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@gmail.com.
HERE ARE THE ADDITIONS TO THE CLIMATE CASE CHART SINCE UPDATE # 114.
FEATURED CASE
Seventh and Second Circuits Upheld Illinois and New York Subsidies for Nuclear Generation
On September 13, 2018, the Seventh Circuit Court of Appeals upheld an Illinois law that established subsidies for some in-state nuclear generation facilities by providing them with “zero emission credits” (ZECs) that fossil fuel-fired power plants were required to purchase. The price of the credits was based on a social cost of carbon. The Seventh Circuit held that the Federal Power Act did not preempt the Illinois law because the ZEC program stayed within the scope of the state’s authority to regulate power-generating facilities and did not impinge on the Federal Energy Regulatory Commission’s (FERC’s) authority to regulate sales of electricity in interstate commerce (including in auctions conducted by regional organizations). The plaintiffs asserted that the ZEC system indirectly regulated such auctions because average auction prices were a component of the formula for determining the cost of a credit. The Seventh Circuit concluded, however, that because the ZEC system did not require that power be sold in an interstate auction, it was not preempted, even though the ZEC system would indirectly influence auction prices by increasing the quantity of power available for sale. In addition to the preemption question, the Seventh Circuit also briefly addressed the plaintiffs’ dormant Commerce Clause claims, writing that Congress’s provision that states may regulate local generation, combined with the “absence of overt discrimination” in the ZEC program, “defeats any constitutional challenge.” Electric Power Supply Association v. Star, No. 17-2445 (7th Cir. Sept. 13, 2018).
Two weeks later, the Second Circuit Court of Appeals affirmed the dismissal of a lawsuit challenging New York State’s ZEC program, which subsidizes qualifying nuclear power facilities. As in the Illinois program, the price of ZECs is based on the social cost of carbon. The Second Circuit concluded that the Federal Power Act did not preempt the ZEC program because the plaintiffs failed to allege “an impermissible ‘tether’” between the ZEC program and wholesale market participation. The Second Circuit found that the ZEC program did not set wholesale prices, but instead “regulates the environmental attributes of energy generation and in the process considers forecasts of wholesale pricing.” The Second Circuit also concluded that ZECs did not compel generators to make wholesale sales. In addition, the court rejected the argument that the “practical effect” of the ZEC program was to regulate wholesale prices, stating: “even though the ZEC program exerts downward pressure on wholesale electricity rates, that incidental effect is insufficient to state a claim for field preemption under the [Federal Power Act].” The court also rejected the plaintiffs’ attempts to distinguish ZECs from renewable energy credits, which FERC previously confirmed were within states’ jurisdiction. The Second Circuit also found that the plaintiffs failed to identify “clear damage to federal goals,” foreclosing their claim of conflict preemption. While the plaintiffs argued that the ZEC program was at odds with the FERC’s goal of promoting competition in the wholesale market from more efficient generators, the court said FERC acted “with the background assumption that the [Federal Power Act] establishes a dual regulatory system between the states and federal government and that the states engage in public policies that affect the wholesale markets.” Finally, the Second Circuit held that the plaintiffs lacked Article III standing for a dormant Commerce Clause claim. The court said the plaintiffs’ alleged injuries arose not from alleged discrimination against out-of-state entities, but from the plaintiffs’ use of fuels disfavored by New York. Coalition for Competitive Electricity v. Zibelman, No. 17-2654 (2d Cir. Sept. 27, 2018).
DECISIONS AND SETTLEMENTS
Ninth Circuit Upheld Oregon Clean Fuels Program
Over the dissent of one judge, the Ninth Circuit Court of Appeals affirmed the dismissal of a lawsuit challenging the Oregon Clean Fuels Program, which regulates production and sale of transportation fuels based on greenhouse gas emissions. The Ninth Circuit held that the Oregon program did not violate the dormant Commerce Clause and that it was not preempted by the Clean Air Act. With respect to the dormant Commerce Clause, the Ninth Circuit said its 2013 decision in Rocky Mountain Farmers Union v. Corey upholding California’s Low Carbon Fuel Standard (LCFS) “squarely controlled” on the issue of whether the Oregon program facially discriminated based on the state of origin. The Ninth Circuit concluded that, like the LCFS, the Oregon program distinguished among fuels based on lifecycle greenhouse gas emissions, not based on origin. The Ninth Circuit also upheld the district court’s finding that allegedly discriminatory statements by Oregon public officials did not undermine the Oregon program’s stated purposes of reducing Oregon’s greenhouse gas emissions. The Ninth Circuit also rejected the contentions that the Oregon program placed impermissible burdens on out-of-state fuels or provided impermissible benefits to in-state entities such as Oregon biofuel producers. Applying the Pike balancing test, the Ninth Circuit found that the complaint failed to plausibly allege that any burden on importers of out-of-state fuels was “clearly excessive” in light of the “substantial state interest” in mitigating greenhouse gas emissions. The Ninth Circuit also rejected a claim that the Oregon program regulated extraterritorially since, as with California’s LCFS in Rocky Mountain, the program applies only to fuels sold in, imported to, or exported from Oregon. With respect to preemption, the Ninth Circuit held that the U.S. Environmental Protection Agency’s exclusion of methane from the definition of volatile organic compounds did not constitute a finding pursuant to Section 211(c) of the Clean Air Act that regulation of methane was unnecessary. The exclusion therefore did not have a preemptive effect. In his dissent, Judge N. Randy Smith wrote that in his view the pleadings plausibly alleged that the Oregon program discriminated in practical effect and that it was plausible that there were nondiscriminatory means to advance Oregon’s interest in mitigating greenhouse gas emissions. American Fuel & Petrochemical Manufacturers v. O’Keeffe, No. 15-35834 (9th Cir. Sept. 7, 2018).
