Jenner & Block

Corporate Environmental Lawyer Blog

October 17, 2018 Trump Administration Releases Fall 2018 Regulatory Agenda

Torrence_jpgBy Allison A. Torrence

The Trump Administration has released its Fall 2018 Unified Agenda of Regulatory and Deregulatory Actions. This regulatory agenda “reports on the actions administrative agencies plan to issue in the near and long term [and] demonstrates this Administration’s ongoing commitment to fundamental regulatory reform and a reorientation toward reducing unnecessary regulatory burdens on the American people.”

According to the Trump Administration, the regulatory agenda reflects the following broad regulatory reform priorities:

  • Advancing Regulatory Reform
  • Public Notice of Regulatory Development
  • Transparency
  • Consistent Practice across the Federal Government

The EPA-specific regulatory agenda lists 148 regulatory actions in either the proposed rule stage or final rule stage, and provides information about the planned regulatory actions and the timing of those actions. Notable regulatory actions under consideration by EPA include:

More information, and EPA's Statement of Priorities, can be found here.

CATEGORIES: Air, Cercla, Climate Change, FIFRA, Greenhouse Gas, Hazmat, RCRA, TSCA, Water

PEOPLE: Allison A. Torrence

September 17, 2018 EPA Finalizes Unprecedented NPL Listing

By Matthew G. Lawson

Rockwell GrenadaOn September 13, 2018, the United States Environmental Protection Agency (“EPA”) took the final, unprecedented step of adding a contaminated site to the Superfund National Priorities List (“NPL”) based solely on the risk to human health posed by indoor air vapor intrusion at the site. The newly designated site, which consists of the former Rockwell International Wheel & Trim facility and its surrounding 76 acres (the “Site”), is located in Grenada, Mississippi. The Site has an extensive history. Beginning in 1966, the Rockwell facility operated as a wheel cover manufacturing and chrome plating plant. After chrome plating operations ceased in 2001, the facility was used for metal stamping until approximately 2007. According to EPA, the Site’s historic operations resulted in multiple releases of trichloroethene, toluene, and hexavalent chromium into the surrounding soil and adjacent wetland. However, EPA’s primary concern—and reason for listing the site—is the potential for airborne volatile organic compounds (“VOCs”) to enter the facility through cracks, joints, and other openings, resulting in contaminated indoor air. The potential for indoor air contamination appears to be of particular concern to EPA, given that nearly 400 individuals currently work within the facility.

The Site will now join a list of approximately 160 contaminated sites that have been federally designated as NPL sites. The NPL includes the nation’s most contaminated and/or dangerous hazardous waste sites. A contaminated site must be added to the NPL to become eligible for federal funding for permanent cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act. While EPA’s decision to list the Site based on risks from indoor air contamination is unprecedented, the move is not all together surprising, given EPA’s recent rulemaking actions. In May 2017, EPA passed a final rule expanding the list of factors the agency is allowed to consider when designating NPL sites to specifically include risks to human health from impacted indoor air. In the preamble to the rule, EPA noted that it needed the authority to list sites on the basis of significant risk to human health from vapor intrusion contamination. 

In contrast to EPA’s position, environmental consultants operating at the Site have strongly opposed the NPL designation. Several of the firms submitted comments on the final listing, asserting that EPA’s risk evaluation failed to take into account the Sub Slab Depressurization System (“SSDS”) installed at the facility in 2017, which subsequently reduced levels of VOCs in the indoor air to safe levels. However, EPA rejected these arguments, noting that even though the SSDS may protect workers from immediate threats, “it is not intended to address possible long-term remedial goals such as addressing the sources of the contamination below the building.”

EPA’s designation of the Site should alert potentially responsible parties that vapor intrusion issues may result in an increased chance of a site becoming listed on the NPL. In addition, parties relying on engineering controls to maintain compliant indoor air vapor levels should note the potential for EPA to deem such actions insufficient as long-term site remedies.

