Each month, Arnold & Porter and the Sabin Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-U.S. climate litigation charts. If you know of any cases we have missed, please email us at columbiaclimate at gmail dot com.
Here are the additions to the Climate Case Chart since Update #71.
FEATURED DECISION
California Appellate Court Upheld AB 32’s Offset Program
The California Court of Appeal ruled that the offset component of California’s cap-and-trade program for greenhouse gas emissions did not violate the California Global Warming Solutions Act of 2006 (AB 32). Two environmental groups had charged that the offset program did not satisfy AB 32’s additionality requirements, and in particular that the California Air Resources Board (CARB) had not ensured that offset projects’ emission reductions would be “in addition to … any other greenhouse gas emission reduction that otherwise would occur.” The court was not persuaded by “the rather pedantic position” that AB 32 required “unequivocal proof” that an offset project’s emission reduction would not otherwise occur. The court called this interpretation “unworkable” and said that such a requirement would not account “for the fact that is virtually impossible to know what otherwise would have occurred in most cases.” The appellate court instead concluded that AB 32 delegated rulemaking authority to CARB to establish a “workable method of ensuring additionality” and that CARB had not acted arbitrarily or capriciously in formulating the offset protocols. The court also ruled that AB 32 authorized CARB to grant early action credits for offset projects previously undertaken pursuant to Carbon Reserve protocols. Our Children’s Earth Foundation v. California Air Resources Board, No. A138830 (Cal. Ct. App. Feb. 23, 2015): added to the “Stop Government Action/Other Statutes” slide.
DECISIONS AND SETTLEMENTS
Court Said Ex-Im Bank’s Action Plausibly Included Activities on the High Seas, Not Just in Australia—So Endangered Species Act Claim Regarding LNG Facility Financing Survived
After initially dismissing an Endangered Species Act (ESA) challenge to Export-Import Bank of the United States (Ex-Im Bank) financing for the development and construction of two liquefied natural gas (LNG) projects located partially in Australia’s Great Barrier Reef World Heritage Area, the federal district court for the Northern District of California denied a motion to dismiss an amended complaint. The court ruled in August 2014 that the action failed to state an ESA claim because the ESA’s consultation requirements did not apply to “agency action” taken in foreign countries. After plaintiffs amended their complaint, however, the court concluded that they had alleged facts that plausibly showed that the Ex-Im Bank’s actions included post-construction shipping activities occurring on the high seas, bringing the actions within the ESA’s scope. The court noted that the Ex-Im Bank had funded the “downstream” portions of the projects, including financing for construction of the LNG facilities and related infrastructure, including two marine jetties and loading berths to transfer LNG to tankers for shipping. Even though the Ex-Im Bank did not specifically provide funding for the shipping activities, the court said that it was “reasonable to infer” that a primary objective of the projects was to ship LNG. Because the term “agency action” in the ESA is construed broadly, the court concluded plaintiffs had stated a plausible ESA claim. Center for Biological Diversity v. Export-Import Bank of the United States, No. 12-cv-6325 (N.D. Cal. Feb. 20, 2015): added to the “Stop Government Action/Other Statutes” slide.
After EPA Declined to Object to Permits for Three Texas Power Plants, Environmental Group Withdrew Lawsuit Seeking to Compel EPA Response
Environmental Integrity Project (EIP) and the U.S. Environmental Protection Agency (EPA) executed a settlement agreement on January 22, 2015, in which they resolved EIP’s lawsuit asking a court to compel EPA to respond to EIP’s petitions requesting that EPA object to Title V permits issued to three power plants by the Texas Commission on Environmental Quality. EPA issued an order on January 23, 2015 denying the three petitions. EPA’s denial addressed three concerns that remained pending after EIP and former party Sierra Club withdrew other issues. The remaining claims rejected by EPA related to the adequacy of monitoring requirements to ensure compliance with particulate matter limits during startup, shutdown, and maintenance at all three plants (an issue EPA said had not been raised during the public comment period), as well as deficiencies in the record supporting the indicator ranges to be monitored for one of the plants. EIP also argued that the permit for one of the plants—the Big Brown plant—should be modified to include a provision explicitly allowing use of “any credible evidence” to demonstrate noncompliance; EIP said this provision was made necessary by a federal court decision regarding the Big Brown plant that held that credible evidence could not be used in citizen suits to enforce emissions limits. EPA said that this issue had not been raised with reasonable specificity during the comment period and, moreover, that a petition would have to identify particular permit terms that excluded use of credible evidence. On February 20, 2015, EIP moved for voluntary dismissal of its lawsuit. EPA published notice of its denial of the petitions in the February 23, 2015 issue of the Federal Register, and indicated that any petition for review of the denial must be filed within 60 days of the notice. Environmental Integrity Project v. McCarthy, No. 1:14-cv-01196 (D.D.C., notice of voluntary withdrawal Feb. 20, 2015): added to the “Challenges to Coal-Fired Power Plants” slide.