D.C. Circuit Denied Stay of Mountain Valley Pipeline; Challengers Filed Opening Brief
On August 30, 2018, the D.C. Circuit Court of Appeals denied motions to stay work on the Mountain Valley Pipeline, a gas pipeline extending 303.5 miles from West Virginia to Virginia. The D.C. Circuit said the petitioners had not satisfied the stringent requirements for a stay pending court review. On September 4, the petitioners filed a joint opening brief. Their arguments include that FERC failed to adequately analyze downstream greenhouse gas effects in its review of the project pursuant to the National Environmental Policy Act (NEPA) and that FERC’s refusal to weigh such impacts in its public interest determination violated the Natural Gas Act. The brief said FERC had estimated the downstream greenhouse gas emissions associated with burning 2.0 billion cubic feet of gas per day but had incorrectly concluded that downstream effects were outside the scope of its NEPA analysis and had refused to use the social cost of carbon to evaluate the downstream impacts. Appalachian Voices v. Federal Energy Regulatory Commission, No. 17-1271 (D.C. Cir. Sept. 4, 2018).
Federal Court Upheld Threatened Listing for Gunnison Sage-Grouse, Rejected Claim That Consideration of Climate Change Was Arbitrary and Capricious
A federal district in Colorado upheld the U.S. Fish and Wildlife Service’s (FWS) 2014 final rule listing the Gunnison sage-grouse as a threatened species and designating 1.4 million acres as critical habitat. The court rejected a procedural challenge to the listing as well as challenges to the merits of the listing. One issue on the merits was the FWS’s consideration of the threat of climate change to the Gunnison sage-grouse. The court found that the FWS’s “assessment of an increased threat from climate change and drought conditions was not arbitrary and capricious.” In addition, the court was not persuaded that the FWS unreasonably dismissed the effectiveness of existing regulatory mechanisms to protect the sage-grouse in the Gunnison Basin. The court noted that one of those mechanisms, a “Candidate Conservation Agreement with Assurances,” “does not take into account climate change, drought, disease, and small population issues—all of which reasonably support the threatened listing.” In addition, the court noted that a 2013 conservation agreement executed by the Colorado and Utah governors and counties in the sage-grouse’s range did not address the threat of climate change. Colorado v. U.S. Fish & Wildlife Service, No. 1:15-cv-00286 (D. Colo. Sept. 27, 2018).
Montana Federal Court Vacated Delisting of Greater Yellowstone Grizzly Bears
The federal district court for the District of Montana vacated the U.S. Fish and Wildlife Service final rule delisting the Greater Yellowstone Ecosystem population of grizzly bears and restored Endangered Species Act status to the Greater Yellowstone grizzlies. The court agreed with the plaintiffs that the FWS “entirely failed to consider an important aspect of the problem” because it did not analyze how delisting the Greater Yellowstone grizzlies would affect the remaining population in the lower 48 states. The court also found that the FWS threat analysis was arbitrary and capricious both because it “illegally negotiated away its obligation to apply the best available science” by dropping a “key commitment” to calibrate any population estimator used in the future to the estimator used to justify the delisting and also because the FWS illogically relied on studies to support its determination that the Greater Yellowstone grizzlies could remain independent and genetically self-sufficient when the studies concluded that introduction of new genetic materials was necessary to ensure the grizzlies’ long-term health. The court’s decision cited one of the studies as recommending measures to ensure cross-breeding between ecosystems “particularly given the unpredictability of future climate and habitat changes.” Crow Indian Tribe v. United States, No. 9:17-cv-00089 (D. Mont. Sept. 24, 2018).
California Federal Court Vacated Withdrawal of Proposed Listing of Pacific Fisher as Threatened
The federal district court for the Northern District of California vacated the FWS’s withdrawal in 2016 of a proposal to list the Pacific fisher as a threatened species under the Endangered Species Act. Although the plaintiffs cited climate change as a threat to the species in their complaint and motion papers, the court’s decision did not address climate change and remanded the matter to the FWS based on inadequate treatment of the threat of toxicants and on “flawed logic regarding population stability.” The court noted that it did not reach the plaintiffs’ “other criticisms regarding the Service’s treatment of other stressors” but said that “[t]his order, however, acknowledges that plaintiffs have raised plausible criticisms.” The court suggested that on remand the FWS “consider and address those further points made by plaintiffs as well.” Center for Biological Diversity v. U.S. Fish & Wildlife Service, No. 3:16-cv-06040 (N.D. Cal. Sept. 21, 2018).