CATEGORIES: Air, Cercla, Climate Change, Greenhouse Gas, Hazmat, Sustainability

PEOPLE: Steven R. Englund, Matthew G. Lawson

September 14, 2018 United Airlines Steps Up to Cut Greenhouse Gases

Siros By Steven M. Siros United-airlines-logo-01

United Airlines became the first U.S. airline to publicly commit to reducing its greenhouse gas emissions (GHG) by 50% by 2050. In a press release issued on September 13, 2018, United Airlines explained that it would achieve that reduction by expanding its use of more sustainable biofuels and by relying on more fuel-efficient aircraft and implementing other operational changes to better conserve fuel. United Airlines' commitment to reduce GHG emissions by 50% by 2020 is consistent with reduction targets established by the International Air Transport Association in May 2018. 

U.S. EPA has yet to regulate GHG emissions from aircraft in the United States, notwithstanding U.S. EPA’s July 25, 2016 endangerment finding for GHG emissions from aircraft and U.S. EPA’s Advanced Notice of Proposed Rulemaking contemplating adoption of the International Civil Aviation Organization’s (ICAO) aviation carbon emission design standards. 

The decision by United Airlines is likely to be followed by other U.S. carriers that have international routes because those carriers will be subject to the ICAO standards when flying internationally.

CATEGORIES: Air, Climate Change, Greenhouse Gas, Sustainability

PEOPLE: Steven R. Englund, Steven M. Siros

September 12, 2018 Pipeline Company Found Guilty for 2015 California Coastal Oil Spill

Plains was convicted of one felony for unlawfully discharging oil into state waters and eight misdemeanors for the following: failing to timely call emergency response agencies; violating a county ordinance banning oil spills; and killing marine mammals, protected sea birds, and other sea life.  Sentencing will be held on December 13, 2018.

According to a statement by California Attorney General Xavier Becerra, the verdict “should send a message: If you endanger our environment and wildlife, we will hold you accountable. At the California Department of Justice, we will continue prosecuting corporate negligence and willful ignorance to the fullest extent of the law.”  (Emphasis added.)

As noted in Law360 (sub. req.), the verdict “underscore[s] the importance of pipeline companies taking their maintenance, inspection and compliance duties seriously, especially in states like California which have strict requirements and liability where knowledge or intent isn’t necessary to sustain criminal convictions.”  Furthermore, the conviction specifically as to failure to notify emergency responders “underscores the importance of that duty and that companies must ensure their policies leave no room for error.”  The relative rarity of criminal environmental convictions for corporations means this case is one to watch is it moves towards sentencing and/or appeals.

CATEGORIES: Climate Change, Hazmat, Sustainability, Water

PEOPLE: Steven R. Englund

August 17, 2018 Chicago’s Trump Tower Sued for Violation of the Clean Water Act

By Matthew G. LawsonTrump

In a recently filed lawsuit in Cook County Circuit Court, the State of Illinois accused Trump International Hotel & Tower of violating multiple clean water laws and endangering fish and aquatic life in the Chicago River. The lawsuit, filed on August 13, 2018 by Illinois Attorney General Lisa Madigan, alleges that the Trump Tower’s water intake cooling system failed to comply with state and federal permit requirements, which are designed to limit the number of fish killed by the intake screens or sudden changes in pressure and temperature caused by the cooling system.  The state’s lawsuit further alleges that the Trump Tower's National Pollutant Discharge Elimination System permit (“NPDES Permit”) expired on August 31, 2017, and that the building had been operating without a permit for nearly a year.

The 1,400 ft. skyscraper is one of the city’s largest users of river water. In order to cool the tower, the building, like most other buildings along the river, uses a water intake cooling system that siphons approximately 20 million gallons of water per day (“MGD”) from the Chicago River. After being utilized to cool the building, this water is subsequently pumped back into the river up to 35 degrees hotter than its original temperature. Because the building's intake system withdraws more than 2 MGD, the building must comply with regulations promulgated under Section 316(b) of the Clean Water Act (“CWA”). According to the attorney general’s lawsuit, these regulations required Trump Tower to document the efforts it has taken to minimize the impact of its intake system on the river’s fish and other aquatic life—actions which the lawsuit claims the building failed to complete. According to a Chicago Tribune article published in June 2018, Trump Tower is the only building relying on water from the Chicago River that has failed to document these efforts. 

In May 2017, Trump Tower submitted a delayed application to renew its then expiring NPDES permit. Despite the building’s alleged failure to timely submit a permit renewal request, it appears the Illinois Environmental Protection Agency (“IEPA”) had been preparing to reissue the Trump Tower’s NPDES Permit as recently as last January. However, the agency changed course after several environmental groups threatened to sue prompting the agency to delay reissuance of the NPDES Permit.

