visit the National Forests as adequate to confer standing to challenge any Government action affecting any portion of those forests would be tantamount to eliminating the requirement of concrete, particularized injury in fact.”

            The Court next rejected the Ninth Circuit’s determination that Earth Island had standing based on an alleged procedural injury. Earth Island contended that, as a result of the 2003 Regulations, it was denied the opportunity to comment on certain Forest Service projects. The Ninth Circuit agreed, holding that the “preclusion from participation in the appeals process may yield diminished recreational enjoyment of the national forests.” The Supreme Court, however, held that “deprivation of a procedural right without some concrete interest that is affected by the deprivation – a procedural right in vacuo – is insufficient to create Article III standing.”

            In his majority opinion, Justice Scalia explicitly rejected a test for standing proposed by Justice Breyer in his dissent, describing it as “a hitherto unheard-of test for organizational standing: whether, accepting the organization’s self-description of the activities of its members, there is a statistical probability that some of the members are threatened with concrete injury.” While recognizing that it is possible (or even likely) that one of Earth Island's members will suffer an injury-in-fact in the future, Justice Scalia concluded that “speculation will not suffice. Standing … is not an ingenious academic exercise in the conceivable … [but] requires … a factual showing of perceptible harm.”

III.       Observations

            The Supreme Court said little in the Earth Island decision that is new.  What is interesting about the case, however, is the Court’s insistence that standing is a flexible concept that adjusts according to the nature of the claim asserted.  Accordingly, there was no question that the Plaintiff’s affiant who alleged injury based on the specific project that was challenged and settled had standing as to that project.  The same facts that provided standing as to the specific project challenged, however, were insufficient to create standing to challenge the rule generally. Moreover, the facts alleged in the second affidavit regarding the “procedural injury” were considered too speculative to establish any concrete injury to any specific person who was a member of the plaintiff group.

            Much of the Clean Water Act litigation over the last decade has been comprised of programmatic challenges parading as challenges to specific individual permits or authorizations.  Although standing affidavits can frequently be crafted by counsel for plaintiffs to meet the requirements of the injury claimed, the Earth Island opinions acts as a reminder that “a factual showing of perceptible harm” still remains the standard by which standing is judged.  Moreover, the broader the claim of injury – such as the inability to provide comment on an agency action - the more difficult it may be to describe with particularity the concrete injury that an affiant suffers.

This article was authored by Blair M. Gardner, Jackson Kelly PLLC. For more information on the author see here.

TVA Ordered to Install Controls in North Carolina’s Public Nuisance Suit

            Following a twelve-day bench trial in the U.S. District Court for the Western District of North Carolina, U.S. District Judge Lacy H. Thornburg found that nitrogen oxides (NO_x), sulfur dioxide (SO₂) and mercury emissions from 4 TVA plants located within 100 miles of North Carolina’s border constituted a public nuisance and ordered TVA to install emission controls.  NC v. TVA, No. 1:06-cv-20 (W.D.N.C. Jan. 13, 2009).  The decision is significant because it is the first trial court decision in a common-law public nuisance action by a state based upon environmental concerns in the state allegedly caused by emissions from power plants in other states.

            At issue were NO_x, SO₂, and mercury emissions from 11 TVA coal-fired power plants, 7 of which are in Tennessee , 2 in Kentucky , and 2 in Alabama.  Applying the law of the source states, the district court imposed an injunction upon TVA requiring the installation and continual, year-round use of pollution control technologies with respect to 4 plants located within 100 miles of North Carolina’s western border.  The district court denied injunctive relief as to the other 7 plants, all of which were located more than 100 miles from North Carolina, finding there was insufficient evidence that emissions from those plants were having an unreasonable impact on North Carolina’s citizens or significantly interfering with North Carolina’s air quality.

            Although the district court issued injunctive relief as to the four 100-mile plants, the district court acknowledged that public nuisance was not the “remedy of choice” and that interstate air pollution concerns are generally resolved by the U.S. Environmental Protection Agency under the Clean Air Act.  The district court explained that public nuisance principles were “less well-adapted than administrative relief to the task of implementing the sweeping reforms that North Carolina desires.”  Recognizing that a system-wide cap on TVA was both more efficient from a business standpoint and also more effective at diminishing overall pollution, the district court stated that the elements of public nuisance, including strict requirements as to both causation and unreasonableness of the harm, did not allow such a cap.

