MacClarence v. EPA

Mar 4: In the U.S. Court of Appeals, Ninth Circuit, Case No. 07-72756. Bill MacClarence petitioned the court for a review of an order the U.S. EPA Administrator denying his request that the Agency object to the issuance of a Clean

Air Act Title V permit for pollutant-emitting activities at Gathering Center #1 (GC 1), an oil and gas processing facility in Prudhoe Bay. The Alaska Department of Environmental Conservation's (ADEC) granted the permit to British Petroleum Exploration (Alaska), Inc.'s (BP), which owns GC 1. The Appeals Court said that because the Administrator's denial of MacClarence's request "was not arbitrary or capricious, we deny the petition."

 

    By way of background, the Prudhoe Bay Unit (PBU) is located on the North Slope of Alaska and extends over 300 square miles. It consists of a series of oil and gas facilities, including thirty-eight drill sites or "well pads" and six production centers, as well as support facilities for PBU workers. GC 1 is one of the six production facilities at the PBU. BP owns approximately 26.35% to 50.7% of the facilities at the PBU, including GC 1, and operates all of the PBU facilities pursuant to an agreement with the other owners. The PBU facilities are engaged in a continuum of oil and gas refining activities, from drilling to sale. Well pads in the PBU pump "three-phase" crude oil from the tundra beneath the PBU facilities. This oil is transferred to the production centers, including GC 1, where it is separated into processed crude oil, water, and hydrocarbon gases. The processed crude oil is pumped from the production centers to the Trans-Alaska Pipeline for sale, while other facilities at the PBU dispose of or re-inject the by-products of the production process.

 

    MacClarence argues that the permit did not comply with the CAA because ADEC, in the final draft permit for GC 1, had not properly "aggregated" stationary sources of air pollution in the PBU. The Appeals Court indicates, "As the record for this case reveals, the aggregation of pollutant-emitting activities for the purposes of designating a "major source" or "major stationary source" is not a clear-cut task. Under the governing regulations, however, determinations regarding 'major sources' for purposes of issuing Title V permits and 'major stationary sources' for purposes of meeting PSD requirements involve the same analysis; the aggregated sources must belong to the same industrial grouping, be located on continuous or adjacent properties, and be under common control."

 

    The Appeals Court says in its ruling that "we do not decide whether MacClarence's substantive argument -- that the CAA requires all pollutant-emitting sources in the PBU to be aggregated for purposes of Title V and other substantive CAA provisions -- is correct. Rather, we consider only whether the EPA Administrator erred in determining that MacClarence failed to demonstrate, pursuant to 42 U.S.C. § 7661d(b)(2), that the final Title V permit for GC 1 did not comply with the CAA.

 

    The Appeals Court indicates that, in denying MacClarence's request, the Administrator reasoned that MacClarence (1) "failed to provide adequate information to support his claim that the entire PBU should be aggregated," and (2) "failed to demonstrate that the failure to aggregate all facilities within the PBU has led to a deficiency in the content of the permit." Therefore, the Appeals Court rules, "Because we conclude that we may properly uphold the Administrator's denial of MacClarence's petition on the basis of the first ground, we need not reach the second. . . the Administrator's conclusion that MacClarence "failed to provide adequate information to support his claim that the entire PBU should be aggregated" was not arbitrary or capricious. . .

 

    "Therefore, we conclude that the Administrator's determination that MacClarence did not demonstrate that the entire PBU should be aggregated did not constitute an impermissible interpretation of MacClarence's burden under 42 U.S.C. § 7661d(b)(2), to 'demonstrate' that ADEC's final Title V permit for BP's GC 1 did not comply with the CAA, nor was it arbitrary or capricious."

 

    Access the complete opinion (click here).

AES Sparrows Point LNG, LLC v. Wilson (Maryland)

Dec 22: In the U.S. Court of Appeals, Fourth Circuit, Case No. 09-1539. The case involves a petition pursuant to the Natural Gas Act, by AES Sparrows Point LNG, LLC and Mid-Atlantic Express Holdings, LLC (collectively AES) to review the State of Maryland Department of the Environment’s denial of a request for water quality certification pursuant to § 401(a)(1) of the Clean Water Act, with respect to a proposed large-scale liquefied natural gas marine import terminal and pipeline project.