Federal Court Dismissed Challenge to EPA Approval of Washington and Oregon Impaired Waters Lists
The federal district court for the Western District of Washington granted summary judgment to EPA in the Center for Biological Diversity’s challenge to EPA’s approval in 2012 of Washington’s and Oregon’s lists of impaired waters under Section 303(d) of the Clean Water Act. Although both states’ water quality standards implicate ocean acidification, which results from seawater’s absorption of carbon dioxide from the atmosphere, neither Washington nor Oregon listed any waters as impaired based on ocean acidification. The Center for Biological Diversity charged that the absence of any such waters from the lists was arbitrary and capricious. As an initial matter, the court concluded that the Center for Biological Diversity had standing to bring the action, rejecting arguments raised by the Western States Petroleum Association and the American Petroleum Institute in an amicus curiae brief. The court concluded that the Center for Biological Diversity had established causation and redressability. The court reasoned that even though global atmospheric carbon dioxide—which the amicus brief argued could not be addressed through a Clean Water Act mechanism—was the primary driver of acidification, the Center for Biological Diversity had alleged that local activities also had a significant impact on ocean acidity and that local mitigation measures could address “hot spots” of ocean acidification. Ultimately, however, the court found that EPA’s approval of the impaired waters lists was neither implausible nor contrary to the evidence. The court also determined that EPA had reasonably concluded that Washington and Oregon assembled and evaluated all existing and readily available water quality data. Center for Biological Diversity v. EPA, No. 13-cv-1866 (W.D. Wash. Feb. 19, 2015): added to the “Stop Government Action/Other Statutes” slide.
Biofuel Company Withdrew Challenge to Delay in 2014 Renewable Fuel Standards
Plant Oil Powered Diesel Fuel Systems, Inc. filed a motion for voluntary dismissal of its petition challenging EPA’s announcement that it would not finalize the 2014 applicable percentage standards for the Renewable Fuel Standard (RFS) program until 2015. The petition, filed just a month earlier, had asserted that EPA’s notification constituted agency action adopting the 2014 RFS standards proposed in November 2013. Plant Oil Powered Diesel Fuel Systems, Inc. v. EPA, No. 15-1011 (D.C. Cir., motion for voluntary dismissal Feb. 17, 2015): added to the “Challenges to Federal Action/Clean Air Act” slide.
Mississippi Supreme Court Ordered Refunds to Ratepayers for Illegal Rate Increase for Kemper Project
The Mississippi Supreme Court held that Mississippi law did not empower the Mississippi Public Service Commission (MPSC) to authorize 2013 rate increases for the Kemper Project, which includes a carbon capture system cited by EPA as an example of a viable technology in its proposed new source performance standards for coal-fired power plants. The court ruled that the Base Load Act (a 2008 law that made it possible for utilities to recover costs prior to a facility becoming operational) did not provide a basis for the rate increases. The court’s judgment requires that Mississippi Power Co. (MPC) refund ratepayers for payments attributable to the rate increases. The court further ruled that the increased rates were confiscatory takings and that ratepayers had been denied due process because of the lack of proper notice. The court also invalidated a 2013 settlement agreement that preceded the rate increase. The court said that the 2013 rate increase resulted from the settlement agreement, in which MPC agreed to abandon its appeal of an earlier denial of a rate increase, and that MPSC lacked authority to enter into a settlement agreement reached during private meetings. Mississippi Power Co. v. Mississippi Public Service Commission, No. 2012-UR-01108-SCT, and Blanton v. Mississippi Power Co., No. 2013-UR-00477-SCT (Miss. Feb. 12, 2015): added to the “Challenges to Coal-Fired Power Plants” slide.