            In support its award of injunctive relief, the district court found that NO_x and SO₂ in the atmosphere form the pollutants PM_2.5 and ozone, both of which have significant negative impacts on human health and the environment.  The district court also found that emissions reductions in a particular state have the most benefit within that state, emissions from a source located outside of state can still have significant impacts on that state’s air quality.  In the case of the TVA plants, the district court found that the four 100-mile plants caused annual average PM_2.5 concentrations to increase by 0.4-0.5 µg/m³ in western North Carolina and 0.3-0.4 µg/m³ in other parts of North Carolina.  The district court also found that the 100-mile plants contributed 4-8 parts per billion (ppb) to peak 8-hour ozone concentrations in western North Carolina and 2-4 ppb to other parts of North Carolina.

            The district court further found that air pollution control technologies were available, namely scrubbers for SO₂ and selective catalytic reduction (SCRs) or selective non-catalytic reduction (SNCRs) for NO_x, and that together SCRs and scrubbers also remove mercury.  Although the district court found that pollution controls at the four 100-mile plants would cost in excess of $1 billion, the district court concluded that the controls were warranted and that it was “financially feasible” for TVA to bear the cost of installation, maintenance, and year-round operation of the available technologies.  Agreeing with North Carolina’s expert, the district court found that TVA must meet timelines of 21 months and 27 months for SCRs and scrubbers, respectively.

 

            Concluding that the uncontrolled emissions for the four 100-mile power plants was a public nuisance to the citizens of North Carolina, the district court issued an injunction requiring prompt installation and year-round usage of appropriate pollution control technologies at the four 100-mile plants.  The district court faulted TVA for “fail[ing] to speedily install readily available pollution control technology,” calling such conduct “unreasonable” under the circumstances.    For additional information concerning North Carolina’s public nuisance lawsuit against TVA, contact Gale Lea Rubrecht at galelea@jacksonkelly.com or 304-340-1200

        This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author see here.

Bhopal Litigation Continues

        November 3, 2008, the Federal Second Circuit Court of Appeals in New York reinstated a suit - Sahu v. Union Carbide Corp., 2^nd Cir., No. 06-5694 11/03/08), seeking injunctive relief and monetary damages under New York State law as a result of groundwater pollution allegedly caused by the Union Carbide Bhopal pesticide manufacturing facility which was the site of an event frequently cited as the world’s worst industrial disaster.  December 3, 1984, a Union Carbide subsidiary pesticide plant released 42 tons of methyl isocyanate (MIC) gas, exposing at least 520,000 people to toxic gases and resulting in the immediate deaths of more than 3,000 people, according to the Indian Supreme Court. It is estimated that a total of 8,000 people died within two weeks, and it is estimated that an additional 8,000 have since died from gas related diseases (Wikkipedia).  The Bhopal incident was significant for West Virginia since the UCC Institute West Virginia facility also manufactured MIC and because of UCC's significant industrial presence in West Virginia. 

 

        The plaintiffs in the groundwater pollution case alleged that groundwater was contaminated before the accident by wastes generated during the manufacture of pesticides. Plaintiffs are trying to bypass the corporate entity and pursue legal action against individuals behind the corporation, notably the then chief executive of Union Carbide, Warren Anderson.   Plaintiffs in the case were members of a group that had previously filed a different suit involving the catastrophic release of MIC. In that case claims were barred by a settlement agreement between the government of India and Union Carbide (Bano v. Union Carbide Corp. 273 F. 3d 120 (2^nd Cir. 2001). 

 

        The Sahu water pollution suit argued that Union Carbide’s response to the 1984 disaster was insufficient. Defendants asked for an order granting summary judgment because the documentary evidence contradicted the allegations of the complaint the defense motions was supported by thousands of pages of evidence. 

 

        The Second Circuit’s ruling was not on any substantive grounds but on a procedural issue that the New York federal District Court had improperly converted a motion to dismiss to a motion for summary judgment.

 

        This article was authored by Barbara D. Little, Jackson Kelly PLLC. For more information on the author see here.

The Problem With Imposing Monthly Effluent Limitations on Non-Continuously Discharging Outlets

          Currently, WVDEP's practice regarding the regulation of non-continuous discharges from on-bench outlets is to test the outlets sporadically, sometimes only once or twice per month or less.  The frequency of testing is to be expected; after all, non-continuous discharges do not, as their name implies, provide a continuous discharge from which daily samples may be drawn.  Depending upon precipitation and other factors, an on-bench outlet may only produce discharge a couple of times per month.  The problem for coal operators arises from DEP's imposition of monthly average limits on discharges from on-bench outlets.  In the event that random sampling reveals a violation of the monthly average limit, the operator would be penalized for thirty separate violations, as though the outlet had been discharging continuously for the entire month at that level. 