After Rejecting Defendants’ Effort to Break Apart and Transfer Case Challenging Oil and Gas Lease Sale Procedures in Sage-Grouse Habitat, Idaho Federal Court Ordered BLM to Apply 2010 Procedures
On September 21, 2018, the federal district court for the District of Idaho issued a preliminary injunction in a lawsuit challenging federal actions that allegedly promote and expedite oil and gas leasing on public lands in violation of federal laws and in contravention of previously agreed-upon protections for the greater sage-grouse. The plaintiffs claimed, among other things, that the defendants violated NEPA by failing to address likely climate change impacts to the sage-grouse and its habitat. The plaintiffs’ motion for a preliminary injunction concerned only Instruction Memorandum (IM) 2018-034, which replaced an IM issued in 2010. The court agreed with the plaintiffs that IM 2018-034 was procedurally invalid and that it limited public notice of and involvement in decisions regarding oil and gas development and leasing in violation of NEPA and the Federal Land Policy and Management Act. The court also found that the plaintiffs suffered irreparable harm and that the balance of hardships and public interest favored an injunction requiring the U.S. Bureau of Land Management to follow certain provisions of the 2010 IM (in lieu of IM 2018-034 provisions) starting in the fourth quarter of 2018. The injunction applied only to oil and gas lease sales in the Greater Sage-Grouse Habitat Management Areas.
Earlier in September, the court denied defendants’ motion to sever and transfer the lawsuit. The court rejected the defendants’ arguments that the challenges to lease sales should be transferred to the district courts in which the lands subject to the lease sales are located. The court also was not persuaded that claims challenging IMs that apply nationwide should be transferred to the District of Montana where other challenges to the IMs were pending. Western Watersheds Project v. Zinke, No. 1:18-cv-00187 (D. Idaho Sept. 21 and Sept. 4, 2018).
Missouri Federal Court Denied California Local Governments’ Request for Stay Pending Appeal of Decision Enjoining Them from Pursuing Climate Claims Against Peabody Energy
The federal district court for the Eastern District of Missouri denied a motion by the County of San Mateo, the City of Imperial Beach, and the County of Marin (the appellants) for a stay pending appeal of a bankruptcy court’s decision enjoining them from pursuing their climate change tort law action against Peabody Energy Corporation (Peabody). The bankruptcy concluded that the appellants’ claims, which were filed in June 2017, were discharged in Peabody’s bankruptcy, from which it emerged in April 2017. In the appeal to the district court, the district court found that the appellants had not established either that they were likely to succeed on the merits or that they would suffer irreparable injury absent a stay pending appeal. County of San Mateo v. Peabody Energy Corp. (In re Peabody Energy Corp.), No. 4:17-cv-02886 (E.D. Mo. Sept. 20, 2018).
Federal Court Said Department of Energy’s Search for Records About Presidential Transition Team’s Climate Change Questions Was Not Adequate
The federal district court for the District of Columbia found that the U.S. Department of Energy (DOE) had not conducted an adequate search in response to Protect Democracy Project’s Freedom of Information Act request for records created between November 9, 2016 and February 15, 2017 regarding Presidential Transition Team questionnaires about climate change, including communications between DOE employees and specified individuals, including Donald Trump, Rick Perry (now the Secretary of Energy), and various Trump aides and officials. The court concluded, however, that DOE had conducted an adequate search for records created during that period regarding personnel changes, assignments, and policies. The court also found that DOE properly invoked Exemption 6 (concerning personal privacy) to withhold information and, except for three sets of documents, had properly invoked Exemption 5 (the deliberative process privilege). The court withheld judgment on the issue of whether Exemption 5 had been properly invoked for the remaining three sets of documents, which included DOE’s response to the transition team’s questionnaire, documents relating to Secretary Perry’s security clearance, and documents released after Protect Democracy Project filed its cross-motion for summary judgment. Protect Democracy Project v. U.S. Department of Energy, No. 17-cv-779 (D.D.C. Sept. 17, 2018).
Colorado Federal Court Rejected Challenge to 2013 BLM Plan for Oil Shale and Tar Sands Development
The federal district court for the District of Colorado rejected a challenge to 2013 amendments to the U.S. Bureau of Land Management’s (BLM) Resource Management Plan related to commercial leasing for oil shale and tar sands (OSTS). Environmental groups had asserted that the amendments’ approach to consultation under Section 7 of the Endangered Species Act (ESA) did not comply with the ESA and alleged, among other things, that OSTS development would increase greenhouse gas emissions, exacerbating the effects of climate change and adversely affecting the lands and waters of Colorado, Utah, and Wyoming. The court found that BLM’s phased approach to ESA consultation was within its authority and not unlawful. The court said its findings were limited to the “unique situation here, where it is unknown whether future OSTS leasing and development will ever be viable, let alone approved and permitted.” The court’s decision did not address the plaintiffs’ climate change-related allegations. Rocky Mountain Wild v. U.S. Bureau of Land Management, No. 1:13-cv-01988 (D. Colo. Sept. 10, 2018).
