Update #63 June 2014
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 June additions are listed below. (If you know of any cases we’ve missed, please email us at columbiaclimate at gmail dot com.)
FEATURED DECISION
WildEarth Guardians v. United States Environmental Protection Agency, No. 13-1212 (D.C. Cir. May 13, 2014): added to the “Force Government to Act/Clean Air Act” slide. The D.C. Circuit Court of Appeals upheld the United States Environmental Protection Agency’s (EPA’s) denial of a request to add coal mines to the list of regulated stationary sources under the Clean Air Act. Earthjustice, on behalf of other environmental groups, had asked EPA to create the new source category and to create standards to address methane emissions from the new category. In April 2013, EPA denied the request, citing its need to “prioritize its actions in light of limited resources and ongoing budget uncertainties.” The D.C. Circuit said that EPA’s determination “easily passes muster” under the deferential standard applied to review of agency denials of rulemaking petitions. The court distinguished this case from Massachusetts v. EPA, 549 U.S. 497 (2007), where EPA had responded to a rulemaking petition seeking regulation of carbon dioxide under the Clean Air Act by disclaiming authority to regulate.
DECISIONS AND SETTLEMENTS
Illinois Farmers Insurance Co. & Farmers Insurance Exchange v. Metropolitan Water Reclamation District of Greater Chicago, No. 14-CV-03251 (N.D. Ill. June 3, 2014): added to the “Adaptation” slide. Illinois Farmers Insurance Co. & Farmers Insurance Exchange and its subsidiaries and related entities (Farmers Insurance) filed notices of dismissal withdrawing their putative class action lawsuits that sought damages from municipal entities in Illinois for failing to implement adequate stormwater management plans to prevent flooding that occurred in 2013. Farmers Insurance had filed nine of the lawsuits (see complaints for Cook, DuPage, Lake, McHenry, and WillCounties), at least two of which (Cook and McHenry) had been removed to federal court. A Farmers Insurance spokesperson said “[w]e believe our lawsuit brought important issues to the attention of the respective cities and counties, and that our policyholders’ interests will be protected by the local governments going forward.”
United States v. Landfill Technologies of Arecibo Corp., No. 3:14-cv-01438 (D.P.R. May 29, 2014): added to the “Regulate Private Conduct” slide. On May 30, 2014, EPA announced that it had reached an agreement with Landfill Technologies of Arecibo Corp., the municipality of Arecibo, and the Puerto Rico Land Authority to settle alleged violations of the Clean Air Act involving defendants’ failures to install a gas collection and control system at a Puerto Rico landfill by a 2005 deadline. Installation of the system was completed in 2012, but EPA alleged that in the intervening six-and-a-half years, the landfill emitted substantial amounts of non-methane organic compounds and other landfill gases, including methane. In the consent decree filed in the federal district court for the District of Puerto Rico on May 29, 2014, defendants agreed to pay a total of $350,000 in civil penalties and to implement a comprehensive recycling and composting plan, the details of which were specified in an appendix to the consent decree. A notice in the Federal Register on June 5, 2014 announced that the comment period on the consent decree would remain open for 30 days (until July 7, 2014).
Clean Energy Fuels Corp. v. California Public Utilities Commission, No. G048820 (Cal. Ct. App. May 29, 2014): added to the “Stop Government Action/Project Challenges” slide. The California Court of Appeal affirmed the California Public Utilities Commission’s (CPUC’s) approval of Southern California Gas Company’s (SoCalGas) application for a “Compression Services Tariff” under which SoCalGas would construct and operate equipment on nonresidential customers’ property to compress, store, and dispense natural gas above standard line pressure for customer end-use applications, including natural gas vehicle refueling, combined heat and power facilities, and peaking power plants. The court said that CPUC had incorporated adequate restrictions in its approval to prevent SoCalGas from unfairly competing with nonutility enterprises. The court also ruled that substantial evidence supported CPUC’s conclusion that the tariff would increase natural gas use in the Los Angeles area and thereby reduce air pollution and greenhouse gas emissions.
Southern California Edison Co. v. California Public Utilities Commission, Nos. B246782, B246786 (Cal. Ct. App. May 28, 2014): added to the “Challenge to State Action” slide. The California Court of Appeal rejected SoCalGas’s challenge to CPUC’s authority to implement the Electric Program Investment Charge (EPIC), which required electric utilities to collect a surcharge from ratepayers to fund renewable energy research, development, and demonstration projects. The court ruled that CPUC had the constitutional and statutory authority to implement EPIC, that EPIC was not an unlawful delegation of CPUC’s authority, and that the surcharge was a regulatory fee, not a tax requiring legislative enactment.