From a practical standpoint, it makes no sense to impose a limit, which is intended to reflect acceptable pollutant levels over extended periods, e.g. over a month, where the discharge being regulated only occurs non-continuously. There is significant potential that an unrepresentative sample may subject a permit holder to thirty days of violation when there was only one violation, when the flow provided enough volume to measure, on the day when the sample was taken.  Daily limits are a more accurate and fair manner of measurement for WVDEP to regulate non-continuous discharges in coal NPDES permits. These daily limits are sufficient to protect water quality and are consistent with the inclusion of only maximum effluent limits in non-coal NPDES permits for non-continuous discharges. Accordingly, all proposed monthly average limits should be deleted from permits that relate to on-bench outlets with non-continuous discharges.

           Setting aside questions of pragmatism and common sense, the legal foundation for this practice is also questionable.  The state Administrative Procedures Act (“APA”) requires the Environmental Quality Board to reverse, vacate, or modify any DEP action, which is arbitrary or capricious.  Imposing monthly average limits on discharges that flow non-continuously in response to precipitation is inherently arbitrary.  Moreover, state and federal NPDES regulations require that only continuous discharges have both daily maximum and average monthly limits.  See 40 CFR 122.45(d); 47 CSR 30-7.3.  Fourth Circuit case law also supports this position. In Chesapeake Bay Foundation, Inc. v. Gwaltney of Smithfield, Ltd., the Court held that EPA regulations provide for monthly average permit limits only for pollutants that are discharged continuously.  With non-continuous discharges, the rules do not require or even mention the concept of permit parameters stated as “monthly averages” as it is described in the continuous flow subsection.  Thus, there is no legal authority for imposing monthly average limits on discharges that flow non-continuously in response to precipitation.

            Given the lack of authority to impose monthly average limits on non-continuous discharges, WVDEP should modify its rules to halt this unfair practice, or the legislature could step in and provide clarification. 

This article was co-authored by Chris M. Hunter and Donnie Adkins, Jackson Kelly PLLC. For more information on the authors see (Hunter) here and (Adkins) here.

Final EPA Rule to Clarify EPCRA Reporting of Chemical Mixtures

          After 10 years, on November 3, 2008 (73 FR 65451-65484) EPA  finalized changes to the Emergency Planning Notification, Emergency Release Notification and Hazardous Chemical Reporting regulations that were proposed on June 8, 1998 (63 FR 31268). The final rule is effective on December 3, 2008.

          Title III of SARA (EPCRA) establishes authorities for emergency planning and preparedness, emergency release notification reporting, community right-to-know reporting, and toxic chemical release reporting. The implementing regulations for emergency planning, emergency release notification and the chemicals subject to these regulations (Extremely Hazardous Substances) are codified in 40 CFR Part 355. The implementing regulations for community right-to-know reporting (or hazardous chemical reporting) are codified in 40 CFR part 370.

 

          The November 3, 2008 final rule:

• Finalizes some of the proposed revisions on applying threshold quantity and the reporting of mixtures under EPCRA sections 311 and 312;
• Removes the Tier I and II inventory forms and instructions from the CFR, as well as making some minor changes to the forms and instructions; and
• Codifies certain existing policies and interpretations in 40 CFR parts 355 and 370.
• Rewrites the 40 CFR Parts 355 and 370 regulation in plainer language renumbering and re-organizing the sections and adds tables for clarification of certain reporting requirements.

          The most important change is the first to the provisions regarding mixtures of chemicals when determining if threshold quantities are met for regulatory applicability and the reporting requirements. For facilities that have only pure chemicals on site, determining if the total amount of a hazardous chemical is at or above the reporting threshold is straightforward. However, in many cases, facilities have mixtures that contain hazardous chemical components, including both extremely hazardous substances (EHSs) and hazardous chemical components which are not extremely hazardous substances (non-EHSs.)

         

          Three changes regarding mixtures were made by this final rule:

(1) Adding a provision to clarify that, when determining the total quantity of an extremely hazardous substance (EHS) present at a facility, the quantity of that substance present in a mixture must be included even if the total quantity of that particular mixture is also being counted toward the threshold level for that mixture;

(2) Adding a provision for applying the threshold quantity to a hazardous chemical component in a mixture when that hazardous chemical component is not an EHS; and

(3) Adding a provision for applying the threshold quantity to a non-EHS hazardous chemical when that chemical is present both by itself and as a component in a mixture.   