The proposal by AES is to construct and operate a liquefied natural gas (LNG) marine import terminal at Sparrows Point (a heavily industrialized area adjacent to Baltimore Harbor) and an eighty-eight-mile pipeline connecting the terminal to three interstate natural gas pipelines in Eagle, Pennsylvania.

The Appeals Court said in conclusion, "we: (1) hold that Maryland waived any potential claim of sovereign immunity in connection with the present petition for review by expressly consenting to defending, in federal court, its decision to deny AES’s Request for § 401(a)(1) Water Quality Certification; (2) hold that AES has failed to establish any basis for us to disturb the Corps’ determination that Maryland had not waived its right to grant or deny AES’s § 401(a)(1) Certification Request; and (3) deny AES’s petition for review of Maryland’s denial of its§ 401(a)(1) Certification Request on the merits." One of the Judges issued a separate concurring opinion.

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California Energy Commission v. Department of Energy

Oct 28: In the U.S. Court of Appeals, Ninth Circuit, Case No. 07-71576. The California Energy Commission (CEC) petitions for review of an order of the U.S. Department of Energy (DOE) denying CEC’s request for a waiver of preemption under the Energy Policy and Conservation Act (EPCA). The CEC sought the waiver in order to establish water efficiency standards for residential clothes washers, as set forth in its state regulations. To obtain such a waiver, CEC was required to show by a preponderance of the evidence that the state regulation was “needed to meet unusual and compelling State or local . . . water interests.”

DOE rejected the CEC’s petition for three separate reasons, but asserts that “each [of the reasons] flowed from CEC’s failure to provide adequate information to DOE to allow the federal agency to make an informed decision.” The DOE also challenged the court’s jurisdiction under the EPCA to review the denial of the waiver, raising an issue of first impression in the Ninth Circuit.

The Appeals Court said, "We hold that this court has jurisdiction under the EPCA. Because the DOE’s stated justifications demonstrate an arbitrary and capricious failure meaningfully to address the CEC’s application for a waiver, we reverse the
DOE’s ruling and remand for further proceedings."

The Appeals Court ruled further, "The CEC has requested that this Court order the DOE to grant the CEC’s waiver petition. However, this Court’s appropriate role is not to engage in the underlying analysis to determine whether the statutory criteria are met, even if the CEC might have supplied the DOE with sufficient information to do so. . . Considering the significant number of
issues left for resolution, many of which require factual findings in the DOE’s area of expertise, we decline to order a waiver on the present record. We reverse the challenged order of the DOE and remand for further proceedings consistent with this opinion."

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Nkihtaqmikon v. Imson

Oct 28: In the U.S Court of Appeals, First Circuit, Case No. 08-2122. The appeal is the second in continuing litigation by a group of members of the Passamaquoddy Tribe called Nulankeyutmonen Nkihtaqmikon (NN) -- the phrase means "We Protect the Homeland," -- to challenge a Bureau of Indian Affairs (BIA) decision which approved a lease of a plot of Passamaquoddy land for the construction and operation of a liquefied natural gas (LNG) facility, contingent on Federal regulatory approval being obtained from the Federal Energy Regulatory Commission (FERC).

Based on a previous ruling by the Appeals Court in this case that the "exhaustion of agency remedies was 'mandatory' under governing precedent," the district court on remand dismissed the case -- leaving NN to pursue its internal Interior Department appeals before resuming (if necessary) litigation in the district court.

As stated by the Appeals Court, NN's main argument against the prior decision is that "unless a statute requires exhaustion, judicial review of agency action under the APA, applicable where no other statutory channel of review is provided, does not require exhaustion unless there is both internal agency review available and the final agency action is rendered inoperative during such review."

The Appeals Court rules that the NN "attack is foreclosed by our mandate unless our earlier decision was plainly wrong and following it would cause a serious injustice. Neither condition has been satisfied. . . None of these developments affects our analysis in the present appeal. The district court's judgment is affirmed."

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Orange County Water District v. Unocal Corp

Oct 1: In the U.S. Court of Appeals, Second Circuit, Case No. 07-5724. In this case involving the chemical gasoline additive methyl tertiary butyl ether (MTBE) and including major international oil and chemical companies as Defendants, Orange County Water District petitions for a writ of mandamus are denied by the Appeals Court. The County's petitions challenged a November 7, 2007 order of the United States District Court for the Southern District of New York which denied a motion to remand to state court. The Appeals Court said in its denial, "We hold that our prior opinion in this multi-district litigation did not preclude the District Court’s conclusion that petitioners failed to file a timely motion for remand ... because the purportedly erroneous removal under. . . did not implicate the District Court’s subject matter jurisdiction. Furthermore, we conclude that any challenge to the District Court’s subject matter jurisdiction is best addressed on direct appeal, rather than by a writ of mandamus."