Kunaknana v. United States Army Corps of Engineers, No. 3:13-cv-00044-SLG; Center for Biological Diversity v. United States Army Corps of Engineers, No. 3:13-cv-00095-SLG (D. Alaska May 27, 2014): added to the “Stop Government Action/NEPA” slide. Plaintiffs commenced two actions in the federal district court for the District of Alaska alleging that the United States Army Corps of Engineers (Corps) did not comply with NEPA and Section 404 of the Clean Water Act in issuing a permit to fill wetlands in the National Petroleum Reserve in Alaska. The permit was required for ConocoPhillips Alaska, Inc. to develop a drill site. The court ruled that the Center for Biological Diversity did not have standing to bring its action. In the other action, the court granted partial summary judgment to the plaintiffs to the extent of finding that the Corps had not provided a reasoned explanation for its decision not to conduct a supplemental environmental analysis. The court did not resolve the Clean Water Act claim and asked the parties to conduct briefing on how the action should proceed. Among the issues the court will consider after further briefing is the extent to which the Corps should consider new information about the potential impacts of climate change on the project.
Klein v. United States Department of Energy, No. 13-1165 (6th Cir. May 21, 2014): added to the “Stop Government Action/NEPA” slide. The Sixth Circuit Court of Appeals reversed a district court ruling that plaintiffs lacked standing to challenge the U.S. Department of Energy (DOE) approval of a $100-million grant for a lumber-based ethanol plant in the Upper Peninsula of Michigan. The grant represented approximately 34% of the total cost of constructing the plant. The Sixth Circuit ruled that, contrary to the finding of the district court for the Western District of Michigan, plaintiffs had provided sufficient facts to support a reasonable inference that the plant would not be built without the DOE grant. They had therefore adequately established the redressability element of standing. On the merits, however, the Sixth Circuit affirmed the judgment in favor of the defendants, finding that DOE had complied with the requirements of the National Environmental Policy Act (NEPA). Among other impacts that DOE had adequately considered were the proposed plant’s greenhouse gas emissions. The environmental assessment concluded that the plant’s reductions in life-cycle greenhouse gas emissions would result in decreased net greenhouse gas emissions.
In re ExxonMobil Chemical Company (Baytown Olefins Plant), PSD Appeal No. 13-11 (EAB May 14, 2014): added to the “Stop Government Action/Project Challenges” slide. EPA’s Environmental Appeals Board (EAB) rejected a challenge by Sierra Club to EPA Region 6’s issuance of a permit for a new natural gas-fired ethylene production unit at ExxonMobil Chemical Company’s Baytown Olefins Plant in Harris County, Texas. Sierra Club contended that EPA had clearly erred or abused its discretion in its assessment of the viability of using carbon capture and sequestration (CCS) to reduce carbon dioxide emissions from the unit. EAB upheld Region 6’s best available control technology (BACT) analysis. EAB concluded that Region 6 had appropriately determined that the total cost of the CCS technology, which would have increased the project’s capital costs by 25%, made CCS economically unachievable, and that implementing CCS would have secondary environmental impacts such as increased emissions of nitrogen oxides and volatile organic compounds. EAB also said that the absence of comparable facilities justified the Region’s reliance on total cost information instead of on data showing the project’s cost-effectiveness per ton of carbon dioxide avoided. EAB also rejected Sierra Club’s arguments that Region 6 had not followed the methodology required in EPA’s Cost Control Manual and that Region 6 should have considered emissions streams from the project’s steam cracking furnaces (which produce a cleaner stream that would be less costly to capture) separately from emissions from the CCS system’s utility plant.
WildEarth Guardians v. McCarthy, No. 1:13-cv-03457 (D. Colo., consent decree filed Apr. 29, 2014; Federal Register notice May 13, 2014): added to the “Challenges to Coal-Fired Plants” slide. In a federal lawsuit challenging its failures to take action on the application for a Title V permit by a coal-fired power plant on the Uintah and Ouray reservation in northeastern Utah, EPA agreed to issue a final decision by August 29, 2014. A comment period on thedraft permit opened on May 1, 2014 with the publication of a notice. EPA announced the filing of the consent decreesettling the lawsuit on May 13. See also the discussion below of WildEarth Guardians’ lawsuit against the United States Bureau of Land Management (BLM) and other federal defendants in connection with the impacts of this power plants operations.
