Environmental Groups Allege EPA Failed to Engage in Endangered Species Act Consultation Before Implementing COVID-19 Enforcement Discretion Policy
White House Promises to Use “All Available Tools” to Implement Deep Cuts to EPA Funding in Fiscal Year 2021
By Leah Song and Steven Siros
On August 18, 2020, the Center for Biological Diversity, Waterkeeper Alliance, Inc., and Riverkeeper, Inc. (“Conservation Groups”) filed a new lawsuit in the U.S. District Court for the Southern District of New York against the U.S. Environmental Protection Agency and Administrator Wheeler (“EPA”) for failing to comply with their mandatory duties under the Endangered Species Act (“ESA”) in connection with promulgation of EPA’s COVID-19 enforcement discretion policy. More specifically, the Conservation Groups argued that the EPA failed to “initiate and complete ESA Section 7 consultation to ensure that EPA’s actions in response to the COVID-19 pandemic,” as described in the March 26, 2020 “COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program” (“Temporary Enforcement Policy”), would not jeopardize any listed species or their habitats. An analysis of the Temporary Enforcement Policy can be found at Jenner & Block’s Corporate Environmental Lawyer blog here.
Other environmental groups had previously challenged EPA’s Temporary Enforcement Policy, claiming that EPA was unreasonably delaying its response to a petition filed by the groups requesting that EPA issue an emergency rule requiring written notice from regulated entities that elect to suspend required environmental reporting and/or monitoring due to the COVID-19 pandemic. On July 8, 2020, Judge McMahon of the United States District Court for the Southern District of New York ruled that the Natural Resources Defense Counsel and other environmental organizations failed to show that they were injured by EPA’s purported “unreasonable delay” and therefore granted summary judgment in favor of EPA.
In this latest lawsuit, the Conservation Groups claim that EPA failed to engage in a required ESA Section 7 consultation prior to promulgating its Temporary Enforcement Policy. Notwithstanding that EPA’s Temporary Enforcement Policy explicitly states that regulated entities should “make every effort to comply with their environmental compliance obligations” and merely provides guidance on how EPA’s plans to exercise its long-held enforcement discretion in light of the challenges posed by the COVID-19 pandemic, the Conservation Groups’ complaint explains how the regulatory programs affected by the Temporary Enforcement Policy implicate the interests of listed species and their habitat as those programs are “intended to limit pollution and prevent adverse environmental harm.” For example, the complaint asserts that suspension of Clean Water Act’s National Pollutant Discharge Elimination System (“NPDES”) effluent sampling program “potentially affects listed species and critical habitats by allowing unmonitored and unreported (and hence unrestricted) contamination of waterways such species depend on.”
The Section 7 consultation process is meant to “insure that any action authorized, funded, or carried out by such agency . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species which is determined . . . to be critical.” 16 U.S.C. § 1536(a)(2). The Section 7 consultation process must be initiated at “the earliest possible time” for any project that “may affect” listed species. 50 C.F.R. § 402.14(a). The Conservation Groups allege that the Temporary Enforcement Policy “clearly meets the ESA’s ‘may affect’ threshold for triggering the agency’s Section 7 consultation obligations.” While the Conservation Groups recognized the unique challenges posed by COVID-19, they stated “this does not mean that EPA may simply ignore its vitally important, and legally required, ESA Section 7 duties and disregard potential impacts on imperiled species and their critical habitats.” They argue there is no evidence that the EPA undertook Section 7 consultation with the U.S. Fish and Wildlife Service or the National Marine Fisheries Service, or even followed the emergency consultation process provided for in the ESA.
EPA announced that it will terminate its reliance on the Temporary Enforcement Policy on August 31, 2020 (although EPA stated that the termination in no way limits its ability to exercise enforcement discretion on a case-by-case basis). EPA’s termination announcement was previously discussed on Jenner & Block’s Corporate Environmental Lawyer blog here. In light of EPA’s announcement, several State Attorneys Generals that had also filed a complaint challenged EPA’s Temporary Enforcement Policy indicated that they intend to dismiss their lawsuit so long as EPA terminates its reliance on the policy on or before August 31st. In an attempt to preempt what is likely to be a motion to dismiss on mootness grounds, the Conservation Groups allege that “there is no assurance that the policy will be rescinded by that date, particularly given the recent surge in COVID-19 cases,” and that their case should therefore be allowed to proceed.
Please feel free to contact the authors with questions or for further information. For regular updates about the impact of COVID‑19 in the workplace and on business generally, please visit Jenner & Block’s Corporate Environmental Lawyer blog and Jenner & Block’s COVID‑19 Resource Center.
