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 U.S. Climate Case Chart (Update #81).
FEATURED CASE
California Supreme Court Said Agency Had Not Provided Adequate Rationale for Determination That Development’s Greenhouse Gas Impacts Would Be Insignificant
The California Supreme Court ruled that consistency with statewide emission reduction goals was a permissible criterion for determining the significance of a project’s greenhouse gas emissions in a California Environmental Quality Act (CEQA) review, but found that the California Department of Fish and Wildlife had not supported its conclusion that a 12,000-acre development’s greenhouse gas emissions would not have significant impacts. The court, reversing a decision by the Court of Appeal upholding the agency’s review, also ruled against the agency on other aspects of its CEQA review. The court remanded to the Court of Appeal for a determination of the parameters of a writ of mandate to be issued. One justice dissented as to the conclusion that the agency had not supported its determination that there would not be significant greenhouse gas emissions impacts, while another justice dissented from the entire opinion. Center for Biological Diversity v. California Department of Fish and Wildlife, No. S217763 (Cal. Nov. 30, 2015): added to the “State NEPAs” slide.
DECISIONS AND SETTLEMENTS
Fourth Circuit Blocked Deposition of EPA Administrator in Coal Companies’ Jobs Study Lawsuit
On November 25, 2015, the Fourth Circuit Court of Appeals granted a petition for writ of mandamus by EPA Administrator Gina McCarthy to preclude Murray Energy Corporation (Murray Energy) from deposing her in its lawsuit seeking to compel EPA to undertake an evaluation of the Clean Air Act’s impacts on employment pursuant to Section 321(a) of the Clean Air Act. The Fourth Circuit indicated that a “reasoned exposition” of the basis for its order would follow “shortly.” Earlier in November, the federal district court for the Northern District of West Virginia denied EPA’s motions for a protective order and to stay McCarthy’s deposition. The district court found that there were extraordinary circumstances justifying deposition of a high-ranking official because of the “divergent positions” taken by EPA with respect to whether it had undertaken the employment study pursuant to Section 321(a) of the Clean Air Act. The court found that McCarthy had personal knowledge of the facts and that her “apparent refusal” to comply with Section 321(a) provided “sufficient prima facie evidence of wrongdoing such that the plaintiffs will be able to probe her deliberative processes.” The district court also found that there was no viable alternative to the deposition of McCarthy. EPA sought the writ of mandamusprior to the district court’s ruling on the motions, and supplemented its arguments in support of granting the writ after the district court denied EPA’s motions. In re McCarthy, No. 15-2390 (4th Cir. Nov. 25, 2015); Murray Energy Corp. v. McCarthy, No. 5:14-cv-00039 (N.D. W. Va. Nov. 12, 2015): added to the “Challenges to Federal Action” slide.
D.C. Circuit Dismissed Challenge to EPA Grant of Waiver for California Tractor Trailer Regulations
The D.C. Circuit Court of Appeals dismissed a petition challenging EPA’s granting to California of a waiver of federal preemption related to the State’s tractor trailer emissions regulations. The court concluded that it lacked jurisdiction to consider the petition because the petitioner raised only a constitutional claim and did not address whether EPA’s action was arbitrary or capricious. The court, which said the issues did not warrant a published opinion, said it was not determining whether it could decide a constitutional claim brought within a broader challenge to an EPA waiver determination. Owner-Operator Independent Drivers Association, Inc. v. EPA, No. 14-1192 (D.C. Cir. Nov. 24, 2015): added to the “Challenges to Federal Action” slide.