               (1) The prior rule provided that in determining whether a reporting threshold for an EHS has been met or exceeded, the owner or operator of a facility shall aggregate the quantity of the EHS present as a component in all mixtures at the facility and all other quantities of the EHS present at the facility.

         

          The Agency amended the regulations to clarify that when determining the total quantity of an EHS present at a facility, the quantity present in a mixture must be included even if the total quantity of that particular mixture is also being counted toward the threshold level for that mixture. For example, a facility has 15,000 pounds of a hazardous chemical mixture which contains 6,000 pounds of sulfuric acid, an EHS. Although the facility may report this mixture on the Tier II form as a mixture since it is above the reporting threshold of 10,000 pounds for a hazardous chemical, the facility must also include the amount of the sulfuric acid in this mixture when determining the total quantity of the sulfuric acid present throughout the facility.

         

          The argument for this change to include the specific quantity of the EHS was the need to assure that emergency responders do not unknowingly encounter a mixture containing an EHS component. The argument against the change was that EHS would be “double-counted”, increasing the reporting burden on large facilities. Additionally, the EHS component of a mixture often does not exhibit the same hazardous properties as it does in its pure form, especially when present in a mixture at low concentrations.

           

          EPA agreed with the importance of specific EHS quantities in mixtures to enable proper community planning for emergencies involving EHSs, and to protect emergency responders finding that the additional reporting burden was outweighed by the need to protect emergency responders. EPA also agreed that a hazardous component may not exhibit the same hazardous properties of the pure chemical when present in a mixture at low concentrations. For this reason, EPA established a de minimis limit (1 percent for hazardous chemicals and 0.1 percent for carcinogens) below which the component in a mixture need not be counted toward the threshold quantity.

               

          (2) The second revision is the addition of a provision to determine if the reporting threshold has been met or exceeded for mixtures that contain non-EHS hazardous chemical components.  Flexibility is required to accommodate the situation when a site may only have MSDSs for mixtures.  The facility has the option to either add up all the amounts of each non-EHS hazardous chemical component present throughout the facility or consider the total quantity of the mixture to determine whether the total quantity equals or exceeds the reporting threshold.

          

          Once it is determined that the reporting threshold is met or exceeded for either the non-EHS hazardous chemical component or the mixture, the facility may report the quantity of non-EHS hazardous chemical component or the mixture itself. The table in §370.14(a) states these options. In some cases, the OSHA regulations may require a facility to prepare or have available an MSDS for the mixture and/or its hazardous chemical components, so EPA added a provision for consistency in MSDS (§ 311) and inventory reporting (§312). This means that if the facility owner or operator decides to report a mixture under §311 by submitting an MSDS for the mixture, then the facility owner or operator should also report that mixture under §312 and not report its hazardous chemical components, unless the facility can show that it is not practicable to do so. EPA wants the MSDS information to correspond with the inventory information to ensure consistency in the qualitative and quantitative information received regarding the hazards of chemicals stored on site.

         

          The new rule removes the Tier I and Tier II inventory forms and instructions from the Code of Federal Regulations, in order to make it easier for the Agency to make minor changes in the forms without having to go through the entire rulemaking process. The Tier I and Tier II forms and instructions are available on the EPA’s web site at http://www.epa.gov/emergencies.

         

          Even with this recent change to clarify the regulations, EPCRA reporting is complicated; you may contact Barbara D. Little at (304) 340-1355 or blittle@jacksonkelly with questions.

         

          This article was authored by Barbara D. Little, Jackson Kelly PLLC. For more information on the author see here.

12 States Sue EPA for Failure to Stop Global Warming from Oil Refineries

     August 25, 2008 New York California, Connecticut, Delaware, Massachusetts, Maine, New Hampshire, New Mexico, Oregon, Rhode Island, Vermont, and Washington, as well as the District of Columbia and the City of New York filed suit in U.S. Court of Appeals for the D.C. Circuit against EPA for failure to issue New Source Performance Standards (NSPS), for controlling  greenhouse gas emissions from oil refineries, which the suit alleges account for about 15 percent of U.S. industrial emissions of carbon dioxide, the main greenhouse gas, as crude refineries burn oil in the production of  gasoline and jet fuel.