Representatives of the Trump organization have responded to the lawsuit with criticism. “We are disappointed that the Illinois Attorney General would choose to file this suit considering such items are generally handled at the administrative level,” stated a representative for the Trump Organization. “One can only conclude that this decision was motivated by politics.”

Environmental groups responded positively to the lawsuit. The Illinois Chapter of the Sierra Club and Friends of the Chicago River, which had jointly announced their own plans to bring suit against Trump Tower last June, stated that they looked forward to assisting in the state’s lawsuit “to assure an outcome that addresses the permit violations, protects additional aquatic life from harm, and makes the river healthier for fish."

This is not the first time Attorney General Madigan has gone after Trump Tower for discharge violations. In 2012, the State sued Trump Tower for failing to obtain a permit for the same intake system. The 2012 lawsuit resulted in Trump Tower agreeing to pay $46,000 in fines and obtaining the proper permitting. In its most recent lawsuit, the State is seeking a preliminary and (after trial) permanent injunction to stop Trump Tower from using its cooling water intake system. In addition, the complaint seeks $10,000 in daily penalties. In an interesting twist, it appears that industry groups previously urged the Trump Administration’s Environmental Protection Agency to overhaul or eliminate the CWA’s cooling water intake rules, which industry groups described as “cumbersome.”

CATEGORIES: Climate Change, Sustainability, Water

PEOPLE: Matthew G. Lawson

August 3, 2018 Drinking Water Providers Seek Pause in Rush to Set MCLs for Emerging Contaminants

Siros By Steven M. Siros Free stock photo of cold, water, drink, glass

The presence of emerging contaminants such as perfluorinated chemicals (PFOS)  and 1,4-dioxane in drinking water often make the headlines as sampling technologies become more sophisticated and these contaminants are being detected with increasing frequency in drinking water systems across the country. There has been a significant push to compel regulators to set regulatory standards and/or issue health advisories for these emerging contaminants, but the impact that these standards and health advisories have on drinking water systems cannot be ignored.

In reaction to media coverage of these emerging contaminants in drinking water supplies, state regulators have been at the front of the pack in trying to set what are often conflicting standards that may not always reflect the current state of science regarding these contaminants. These state regulations often fail to consider the difficulties that drinking water suppliers face in complying with these standards, especially in instances where there are not established treatment technologies that are capable of treating these contaminants in a cost-effective manner. In addition, when setting health advisories for various contaminants, U.S. EPA typically does not consider the effect of those advisories on drinking water providers.  It is often the case, however, that these providers are pressured either by state regulators and/or the general public to ensure that the drinking water meets these health advisory levels, which are set without regard to whether cost-effective technologies exist that are capable of treating these emerging contaminants.   

These concerns were recently highlighted in comments submitted by the Association of Metropolitan Water Agencies (AMWA) in response to ongoing efforts by U.S. EPA to set standards for PFOS in drinking water. The AMWA cautioned U.S. EPA from rushing to adopt an MCL for PFOS, noting that “it is crucial that we have effective treatment technologies that are available and feasible to implement before any regulatory or non-regulatory action is taken.” The AMWA further noted that significant gaps existed with respect to the public health effects of PFOS in drinking water systems and recommended that these gaps should be remedied before regulatory standards were set by U.S. EPA. 

The AMWA and other water quality professionals support a federal standard that would apply to all drinking water systems and that appropriately takes into consideration the current state of science regarding these emerging contaminants, but also considers the technical and economic feasibility of treating these contaminants. Otherwise, there will continue to be a patchwork of regulations for these emerging contaminants, as is the case in New Jersey, where the state maximum contaminant level for PFOS has been set at 14 parts per trillion, as compared to the U.S. EPA health advisory of 70 parts per trillion. Another example of such an emerging contaminant is 1,4-dioxane, which has a U.S. EPA health advisory level of 0.35 parts per billion.  Some states have relied on that health advisory level to compel drinking water systems to treat 1,4-dioxane to below 0.35 parts per billion notwithstanding that there are not cost-effective treatment methodologies to treat 1,4-dioxane to that level.  Other states, such as Oklahoma, have no regulatory standard for 1,4-dioxane in drinking water. Until such time as the science and treatment technologies catch up with public perception, it will continue to be difficult for drinking water providers to know with certainty exactly how to deal with these emerging contaminants.