New York Sets PFAS And 1,4-Dioxane MCL
By Steven M. Siros
On July 30, 2020, New York’s Public Health and Planning Council voted to establish maximum contaminant levels (MCLs) for PFOA and PFOS, two of the more common per- and polyfluoroalkyl substances known as PFAS. The MCL for both PFOA and PFOS was set at 10 parts per trillion (ppt) and once approved by the state’s Health Commissioner, public water systems serving 10,000 people or more will be required to start testing for these compounds within 60 days of the date the regulations are published in the New York State Register. Systems serving between 3,300 and 9,999 person would have to begin testing within 90 days, while all other systems would need to begin testing within six months. In conjunction with setting the PFAS MCL, New York also set a 1 part per billion MCL for 1,4-dioxane, another emerging contaminant.
The most immediate impact of the new MCLs will be the testing obligation it imposes on drinking water providers. If these contaminants are detected in drinking water above the MCL, the drinking water provider will be required to notify its consumers and develop a plan to address the MCL exceedances. Although New York has historically provided grants to assist municipalities in addressing these types of emerging contaminants, these grants are unlikely to be sufficient in light of the wide-spread testing that will now be required. As such, one can likely expect a substantial increase in litigation as municipalities aggressively look to shift the burden of paying for these remedial measures from ratepayers to manufacturing and/or other industrial operations that may have contributed to the presence of these contaminants in the environment.
U.S. EPA Limits States’ Veto Rights on Infrastructure Projects
By Steven M. Siros
Under Section 401 of the Clean Water Act (“CWA”), projects requiring federal permits or licenses that have the potential to result in point source discharge into waters of the United States must obtain a Section 401 water quality certification evidencing compliance with applicable state water quality standards. Until this state certification is received, a project can’t obtain its federal permit or license.
In response to claims that the states are unreasonably delaying Section 401 certifications and/or imposing requirements that go beyond the mandates of the CWA, U.S. EPA has issued a final rule clarifying the time period for states these certification reviews and limiting the conditions that can be imposed on a project as part of this certification process. In a press release accompanying the final rule, U.S. EPA Administrator Andrew Wheeler stated that “EPA is returning the Clean Water Act certification process under Section 401 from its original purpose, which is to review potential impacts from discharges from federally permitted projects may have on water resources, not to indefinitely delay or block critically important infrastructure.”
Section 401 of the CWA requires certifying authorities to act on Section 401 certification requests within a “reasonable period of time” that shall not exceed one year. 33 U.S.C. 1341(a)(1). Federal licensing and permitting agencies are tasked in the final rule with establishing what constitutes a “reasonable period of time either categorically or on a case-by-case basis” but in no circumstances can the period exceed one year. 40 CFR § 121.6. The final rule provides that the “reasonable period of time” starts to run once the certifying agency receives a “certification request” as opposed to running once the certifying authority deems the application or request “complete” as had been the historical practice.
The final rule also clarifies that the state review is limited to ensuring compliance with water quality standards as opposed to addressing non-water quality related considerations For example, U.S. EPA noted that certifying authorities have “on occasion required in a certification condition the construction of biking and hiking trails … and the creation of public access for fishing along waters of the United States.” Certifying authorities have also attempted to address air emission and transportation effects as part of the certification process. U.S. EPA's final rule specifically states that the Section 401 certification “is limited to assuring that a discharge from a Federally licensed or permitted activity will comply with water quality requirements.” 40 CFR § 121.3.
Within this “reasonable time period” set by the permitting agency, certifying authorities can grant, grant with conditions or deny certification requests. 40 CFR § 121.7. Certifying authorities may also waive the certification requirement, either expressly or by failing to act. 40 CFR § 121.9. Section 401 certifications must include supporting information for each condition, including a statement explaining why the condition is necessary to assure that the discharge will comply with state water quality requirements. Denials must state the reasons for denial, including the specific water quality requirements with which the discharge will not comply, and if the denial is for insufficient information, the denial must describe the specific information that would be required. In the event that a certifying authority fails to comply with the procedural requirements governing the certification process, the final rule allows the permitting agency to deem that the certifying agency has waived its certification rights. 40 CFR § 121.9(a)(2).
U.S. EPA's final rule has been praised by industry groups with the American Petroleum Institute issuing a statement that " the addition of a well-defined timeline and review process will provide certainty to operators as they develop infrastructure projects that meet state water quality standards." The Natural Resources Defense Council, on the other hand, issued a statement claiming that the new rule "makes a mockery of this EPA's claimed respect for cooperative federalism."
Please feel to contact the author with questions or for further information. For regular updates on breaking environmental, health and safety issues, please visit Jenner & Block’s Corporate Environmental Lawyer Blog.