FTC Found No Violation of Law by Green Mountain Power But Advised Clear and Consistent Communications Regarding Renewable Energy
On February 5, 2015, the Federal Trade Commission (FTC) sent a letter to counsel for Green Mountain Power Corporation (GMP) expressing concern that GMP might have created confusion for its customers about the renewable attributes of the power they purchased because GMP might not have “clearly and consistently communicated” that GMP sells renewable energy certificates (RECs) for most of its renewable energy-generating facilities to entities outside Vermont. FTC sent the letter after receiving a petition from the Environmental and Natural Resources Law Clinic at Vermont Law School on behalf of several Vermont citizens. In the February 5 letter, the FTC said that no findings had been made that any GMP statements violated the Federal Trade Commission Act, but urged that GMP prevent future confusion by clearly communicating the implications of its REC sales—namely, that when GMP sells RECs tied to a particular renewable energy facility, it may no longer characterize the power delivered from that facility as renewable. Letter from Federal Trade Commission to Counsel for Green Mountain Power Corp. (Feb. 5, 2015): added to the “Regulate Private Conduct” slide.
Natural Gas Industry Groups Dropped Challenges to Greenhouse Gas Reporting Rule
The American Gas Association and the Interstate Natural Gas Association of America moved to voluntarily withdraw their challenges to EPA’s greenhouse gas reporting rule. The groups filed challenges in 2011 and 2012. American Gas Association v. EPA, Nos. 11-1020, 12-1108 (D.C. Cir., motion for voluntary dismissal Feb. 4, 2015); Interstate Natural Gas Association of America, No. 11-1027 (D.C. Cir., motion for voluntary dismissal Feb. 20, 2015): added to the “Challenges to Federal Action/Clean Air Act” slide.
Federal Court Upheld Tennessee Valley Authority Decision to Switch to Natural Gas at Kentucky Facility
The federal district court for the Western District of Kentucky granted summary judgment to the Tennessee Valley Authority (TVA) in an action challenging TVA’s plan to retire coal-fired electric generating units and replace them with a new natural gas plant at a facility in Muhlenberg County, Kentucky. TVA’s National Environmental Policy Act procedures provide that a new power generating facility usually requires an environmental impact statement (EIS), but the court agreed with TVA that it had discretion to determine whether an EIS was warranted in a particular case. In this case, TVA determined there would be no major environmental impacts, and that there would in fact be environmental benefits, including significant benefits to regional air quality, a significant reduction in carbon dioxide emissions, reductions in water withdrawals and heated discharges into the Green River, and reduction of the production of coal combustion waste. The court upheld all the challenged aspects of TVA’s review. It rejected claims that TVA failed to consider the importance of the availability of an adequate supply of electricity at a reasonable price and that it did not consider the significant employment impacts if the facility stopped burning coal. The court also concluded that the assessment of impacts did not improperly segment the decommissioning of the coal-fired units (which the court characterized as a “too speculative” possibility) or the construction and operation of a natural gas pipeline (the impacts of which the court determined TVA had assessed to the extent possible). Nor was the court persuaded by plaintiffs’ contentions that TVA had understated emissions of greenhouse gases from natural gas, that it arrived at a predetermined outcome, or that it had used an improper no action alternative. The court also determined that TVA’s decisionmaking regarding least-cost planning under the Tennessee Valley Authority Act of 1933 was not arbitrary and capricious. Plaintiffs have appealed the court’s judgment to the Sixth Circuit. Kentucky Coal Association v. Tennessee Valley Authority, No. 4:14CV-00073 (W.D. Ky. Feb. 2, 2015, amended Feb. 3, 2015): added to the “Challenges to Federal Action” slide.