CATEGORIES: Climate Change, Sustainability, Water

PEOPLE: Steven R. Englund, Steven M. Siros

June 12, 2018 Environmental Groups Set Stage for Likely Legal Challenge to FERC GHG NEPA Review Policy

Siros By Steven M. Siros Image result for "natural gas pipeline"

On May 18, 2018, the Federal Energy Regulatory Commission (FERC) issued an order denying a rehearing request on FERC’s prior issuance of a certificate of public convenience and necessity for a natural gas pipeline project for Dominion Transmission. An environmental group had challenged that certificate, arguing in part that FERC failed to adequately consider the upstream and downstream impacts of the project. These upstream and downstream impacts, according to the environmental group, included greenhouse gas (GHG) emissions. FERC, on a party-line vote, concluded that the upstream and downstream GHG impacts of this particular project were not sufficiently causally connected to and/or the reasonable foreseeable effect of the project and therefore fell outside of the scope of the required NEPA analysis.  FERC distinguished its holding with the decision in Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) by noting that in that case, the pipeline project was delivering natural gas to identifiable gas-fired electric generating plants and therefore the downstream use of the gas was foreseeable. 

The Delaware Riverkeeper Network sent a letter to FERC asking it to formally rescind its May 18 order, claiming that FERC’s decision was contrary to the requirements of NEPA. This letter, along with similar letters from other environmental groups, are likely precursors to legal challenges to FERC’s interpretation of its obligations under NEPA. Notwithstanding the positions being advanced by these environmental groups, FERC continues to review and approve pipeline projects without requiring a detailed analysis of GHG emissions as evidenced by FERC’s May 31 approval of the Okeechobee Lateral Project.

CATEGORIES: Climate Change, Greenhouse Gas, Sustainability, Water

PEOPLE: Steven R. Englund, Steven M. Siros

June 12, 2018 Environmental Groups Set Stage for Likely Legal Challenge to FERC GHG NEPA Review Policy

Siros By Steven M. Siros Image result for "natural gas pipeline"

On May 18, 2018, the Federal Energy Regulatory Commission (FERC) issued an order denying a rehearing request on FERC’s prior issuance of a certificate of public convenience and necessity for a natural gas pipeline project for Dominion Transmission. An environmental group had challenged that certificate, arguing in part that FERC failed to adequately consider the upstream and downstream impacts of the project. These upstream and downstream impacts, according to the environmental group, included greenhouse gas (GHG) emissions. FERC, on a party-line vote, concluded that the upstream and downstream GHG impacts of this particular project were not sufficiently causally connected to and/or the reasonable foreseeable effect of the project and therefore fell outside of the scope of the required NEPA analysis.  FERC distinguished its holding with the decision in Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) by noting that in that case, the pipeline project was delivering natural gas to identifiable gas-fired electric generating plants and therefore the downstream use of the gas was foreseeable. 

The Delaware Riverkeeper Network sent a letter to FERC asking it to formally rescind its May 18 order, claiming that FERC’s decision was contrary to the requirements of NEPA. This letter, along with similar letters from other environmental groups, are likely precursors to legal challenges to FERC’s interpretation of its obligations under NEPA. Notwithstanding the positions being advanced by these environmental groups, FERC continues to review and approve pipeline projects without requiring a detailed analysis of GHG emissions as evidenced by FERC’s May 31 approval of the Okeechobee Lateral Project.

CATEGORIES: Climate Change, Greenhouse Gas, Sustainability, Water

PEOPLE: Steven R. Englund, Steven M. Siros

June 7, 2018 White House Cites National Security Concerns as Administration Moves to Save Coal and Nuclear Power Plants

A combination of stagnant power consumption growth and the rise of natural gas and renewable power sources has resulted in the displacement and potential closure of many older coal and nuclear power plants in the United States. According to the U.S. Energy Information Administration, since 2008, coal and nuclear energy have seen a continuous decline in their percentage of the nation’s total energy generation market. And in 2015, the closure of coal fueled power plants accounted for more than 80% of the nation’s retired energy generating capacity.