The Ninth Circuit Sends Climate Change Cases Back to State Court
By Leah M. Song
On May 26, 2020, the Ninth Circuit agreed with plaintiffs that two climate change lawsuits—County of San Mateo v. Chevron Corp. et al. and City of Oakland v. BP p.l.c. et al.—had been improperly removed to the federal courts, continuing courts’ recent trend of remanding these types of cases back to state court.
A growing form of climate change litigation in the United States consists of lawsuits filed by states or municipalities against private industry, and more specifically, the fossil-fuel industry. States, cities and other units of local government have filed lawsuits alleging state common law theories, including nuisance, trespass, failure to warn of the known impacts of climate change, and unjust enrichment. The outcome of these cases thus far has hinged on whether or not the fossil fuel companies are able to successfully remove the litigation to federal court where they stand a much greater chance of getting the litigation dismissed. Generally, plaintiffs (including states, units of local government, and non-governmental organizations) asserting climate change claims against corporations prefer to be in state court where they can take advantage of perceived plaintiff-friendly common law or state statutes. On the other hand, defendants inevitably seek to remove such cases to federal court where they have had a higher level of success securing dismissals on the grounds that the issue is preempted by the Clean Air Act and/or addresses a “political question” which is better left to the discretion of Congress. See City of N.Y. v. BP P.L.C.. 325 F. Supp. 3d 466 (S.D.N.Y. 2018).
In County of San Mateo v. Chevron Corp. et al., six California municipalities and counties sued more than 30 fossil-fuel companies in California state court. The plaintiffs brought a variety of claims under state common law including nuisance, negligence, failure to warn, and trespass. In City of Oakland v. BP p.l.c. et al., the Cities of Oakland and San Francisco sued five fossil-fuel companies in state court under a theory of nuisance. The fossil-fuel companies removed both cases to federal court. The San Mateo district court remanded the case back to state court while the Oakland district court refused to remand the case back to state court, finding that plaintiffs’ public nuisance claims were governed by federal common law, but then proceeding to dismiss the lawsuit. Both cases were appealed to the Ninth Circuit.
On May 26th, the Ninth Circuit joined the Fourth Circuit (Mayor and City Council of Baltimore v. BP P.L.C., et al., No. 19-1644 (4th Cir. Mar. 6, 2020)) in concluding that these climate change cases alleging only state-common law claim belonged in state court. In County of San Mateo v. Chevron Corp. et al., the Ninth Circuit emphasized its limited authority to review an order remanding a case back to state court under 28 U.S.C. § 1447(d). The Ninth Circuit therefore limited its review to determining whether the district court erred in holding that the federal court lacked subject matter jurisdiction under the federal-officer removal statute.
In order to determine whether the district court erred in holding that it did not have subject matter jurisdiction, the Ninth Circuit examined whether the companies were “acting under” a federal officer’s directions. The companies argued that they were “persons acting under” a federal officer based on several agreements with the government. However, the Ninth Circuit concluded that the companies’ activities under these agreements did not give rise to a relationship where they were “acting under” a federal officer. Accordingly, the Ninth Circuit court held that the fossil fuel companies failed to meet their burden for federal-officer removal and therefore affirmed the district court’s remand order.
In City of Oakland v. BP p.l.c. et al., the Ninth Circuit considered whether “the district court erred in determining that it had federal-question jurisdiction under 28 U.S.C. § 1331” and ultimately held that plaintiffs’ state common-law public nuisance claims did not arise under federal common law. The court acknowledged that there are exceptions to the well-pleaded complaint rule for claims that arise under federal law, but concluded that none of those exceptions applied here.
The court reasoned that “[t]he question whether the Energy Companies can be held liable for public nuisance based on production and promotion of the use of fossil fuels and be required to spend billions of dollars on abatement is no doubt an important policy question, but it does not raise a substantial question of federal law for the purpose of determining whether there is jurisdiction under § 1331.” Furthermore, evaluation of the public nuisance claim would require factual determinations which are “not the type of claim for which federal-question lies.” The fossil fuel companies argued that the plaintiffs’ public nuisance claim was completely preempted by the Clean Air Act, but the court was not persuaded.
In response to defendants’ argument that by amending their complaint to assert a federal common law claim, the district court properly had subject matter jurisdiction under 28 U.S.C. § 1331, the Ninth Circuit noted that plaintiffs only amended their complaint in response to the district court’s statements that plaintiffs’ claims were governed by federal common law. Moreover, the Ninth Circuit noted that since a party violates § 1441(a) “if it removes a cases that is not fit for federal adjudication, a district court must remand the case to state court, even if subsequent action conferred subject-matter jurisdiction on the district court.”