Colorado Supreme Court Denied Governor’s Petition in Dispute with Attorney General over Clean Power Plan Challenge
The Colorado Supreme Court denied Governor John W. Hickenlooper’s petition for a ruling requiring Attorney General Cynthia H. Coffman to show cause regarding her authority to sue the federal government on behalf of the State without authorization from the governor. The governor filed the petition after the attorney general joined West Virginia and other states in their D.C. Circuit challenge to the Clean Power Plan. The governor and attorney general are elected separately. Governor Hickenlooper is a Democrat; Attorney General Coffman is a Republican. In its one-page order denying the governor’s petition, the court said that the governor had an “adequate alternative remedy.” The granting of relief in an original proceeding in the Colorado Supreme Court requires that the case involve an extraordinary matter of public importance and that there be no adequate conventional appellate remedies. The governor had asked the court to declare that the governor has ultimate authority to determine whether the State will sue the federal government and that the attorney general must withdraw the State from the Clean Power Plan lawsuit. The petition also said that the attorney general’s challenges of the federal “waters of the United States” rule and federal regulations regarding hydraulic fracturing on federal and tribal lands should be withdrawn. The petition asserted that the attorney general was without statutory, common law, or other authority to sue the federal government, that the lawsuits challenging the federal environmental laws were at odds with the attorney general’s statutory obligations to be legal counsel to the State, and that the actions violated the Colorado Constitution, which the petition said grants the governor power to set executive department policy. On November 20, the attorney general responded, arguing that the Colorado Supreme Court should not invoke its “extraordinary” original jurisdiction to resolve “a political disagreement between state officials of different parties.” The attorney general contended that the governor was seeking to re-litigate issues that the court resolved 12 years earlier in a case where the attorney general sued to invalidate an act of the Colorado legislature. In that case, the attorney general said, the court ruled that the attorney general could independently seek judicial review on behalf of the people of the State. Hickenlooper v. Coffman, No. 2015 SA 296 (Colo., petition filed Nov. 4, 2015, attorney general’s brief Nov. 20, 2015, orderDec. 3, 2015): added to the “Challenges to Federal Action/Clean Power Plan” slide.
Washington Court Said State’s Ongoing Greenhouse Gas Rulemaking Was Fulfilling Its Mandate to Protect Air Quality and Public Trust Resources
The Washington Superior Court issued a decision in which it affirmed that climate change affects public trust resources in the state, but ultimately held that the state was fulfilling its public trust obligations because it was engaged in rulemaking to establish more comprehensive greenhouse gas standards. The court said that Washington’s current regulatory regime, which requires technological controls for a small number of sources but does not address greenhouse gas emissions from transportation, would not fulfill its statutory mandate under state air laws, a mandate that the court said must be understood in the context of the Washington State Constitution and the public trust doctrine. The court did not expand the definition of “public trust resources” protected under the Washington State Constitution to encompass the atmosphere. Instead, the court explained that climate change poses a threat to the state’s navigable waters, a traditional public trust resource that the state has an obligation to protect from harm. The court concluded that the State was not acting arbitrarily and capriciously because it had commenced a rulemaking process, at the direction of the governor, to set a regulatory cap on greenhouse gas emissions. Foster v. Washington Department of Ecology, No. 14-2-25295-1 (Wash. Super. Ct. Nov. 19, 2015): added to the “Common Law Claims” slide.
California Court of Appeal Said State Lands Commission Had to Consider Whether Sand Mining in San Francisco Bay Was Appropriate Use of Public Trust Resource, But Upheld CEQA Review
The California Court of Appeal ruled that the California State Lands Commission had complied with the California Environmental Quality Act (CEQA) when it authorized continued dredge mining of sand from sovereign lands under the San Francisco Bay, but remanded to the commission for consideration of whether sand mining leases were a proper use of public trust property. The court’s analysis of CEQA compliance did not address the environmental impact report’s (EIR’s) consideration of greenhouse gas emissions, but the court noted that the final EIR identified the selected alternative as environmentally preferable in part because not continuing the dredging likely would require the Bay Area construction industry to obtain sand from more distant locations, which would lead to increased air emissions, including greenhouse gas emissions. San Francisco Baykeeper v. California State Lands Commission, No. A142449 (Cal. Ct. App. Nov. 18, 2015): added to the “State NEPAs” slide.
California Appellate Court Said New Environmental Review Was Required for Affordable Housing Development Due to Deficient Analysis of Greenhouse Gas Emissions
In an unpublished opinion, the California Court of Appeal reversed a trial court decision that upheld a negative declaration prepared pursuant to the California Environmental Quality Act (CEQA) for the Highland Park Transit Village Project in Los Angeles, a residential development composed of 20 condominiums and a 50-unit building for affordable housing. The appellate court found that the initial study prepared by the City of Los Angeles was inadequate because its discussion of greenhouse gas emissions did not comply with CEQA guidelines. The appellate court said that the study made no attempt to quantify greenhouse gas emissions, did not include qualitative analysis or performance-based standards, and did not support the effectiveness of a mitigation measure that required used of construction materials that contained no, or low levels of, volatile organic compounds. Friends of Highland Park v. City of Los Angeles, No. B261866 (Cal. Ct. App. Nov. 4, 2015): added to the “State NEPAs” slide.