In an attempt to reverse these trends, President Donald Trump has ordered Energy Secretary Rick Perry to take “immediate action” to stem the closure of nuclear and coal power plants. In an official White House statement issued on June 1, 2018, the Trump Administration stated that “keeping America's energy grid and infrastructure strong and secure protects our national security… Unfortunately, impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our nation's energy mix, and impacting the resilience of our power grid.” 

The statement is not the first time the Administration has asserted that coal and nuclear plants are critical to national security. In January of this year, Mr. Perry presented a sweeping proposal to the Federal Energy Regulatory Commission (“FERC”), which requested subsidies for struggling coal and nuclear plants that were no longer able to operate profitably in the current energy markets. In presenting the proposal, Mr. Perry argued that coal and nuclear plants’ unique ability to store at least 90 days of fuel on-site made the energy sources critical to the reliability and stability of the United States’ energy markets. In a 5-0 decision, FERC rejected the Energy Secretary’s proposal, and casted doubt on Mr. Perry’s claims that energy markets would become vulnerable and unreliable without contributions from coal and nuclear power.

It appears the Trump Administration may now be seeking a more direct route to provide assistance to coal and nuclear power plants. According to Bloomberg, a draft memo from the Department of Energy (“DOE”) reveals that the agency is considering using its authority under Section 202(c) of the Federal Power Act and the Defense Production Act of 1950 to force regional grid operators to buy electricity from a list of coal and nuclear plants the department deems crucial to national security. The plan would require suppliers to purchase power from the plants for 24 months in order to starve off closures as the Administration works to provide a long-term solution. If the DOE plan is implemented, it is likely to face legal challenges from both utilities and environmental groups. Regardless of whether the DOE elects to pursue this strategy, it appears that the Trump Administration is focused on working to protect aging coal and nuclear plants.

CATEGORIES: Air, Climate Change, Greenhouse Gas, Sustainability, Water

PEOPLE: Matthew G. Lawson

June 7, 2018 White House Cites National Security Concerns as Administration Moves to Save Coal and Nuclear Power Plants

A combination of stagnant power consumption growth and the rise of natural gas and renewable power sources has resulted in the displacement and potential closure of many older coal and nuclear power plants in the United States. According to the U.S. Energy Information Administration, since 2008, coal and nuclear energy have seen a continuous decline in their percentage of the nation’s total energy generation market. And in 2015, the closure of coal fueled power plants accounted for more than 80% of the nation’s retired energy generating capacity.

In an attempt to reverse these trends, President Donald Trump has ordered Energy Secretary Rick Perry to take “immediate action” to stem the closure of nuclear and coal power plants. In an official White House statement issued on June 1, 2018, the Trump Administration stated that “keeping America's energy grid and infrastructure strong and secure protects our national security… Unfortunately, impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our nation's energy mix, and impacting the resilience of our power grid.” 

The statement is not the first time the Administration has asserted that coal and nuclear plants are critical to national security. In January of this year, Mr. Perry presented a sweeping proposal to the Federal Energy Regulatory Commission (“FERC”), which requested subsidies for struggling coal and nuclear plants that were no longer able to operate profitably in the current energy markets. In presenting the proposal, Mr. Perry argued that coal and nuclear plants’ unique ability to store at least 90 days of fuel on-site made the energy sources critical to the reliability and stability of the United States’ energy markets. In a 5-0 decision, FERC rejected the Energy Secretary’s proposal, and casted doubt on Mr. Perry’s claims that energy markets would become vulnerable and unreliable without contributions from coal and nuclear power.

It appears the Trump Administration may now be seeking a more direct route to provide assistance to coal and nuclear power plants. According to Bloomberg, a draft memo from the Department of Energy (“DOE”) reveals that the agency is considering using its authority under Section 202(c) of the Federal Power Act and the Defense Production Act of 1950 to force regional grid operators to buy electricity from a list of coal and nuclear plants the department deems crucial to national security. The plan would require suppliers to purchase power from the plants for 24 months in order to starve off closures as the Administration works to provide a long-term solution. If the DOE plan is implemented, it is likely to face legal challenges from both utilities and environmental groups. Regardless of whether the DOE elects to pursue this strategy, it appears that the Trump Administration is focused on working to protect aging coal and nuclear plants.