Notwithstanding these conclusions, the Ninth Circuit noted that the district court had not addressed alternative bases for removal raised by defendants and therefore remanded the case back to the district court. However, the Ninth Circuit specifically noted that if the district court concludes that there are no valid bases for federal jurisdiction, the case should be remanded back to state court.
Although these rulings did not address the merits of plaintiffs’ common-law claims, these cases will certainly pose challenges for defendants seeking to remove these types of cases to federal court, and will likely affect plaintiffs’ and defendants’ strategies in climate change litigation moving forward. Jenner & Block’s Corporate Environmental Lawyer will continue to update on those matters, as well as other important climate change litigation cases, as they unfold.
U.S. EPA Extends Comment Period on PFAS Safe Drinking Water Act Regulatory Determination to June 10, 2020
By Steven M. Siros
As discussed in more detail in a previous blog, on February 20, 2020, the U.S. Environmental Protection Agency (“U.S. EPA”) announced that it was seeking public comments on its preliminary regulatory determination that seeks to implement regulatory limits for Per- and Polyfluoroalkyl Substances (PFAS) in public drinking water across the United States. The regulatory determination is a key step in the creation of a Maximum Contamination Level (“MCL”) that will act to limit the quantity of PFAS permitted in public drinking water.
In its preliminary regulatory determination, U.S. EPA proposes setting MCL levels for two PFAS substances, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), which EPA has determined meet the statutory criteria to become regulated contaminants under the Safe Drinking Water Act. To meet this criteria, U.S. EPA had to find that: (1) the consumption of PFOS and PFOA may result in adverse health effects; (2) PFOS and PFOA have been identified in public water supplies at frequencies and levels sufficient to cause a public health concern; and (3) that new regulation presents a meaningful opportunity to reduce the health risks posed by PFOS and PFOA.
The Association of Metropolitan Water Agencies and the American Water Works Association (collectively “AMWA”) submitted comments that were supportive of setting an MCL for PFOS and PFOA. In addition to targeting PFOA and PFOS, the AMWA recommended that U. S. EPA also include four other long-chain PFAS compounds in its regulatory determination. AMWA also recommended that U.S. EPA “thoroughly consider state standards and guidelines with significantly lower PFAS levels that [U.S. EPA’s] Health Advisory Level (HAL) of 70 parts per trillion (ppt) for combined concentrations of PFOA and PFOS.”
The AMWA also requested that U.S. EPA extend the comment period an additional 30 days to allow the AMWA to more fully engage with its members and to provide more meaningful and comprehensive comments on the proposal. To that end, U.S. EPA has now agreed to extend the comment period an additional 30 days May 10th to June 10th.
Supreme Court Expands the Reach of Clean Water Act Permitting Authority
By Allison A. Torrence
On April 23, 2020, the U.S. Supreme Court issued an important decision on the reach of the Clean Water Act (“CWA”). The Court’s decision in County of Maui, Hawaii v. Hawaii Wildlife Fund, Case No. 18–260, addresses whether the CWA requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source such as groundwater. In a 6-3 opinion, the Court held that CWA permitting authority extended to indirect discharges that are the functional equivalent of a direct discharge from a point source into navigable waters. Justice Breyer delivered the opinion of the Court, joined by Justices Roberts, Ginsburg, Sotomayor, Kagan and Kavanaugh. Justice Kavanaugh also wrote a concurring opinion and Justices Thomas, Gorsuch and Alito dissented.
At issue in the case was the County of Maui’s wastewater reclamation facility located on the island of Maui, Hawaii. The County pumps partially treated sewage through four injection wells hundreds of feet underground. After injection, the effluent travels approximately a half mile through groundwater to the Pacific Ocean.
The case came up from the Ninth Circuit, which had ruled that a permit was required when “the pollutants are fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into the navigable water.” Hawaii Wildlife Fund v. County of Maui, 886 F. 3d 737, 749 (9th Cir. 2018) (emphasis added). The Supreme Court took issue with the Ninth Circuit’s fairly traceable standard, explaining that “[v]irtually all water, polluted or not, eventually makes its way to navigable water” and thus, the lower court’s standard would give EPA broad new permitting authority not supported by the CWA’s statutory language or legislative history. Slip Op. at 5.
The Court also rejected the position put forward by the County of Maui and the Solicitor General (appearing on behalf of the United States as Amicus Curiae), who argued that the CWA’s permitting requirement does not apply if a pollutant, having emerged from a point source, travels through any amount of groundwater before reaching navigable waters. The Court explained that this would lead to the untenable situation that a discharger could simply move its point source a few feet back from a navigable water such that the pollutants would have to travel through a few feet of groundwater (or any other media) before reaching the navigable water, thus avoiding permitting requirements.