The Appeals Court said the question presented is whether a district court may retain jurisdiction when a case was improperly removed to Federal court. Specifically, the Appeals Court ruled as to whether improper removal under the bankruptcy removal statute requires subsequent remand to state court.

By way of background and summary the Appeals Court explains, "The Orange County Water District (OCWD) petitions for a writ of mandamus challenging a November 7, 2007 order of the United States District Court for the Southern District of New York (Shira A. Scheindlin, Judge), denying OCWD’s motion to remand the case from the Southern District of New York to California state court. OCWD argues that this Court’s decision in In re MTBE Prods. Liab. Litig., 488 F.3d 112 (2d Cir. 2007) (MTBE) -- which involved other parties in this multi-district litigation -- required the District Court to remand OCWD’s action. Specifically, OCWD contends as follows: (1) this Court’s opinion in MTBE requires that the District Court find that OCWD asserted a timely objection under 28 U.S.C. § 1447(c) to the improper application of the bankruptcy removal statute, 28 U.S.C. § 1452(a); and, alternatively, (2) the District Court was required to abstain pursuant to 28 U.S.C. § 1334(c)(2) because it lacked 'core' bankruptcy jurisdiction. We deny OCWD’s petition for a writ of mandamus because we conclude that: (1) our opinion in MTBE did not require the District Court to remand OCWD’s action, and (2) OCWD’s alternative jurisdictional arguments can be reviewed in the regular course of appeal."

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WildEarth Guardians v. US Forest Service

Jul 24: In the U.S. Court of Appeals, Tenth Circuit, Case No. 09-1089. The appellant, Mountain Coal Company (MCC), owns and operates the West Elk Mine, a large underground coal mine lying beneath the Grand Mesa, Uncompahgre, and Gunnison National Forests in Colorado. After the United States Forest Service approved plans for venting methane gas from the mine, WildEarth Guardians brought suit against the Forest Service, the Department of Interior, and several of their officials under the Administrative Procedure Act, contending that the approval violated the National Environmental Policy Act (NEPA). MCC moved to intervene under Federal Rule of Civil Procedure 24.

The district court denied the motion and MCC appealed. Because “[a]n order denying intervention is final and subject to immediate review if it prevents the applicant from becoming a party to an action,” Coalition of Ariz./N.M. Counties for Stable Econ. Growth v. Dep’t of the Interior, 100 F.3d 837, 839 (10th Cir. 1996) (Coalition). The Appeals Court concluded that MCC is entitled to intervene as of right, and accordingly reversed the district court’s decision and remanded the case with instructions to grant MCC’s motion to intervene.

The Appeals Court ruled, "We are convinced that MCC has established a possibility of inadequate representation. . . the government has multiple objectives and could well decide to embrace some of the environmental goals of WildEarth. Therefore, MCC should not be required to rely on the defendants to represent its interests."

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California Trout v. FERC

Jul 20: In the U.S. Court of Appeals, Ninth Circuit, Case No. 07-73664, 07-74494 & 08-71593. According to the Ninth Circuit, the Supreme Court has long stressed that “the formulation of procedures [is] basically to be left within the discretion of the agencies to which Congress [has] confided the responsibility for substantive judgments.” [Citing: Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 524-25 (1978)].

The Appeals Court said, "Agencies must have the ability to manage their own dockets and set reasonable limitations on the processes by which interested persons can support or contest proposed actions. In this respect, an agency’s procedural rules operate much as our own rules of procedure do: we require litigants to observe the orderly procedures of the court, even if such rules occasionally bar inattentive or ill-advised parties from our courtrooms. So long as an agency’s procedural rules do not afford petitioners less protection than the minimum mandated by the Administrative Procedure Act (APA) and the Constitution, we are not free to 'improperly intrude[ ] into the agency’s decision-making process' and second-guess its administrative tradeoffs. Id. at 525.