Earth First! Dismissed from Dakota Access Pipeline Developers’ RICO Lawsuit; Greenpeace Defendants Moved to Dismiss Amended Complaint
On August 22, 2018, the federal district court for the District of North Dakota dismissed the defendant “Earth First!” (EF) from a Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit brought by the developers of the Dakota Access Pipeline. The court dismissed for failure to effect service. The court had issued an order to show cause on July 23, 2018, requiring that the plaintiffs show cause as to why EF should not be dismissed. The court noted in the order to show cause that the plaintiffs had served Earth First! Journal (Journal), which claimed that EF was a movement not affiliated with Journal. On August 3, the court ruled that Journal was not a proper party to the suit and denied leave to conduct discovery on Journal. The court further ruled that the plaintiffs’ service of another nonparty on July 27 was “wholly insufficient to provide notice to an entity subject to suit that allegedly provided hundreds of thousands of dollars to fund an international terrorist, drug-smuggling RICO enterprise.” In its August 22 order, the court said the plaintiffs’ amended complaint (filed on August 6, 2018) did not establish that Earth First! was an entity subject to suit but granted the plaintiffs 30 days to identify John and Jane Doe Defendants who allegedly operated as associates of, or held themselves out as representatives, of EF. In a motion on September 4, the plaintiffs asked for limited discovery on John and Jane Does.
The plaintiffs filed their amended complaint after the court dismissed one defendant from the case on July 24 and then denied, on July 25, other defendants’ motions to dismiss without prejudice to renewal if the plaintiffs filed an amended complaint “containing concise and direct allegations” against each named defendant. In its July 25 order, the court warned the plaintiffs that they had failed to state plausible RICO claims against defendants Greenpeace International, Greenpeace Fund, Inc., and Greenpeace, Inc. and had failed to comply with basic rules of pleading, but that they had supplied sufficient information to permit amendment rather than dismissal. On September 4, the Greenpeace defendants filed new motions to dismiss, arguing failure to state plausible claims under RICO or for defamation, tortious interference, or criminal trespass. Energy Transfer Equity, LP v. Greenpeace International, No. 1:17-cv-00173 (D.N.D.).
Southern California Gas Co. to Mitigate Methane Emissions, Fund Environmental Projects to Resolve Governmental Claims Arising from Aliso Canyon Gas Leak
On August 8, 2018, the California attorney general, Los Angeles city and county officials, and Southern California Gas Company (SoCalGas) lodged a proposed consent decree in the California Superior Court that would resolve the governmental parties’ civil claims arising from the natural gas leak from SoCalGas’s Aliso Canyon storage facility in 2015. The consent decree requires SoCalGas to mitigate 109,000 tons of methane emissions in accordance with the terms of a Mitigation Agreement, which provides that the mitigation projects will at least initially be dairy-digester biomethane projects. The Mitigation Agreement was subject to 35 days of public comment. The proposed consent decree also requires payment of $119.5 million to fund the methane mitigation obligation, a mitigation reserve, civil penalties, supplemental environmental projects (SEPs), and the governmental plaintiffs’ costs. The approved SEPs include projects to improve air quality in public schools in environmental justice communities, enhanced air monitoring and reporting requirements in the area near the Aliso Canyon facility and in other areas in the county, mobile asthma clinics, electric school buses and infrastructure, a study of the long-term health effects of natural gas and its constituents, and lead-based paint abatement projects. In addition, SoCalGas must continue to conduct fenceline methane monitoring for at least eight years and comply with associated public disclosure, notice, and reporting requirements. In re Southern California Gas Leak Cases, Nos. BC602973, BC628120 (JCCP No. 4861) (Cal. Super. Ct. Aug. 8, 2018).
NEW CASES, MOTIONS, AND NOTICES
Exxon Sought Supreme Court Review of Massachusetts High Court’s Finding of Personal Jurisdiction in Massachusetts Attorney General’s Climate Change Investigation
Exxon Mobil Corporation (Exxon) filed a petition for writ of certiorari seeking review of the Massachusetts Supreme Judicial Court ruling that permitted Massachusetts Attorney General Maura Healey to proceed with her investigation of Exxon’s marketing and sales of fossil fuel products. Exxon asserted that the case—in which the attorney general made, according to Exxon, “sweeping investigatory requests … for decades’ worth of documents concerning petitioner’s knowledge of, and the relationship of petitioner’s products to, climate change”—involved “a breathtaking assertion of personal jurisdiction over a nonresident defendant.” Exxon argued that the Supreme Judicial Court had applied a “lax” but-for causation standard for determining whether Exxon’s contacts with the state were sufficient to establish specific jurisdiction and that this standard did not comport with due process. Exxon said the case presented “an ideal opportunity” to resolve an open question of the type of relationship that is required between a plaintiff’s claims and a defendant’s forum contacts to satisfy constitutional requirements. Exxon also said the case offered the opportunity “to address a subsidiary question that is vexing the lower courts: specifically whether an unexercised contractual power to be involved in another party’s potential contact with a forum State has any relevance to the specific-jurisdiction inquiry (and, if so, in what way).” Exxon further argued that the Massachusetts high court’s decision was difficult to reconcile with Supreme Court precedent and that the “disarray in the lower courts” provided a basis for Supreme Court review. Exxon Mobil Corp. v. Healey, No. 18-311 (U.S., filed Sept. 10, 2018).