Instead of the fairly traceable standard, the Supreme Court held that a CWA permit is required if the addition of the pollutants through groundwater is the functional equivalent of a direct discharge from a point source into navigable waters. The Court explained its reasoning as follows:
We hold that the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge. We think this phrase best captures, in broad terms, those circumstances in which Congress intended to require a federal permit. That is, an addition falls within the statutory requirement that it be “from any point source” when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means.
Slip Op. at 15 (emphasis added).
The Court provided a number of factors that may be relevant to consider when determining whether an indirect discharge is the functional equivalent of a direct discharge from a point source, including:
the nature of the material through which the pollutant travels;
the extent to which the pollutant is diluted or chemically changed as it travels;
the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source;
the manner by or area in which the pollutant enters the navigable waters; and
the degree to which the pollution (at that point) has maintained its specific identity.
Slip. Op. at 16.
The Court vacated the Ninth Circuit’s opinion and remanded for further proceedings consistent with its ruling.
This decision expands the reach of the CWA and will likely require some previously unpermitted operations to obtain CWA permits. The most obvious impact will probably be felt at wastewater treatment plants practicing groundwater injection at locations in close proximity to navigable waters (like the County of Maui operation at issue in the case). But other businesses should consider whether their operations have discharges that might indirectly discharge to a navigable water. The Court specifically acknowledged that a septic system or other wastewater treatment system, even if not actively injecting pollutants into groundwater, could be considered indirect discharges under the Court’s analysis and may need a CWA permit if, considering the various factors above, it is the functional equivalent of a direct discharge.
In light of this decision, EPA may consider issuing rulemakings, general permits or taking other regulatory actions. In the near term, all interested parties will closely watch how the remanded case unfolds in the Ninth Circuit. There is plenty more to come and Jenner & Block’s Corporate Environmental Lawyer Blog will keep you updated on these developments.
Supreme Court issues Landmark CERCLA Ruling Finding that State Law Challenges to USEPA Cleanup Can Be Raised in State Court (But Plaintiffs Still Lose)
By Steven M. Siros and Matthew G. Lawson
On Monday, April 20, 2020, the United States Supreme Court issued a key opinion regarding the preclusive effect of the Comprehensive Environmental Response, Compensation and Recovery Act (CERCLA), 42 U.S.C. Section 9601, on state common law remedies within Superfund Sites. In Atlantic Richfield v. Christian, Case No. 17-1498, the Supreme Court affirmed in part and vacated in part a decision by the Montana Supreme Court that “restoration claims” asserted by private property owners could go forward against a potentially responsible party (PRP) that had previously settled its CERCLA liability with the United States Environmental Protection Agency (USEPA).
The case involves the Anaconda Smelter Site, a Superfund site covering 300 square miles of property contaminated by historical smelter and ore processing operations. In 1983, USEPA identified Atlantic Richfield Co. as a PRP for the site’s contamination and the parties entered into a settlement agreement that required Atlantic Richfield to investigate and remediate the site under the oversight of USEPA. In the 37 years since, USEPA has managed an extensive cleanup at the site, which included the removal of 10 million cubic yards of contaminated soil and capping in place an additional 500 million cubic yards of waste over 5,000 acres. Atlantic Richfield estimates that it has spent approximately $450 Million USD remediating the site and that its cleanup is nearly complete.
However, the USEPA-mandated cleanup standards were deemed insufficient by a number of local landowners who allege that their properties remain damaged by Atlantic Richfield’s contamination. The landowners asserted common law tort claims against Atlantic Richfield seeking funds to remediate their properties—located within the Superfund Site—beyond the levels required by the USEPA-approved remedy. For example, the plaintiffs sought funding to remediate arsenic levels in their properties’ soil to a level of 15 parts per million, rather than the 250 parts per million limit approved by USEPA. In total, the additional cleanup efforts sought by plaintiffs are estimated to cost Atlantic Richfield an additional $50 to $58 million in cleanup costs. Following the Montana Supreme Court’s holding that the landowner’s restitution claims could proceed in spite of Atlantic Richfield’s settlement with USEPA and the ongoing cleanup effort, Atlantic Richfield appealed the issue to the Supreme Court.