In the instant case, petitioners California Trout (CalTrout) and Friends of the River (FOR) contend that the Federal Energy Regulatory Commission (FERC, the Commission) applied its rule governing intervention in a license renewal proceeding in an arbitrary and capricious fashion. The Appeals Court, in a split decision said, "Although petitioners have set forth evidence that their late intervention would not prejudice the Commission’s proceeding, under the circumstances we cannot find that the Commission’s decision was an abuse of its discretion. The regulation at issue explicitly confers on the Commission a broad power to differentiate among untimely interveners and permits the Commission to summarily reject a prospective intervener who cannot demonstrate 'good cause' for its untimely motion. Because we find that the Commission reasonably determined that petitioners lacked good cause for their untimely attempt to intervene, we deny the petition for review."

In its final argument, the majority ruled, "Finally, we observe that the Commission’s procedural rules are no less important -- and, therefore, no less deserving of respect -- than our own code of procedure. Such rules provide for orderly decision-making and constitute advance notice of the process by which our institutions will conduct themselves. The petitioners knew the rules of the game and assumed the risks of their decision not to intervene. The Commission had no obligation, by statute or by rule, to provide relief for petitioners’ failure to intervene in a timely fashion."

The dissenting Justice said, "I respectfully dissent and would grant the petition because the Commission has erected an unreasonably high barrier to good cause for late intervention, and without explanation or justification has departed from its own precedent of routinely granting late intervention where there is no risk of prejudice. In denying Petitioners’ motions for late intervention, the Federal Energy Regulatory Commission (the Commission) has arbitrarily imposed a good cause requirement far more stringent than indicated by analogous precedent and at odds with the liberal standard it has applied consistently in similar cases. Moreover, it should not go unnoticed that in denying leave to intervene, the Commission has silenced any party wishing to advance Petitioners’ environmental concerns."

Access the complete opinion and dissent (click here).

Alaska Wilderness v. Kempthorne, Et. Al.

Jun 30: In the U.S. Court of Appeals, Ninth Circuit, Case Nos. 07-71989 and 07-72183. Petitioners in this case challenge the Minerals Management Service’s (MMS) approval of Respondent-Intervenor Shell Offshore Inc.’s (Shell) 2007-2009 Beaufort Sea Plan of Exploration (EP). On May 5, 2009, however, Shell withdrew its EP, and the MMS subsequently rescinded its prior approval of that EP. The MMS characterized the EP as “null and void” and declared that it “will not consider nor approve any exploratory drilling activity under this EP.”

The Appeals Court said, "The MMS’s rescission of its approval of the EP, which was the agency action at issue in this appeal, renders Petitioners’ challenge moot. Accordingly, Shell’s unopposed 'Motion to Dismiss Appeal as Moot' is granted. This appeal is dismissed as moot. The parties shall bear their own costs on appeal. A certified copy of this order shall serve as the mandate of this court."

Access the court order (click here).

State of New Mexico v. Bureau of Land Management

Apr 28: In the U.S. Court of Appeals, Tenth Circuit, Case No.06-2352. As explained by the Appeals Court, the litigation concerns the environmental fate of New Mexico’s Otero Mesa, the largest publicly-owned expanse of undisturbed Chihuahuan Desert grassland in the United States (over 1.2 million acres). From 1998 to 2004, the Bureau of Land Management (BLM or the Agency) conducted a large-scale land management planning process for federal fluid minerals development in Sierra and Otero Counties, where the Mesa is located. Ultimately, the Agency opened the majority of the Mesa to development, subject to a stipulation that only 5% of the surface of the Mesa could be in use at any one time.

Invoking the National Environmental Policy Act (NEPA), the Federal Land Management Policy Act (FLPMA), and the National Historic Preservation Act (NHPA), the State of New Mexico and a coalition of environmental organizations led by the New Mexico Wilderness Association (NMWA) challenged in federal district court the procedures by which BLM reached this determination. NMWA also challenged BLM’s decision not to consult with the Fish and Wildlife Service (FWS) under the Endangered Species Act (ESA) regarding possible impacts of the planned development on the Northern Aplomado Falcon.

The district court rejected the challenges, save for the plaintiffs’ argument that BLM erred in beginning the leasing process on the Mesa before conducting additional analysis of site-specific environmental impacts flowing from the issuance of development leases. The Appeals Court ruled, "Discerning serious flaws in BLM’s procedures, we affirm the district court’s conclusion that NEPA requires BLM to conduct site-specific analysis before the leasing stage but reverse its determination that BLM’s plan-level analysis complied with NEPA. Moreover, we affirm its conclusion that BLM complied with public comment provisions in FLPMA, and we vacate as moot the portion of the district court’s order addressing NMWA’s ESA claims."