Trial Set to Begin in Late October in Young People’s Climate Change Case Against Federal Government
On September 20, 2018, the federal district court for the District of Oregon issued a scheduling order setting trial dates for the climate change constitutional lawsuit brought by young people against the federal government. The order set the trial to begin on Monday, October 29. The trial is expected to last 8 to 12 weeks (at least through January with court closures for holidays). The federal government’s motions for summary judgment and judgment on the pleadings are still pending, as are motions by the plaintiffs concerning whether the court may take judicial notice of certain documents. [NOTE: The original version of this update indicated incorrectly that the trial was expected to last two weeks.]
On September 5, the federal government filed its response to the plaintiffs’ submission on August 24 of a notice of supplemental disputed facts in support of their opposition to the summary judgment motion. The plaintiffs’ notice was based on information in the federal government’s expert reports. The government urged the court not to consider the supplemental disputed facts, calling their submission “untimely and procedurally improper” and asserting that the plaintiffs’ claims “are legally deficient in ways that cannot be saved by any amount of factual development.” Also on September 5, the federal government filed a notice with the court to inform it of the dismissal of New York City’s lawsuit against oil and gas companies and of the dismissal of a lawsuit brought by 12 young people against the State of Washington. The defendants characterized both decisions as finding “that a judicial solution for claims arising out of climate change—like that requested in this case—is barred by the separation of powers.” The court also noted that Washington decision had found no constitutional right to a stable and healthy climate. On September 26, the defendants moved to amend the deadline for exchanging exhibit lists from October 1 to October 12. The defendants contended that the parties “will be in no position to provide a meaningful or complete exhibit list by October 1, 2018, particularly given the number of depositions, scheduled for the first two weeks in October and the need for counsel to prepare for those depositions.” The defendants indicated that the plaintiffs opposed the request. The court granted the defendants’ motion on September 28. Juliana v. United States, No. 6:15-cv-1517 (D. Or.).
Briefing Completed on Motions to Dismiss Lawsuits Challenging EPA Actions Rolling Back Vehicle Greenhouse Gas Emissions Standards
States, environmental groups, utilities, and a coalition of companies supporting the development of electric vehicle and other advanced transportation technologies told the D.C. Circuit Court of Appeals that their lawsuits challenging the U.S. Environmental Protection Agency’s (EPA’s) withdrawal of the Obama administration’s Mid-Term Evaluation of Greenhouse Gas Emissions Standards for Model Year 2022-2025 Light-Duty Vehicles was a final agency action and ripe for review. They therefore urged the D.C. Circuit to deny motions to dismiss their cases. Each set of petitioners also argued that they had standing to maintain their cases. Two amicus motions were also filed to oppose EPA’s action. The South Coast Air Quality Management District, which has jurisdiction over pollution from non-motor vehicle sources in the Los Angeles metropolitan area and surrounding counties, told the D.C. Circuit that its “time-locked plans” for meeting air quality standards depended “overtly and materially” on reductions associated with the greenhouse gas vehicular emissions standards at issue in the cases. In the second amicus motion, a coalition of local governments led by the National League of Cities contended that its members had “strong interest in maintaining and improving” the emissions standards at issue in the case, on which the local governments “rely heavily” to meet their own emissions reductions targets. Briefing on the motions to dismiss was completed on September 21 when EPA and auto industry trade groups filed replies, in which they asserted again that the challenged action was not a reviewable final action because EPA had not completed its decision-making process and the challenged action did not have legal consequences. California v. EPA, No. 18-1114 (D.C. Cir.).
Manufacturers Said D.C. Circuit’s 2017 Decision Vacating HFC Ban Required Same Result for Expansion of Ban
Mexichem Fluor, Inc. and Arkema Inc.—manufacturers of industrial chemicals, including hydrofluorocarbons (HFCs)—filed an opening brief in their challenge to a 2016 EPA rule that expanded a ban on using HFCs and HFC blends as replacements for ozone-depleting substances. In a 2015 rule, EPA previously had classified HFCs and HFC blends as unacceptable for 25 uses pursuant to the Significant New Alternatives Program (SNAP) under Clean Air Act Section 612; the 2016 rule extended the ban to other sectors. In 2017, the D.C. Circuit ruled that EPA acted outside its authority in promulgating the 2015 rule. In their brief concerning the 2016 rule, the manufacturers said the 2017 decision was controlling and that the 2016 rule was “invalid insofar as the ban applies to those who have already replaced ozone-depleting substances.” The manufacturers also argued that jurisdictional arguments raised by respondent-intervenors were foreclosed by stare decisisand collateral estoppel, and that, in any event, the arguments lacked merit. Mexichem Fluor, Inc. v. EPA, No. 17-1024 (D.C. Cir. Sept. 17, 2018).