Atlantic Richfield argued that plaintiff’s claims were barred because CERCLA §113 strips courts of the jurisdiction to review challenges to USEPA cleanup plans. Atlantic Richfield further argued that plaintiffs’ restoration claims were precluded by CERCLA §122(e)(6), which provides that “no potentially responsible party may undertake any remedial action” at the site without EPA approval. Atlantic Richfield cautioned that the Montana Supreme Court’s contrary reading of CERCLA would throw a wrench into the Act’s carefully balanced settlement scheme by allowing landowners at Superfund sites to “shred EPA’s plans and impose different, and potentially detrimental, multimillion-dollar cleanups.” In an amicus brief, The Chamber of Commerce and other industry groups sided with Atlantic Richfield, arguing that the Montana Supreme Court’s ruling would create “chaos across the Nation’s Superfund sites, with EPA pursuing one remediation course and various ad hoc private lawsuits mandating different, potentially dangerous or conflicting remediation work.” An amicus brief was also filed by the Solicitor General on behalf of the United States, which argued that the Supreme Court should deny Atlantic Richfield’s writ of certiorari because the Montana Supreme Court had yet not reached a final judgment in the underlying dispute and review of the proposed questions was premature at the current state of litigation. However, the Solicitor’s amicus brief went on to state that—in the event the Supreme Court granted certiorari—the Court should find that that Montana Supreme Court erred in holding that the landowner’s claims for restoration damages did not constitute “challenges” to USEPA’s selected remedy under CERCLA §113. The Solicitor reasoned that enactment of the landowner’s proposed restoration actions would “directly impact the implementation” of USEPA’s existing remedy and that the proposed actions therefore constituted a challenge to the cleanup.
In response, plaintiffs argued that their common law claims were not barred by CERCLA §113 because the claims did not “arise under” CERCLA. In addition, the plaintiffs argued their claims for money to restore their property did not constitute a “challenge” to the cleanup because plaintiffs were not seeking to overturn the USEPA order or otherwise asking the court to review that order. Rather, plaintiffs were merely seeking to compel Atlantic Richfield to “restore” their impacted properties by further removing impacted soils that remained unaddressed by the USEPA cleanup order based on Minnesota common law statutes.
In a split opinion, the Supreme Court ultimately held that the plaintiff’s state law claims against Atlantic Richfield were not precluded by CERCLA, but that the plaintiffs could not move forward with additional restoration activities without first securing approval from USEPA. First, the court held that §113 did not divest the Montana Supreme Court of jurisdiction over plaintiff’s claims because the state common law claims did not arise under CERCLA. However, the Supreme Court went on to find that—as owners of property located within the Superfund Site—plaintiffs were themselves PRPs for the Anaconda Smelter Site. Thus, under CERCLA §122, plaintiff were precluded from implementing any remedial actions at the site without first securing USEPA approval. As reasoned by Chief Justice Robert’s majority opinion, “under the landowners' interpretation, property owners would be free to dig up arsenic-infected soil and build trenches to redirect lead-contaminated groundwater without even notifying EPA…[w]e doubt Congress provided such a fragile remedy to such a serious problem.”
Justice Alito filed a separate opinion—concurring in part and dissenting in part—in which the Justice endorsed the Court’s finding that plaintiffs were PRPs under CERCLA. However, Justice Alito argued that the court should not have reached the question of whether state courts have jurisdiction to entertain “challenges” to EPA-approved cleanups. Justice Alito went on to clarify his understanding that under the Court’s majority opinion, “the Montana Supreme Court has two options on remand: (1) enter a stay to allow the landowners to seek EPA approval or (2) enter judgment against the landowners on their restoration damages claim without prejudice to their ability to refile if they obtain EPA approval.” Under either scenario, USEPA approval would be required and therefore Justice Alito concluded that the Court should not have opined on the jurisdictional question.
Justice Gorsuch also filed a separate opinion concurring in part and dissenting in part, in which Justice Thomas joined. Justice Gorsuch agreed that the Montana state court had jurisdiction over plaintiffs’ state law claims but disagreed with the Court’s conclusion that plaintiffs were PRPs under CERCLA and therefore precluded under CERCLA §122 from challenging the USEPA cleanup plan. Justice Gorsuch argued that CERCLA was enacted to supplement, not supplant, state common law remedies available to innocent landowners damaged by third-party contamination. Thus, Justice Gorsuch opined that plaintiffs’ state law claims should be allowed to go forward without the need to secure permission from USEPA.
Jenner & Block’s Corporate Environmental Lawyer will continue to track and update on this case as it is remanded back to the Montana Supreme Court.