CATEGORIES: Air, Climate Change, Greenhouse Gas, Sustainability, Water

PEOPLE: Matthew G. Lawson

May 18, 2018 CRA Survives Constitutional Challenge—Are More Rules and Guidance at Risk of Disapproval?

Steven M. Siros Photo By Steven M. Siros 

A recent decision by the U.S. District Court for the District of Alaska rejected efforts by the Center for Biological Diversity (the “Center”) to challenge the constitutionality of the Congressional Review Act (CRA).  The CRA, which was originally enacted in 1996, allows for Congressional disapproval of rules promulgated by administrative agencies under limited circumstances.  Historically, the CRA had been used sporadically, but the current Congress has relied on the CRA on at least 16 occasions to roll back Obama administration regulations, and more CRA resolutions may be on the horizon. 

In Center for Biological Diversity v. Zinke, the Center challenged the use of the CRA to invalidate a Department of Interior (DOI) rule which limited certain hunting and fishing practices on Alaskan National Wildlife Refuges.  More specifically, the Center argued that the CRA unconstitutionally allowed Congress to alter DOI’s authority without using bicameralism and presentment to amend the underlying statutes that gave DOI its authority over the National Wildlife Refuges in Alaska.  The Center also argued that the CRA’s prohibition on the issuance of a future rule in “substantially the same form” violates the separation of powers doctrine. 

The district court dismissed the Center’s lawsuit, finding that “Public Law 115-20 was passed by both the House and the Senate and submitted to the President for approval as required by the CRA—which was also passed by both houses of Congress and signed into law by the President.  Thus, the requirements of bicameralism and presentment are met and [the Center’s] separation of powers concerns fail to state a plausible claim for relief.”  The court further noted that “[a]ny injury caused by DOI’s inability to promulgate a substantially similar rule, in the absence of any assertion that DOI would otherwise do so, is too speculative to constitute a concrete or imminent injury and is insufficient to confer Article III standing.”  The court also noted that even if the Center could establish an “injury in fact,” the Center had not adequately alleged how invalidating the CRA would redress the Center’s alleged injuries. 

Although the CRA remains in full force and effect, one might wonder whether it will retreat back into the shadows at least until the next administration.  The conventional view had been that Congress only has 60 days after a rule takes effect to pass a CRA resolution disapproving it.  However, lawmakers in Congress are advancing a more novel interpretation of the CRA to review (and potentially disapprove) older rules (and guidance).  If a rule or guidance was not  officially “submitted” to Congress for review (and many apparently have not officially been submitted), then the current administration could now submit them for review which would restart the 60-day clock.  For example, in April, the Senate voted to disapprove a 2013 Consumer Financial Protection Bureau guidance on auto loan financing.  The House has not yet taken action on the resolution.  If, however, the guidance were to be disapproved under the CRA, then the effect of that disapproval is that the agency will be unable to enact a “substantially similar” rule or guidance.  That is really the true power of the CRA, and word is that members of Congress are reviewing older rules and guidance that could be the target of a CRA resolution.  Whether the CRA remains a powerful tool this far into the Trump administration remains to be seen, but one can expect that the Center’s constitutional challenge to the CRA is unlikely to be the last. 

CATEGORIES: Climate Change, Consumer Law and Environment, Sustainability, Toxic Tort

PEOPLE: Steven R. Englund, Steven M. Siros

May 18, 2018 CRA Survives Constitutional Challenge—Are More Rules and Guidance at Risk of Disapproval?

Siros By Steven M. Siros 

A recent decision by the U.S. District Court for the District of Alaska rejected efforts by the Center for Biological Diversity (the “Center”) to challenge the constitutionality of the Congressional Review Act (CRA).  The CRA, which was originally enacted in 1996, allows for Congressional disapproval of rules promulgated by administrative agencies under limited circumstances.  Historically, the CRA had been used sporadically, but the current Congress has relied on the CRA on at least 16 occasions to roll back Obama administration regulations, and more CRA resolutions may be on the horizon. 