New York Attorney General Settled with Peabody Energy After Investigation of Company’s Disclosures of Climate Policy Risks
On November 8, Peabody Energy Corporation reached a settlement with the New York State Attorney General’s Office (NYAG) in which the company agreed to revise its financial disclosures to reflect the potential impact of climate change regulations on its future business. The settlement followed an investigation by the NYAG concerning Peabody’s disclosure of financial risks associated with climate change policies in filings to the Securities and Exchange Commission (SEC). The NYAG found—and Peabody neither admitted nor denied—that Peabody had repeatedly denied its ability to reasonably predict the potential impacts of climate change policies on future operations, financial conditions, and cash flows, while at the same time making market projections about the impact of future climate change policies, some of which concluded that regulatory actions could have a severe negative impact on Peabody’s future financial condition. The NYAG also found that Peabody misrepresented findings and projections of the International Energy Agency regarding global coal demand in SEC filings and in communications to the investment community and general public. The NYAG concluded that Peabody had violated New York’s Martin Act, which forbids financial fraud. In the assurance of discontinuance of the investigation, Peabody agreed to add specific language on climate policy risks in its next quarterly report and to acknowledge potential effects of climate regulation on demand for Peabody’s products and securities. In re Peabody Energy Corp., Assurance No. 15-242 (N.Y. State Att’y Gen. Nov. 8, 2015): added to the “Regulate Private Conduct” slide.
NEW CASES, MOTIONS, AND NOTICES
Additional Parties Joined Clean Power Plan Litigation; EPA Filed Opposition to Stay
As of December 4, additional petitions challenging the final Clean Power Plan rule had been filed, bringing the total number of petitions challenging EPA’s carbon dioxide emission standards for existing power plants to 28 and the total number of states challenging the rule to 27. All of the petitions have been consolidated under the captionWest Virginia v. EPA. On December 3, 2015, EPA filed its brief opposing motions to stay the rule. EPA said that the petitioners were unlikely to succeed on the merits, arguing that its carbon dioxide emissions guidelines were within its authority and that it had not impinged on the regulatory turf of other federal agencies or the states. In addition, EPA said that neither the states nor the industry petitioners had shown a likelihood of irreparable injury, and that a stay would not be in the public interest because climate change was already affecting the national public health, welfare, and environment and because grid reliability and electricity rates were not threatened by the rule. A group of 18 states, joined by the District of Columbia and six municipalities, have moved to intervene on behalf of EPA, along with a number of other parties, including owners, developers, and operators of power plants; the municipally-owned utilities of Austin and Seattle; and Pacific Gas and Electric Company, a utility that provides electricity and gas to northern and central California. In addition, two former EPA administrators—William D. Ruckelshaus, EPA’s first and fifth administrator, and William K. Reilly, who led the agency during President George H.W. Bush’s administration—sought to participate on EPA’s behalf as amici curiae. Additional parties have also asked to intervene on behalf of the petitioners challenging the Clean Power Plan rule. On November 30, the D.C. Circuit extended the deadline for filing initial submissions and procedural motions fromNovember 30 to December 18. The deadline for dispositive motions was extended to December 28. Additional petitions were also filed seeking review of EPA’s carbon dioxide standards for new and modified power plants. The new petitioners, whose proceedings were consolidated with the one filed by North Dakota, included the coal company Murray Energy Corporation, the nonprofit group Energy & Environmental Legal Institute, and 23 states led by West Virginia (but not including Colorado, which had joined the West Virginia coalition in the challenge to the Clean Power Plan rule). Sixteen states and the District of Columbia and New York City moved to intervene on behalf of EPA in the challenge to the New Source Performance Standards. Links to all of these filings are available on the climate litigation chart. West Virginia v. EPA, Nos. 15-1363 et al. (D.C. Cir.); North Dakota v. EPA, Nos. 15-1381 et al. (D.C. Cir.): added to the “Challenges to Federal Action/Clean Power Plan” slide.