    The suit, led by New York Attorney General Andrew Cuomo, charges that the EPA violated the federal Clean Air Act by refusing to issue standards, based on the Supreme Court's ruling that EPA has the power to regulate greenhouse gases under the Clean Air Act. This suit augments other suits by coalitions of States against EPA to require the Agency to set standards for global warming emissions from power plants and to uphold the right of states to regulate pollution emissions from automobiles.

     This article was authored by Barbara D. Little, Jackson Kelly PLLC. For more information on the author see here.

In Re Methyl Tertiary Butyl Ether (MTBE”) Products Liability Litigation – The Commingled Product Theory

     In 2003/2004, fifty-nine (59) suits from across the country brought by municipalities, public services districts and other types of public water systems were joined in this multi-district litigation in the Southern District of New York.  These suits alleged that the plaintiffs’ wells had been contaminated with MTBE[1] from leaking underground storage tanks at retail gasoline outlets.  The defendants were makers of MTBE, refiners who added MTBE to their gasoline and retailers.  What started out as a promising case for the defendants on the issue of causation has turned into a series of defeats.

     Out of the vast numbers of original defendants, only a few remain.  Most of the major defendants having read the writing on the wall paid over $400 million and undertook certain remediation obligations to get out.  Many of the smaller defendants were voluntarily dismissed because they could not have caused the contamination.

     The remaining diehards, including Exxon Mobil and Lyondell Chemical and Equistar Chemical (makers of MTBE) were dealt another blow in May of this year when the district court refined its “commingled product theory” of liability.  2008 WL 2047611 (S.D.N.Y. May 13, 2008).  The commingled product theory is an “alternative” theory of liability which plaintiffs are allowed to rely on when they cannot prove that the conduct of a defendant is the proximate cause of their injury.

     In this case, the plaintiffs could not prove that the product of any of the defendants damaged their wells.  The plaintiffs in the phase of the case at issue were water suppliers in Suffolk County, New York.  As the district court noted, the plaintiffs faced two obstacles in attempting to prove causation.  First, in many instances, they could not identify the releases which contaminated their wells.  Second, it was impossible to determine the identity of the refiners of the gasoline and the manufacturers of the MTBE which contaminated the wells.

     The district court solved these problems for the plaintiffs by inventing the commingled product liability theory which it “developed to fit the particular facts of this case”.  The court reasoned that all of the gasoline sold in Suffolk County arrived at the New York Harber either on the Colonial Pipeline which originates from the Gulf Coast or on ships from domestic and overseas refiners.  Most of the gasoline that is shipped in the pipeline is designated as fungible which means that it is mixed with other refiners’ products of the same type.  When it arrives in New York Harbor, the gasoline is commingled with other gasoline and stored in large tanks at primary terminals.  It is later redirected to secondary terminals serving regional markets.  Gasoline arriving by ship is also mixed with other product at the primary and secondary terminals.  From the secondary terminals, it is shipped by truck to retail locations.

     Since each of the defendants had produced gasoline or MTBE which entered the New York Harbor by pipeline or ship, the district court concluded that sufficient evidence of causation existed to survive a summary judgment motion.  The court described the plaintiffs’ burden as follows:

when a plaintiff can prove that certain gaseous or liquid products . . . of many refiners were present in a completely commingled or blended state at the time and place that the risk of harm occurred, and the commingled products caused the plaintiff’s injury, each refiner or manufacturer is deemed to have caused the harm.

2008 WL 2047611 at 16.  The theory as described by the court makes sense because each refiner contributed to the harm.

     However, the theory as applied by the district court went much further.  As the court implicitly recognized, there was no assurance that the product was “completely” commingled or that each refiner contributed to the harm.  Based on the evidence, the district court determined that a jury could “conclude that most defendants’ gasoline contributed to contamination in at least some wells at some point”,  2008 WL 2047611 at 15, and there is a “good chance that many defendants, if not the majority, actually did cause plaintiffs’ injury”.  Id at 16.  Thus, liability is imposed not because the refiner’s product is part of the commingled product which caused the injury, but because it might have been. 

     Even though the refiners are allowed to avoid liability if they can prove their product could not have contributed to a particular injury, the court held that evidence that a refiner’s share of the MTBE gasoline shipped to New York was infinitesimal does not relieve it of liability.

     This article was authored by James R. Snyder, Jackson Kelly PLLC. For more information on the author see here.

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[1] MTBE is a gasoline additive.  It was first used in the 1980’s as an octane booster and later as an oxygenate to meet requirements of the Clean Air Act.