In Center for Biological Diversity v. Zinke, the Center challenged the use of the CRA to invalidate a Department of Interior (DOI) rule which limited certain hunting and fishing practices on Alaskan National Wildlife Refuges.  More specifically, the Center argued that the CRA unconstitutionally allowed Congress to alter DOI’s authority without using bicameralism and presentment to amend the underlying statutes that gave DOI its authority over the National Wildlife Refuges in Alaska.  The Center also argued that the CRA’s prohibition on the issuance of a future rule in “substantially the same form” violates the separation of powers doctrine. 

The district court dismissed the Center’s lawsuit, finding that “Public Law 115-20 was passed by both the House and the Senate and submitted to the President for approval as required by the CRA—which was also passed by both houses of Congress and signed into law by the President.  Thus, the requirements of bicameralism and presentment are met and [the Center’s] separation of powers concerns fail to state a plausible claim for relief.”  The court further noted that “[a]ny injury caused by DOI’s inability to promulgate a substantially similar rule, in the absence of any assertion that DOI would otherwise do so, is too speculative to constitute a concrete or imminent injury and is insufficient to confer Article III standing.”  The court also noted that even if the Center could establish an “injury in fact,” the Center had not adequately alleged how invalidating the CRA would redress the Center’s alleged injuries. 

Although the CRA remains in full force and effect, one might wonder whether it will retreat back into the shadows at least until the next administration.  The conventional view had been that Congress only has 60 days after a rule takes effect to pass a CRA resolution disapproving it.  However, lawmakers in Congress are advancing a more novel interpretation of the CRA to review (and potentially disapprove) older rules (and guidance).  If a rule or guidance was not  officially “submitted” to Congress for review (and many apparently have not officially been submitted), then the current administration could now submit them for review which would restart the 60-day clock.  For example, in April, the Senate voted to disapprove a 2013 Consumer Financial Protection Bureau guidance on auto loan financing.  The House has not yet taken action on the resolution.  If, however, the guidance were to be disapproved under the CRA, then the effect of that disapproval is that the agency will be unable to enact a “substantially similar” rule or guidance.  That is really the true power of the CRA, and word is that members of Congress are reviewing older rules and guidance that could be the target of a CRA resolution.  Whether the CRA remains a powerful tool this far into the Trump administration remains to be seen, but one can expect that the Center’s constitutional challenge to the CRA is unlikely to be the last. 

CATEGORIES: Climate Change, Consumer Law and Environment, Sustainability, Toxic Tort

PEOPLE: Steven R. Englund, Steven M. Siros

May 15, 2018 Fracking Industry Warns of “Devastating Effects” from Pennsylvania Court Ruling

On April 2, 2018, the Pennsylvania Superior Court issued a potentially groundbreaking decision by holding that trespass and conversion claims arising from hydraulic fracturing are not precluded by the rule of capture. In reaching this conclusion, the court found that the Southwestern Energy Production Company (“Southwestern”) may have committed trespass when it extracted natural gas located under neighboring properties by draining the gas through fissures created from hydrofracturing fluid. Such a holding was almost universally thought to be precluded by the rule of capture. The rule of capture, which can be traced back to 18th century fox hunting, has historically been applied to find that oil and gas companies cannot be held liable for “capturing” oil and gas that drain naturally from neighboring land as a result of legal extraction activities. In differentiating hydraulic fracking from traditional oil and gas extraction, the court focused on the fact that hydraulic fracking actually pumps fluid across property lines to open up non-natural fissures that allow the natural gas to seep back across the property to be extracted. 

Fracking Image

 

The potential impact of the Pennsylvania court’s decision has spurred high levels of concern from the greater fracking industry. On the same day that Southwestern filed an appeal requesting an en banc rehearing of the decision, seven separate industry trade groups filed leave with the court seeking permission to file amicus briefs urging the court to grant Southwestern the rehearing. One of these groups, the Marcellus Shale Coalition (“MSC”), is a collection of approximately 200 producers, midstream, and local supply-chain companies that produce more than 95% of the natural gas in Pennsylvania. The group has asserted that the April 2nd ruling interrupts well-established law and creates an “unprecedented form of tort liability” that threatens the entire industry. In a similar filing, the Pennsylvania Chamber of Business and Industry stressed that the decisions could have devastating effects on the industry and the economy of Pennsylvania. According to the American Petroleum Institute, the hydraulic fracking industry currently provides an estimated 322,600 jobs to Pennsylvania and contributes nearly $44.5 million in revenue to the state’s economy.