Proceedings Filed in D.C. Circuit to Challenge FERC Approvals of PennEast Project
A number of petitions for review were filed in the D.C. Circuit Court of Appeals to challenge FERC’s issuance of a certificate of public convenience and necessity for the PennEast project and FERC’s denial of requests for rehearing. The PennEast project includes a 116-mile natural gas pipeline from Pennsylvania to New Jersey, three lateral pipelines, a compression station, and appurtenant aboveground facilities. Issues raised by the petitioners in the requests for rehearing included FERC’s consideration of greenhouse gas emissions and impacts on climate change. Delaware Riverkeeper Network v. Federal Energy Regulatory Commission, Nos. 18-1128 et al. (D.C. Cir.).
Oil and Gas Companies Argued for Rhode Island Climate Case to Stay in Federal Court
Oil and gas companies filed papers opposing Rhode Island’s motion to remand its lawsuit seeking to hold them liable for climate change impacts to Rhode Island state court. The companies argued that the case “raises federal claims that belong in federal court” and that Rhode Island “cannot avoid the comprehensive role federal law plays” through “selective pleading and strategic omission.” The companies asserted that the case “threatens to interfere with longstanding federal policies over matters of uniquely national importance, including energy policy, environmental protection, and foreign affairs.” They contested Rhode Island’s assertion that the requested remedies would redress only injuries within Rhode Island, arguing that Rhode Island sought to hold them liable for their “global conduct” and for harms that occurred all over the world and that had not relation to their conduct. The companies asserted a number of possible bases for federal jurisdiction. First, they argued that federal common law controls Rhode Island’s claims. Second, they argued that the claims arise under federal law because they necessarily raise a substantial and disputed federal issue because the nuisance claim “unavoidably second-guess the reasonableness of the balance struck by federal energy policy.” Third, they contended that the Clean Air Act and other federal statutes completely preempt Rhode Island’s claims. Fourth, they asserted that there is jurisdiction under “various jurisdiction-granting statutes and doctrines”: the Outer Continental Shelf Lands Act, the federal officer removal statute, the federal enclaves doctrine, the bankruptcy removal statute, and federal admiralty jurisdiction. Rhode Island v. Chevron Corp., No. 1:18-cv-00395 (D.R.I. Sept. 14, 2018).
King County Asked Washington Federal Court to Stay Climate Case Until Ninth Circuit Decides Oakland and San Francisco’s Appeal of Dismissal of Their Case
On September 13, 2018, King County filed a motion to stay proceedings in its climate change case against oil and gas companies until the Ninth Circuit decides the pending appeal by Oakland and San Francisco of the dismissal of their similar lawsuits. Three of the five defendants supported the stay request, while the other two objected. The objecting defendants argued that the stay could harm them by prolonging litigation that could be resolved on legal motions, that King County had not made a “clear case” that allowing the case to go forward would result in hardship or inequity, and that “orderly course of justice” did not support a stay since briefing in the Ninth Circuit was scheduled to continue through January 2019 and the stay could delay King County’s proceeding for a year or more. King County v. BP p.l.c., No. 2:18-cv-00758 (W.D. Wash.).
Baltimore Moved to Remand Its Climate Lawsuit Against Fossil Fuel Companies to State Court
On September 11, 2018, Baltimore moved to remand its climate change lawsuit against fossil fuel companies to Maryland state court. First, Baltimore contended that the defendants’ assertions that federal common law governed the City’s tort claims raised an ordinary preemption defense, which did not confer subject matter jurisdiction. Moreover, Baltimore argued, its claims were not required to be pleaded under federal common law and, in any event, fell outside the scope of federal common law. Baltimore further argued that the defendants’ other grounds for removal did not supply a basis for federal subject matter jurisdiction. In particular, Baltimore asserted that the complaint did not necessarily raise substantial, disputed federal questions; that the Clean Air Act did not preempt the City’s claims; that the Outer Continental Shelf Lands Act did not supply jurisdiction for the claims; that there was no federal enclave jurisdiction; that the federal officer removal statute did not apply because the defendants did not act under federal officers; that the bankruptcy removal provisions did not apply; and that admiralty jurisdiction did not provide a basis for removal. Mayor & City Council of Baltimore v. BP p.l.c., No. 1:18-cv-02357 (D. Md. Sept. 11, 2018).
Conservation Groups Challenged Oil and Gas Lease Sales in Colorado and Utah
Four conservation groups filed a lawsuit in federal court in Colorado challenging 121 oil and gas leases covering 117,720.59 acres in and around the Uinta Basin in northwestern Colorado and northeastern Utah. The plaintiffs asserted that BLM violated the Federal Land Policy and Management Act, NEPA, and the Administrative Procedure Act. The complaint alleged that additional oil and gas development would further impair air quality and adversely affect Dinosaur National Monument and also asserted that greenhouse gas emissions from oil and gas development threatened public health and the environment. With respect to climate change, the complaint alleged a failure by BLM to take a hard look at cumulative climate impacts “in conjunction with other past, present, and future lease sales in the Uinta Basin.” Rocky Mountain Wild v. Zinke, No. 1:18-cv-02468 (D. Colo., filed Sept. 27, 2018).