EPA Announces Regulatory Determination to Regulate PFAS in Drinking Water
By Matthew G. Lawson
On Thursday, February 20, 2020, the U.S. Environmental Protection Agency (“EPA”) announced a preliminary regulatory determination that the agency will seek to implement regulatory limits for Per- and Polyfluoroalkyl Substances (PFAS) in public drinking water across the United States. The regulatory determination is a key step in the creation of a Maximum Contamination Level (“MCL”) that will act to limit the quantity of PFAS permitted in public drinking water. In its preliminary regulatory determination, EPA proposes setting MCL levels for two PFAS substances, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), which EPA has determined meet the statutory criteria to become regulated contaminants under the Safe Drinking Water Act. To meet this criteria, EPA had to find that: (1) the consumption of PFOS and PFOA may result in adverse health effects; (2) PFOS and PFOA have been identified in public water supplies at frequencies and levels sufficient to cause a public health concern; and (3) that new regulation presents a meaningful opportunity to reduce the health risks posed by PFOS and PFOA.
As part of its announcement, EPA will seek public comments on its preliminary findings for the next 60 days. Critically, the preliminary regulatory determination offers no insight into the regulatory levels EPA anticipates setting for PFOS or PFOA. Through its voluntary Health Advisory Level (“HAL”), EPA currently recommends that municipalities maintain a maximum limit of 70 parts per trillion of PFAS in drinking water served to the public. While the HAL is referenced in EPA’s preliminary regulatory determination, it is unclear whether EPA will look to set PFOS or PFAS’ mandatorily MCL at a similar level. EPA’s election to regulate PFOS and PFOA kicks off a two-year period for the agency to determine an appropriate MCL for the contaminants. Following the formal proposal of an MCL, the agency has another 18 months to set its final drinking water requirements.
The release of a preliminary regulatory determination marks a critical step in EPA’s implementation of its PFAS Action Plan. Under the PFAS Action Plan, EPA has committed to “identifying and understanding PFAS, [ ] addressing current PFAS contamination, preventing future contamination, and effectively communicating with the public about PFAS.” The plan sets forth four overarching goals for regulating PFAS:
Consider the creation of an MCL for PFOA and PFOA;
Begin necessary steps to propose designating PFOA and PFOS as “hazardous substances” through available federal statutory mechanisms, including CERCLA, RCRA, TSCA and the CWA;
Develop and implement groundwater cleanup recommendations for PFOA and PFOS at contaminated sites;
Develop toxicity values or oral reference doses for various PFAS chemicals.
Under the Trump Administration, the EPA has repeatedly affirmed that addressing the emerging contaminant PFAS is a key and ongoing priority for the agency. As stated in the PFAS Action Plan, “the EPA has heard clearly the public’s desire for immediate action to address potential human health and economic impacts from PFAS in the environment.” In fact, despite proposing large cuts to EPA’s overall budget, the Trump Administration’s proposed budget for 2021 requests an additional $6 million dollars from Congress to carry out EPA’s PFAS Action Plan. “Under President Trump, EPA is continuing to aggressively implement our PFAS Action Plan – the most comprehensive cross-agency plan ever to address an emerging chemical,” stated EPA Administrator Andrew Wheeler. “With today’s action, EPA is following through on its commitment in the Action Plan to evaluate PFOA and PFOS under the Safe Drinking Water Act.”
By Matthew G. Lawson
On Monday, February 10, 2020, the Trump Administration released its proposed budget for Fiscal Year 2021. The proposal calls for sweeping cuts to a number of federal agencies and departments, including deep cuts to the United States Environmental Protection Agency (“USEPA”). If enacted, the proposed budget would grant $6.7 billion in funding to USEPA, a $2.4 billion or 26-percent reduction from the agency’s $9.1 billion budget in 2020. In the budget proposal’s preamble, the Administration promises to “call on the Government to reduce wasteful, unnecessary spending, and to fix mismanagement and redundancy across agencies.”
With respect to USEPA’s budget allocation, the proposal promises to “eliminate almost 50 wasteful programs that are outside of EPA’s core mission or duplicative of other efforts, saving taxpayers over $600 million.” Proposed major cuts include the reduction of nearly 50% of the agency’s research budget, including all funding for grants to independent universities and research institutes conducting air, water, and other environmental and health research. Another target for deep cuts is USEPA’s safe drinking water revolving funds. The revolving funds are used to help fund water infrastructure projects undertaken by state or municipal public water providers. Under the proposed budget, the available funds for such projects would be cut from approximately $2.77 billion down to $2 billion.
While the proposal primarily focuses on proposing cuts to USEPA’s fiscal budget, it does contain a few line item requests for additional funding. In particular, the proposal asks for an additional $6 million to carry out USEPA’s Per- and Polyfluoroalkyl Substances (PFAS) Action Plan. The additional funding is sought to continue research into the risk posed by PFAS compounds, address current contamination issues, and effectively communicate findings to the public. In addition, the budget requests $16 million into new research to help prevent and respond to the rising growth of harmful algal blooms.