U.S. Government to Pay Oil Companies $1.1 Billion because Environmental Law Constituted Breach of Contract

     August 26, 2008 a three-judge panel of the U.S. Court of Appeals for the Federal Circuit ruled that a group of oil and gas companies were entitled to repayment of the initial costs of oil leases off the coast of California because the U.S. Department of Interior (DOI) suspended 35 leases 11 years after the passage of a 1990 amendment to the 1972 Coastal Zone Management Act (CZMA). (Amber Resources Co., et al v. U.S. Case # 07-5047 U.S. Court of Appeals for Fed. Cir.)

     Amber Resources, Total SA, Anadarko Petroleum and Devon Energy, among others, sued the government over the leases in the Court of Federal Claimst which ruled in favor of the oil companies in 2005. The breach of contract occurred because all the lease contracts were executed by 1984, well prior to the enactment of the 1990 CZMA amendment, which provided that any leases to extract resources in coastal zones had to meet with the approval of state regulators, even if the leases were within national territorial jurisdiction rather than state jurisdiction. State coastal jurisdiction extends three nautical miles from shore and federal territorial waters extend to 200 nautical miles.  The companies had correctly assumed that the 1990 CZMA amendments did not apply to their leases and had continued to perform under the lease agreements for 11 years after the enactment of the 1990 CZMA amendment.   In 2001in litigation initiated by the State of California, California v. Norton, 150 F.Supp.2d 1046, 1053 (N.D.Cal.2001), the Federal District Court for the Northern District of California ruled ordered the DOI to place the areas under direct suspension prohibiting the companies to conduct any exploration in the lease territories until the DOI made a determination in accord with the 1990 CZMA amendments to determine if drilling operations were consistent with State law, i.e. California. 

    In July 2002, the companies sued in the Court of Federal Claims, asserting that the application of the 1990 CZMA amendments to their leases constituted a material breach of the lease agreements that entitled them to rescission of the leases and restitution of the payments they had made under the lease agreements. In August 2005, the Court of Claims ruled that Congress's enactment of the 1990 amendments to the CZMA constituted an anticipatory repudiation of the lease agreements. The Court reached that conclusion because it found that the 1990 amendments established new statutory requirements that deviated significantly from the procedures and standards that were in effect when the leases were executed, and that the statutory imposition of new procedures and standards violated section 1 of the lease agreements. On appeal the government argued that implementation of the CZMA amendment did not constitute a cancellation of the existing lease agreements and therefore there was no breach of contract entitling the plaintiffs to restitution.  The Federal Circuit held that while the CZMA amendments themselves did not repudiate lease agreements, the government's application of CZMA amendments did repudiate the lease agreements, which justified restitution of the full amount of bonus payments for the leases, although additional damages for $717 million expended on the leases were not recoverable.

     This article was authored by Barbara D. Little, Jackson Kelly PLLC. For more information on the author see here.

EPA's Title V Monitoring and Testing Compliance Program Vacated

     The United States Court of Appeals for the District of Columbia issued a ruling on August 19, 2008 in Sierra Club v. EPA that vacates EPA's 2006 rule that implements Title V to assure compliance through monitoring.  The Court finds that EPA's prohibition of states and local authorities from supplementing inadequate monitoring requirements on a case-by-case basis in each permit issued is unlawful.  The Court concludes that EPA's prohibition means that some permit programs currently in place do not comply with Title V which requires that "every one" of the permits issued by permitting authorities include adequate monitoring requirements.  The Court focuses on the point that EPA has even conceded that some monitoring requirements may not be adequate to assure compliance and should be improved.  The Court reads Title V to mean that somebody must fix these inadequate monitoring requirements. 

     The court upheld the Part 70 rules in spite of challenge.  The Court concluded that Section 70.6(c)(1) ensures that all Title V permits include monitoring requirements "sufficient to assure compliance with the terms and conditions of the permit," even when Section 70.6(3)(i)(A) and 70.6(a)(3)(i)(B) are not applicable.  "This reading provides exactly what we have concluded the Act requires:  a permitting authority may supplement an inadequate monitoring requirement so that the requirement will "assure compliance with permit terms and conditions.""

     The Court grants the petition for review with respect to the 2006 rule, which they vacate and denies the petition for review with respect to the monitoring provisions of the Part 70 Rules. 

     This article was authored by Kathy G. Beckett, Jackson Kelly PLLC. For more information on the author see here.