Each month, Arnold & Porter and the Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-US climate litigation charts. The December 2013 additions are listed below. (If you know of any cases we’ve missed, please email us at columbiaclimate at gmail dot com.)
California Chamber of Commerce v. California Air Resources Board; Morning Star Packing Co. v. California Air Resources Board (Cal. Super. Ct. Nov. 12, 2013). The California Superior Court issued a ruling denying two petitions that challenged the sale and auction provisions of California’s greenhouse gas (GHG) cap-and-trade regulations. The court was not persuaded by the petitioners’ argument that the text, structure, and legislative history of AB 32—the statute creating California’s GHG reduction program—showed that the California Legislature did not intend to authorize the sale of allowances. The court instead found that AB 32 broadly delegated to the California Air Resources Board the authority to design a system for distributing emissions allowances. The court also rejected the contention that the sale of allowances constituted an unconstitutional tax because AB 32 was not passed by a supermajority of the legislature. The court held that “[o]n balance” the charges for emissions allowances “are more like traditional regulatory fees than taxes, but it is a close question.” Having found that the charges were more like a fee than a tax, the court held that the charges were valid fees because their primary purpose was regulation (i.e., GHG emissions reduction), not revenue generation; the total fees would not exceed the costs of the regulatory programs they supported because AB 32 required the proceeds to be spent in furtherance of AB 32’s regulatory purposes; and there was a “reasonable relationship” between the charges for the allowances and the regulated entities’ collective responsibility for the harmful impacts of GHG emissions. The Pacific Legal Foundation, which represents the Morning Star Packing Co. petitioners, announced that it would appeal the ruling.
DECISIONS AND SETTLEMENTS
Southern Utah Wilderness Alliance v. Burke (D. Utah Nov. 4, 2013): added to the “Stop Government Action/NEPA” slide. Ten environmental and historic preservation organizations challenged the Richfield Resource Management Plan and Travel Plan for 2.1 million acres of federal land in south-central Utah. Although the federal district court for the District of Utah found that the Bureau of Land Management (BLM) had failed to comply with the National Historic Preservation Act and with its own off-highway vehicle (OHV) minimization criteria, the court rejected plaintiffs’ claim that BLM failed to take into account the impacts of OHV damage in the context of climate change as required by the National Environmental Policy Act (NEPA) and Secretarial Order 3226, which requires agencies within the Department of the Interior to “consider and analyze potential climate change impacts when undertaking long-range planning exercises . . . [and] when developing multi-year management plans.” The court found that BLM’s evaluation of OHV impacts and climate change was sufficient to comply with the Secretarial Order and NEPA. The court noted that “[t]he EIS in this case identifies the climate changing pollutants at issue, the studies regarding the environmental impacts of those pollutants, and the activities in the Richfield Planning Area that may generate emissions of such climate changing pollutants,” and that the EIS had “established the existing baseline climate of the Richfield Planning Area” and determined the “potential long-term emissions impacts associated with OHV use … to be minimal.” The court also pointed to portions of the EIS that indicated that certain activities in the plan such as management of vegetation to favor perennial grasses could actually sequester carbon.
Competitive Enterprise Institute v. National Aeronautics and Space Administration (D.D.C. Oct. 29, 2013): added to the “Climate Change Protestors and Scientists” slide. The Competitive Enterprise Institute (CEI) commenced a federal lawsuit in 2010 to compel the National Aeronautics and Space Administration (NASA) to produce documents in response to CEI’s requests under the Freedom of Information Act (FOIA) for information related to NASA’s correction in 2007 of its global temperature data sets. The Goddard Institute of Space Studies (GISS), a component of NASA, had revised the data sets after a statistician brought to NASA’s attention an error that he alleged caused the agency to overstate U.S. temperatures from 2000 onward. The district court for the District of Columbia granted in part and denied in part NASA’s motion for summary judgment. The court directed NASA to produce responsive documents from a certain directory on GISS’s computer system, including computer programs and data files that would require a computer program or commercial visualization tool in order to be intelligible. The court also ruled that a GISS scientist’s e-mails relating to the blog RealClimate, to which he contributed, constituted agency records to the extent that they “traveled” on the NASA e-mail domain and related to agency business, regardless of whether the scientist used his RealClimate or NASA e-mail account. The court otherwise found that the NASA/GISS search for responsive records had been adequate, determining, among other things, that the scientist’s e-mails located only on an “@columbia.edu” domain were not in the agency’s control and therefore not susceptible to a FOIA request.
In re WildEarth Guardians, IBLA No. 2013-172 (Interior Bd. of Land Appeals Oct. 29, 2013): added to the “Stop Government Action/NEPA” slide. The Interior Board of Land Appeals (IBLA) granted the BLM’s request that it remand to BLM the agency’s decision to authorize the sale and issuance of the El Segundo Mine Coal Lease in northwestern New Mexico. WildEarth Guardians had appealed BLM’s decision, arguing that BLM had authorized the lease in violation of NEPA, which required BLM to take a hard look at the indirect and cumulative impacts on air quality and climate caused by coal mining and combustion. In remanding the matter, the IBLA set aside BLM’s decision.