Energy and Environment Legal Institute v. Epel, No. 11-cv-00859-WJM-BNB (D. Colo. May 9, 2014;standing order May 1, 2014): added to the “Challenges to State Action” slide. The federal district court for the District of Colorado ruled on May 9 that the “Renewables Quota” of Colorado’s Renewable Energy Standard (RES) did not violate the dormant Commerce Clause. The Renewables Quota required that utilities obtain 30% of their energy from renewable sources by 2020. The judgment in favor of the defendants came eight days after the court ruled that the Energy and Environment Legal Institute—“a non-profit organization dedicated to the advancement of rational, free-market solutions to land, energy, and environmental challenges in the United States”—had standing to challenge the Renewables Quota, based on the lost sales and lost ability to compete of one of its members, a mining company that operated two coal mines in Wyoming. (The court concluded, however, that neither the organization nor one of its individual members had standing to challenge two ancillary provisions of the RES.) In its May 9 opinion, the court found that plaintiffs had not made any effort to show that the Renewables Quota discriminated against out-of-state interests on its face or in purpose or effect. Moreover, the court rejected plaintiffs’ contentions that the Renewables Quota improperly regulated wholly out-of-state commerce. The court noted that the RES only affected commerce when an out-of-state electricity generator “freely chooses to do business with a Colorado utility” and that the RES did not impose conditions on the importation of electricity. The court also found that plaintiffs had failed to establish that the RES burdened interstate commerce for the purpose of the Pike balancing test. Plaintiffs announced they would appeal the district court’s judgment to the Tenth Circuit Court of Appeals.
U.S. v. Miami-Dade County, Fla., No. 1:12-cv-24400-FAM (S.D. Fla., order denying motion to reopen May 8, 2014; order granting motion to enter consent decree Apr. 9, 2014): added to the “Adaptation” slide. The federal district court for the Southern District of Florida denied intervenor Biscayne Bay Waterkeeper’s motion to reopen the case, which was resolved by a consent decree between the federal and state governments and Miami-Dade County. The court agreed with the U.S. that the consent decree had resolved the Clean Water Act violations at issue in the case. Intervenors originally had charged that the improvements to the County’s water treatment plants and sewer system required by the consent decree did not adequately address future sea level rise. The final consent decreeincluded higher stipulated penalties for failures to submit timely deliverables and for occurrences of sanitary sewer overflows (SSOs). The court required the County to submit semiannual status reports on SSOs and on its progress in implementing the improvements required by the consent decree.
Monroe Energy, LLC v. Environmental Protection Agency, No. 13-1265 (D.C. Cir. May 6, 2014): added to the “Challenges to Federal Action” slide. The D.C. Circuit upheld EPA’s rule establishing the 2013 renewable fuel standards. In the final rule, which was issued months past the statutory deadline, EPA maintained the volumes for total renewable fuels and advanced biofuels established by the Energy Policy Act of 2005 as amended by the Energy Independence and Security Act of 2007. EPA reduced the statutory volume for cellulosic biofuel from 1.0 billion gallons to 6 million gallons. The D.C. Circuit rejected petitioner’s contentions that EPA had acted arbitrarily or unreasonably by not reducing the total renewable fuel quota despite having substantially reduced the volume for cellulosic biofuel and despite the constraints posed by the “E10 blendwall” created by the inability of U.S. vehicle engines to use gasoline consisting of more than 10% ethanol. The court also said that EPA’s failure to meet the statutory deadline for setting the RFS was not a basis for vacating the rule since obligated parties had been put on notice by the volumes set in the statute and EPA’s assertion in the proposed rule that it would not waive statutory volumes other than for cellulosic biofuel, and because EPA had extended the compliance deadline by four months.
NEW CASES, MOTIONS, AND NOTICES
WildEarth Guardians v. United States Bureau of Land Management, No. 14-cv-01452 (D. Colo., filed May 23, 2014): added to the “Stop Government Action/NEPA” slide. WildEarth Guardians filed a lawsuit in the federal district court for the District of Colorado challenging BLM’s approval of the Blue Mountain Coal Lease and the U.S. Office of Surface Mining’s and the Secretary of the Interior’s approval of a “mining plan” modification that authorized development of the coal lease. WildEarth Guardians alleged that the agencies’ issuance of a Finding of No Significant Impact violated NEPA because they failed to adequately address the air quality impacts of expanded mining and the air quality impacts of extending the life of operations at a coal-fired plant in Uintah County, Utah for which the mine was the sole source of fuel. (See above for a discussion of a settlement related to this power plant.) The allegations focused on local air pollution impacts, not the impacts of greenhouse gas emissions.