Massachusetts Land Court Found Intent to Abandon Nonconforming Cottage Destroyed by Hurricane
After a hurricane damaged a cottage in Wareham, Massachusetts in 1991, its owners demolished the cottage, which did not conform to zoning requirements. The couple sold the property in 1993 for $5,000. In 2001, the new owner made his first attempt to obtain a permit to build a new residence on the property. In 2011, he received a special permit allowing him to build a house. The permit was challenged on the grounds that the owner had abandoned the residential structure and was not entitled to rebuild. The Massachusetts Land Court found an intent to abandon the residential structure. The court noted the low price the owner paid for the property and the unexplained eight-year gap between the time he purchased the property and the time when he first sought approval to rebuild. Chiaraluce v. Ferreira, Nos. 11 MISC 451014, 11 MISC 451165 (Mass. Land Ct. Dec. 31, 2014): added to the “Adaptation” slide.
NEW CASES, MOTIONS, AND NOTICES
Groups Sought Disclosure of SEC Communications with Ceres and New York Attorney General on Climate Change
The Energy & Environment Legal Institute and the Free Market Environmental Law Clinic filed a Freedom of Information Act lawsuit (FOIA) against the Security and Exchange Commission (SEC). The lawsuit, filed in the federal district court for the District of Columbia, seeks to compel production of documents relating to the SEC’s interactions with the investor-activist group Ceres and New York Attorney General Eric Schneiderman. The FOIA request asked for text messages and emails containing specified climate change-related terms. Energy & Environment Legal Institute v. United States Security & Exchange Commission, No. 1:15-cv-00217 (D.D.C., filed Feb. 12, 2015): added to the “Force Government to Act/Other Statutes” slide.
Los Angeles and Other Parties Challenged Restrictive Kern County Ordinance on Biosolids Recycling
The City of Los Angeles, two sanitation districts, two businesses involved in the recycling of biosolids, and the California Association of Sanitation Agencies commenced a lawsuit against Kern County and its board of supervisors and planning commission to challenge the “surreptitious adoption” of a zoning ordinance that would impose burdensome requirements on biosolids recycling. The plaintiffs-petitioners alleged violations of the California Environmental Quality Act and failures to provide required notices. They also alleged that the ordinance violated a writ issued in another proceeding that required preparation of an environmental impact report in connection with a zoning ordinance concerning land application of biosolids. Their petition-complaint alleged that land application of biosolids can replace use of chemical fertilizers, which accelerate climate change both because of the use of fossil fuels in their manufacture and because of their removal of organic carbon from the soil. City of Los Angeles v. County of Kern, No. S-1500-CV-284100 (Cal. Super. Ct., filed Feb. 10, 2015): added to the “State NEPAs” slide.
Organizations Sought Decisions from EPA on Regulating Concentrated Animal Feeding Operations Under the Clean Air Act
The Humane Society of the United States and four environmental organizations filed a lawsuit in the federal district court for the District of Columbia. They asked the court to require EPA to respond to their 2009 petition asking that concentrated animal feeding operations (CAFOs) be regulated as a source of air pollution under the Clean Air Act. The complaint alleged that air pollution from CAFOs endangers public health and welfare, including by contributing to climate change due to their emissions of methane and nitrous oxide. In a related action, six organizations sought a response from EPA to a 2011 petition asking the agency to identify ammonia as a criteria pollutant. Large livestock operations are the leading source of ammonia pollution. The complaint alleged that ammonia contributes to regional haze, which has been associated with climate impacts. Humane Society of the United States v. McCarthy, No. 15-cv-0141 (D.D.C., filed Jan. 28, 2015); Environmental Integrity Project v. EPA, No. 15-cv-139 (D.D.C., filed Jan. 28, 2015): added to the “Force Government to Act/Clean Air Act” slide.