The budget proposal is not the first time the Trump Administration has sought to implement deep cuts into USEPA’s budget. In fact, the Trump Administration has now proposed nearly identical cuts to the agency’s budget in each of the last three fiscal years. As previously discussed by the Corporate Environmental Lawyer, the Trump Administration first proposed a $2.7 billion budget reduction for USEPA in fiscal year 2018. However, the proposal was rebuffed by congress and the final spending bill ultimately signed by Trump held the agency’s budget at $8.1 billion, even with its 2017 level. The following year, the Trump Administration again proposed cutting the agency’s budget by more than $2 billion, but ultimately agreed to a spending deal that increased the agency’s budget to $8.8 billion. Finally, during fiscal year 2020, the Trump Administration proposed approximately $2.7 billion in cuts to USEPA’s budget. As before, Congress rejected the proposal and ultimately approved a nearly record high budget for USEPA of $9.1 Billion. Congress’ continued rejection of the spending cuts proposed by the Trump Administration is acknowledged in the Administration’s most recent 2021 budget proposal, which derides Congress for continuing “to reject any efforts to restrain spending” and “greatly contribut[ing] to the continued ballooning of Federal debt and deficits, putting the Nation’s fiscal future at risk.” The proposal promises that the Trump Administration will use “all available tools and levers” to ensure that the spending reductions outlined in the budget are finally implemented.
Trump Administration Proposes Landmark Changes to National Environmental Policy Act’s Review Process
By Matthew G. Lawson
Marking the 50th anniversary of the enactment of the National Environmental Policy Act (“NEPA”), on January 1, 2020, the Trump White House published a Presidential Message announcing the imminent release of newly proposed regulations designed to “modernize” the foundational environmental statute. NEPA, which requires federal agencies to quantify and consider environmental impacts before undertaking actions that have the potential to “substantially impact” the environment, has far reaching applications. Under NEPA, federal agencies are often required to complete an Environmental Impact Assessment (“EIS”) prior to starting public infrastructure projects such as roads, bridges and ports, or before permitting certain private actions that require federal approval, such as construction of pipelines or commencement of mining operations. According to the 2018 Annual NEPA Report, EISs drafted by federal agencies between 2010 and 2017 took an average of 4.5 years to complete. The Presidential Message asserts that the existing NEPA review process “has become increasingly complex and difficult to navigate,” while causing “delays that can increase costs, derail important projects, and threaten jobs for American workers and labor union members.” The regulations proposed by the Trump Administration are expected to be released by the Council on Environmental Quality (“CEQ”) later this week.
If enacted, the proposed regulations could mark the first comprehensive update to NEPA’s review process in more than four decades. According to accounts of a draft memo from CEQ outlying the proposed changes, the modifications will bring substantial changes to the NEPA review process, including:
requiring that all EISs be completed within a two-year time limit;
limiting the scope of projects that trigger the requirement to draft an EIS; and
in the case of private actions that require federal approval, allowing private companies to take lead in reviewing potential environmental impacts under the supervision of a federal agency.
Perhaps most critically, CEQ is expected to advise that federal agencies are no longer required to consider “cumulative” environmental consequences when accounting for the environmental impacts of a specific action. This language appears aimed at eliminating the requirement that federal agencies consider the impact of increased greenhouse gas (“GHG”) emissions and climate change as part of their NEPA review. The proposal comes after several high profile infrastructure projects back by President Trump, including the Keystone XL oil pipeline, were blocked by federal judges on the basis that the project’s EIS failed to sufficiently consider the impacts of climate change.
While the CEQ regulations have not been comprehensively revised since 1986, in recent years the Obama and Trump Administrations have independently sought to clarify the obligation imposed on Federal agencies to consider GHG emissions and climate change under NEPA. In 2016, the Obama Administration CEQ released guidance endorsing the view that NEPA requires federal agencies to consider and quantify any reasonably foreseeable GHG emissions that are attributable to a proposed action. However, this guidance was subsequently withdrawn by the Trump Administration CEQ in 2017, and replaced in June 2019 with draft guidance that cautioned agencies to only consider GHG emissions that were “substantial enough to warrant quantification” and not “overly speculative.”
Once the CEQ’s newly proposed regulations are released and filed in the federal register, the public will be afforded 60 days to comment on the changes. From this point, the Trump Administration is aiming to publish the final regulations before the presidential election in November. However, before the new regulations can take effect, environmental groups are expected to challenge them in court proceedings.