States Challenged BLM’s Repeal of Key Provisions of Waste Prevention Rule; Trade Groups Sought to Intervene to Defend Repeal
On the same day that BLM issued a final rule repealing key requirements of the Waste Prevention Rule, California and New Mexico filed a lawsuit in the federal district court for the Northern District of California challenging the repeal. The states alleged causes of action under the Administrative Procedure Act, the Mineral Leasing Act, and NEPA. They asserted that BLM failed to offer a reasoned explanation for reversing its previous determination that the Waste Prevention Rule was necessary to fulfill its statutory mandates and alleged in particular that the “interim domestic social cost of methane” metric used by BLM to justify the repeal was arbitrary and not based on best available science. The states also asserted that “perfunctory” conclusion that the repeal would not have significant environmental impacts violated NEPA. The states alleged that the repeal would likely result in a number of significant adverse impacts, including climate change harms. The Western Energy Alliance and Independent Petroleum Association of America moved to intervene. They argued that they were entitled to intervene as of right because they had legally protectable interests that the named defendants could not adequately protect. Alternatively, they argued for permissive intervention. After the final rule was published in the Federal Register, a number of environmental groups led by Sierra Club filed a separate lawsuit challenging the repeal. The groups asserted claims under the Mineral Leasing Act, the Federal Land Policy and Management Act, NEPA, and the Administrative Procedure Act. Their complaint alleged that BLM’s use of an interim social cost of methane excluded significant domestic and global impacts. The groups contend that an environmental impact statement is required because “extensive record evidence” shows the repeal will have “significant negative public health and climate impacts, and there is a high degree of controversy and uncertainty surrounding the use of the social cost of methane.” California v. Zinke, No. 3:18-cv-05712 (N.D. Cal., filed Sept. 18, 2018); Sierra Club v. Zinke, No. 3:18-cv-05984 (N.D. Cal., filed Sept. 28, 2018).
Center for Biological Diversity Filed FOIA Suit Seeking Federal Records on Aircraft Emissions Standards
The Center for Biological Diversity filed a Freedom of Information Act (FOIA) lawsuit against the U.S. Department of State, the Federal Aviation Administration, and EPA in federal court in the District of Columbia seeking to compel the agencies’ provision of documents related to U.S. aircraft emission standards and U.S. participation in the 2016 International Civil Aviation Organization (ICAO) carbon dioxide rulemaking process. The Center for Biological Diversity sought, among other documents, communications between aircraft manufacturers and airlines and U.S. officials. Center for Biological Diversity v. U.S. Department of State, No. 1:18-cv-02139 (D.D.C., filed Sept. 16, 2018).
Exxon Sought Reconsideration of Texas Federal Court’s Decision to Let Securities Fraud Case Proceed
Exxon Mobil Corporation filed a motion for reconsideration of a Texas federal district’s order that partially denied Exxon’s motion to dismiss a lawsuit brought by investors who alleged that Exxon and Exxon officials made material misstatements concerning the company’s use of proxy costs for carbon in business and investment decisions. Exxon argued that the court’s conclusion that the investors had adequately pleaded scienter was inconsistent with the Private Securities Litigation Reform Act of 1995 and Fifth Circuit precedents. Alternatively, Exxon requested that the court certify its order for interlocutory appeal. Ramirez v. Exxon Mobil Corp., No. 3:16-cv-03111 (N.D. Tex. Sept. 11, 2018).
Indian Tribes Filed Lawsuit Challenging Keystone XL Permit
The Rosebud Sioux Tribe and Fort Belknap Indian Community filed a lawsuit challenging the presidential permit for the Keystone XL Pipeline. The plaintiffs asserted claims under the Administrative Procedure Act, the National Environmental Policy Act, and the National Historic Preservation Act. Among other things, they alleged that the 2017 decision granting the permit lacked any analysis of the impacts the pipeline would have on climate change, foreign policy, national security, and the economy. They also alleged that the 2017 decision ignored or contradicted specific factual findings and analyses in then-Secretary of State John Kerry’s 2015 decision denying the permit. Rosebud Sioux Tribe v. U.S. Department of State, No. 4:18-cv-00118 (D. Mont., filed Sept. 10, 2018).
Environmental Groups Challenged TVA’s “Anti-Solar Rate Changes”
Five environmental groups filed a lawsuit in federal court in Alabama challenging the Tennessee Valley Authority’s (TVA’s) new rate structure, which the plaintiffs alleged would have the effect of “discouraging businesses and homeowners from investing in renewable energy and energy efficiency measures.” The plaintiffs alleged that the rate changes—which they referred to as the “Anti-Solar Rate Changes”—involved lowering energy rates for large customers, reducing the wholesale service energy rate, and lowering rates for customers who use the most electricity. The complaint cited TVA’s statements that without reductions in large companies’ electricity rates, the companies would have “increased incentives to pursue uneconomic DER [distributed energy resources]” such as solar. The plaintiffs asserted that TVA violated the National Environmental Policy Act and acted arbitrarily and capriciously because TVA’s environmental assessment had not “meaningfully” addressed the rate changes’ environmental impacts. The plaintiffs also charged that TVA finalized the rate changes before completing an update to its integrated resource plan (due to be completed in 2019), in which the plaintiffs alleged TVA would “for the first time” address availability and use of DER, the effects of power production on the environment (including climate change), emissions of greenhouse gases, and air quality. Center for Biological Diversity v. Tennessee Valley Authority, No. 3:18-cv-01446 (N.D. Ala., filed Sept. 6, 2018).