WildEarth Guardians Objected to Oil and Gas Leasing Analysis for Pawnee National Grassland
WildEarth Guardians submitted an objection to the Rocky Mountain Region of the United States Forest Service concerning the Draft Record of Decision and Final Environmental Impact Statement for the Pawnee National Grassland Oil and Gas Leasing Analysis. WildEarth Guardians alleged that the Forest Service had violated the National Environmental Policy Act, the Clean Air Act, the Endangered Species Act, and the Arapaho-Roosevelt National Forest and Pawnee National Grassland Land and Resource Management Plan. Among the issues that WildEarth Guardians asserted had received insufficient attention were the climate impacts of post-leasing development of the oil and gas resources underlying the grasslands. WildEarth Guardians said that the Forest Service should have used the social cost of carbon protocol to account for carbon costs. WildEarth Guardians v. Casamassa (U.S. Forest Service, filed Jan. 20, 2015): added to the “Stop Government Action/NEPA” slide.
Sierra Club Sued EPA over New Hampshire Power Plant
Sierra Club filed a Clean Air Act citizen suit against the EPA Administrator asking the federal district court for the District of Columbia to compel EPA to grant or deny Sierra Club’s petition asking the agency to object to an air pollution operating permit issued for coal-fired power plant in Portsmouth, New Hampshire. Sierra Club submitted the petition on July 28, 2014. The organization’s objections to the permit concern allegedly inadequate controls for sulfur dioxide and particular matter. Sierra Club v. McCarthy, No. 1:14-cv-02149 (D.D.C., filed Dec. 18, 2014): added to the “Challenges to Coal-Fired Power Plants” slide.
Here are recent additions to the Non-U.S. Climate Litigation Chart.
In Canada, Court finds newspaper and journalists liable for defaming climate scientist. Professor Andrew Weaver, a renowned Canadian climate scientist, filed suit against the National Post, its publisher, and several journalists for defamation. Dr. Weaver’s claims arose out of the defendants’ publication of statements that allegedly injured Dr. Weaver’s reputation as a climate scientist in the context of the “Climategate” controversy. Plaintiff Weaver sought an injunction requiring the newspaper to remove the allegedly false statements from its website and from any sites where the statements were reposted. The Supreme Court of British Columbia found that the defendants had defamed Dr. Weaver and that their statements were not protected by the defense of fair comment because the facts upon which they relied were false. The Court awarded Dr. Weaver $50,000 in general damages, and directed the defendants to remove the offending articles, require third parties to cease republication, and publish a retraction. Weaver v. Corcoran, et al. (Canada, Supreme Court of British Columbia [2015] S102698)–Added to “Suits against Corporations” slide.
A EU Court finds that a German sugar refinery should not be penalized where the refinery’s emissions report was corrected after the deadline and additionally allowances were surrendered. Nordzucker AG (“Nordzucker”), a sugar refinery operator in Germany, produced an emissions report for 2005 pursuant to Directive 2003/87/EC, part of the European Union’s greenhouse gas emissions trading scheme. Nordzucker’s emissions report excluded emissions resulting from steam generation necessary to operate the refinery’s drying facility on the basis of a letter from a German Ministry stating that such facilities were exempted from compulsory emissions trading schemes. An expert verified the report, and Nordzucker surrendered emissions allowances equal to the emissions stated in the report. Subsequently, the German Emissions Trading Authority examined Nordzucker’s emissions report and found that it should have included emissions attributable to the refinery’s drying facility. Nordzucker revised its emissions report and surrendered additional allowances. German authorities found Nordzucker liable for failing to timely surrender emissions allowances and levied a penalty as provided in Article 16(3) of Directive 2003/87. After a series of appeals, the German Federal Administrative Court referred to the European Court of Justice the question whether excess emissions penalties apply where an operator surrenders allowances equal to emissions stated in a verified report, but where the report is later found to understate the operator’s emissions and additional allowances are surrendered. The European Court of Justice found that such penalties should not apply and that, in such cases, national authorities should establish proportionate penalties taking into account relevant factual circumstances. Bundesrepublik Deutschland v. Nordzucker AG (European Union, European Court of Justice [2015] C-148/14)–Added to “EU Emissions Trading Scheme” slide.