Group Asked Supreme Court to Require More EPA Rulemaking Post-UARG v. EPA
The Energy-Intensive Manufacturers Working Group on Greenhouse Gas Regulation (Group) filed a petition seeking Supreme Court review of the D.C. Circuit’s decision on remand from the Supreme Court’s decision in Utility Air Regulatory Group v. EPA. In April 2015, the D.C. Circuit issued an order governing further proceedings in which it accepted EPA’s view that UARG v. EPA did not require EPA to start from scratch to establish a greenhouse gas permitting regime for stationary sources. The D.C. Circuit said that EPA should rescind its regulations requiring Prevention of Significant Deterioration (PSD) or Title V permits solely based on a source’s greenhouse gas emissions and that the agency should “consider whether any further revisions to its regulations are appropriate in light of UARG v. EPA.” In its petition for a writ of certiorari, the Energy-Intensive Manufacturers Working Group argued that EPA should be required to conduct new rulemaking if it wants to regulate greenhouse emissions from “anyway” sources (i.e., sources that meet PSD and Title V emissions thresholds for other air pollutants) and that the D.C. Circuit should have vacated the existing regulations. Energy-Intensive Manufacturers Working Group on Greenhouse Gas Regulation v. EPA, No. 15-637 (U.S., filed Nov. 5, 2015): added to the “Challenges to Federal Action/Clean Air Act” slide.
Group Alleged Los Angeles Failed to Comply with CEQA in Agreement to Open LAX to “Transportation Network Companies”
An organization commenced a lawsuit challenging a licensing agreement approved by the City of Los Angeles that would allow the manager of the Los Angeles International Airport (LAX) to grant “Transportation Network Companies” such as Uber, Sidecar, and Lyft permits to conduct operations at LAX. The organization alleged that the City had violated CEQA by improperly using categorical exemptions to avoid environmental review. The organization said the categorical exemptions were not appropriate because the action would result in an increase in the use of vehicles not subject to clean fleet vehicle rules. Among the potential impacts alleged by the organization was a substantial increase in carbon monoxide emissions; the petition cited carbon monoxide’s health effects, but also its “important indirect effects on global warming” due to its reaction in the atmosphere with hydroxyl radicals that would otherwise reduce the lifetimes of strong greenhouse gases such as methane. Alliance for a Regional Solution to Airport Congestion v. City of Los Angeles, No. BS158633 (Cal. Super. Ct. filed Nov. 2, 2015): added to the “State NEPAs” slide.
Ethanol Producer Challenged California’s Readopted Low Carbon Fuel Standard
An ethanol producer and a California resident filed a lawsuit in California Superior Court challenging the California Air Resources Board’s (CARB’s) re-adopted low carbon fuel standard (LCFS) regulation and related alternative diesel fuel regulations. The petitioners alleged that CARB failed to comply with its obligations under CEQA or with the terms of a peremptory writ of mandate issued by the California Superior Court in 2014 that ordered CARB to consider its 2009 LCFS regulation’s potential adverse environmental effects of emissions of nitrogen oxides. The petitioners asserted a number of substantive CEQA violations. The petitioners also contended that CARB had failed to respond adequately to numerous environmental comments or to maintain a public rulemaking file, and that CARB had not complied with California’s Global Warming Solutions Act of 2006. POET, LLC v. California Air Resources Board, No. 15 CECG03380 (Cal. Super. Ct., filed Oct. 30, 2015): added to the “Challenges to State Action” slide.
New York Attorney General Issued Subpoena to Exxon Mobil Regarding Climate Disclosures
On November 5, 2015, Exxon Mobil Corporation (Exxon) confirmed that it had received a subpoena from the New York State Attorney General’s Office related to the company’s statements to investors and its board of directors regarding climate change risks and their consistency with the company’s internal research. The subpoena reportedly seeks extensive financial records, emails, and other documents covering a 40-year period as part of an investigation that began a year earlier. The investigation is being conducted under the State’s Martin Act, which forbids financial fraud and gives the State broad investigative powers. The investigation is also reported to be looking into whether Exxon violated state consumer protection laws. The subpoena itself is not publicly available, but reports on the subpoena are available in the New York Times, Bloomberg Business, andInsideClimate News.