In Southwestern’s own appeal, the company echoed many of the concerns proclaimed by the industry. The company stressed that the decision would “unleash a torrent of speculative lawsuits” that could threaten the economic livelihood of the industry throughout the state. The company also characterized the April 2nd ruling as an impractical precedent for future decisions. Southwestern noted that the opinion would require courts and juries to speculate whether hydrofracturing fluid located miles below the surface ever moved onto neighboring property, which is a task the company portrayed as “a fool’s errand.”

The ultimate resolution of the matter has potentially far-reaching impacts on the U.S. energy markets. Behind Texas, Pennsylvania is the United States’ second largest producer of natural gas. The state generated 19 percent of the United States’ total output in 2017 and has seen steady gains in production output since 2010. Further, the decision raises questions about whether other state courts may adopt the logic of the Pennsylvania Superior Court and similarly hold that trespass and conversion claims against hydraulic fracking are not precluded by the historic rule of capture.

We will continue to track this case as it moves through the Pennsylvania courts.

CATEGORIES: Climate Change, Real Estate and Environment, Sustainability

PEOPLE: Matthew G. Lawson

May 15, 2018 Fracking Industry Warns of “Devastating Effects” from Pennsylvania Court Ruling

On April 2, 2018, the Pennsylvania Superior Court issued a potentially groundbreaking decision by holding that trespass and conversion claims arising from hydraulic fracturing are not precluded by the rule of capture. In reaching this conclusion, the court found that the Southwestern Energy Production Company (“Southwestern”) may have committed trespass when it extracted natural gas located under neighboring properties by draining the gas through fissures created from hydrofracturing fluid. Such a holding was almost universally thought to be precluded by the rule of capture. The rule of capture, which can be traced back to 18th century fox hunting, has historically been applied to find that oil and gas companies cannot be held liable for “capturing” oil and gas that drain naturally from neighboring land as a result of legal extraction activities. In differentiating hydraulic fracking from traditional oil and gas extraction, the court focused on the fact that hydraulic fracking actually pumps fluid across property lines to open up non-natural fissures that allow the natural gas to seep back across the property to be extracted. 

The potential impact of the Pennsylvania court’s decision has spurred high levels of concern from the greater fracking industry. On the same day that Southwestern filed an appeal requesting an en banc rehearing of the decision, seven separate industry trade groups filed leave with the court seeking permission to file amicus briefs urging the court to grant Southwestern the rehearing. One of these groups, the Marcellus Shale Coalition (“MSC”), is a collection of approximately 200 producers, midstream, and local supply-chain companies that produce more than 95% of the natural gas in Pennsylvania. The group has asserted that the April 2nd ruling interrupts well-established law and creates an “unprecedented form of tort liability” that threatens the entire industry. In a similar filing, the Pennsylvania Chamber of Business and Industry stressed that the decisions could have devastating effects on the industry and the economy of Pennsylvania. According to the American Petroleum Institute, the hydraulic fracking industry currently provides an estimated 322,600 jobs to Pennsylvania and contributes nearly $44.5 million in revenue to the state’s economy.

In Southwestern’s own appeal, the company echoed many of the concerns proclaimed by the industry. The company stressed that the decision would “unleash a torrent of speculative lawsuits” that could threaten the economic livelihood of the industry throughout the state. The company also characterized the April 2nd ruling as an impractical precedent for future decisions. Southwestern noted that the opinion would require courts and juries to speculate whether hydrofracturing fluid located miles below the surface ever moved onto neighboring property, which is a task the company portrayed as “a fool’s errand.”

The ultimate resolution of the matter has potentially far-reaching impacts on the U.S. energy markets. Behind Texas, Pennsylvania is the United States’ second largest producer of natural gas. The state generated 19 percent of the United States’ total output in 2017 and has seen steady gains in production output since 2010. Further, the decision raises questions about whether other state courts may adopt the logic of the Pennsylvania Superior Court and similarly hold that trespass and conversion claims against hydraulic fracking are not precluded by the historic rule of capture.

We will continue to track this case as it moves through the Pennsylvania courts.

CATEGORIES: Climate Change, Real Estate and Environment, Sustainability

PEOPLE: Matthew G. Lawson