Columbia Riverkeeper Brought FOIA Lawsuit Seeking Department of Energy Documents Regarding Proposed Methanol Refinery
Columbia Riverkeeper filed a FOIA against the U.S. Department of the Energy (DOE) in the federal district court for Oregon seeking to compel production of records related to “greenhouse gas emissions, climate change, and federal financial assistance for a petrochemical manufacturing and export facility called the Kalama methanol refinery.” The plaintiff alleged that the refinery “would be among the worst causes of greenhouse gas pollution in Washington State.” The FOIA request sought communications between DOE and the company that proposed the refinery. Columbia Riverkeeper v. U.S. Department of Energy, No. 3:18-cv-01544 (D. Or., filed Aug. 22, 2018).
Lawsuit Filed to Challenge Denial of Water Quality Certification for Coal Export Terminal in Washington
A company seeking approvals to build a coal export terminal in Washington filed a lawsuit in state court challenging the Washington Department of Ecology’s (Ecology’s) denial of a Clean Water Act Section 401 water quality certification. The company alleged that Ecology improperly used Washington’s State Environmental Policy Act as the basis for denial. The company asserted claims under Washington’s Administrative Procedure Act and under the Washington and U.S. Constitutions (violations of due process and equal protection rights). The complaint alleged that the process had been “driven by political considerations” and that “coal … is out of political favor with some in Washington State, including Washington’s Governor, who has banked his political career on fighting climate change.” Millennium Bulk Terminals Longview, LLC v. Washington State Department of Ecology, No. 18-2-00994-08 (Wash. Super. Ct., filed Sept. 6, 2018).
Sierra Club Challenged San Diego County Approval of Developments, Alleging Failure to Ensure Mitigation of Greenhouse Gas Emissions
Sierra Club filed a lawsuit in California Superior Court against San Diego County charging that the County’s approvals of three residential developments did not require enforceable measures to mitigate the projects’ impacts on greenhouse gas emissions and climate as required by the California Environmental Quality Act. The petition alleged that the approval of the “three large residential development projects in the County’s rural back-country areas” would result in just under 4,000 new residential units and over 800,000 square feet of commercial office space. Sierra Club further alleged that the County allowed the projects’ impacts to be mitigated with off-site greenhouse gas emissions offsets “anywhere in the world” at the discretion of a County planning official. Sierra Club contended that allowing offsets outside San Diego County violated a mitigation measure adopted for the County’s general plan. Sierra Club also restated its challenge—previously made in separate lawsuits filed in March 2018—to the County’s Climate Action Plan, which Sierra Club alleges also did not satisfy the general plan’s mitigation requirements. Sierra Club v. County of San Diego, No. 37-2018-00043084-CU-TT-CTL (Cal. Super. Ct., filed Aug. 23, 2018).
HERE IS A RECENT ADDITION TO THE NON-U.S. CLIMATE LITIGATION CHART.
Environmental Groups Sued Ontario for Lack of Public Consultation on Regulations and Legislation that Would End Ontario’s Cap-and-Trade Program
Environmental groups filed suit against the Ontario government, alleging the government failed to meet legal requirements for public consultation on regulations that would end Ontario’s cap-and-trade program and a proposed bill that would undercut the province’s legislative regime for combatting climate change. Plaintiffs argue that both the regulations and the bill violate requirements under the Environmental Bill of Rights (EBR) for public participation in the development of environmentally significant regulations and legislation.
The lawsuit concerns Ontario Regulation 386/18 filed on July 3, 2018 by the Minister of Environment, Conservation and Parks. The government did not conduct a public consultation process and filed a claim that the 2018 election was “substantially equivalent” to the 30-day consultation process required by law. Plaintiffs argue that the government was still required to undertake public consultation for the regulation under the EBR and that the regulation is ultra vires because it contradicts the purpose of the “Climate Change Mitigation and Low-Carbon Economy Act,” the enabling act for this regulation. The lawsuit additionally concerns “Bill 4, the Cap and Trade Cancellation Act, 2018” filed on July 25, 2018. This bill would repeal the “Climate Change Mitigation and Low-carbon Economy Act, 2016,” which includes greenhouse gas emission reduction targets. Plaintiffs argue that this bill would have a significant environmental impact because it would repeal existing greenhouse gas emissions targets without establishing new targets. If there is a significant environmental impact, then the government must undertake the mandatory notice and comment process required by the EBR.
Plaintiffs seek declaratory relief and ask the Court to quash the regulations. The case was tentatively set for expedited hearing on September 21, 2018. Greenpeace Canada v. Minister of the Environment, Conservation, and Parks, No. 575/18 (Ont. Sup. Ct. J., filed Sept. 11, 2018).