Monroe Energy, L.L.C. v. Environmental Protection Agency, No. 13-1265 (D.C. Cir. Oct. 29, 2013) (consolidated with American Fuel & Petrochemical Manufacturers v. EPA, No. 13-1268, and American Petroleum Institute v. EPA, No. 13-1267): added to the “Challenges to Federal Action” slide. The D.C. Circuit granted the motion by petitioner Monroe Energy, L.L.C. (Monroe) to expedite the review of challenges to the United States Environmental Protection Agency’s (EPA’s) final rule setting the 2013 renewable fuel standards. Monroe had argued that expedited review was needed so that the court’s decision would be rendered well in advance of the June 30, 2014 deadline for submitting Renewable Identification Numbers to EPA. Monroe noted that EPA had issued its final rule eight and a half months after the statutory deadline. The briefing schedule set by the D.C. Circuit provides for the final set of briefs to be submitted by February 20, 2014 (Monroe had requested that briefing be completed in mid-December 2013).
Petrozzi v. City of Ocean City (N.J. App. Div. Oct. 28, 2013): added to the “Adaptation” slide. Property owners sued the City of Ocean City after the dune system created by the City in the early 1990s increased in height due to natural accretion and exceeded height limitations agreed to in easements granted by the property owners. The City was barred from reducing the dunes’ height because the New Jersey Department of Environmental Protection denied it a dune maintenance permit, which was required pursuant to 1994 amendments to New Jersey’s Coastal Area Facility Review Act (CAFRA). A trial judge ruled that most of the property owners were not entitled to breach of contract damages because the City’s performance was made impossible or impracticable by the CAFRA amendments; the judge ruled that the City was liable only to two sets of property owners who granted easements after the passage of the CAFRA amendments. The New Jersey Appellate Division ruled, however, that the property owners who granted easements prior to the amendments were entitled to restitution. The court noted that in calculating the restitutionary payments or breach of contract damages due to the property owners, the court should take into account the New Jersey Supreme Court’s decision in Borough of Harvey Cedars v. Karan, in which the court indicated that any reduction in value due to loss of views should be offset by value added due to the dunes’ storm-protection benefits.
NEW CASES, MOTIONS, AND NOTICES
Utility Air Regulatory Group v. EPA, No. 12-1146; American Chemistry Council v. EPA, No. 12-1248; Energy-Intensive Manufacturers v. EPA, No. 12-1254; Southeastern Legal Foundation v. EPA, No. 12-1268; Texas v. EPA, No. 12-1269; Chamber of Commerce v. EPA, No. 12-1272 (U.S. Nov. 25, 2013). The U.S. Supreme Court has scheduled oral argument for Monday, February 24, 2014, in the cases challenging EPA’s determination that its regulation of GHG emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit GHGs. The D.C. Circuit upheld EPA’s determination in Coalition for Responsible Regulation v. EPA. The Court has allotted one hour for the oral argument.
Office of Management and Budget, Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order No. 12866, Notice of Availability and Request for Comments (78 Fed. Reg. 70,586, Nov. 26, 2013): added to the “Challenges to Federal Action” slide. The Office of Management and Budget (OMB) announced the availability of, and requested public comments on, an updated Technical Support Document (TSD) for agencies to use to estimate the social cost of carbon (SCC) in their rulemakings. OMB indicated that it was particularly interested in comments on the selection of the models used and the synthesis of the resulting SCC estimates; how the distribution of SCC estimates should be represented in regulatory impact analyses; and the strengths and limitations of the overall approach. The publication of the updated TSD comes after OMB received a “petition for correction” in September 2013 from seven industry and business groups seeking withdrawal of the TSDs issued in 2010 and May 2013. The deadline for comments is January 27, 2014.
Washington Environmental Council v. Bellon (9th Cir. Oct. 31, 2013): added to the “Force Government to Act/Clean Air Act” slide. On October 17, 2013, the Ninth Circuit dismissed on standing grounds a citizen suit brought by two environmental groups to compel the Washington Department of Ecology (WDOE) and two regional clean air agencies to regulate oil refineries under the Clean Air Act. After a judge of the Ninth Circuit called for a vote to determine whether the case would be reheard en banc, the court issued an order on October 31, 2013 requiring the parties to submit briefs on whether the case should be reheard. Briefs were filed by the environmental groups, WDOE, and the Western States Petroleum Association on November 21.
Sierra Club v. Oklahoma Gas and Electric Co. (E.D. Okla., filed Aug. 12, 2013; motion to dismiss Nov. 4, 2013). In August 2013, Sierra Club filed a lawsuit against the owner and operator of a coal-fired power plant in Muskogee, Oklahoma. Sierra Club alleged that the defendant had failed to comply with the Clean Air Act in connection with a major modification to the plant in 2008. Sierra Club sought declaratory and injunctive relief and penalties and claimed that the defendant had not obtained the required Prevention of Significant Deterioration (PSD) permit and that the plant’s emissions violated opacity and particulate matter limits. The claims for relief focus on traditional pollutants—sulfur dioxide, nitrogen oxides, and particulate matter—but Sierra Club alleges injuries that include the power plant’s emissions of carbon dioxide contributing to global warming. On November 4, 2013, defendant moved to dismiss the action on the grounds that the PSD claim was untimely and that the opacity and particular matter claim was insufficiently pled.