Center for Biological Diversity, Protest of BLM’s July 17, 2014 Oil and Gas Competitive Lease Sale and Environmental Assessment DOI-BLM-NV-B000-2014-0001-EA (May 12, 2014): added to the “Stop Government Action/NEPA” slide. The Center for Biological Diversity (CBD) submitted a formal protest to BLM’s Nevada office objecting to BLM’s plan to conduct an oil and gas lease sale in July 2014 for 102 parcels covering 174,021.36 acres. CBD asked BLM to cancel the lease sale and prepare a full environmental impact statement. CBD said BLM must reopen the decision-making process to address methane waste, water quality, air quality, sage grouse and other biological resources, and climate change impacts.
Letter to Securities and Exchange Commission from the Chesapeake Climate Action Network and Ruth McElroy Amundsen regarding Dominion Midstream Partners LP registration statement (May 6, 2014): added to the “Regulate Private Conduct” slide. The Chesapeake Climate Action Network and an individual shareholder in Dominion Resources, Inc. sent a letter to the U.S. Securities and Exchange Commission (SEC) asserting their belief that Dominion Midstream Partners LP, might have omitted or inadequately disclosed material information in a registration statement submitted to the SEC on March 28, 2014. The letter and the accompanying analysis identify the following areas as “potentially … characterized by lack of disclosure”: permitting and litigation delay risks for the company’s proposed liquefaction facility at its liquefied natural gas (LNG) terminal on the Chesapeake Bay in Maryland; environmental risks and impacts associated with the LNG facility, including water drawdown, air and greenhouse gas mitigation risks, and climate change impacts to the facility; and risks related to the company’s ability to generate stable and consistent cash flow such as permitting delays, the financial health of the parent company, and project cost overruns.
American Petroleum Institute v. EPA, No. 14-1048 (D.C. Cir., filed Apr. 3, 2014; statement of issues May 5, 2014; Carbon Sequestration Council v. EPA, No. 14-1046 (D.C. Cir., filed Apr. 2, 2014; statement of issuesMay 8, 2014) (consolidation order May 6, 2014): added to the “Challenges to Federal Action” slide. Two petitions were filed in the D.C. Circuit Court of Appeals seeking review of EPA’s final regulation under the Resource Conservation and Recovery Act (RCRA) that created a conditional exclusion for hazardous carbon dioxide streams from the definition of “hazardous waste,” provided that the streams meet certain conditions, including that they be captured from emission streams and be injected into Underground Injection Control Class VI wells for purposes of geologic sequestration. Petitioners argued that EPA improperly interpreted “solid waste” to include carbon dioxide as a supercritical fluid. API believed that this interpretation could be used to draw other supercritical fluids such as methane or propane into RCRA’s jurisdiction. The proceedings were consolidated on May 6, 2014.
Here are recent additions to the Non-U.S. Climate Litigation Chart.
Chicago Climate Exchange v. Bourse de Montreal (Canada, Trade-marks Opposition Board, [2014] CarswellNat 1045): The Chicago Climate Exchange opposed an application for the trademark of the Montreal Green Exchange, a green exchange for carbon trading and other environmental products and instruments. The Chicago Climate Exchange alleged that the name of the exchange would be confused with its registered trademarks, Montreal Climate Exchange and Marche Climatique de Montreal. Due to the similarity in the nature of services and the degree of resemblance between the marks, the court found in favor of the Chicago Climate Exchange and refused the application. —Added to “Suits against Corporations” slide.
Ioane Teitiota v. The Chief Executive of the Ministry of Business, Innovation and Employment (New Zealand, Court of Appeals of New Zealand [2014] NZCA 173): A Kiribati citizen appealed the denial of refugee status in the New Zealand Court of Appeals. The High Court had found that the impacts of climate change on Kirabatu did not qualify the appellant for refugee status because the applicant was not subjected to persecution required under the 1951 United Nations Convention relating to the Status of Refugees. In dismissing the application, the Court of Appeals noted the gravity of climate change but stated that the Refugee Convention did not appropriately address the issue. —Added to “Human Rights” slide.