Mississippi Insurance Department v. United States Department of Homeland Security (S.D. Miss., filed Sept. 26, 2013; first am. compl. Oct. 7, 2013): added to the “Adaptation” slide. The Mississippi Insurance Department (MID) filed a lawsuit in the federal district court for the Southern District of Mississippi seeking to enjoin or stay rate increases for the National Flood Insurance Program (NFIP). The increased rates became effective on October 1, 2013. MID alleged that the Federal Emergency Management Agency (FEMA) acted arbitrarily and capriciously by imposing substantial rate increases prior to completing studies, including an affordability study, mandated by the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012 (BW-12). BW-12, which President Obama signed in July 2012, “requires changes to all major components of the [NFIP], including flood insurance, flood hazard mapping, grants, and the management of flood plains.” MID noted that “[m]any of the changes are designed to make the NFIP more financially stable, and ensure that flood insurance rates more accurately reflect the real risk of flooding,” but that BW-12 “is perceived as an oncoming economic disaster to Mississippi citizens and other persons having homes or businesses located in a flood zone.” In addition to injunctive relief, MID also seeks a declaration that FEMA must undertake the studies required by BW-12 prior to making its rate determinations. Other states and state insurance departments have filed amicus curiae papers in support of MID’s claims, including Florida, the Louisiana Department of Insurance, Massachusetts, and the South Carolina Department of Insurance.
Here are recent additions to the Non-U.S. Climate Litigation Chart.
Billerud Karlsborg AB v. Naturvardsverket (European Court of Justice (Second Chamber)  Case C-203/12, 17 October 2013): The Swedish environmental protection agency, imposed penalties on the Billerud companies for failing to surrender credits under the EU Emissions Trading Scheme in 2006. The Billerud companies challenged the penalties arguing that since the failure was due to an internal error and the companies had a sufficient number of allowances at the time, they should be excused. The European Court of Justice (CJEU) found that under Directive 2003/87/EZ, penalties for failure to surrender credits still apply even if the entity held a sufficient number of allowances at that time. In addition, the CJEU found that the penalty was a lump sum and may not be varied by a national court on the basis of the principle of proportionality. —Added to “EU Emissions Trading Scheme” slide.
Iberdrola S.A. et al.,Judgement of the Court (Fifth Chamber) of 17 of Oct. 2013 (European Union Court of Justice (Fifth Chamber)  Case C-566/11, 17 October 2013): Spain amended its system for purchasing wholesale electricity by reducing the remuneration of electricity production to remove unfair windfalls for electricity producers caused by issuance of allowances under the EU Emissions Trading System free of cost. Electricity producers challenged the measure asserting that it was contrary to Directive 2003/87/EZ (establishing the EU Emissions Trading System) because it neutralized the ‘free of charge’ nature of emissions. The EU Court of Justice found that the Directive does not preclude remuneration for electricity producers for the purpose of counterbalancing windfall profits resulting from the allocation of emission allowances. In addition, the court found that the legislative measure does not remove the incentive to reduce greenhouse gas emissions and was thus not inconsistent with the goals of the Directive. —Added to “EU Emissions Trading Scheme” slide.
Rainbow Shores P/L v Gympie Regional Council & Ors (Planning and Environment Court of Queensland  QPEC 26, 12 June 2013): Applicant appealed denial of a planning permit for a proposed integrated resort and residential community. The proposal was challenged on a number of grounds including concerns about erosion and storm surges. The Australia state court dismissed the appeal, finding that the proposal did not adequately address the site’s increased vulnerability to erosion and storm surges as a result of sea level rise. —Added to “Climate Adaptation” slide.
New Zealand Climate Science Education Trust v. National Institute of Water and Atmospheric Research Ltd (New Zealand Court of Appeal  NZCA 555, 15 October 2013) The New Zealand Court of Appeal upheld an order requiring New Zealand Climate Science Education Trust (Trust) to pay close to $90,000 in court fees for unreasonably challenging the National Institute of Water and Atmospheric Research’s (NIWAR) published data reflecting climate change. The Trust contended that NIWAR had employed the wrong methodology to adjust historic temperature data. The Court of Appeal agreed with the lower court that the “public interest grounds” for the challenge did not justify a reduction in its liability. —Added to “Access to Information” slide.
Bulga Milbrodale Progress Association Inc. v. Minister for Planning and Infrastructure and Warkworth Mining Limited (New South Wales Land and Environment Court  NSWLEC 48, 14 April, 2013): Plaintiffs appealed the approval of a mining project that would expand a coal mine into areas previously designated as “non-disturbance areas” and extend the mining permit for ten years. The court overturned the approval due to significant adverse impacts including reduced biodiversity. In assessing biodiversity concerns, the court considered vulnerability to climate change. —Added to “Protecting Biodiversity Ecosystem” slide.
Photo by SalFalko