New Mexico Attorney General Gary King commented on the decision and said, "This is great news for those who believe as I do that the preservation of Otero Mesa is critical to the health of people, wildlife and the environment In southeastern New Mexico. This decision confirms the position of the Attorney General's office that the Otero Mesa development plan did not properly take into consideration all the environmental impacts to the habitat and protection of groundwater in the area so this is a huge victory for us." The AG indicated in a release that the 10th Circuit reversed Judge Bruce Black on most issues concerning the propriety of issuing oil and gas leases on Otero Mesa. The Bureau of Land Management will likely have to complete an environmental impact statement on the entire Otero Mesa management plan; at least consider totally closing Otero Mesa to development; show more evidence for conclusions about impacts on the area's aquifer and; conduct further analysis before leasing.

Access the complete opinion (click here). Access the statement from the NM AG (click here). Access the New Mexico Wilderness Association website for more information (click here).

New Jersey DEP v. U.S. Nuclear Regulatory Commission

Mar 31: In the U.S. Court of Appeals, Third Circuit, Case No. 07-2271. As explained by the Appeals Court, the issue presented by the appeal is whether the Nuclear Regulatory Commission (NRC), when it is reviewing an application to relicense a nuclear power facility, must examine the environmental impact of a hypothetical terrorist attack on that nuclear power facility. The New Jersey Department of Environmental Protection (NJDEP) contends that the National Environmental Policy Act of 1969 (NEPA) requires the analysis of the impact of such an attack.

NJDEP petitioned for review of an NRC decision denying its request to intervene in relicensing proceedings for the Oyster Creek Nuclear Generating Station (Oyster Creek). The NRC concluded that terrorist attacks are “too far removed from the natural or expected consequences of agency action” to require an environmental impact analysis and that, in any event, it had already addressed the environmental impact of a potential terrorist act at Oyster Creek through its Generic Environmental Impact Statement [GEIS] and site-specific Supplemental Environmental Impact Statement [SEIS]. The Appeals Court agreed with the NRC and denied the petition for review.

The Third Circuit explained its decision further saying, ". . .the GEIS and SEIS together provide both generic and site-specific analyses of potential environmental impacts at Oyster Creek arising from terrorist attacks. New Jersey has never explained how or why an aircraft attack on Oyster Creek would produce impacts that are different from severe accidents and has not provided any evidence that the NRC could engage in a meaningful analysis of the risks of an attack. Instead, NJDEP argues, quoting our decision in Limerick Ecology Action v. NRC, that the NRC’s 'mere assertion of unquantifiability' does not immunize it from having to conduct a NEPA analysis. . . This is a true statement of the law, but it ignores our holding in Limerick that the burden is on the petitioner to demonstrate that the NRC could evaluate risks more meaningfully than it has already done. . . NJDEP has not met its burden here.

"Because NJDEP did not present an admissible contention before the NRC, concerning the environmental effects of a hypothetical aircraft attack on Oyster Creek, we will deny the petition for review."

Access the complete opinion (click here).

Eastern Niagara Public Power v. FERC

Mar 13: In the U.S. Court of Appeals, D.C. Circuit, Case No. 07-1472. From 1958 to 2007, the New York Power Authority (NYPA) operated the Niagara Power Project, a hydroelectric facility about five miles downriver from Niagara Falls, pursuant to a 50-year license granted by what is now the Federal Energy Regulatory Commission (FERC). In 2007, FERC approved NYPA’s relicensing application and granted a new 50-year license. Several communities in western New York have challenged FERC’s 2007 licensing decision as arbitrary and capricious and unsupported by substantial evidence. However, the Appeals Court decided, "We deny their petition because FERC’s decision to issue the new license was reasonable and reasonably explained."

Petitioners argue that a 50-year license is too long and inconsistent with Agency practice regarding the terms of licenses, but the Appeals Court said, "FERC possesses express statutory authority to set license terms between 30 and 50 years." Second, petitioners argue that FERC undervalued the project’s output in considering the appropriate length of the new license, but the Appeals Court said, "Applying the deferential arbitrary-and-capricious standard, we have no room to overturn that reasoned and reasonable determination."

Third, petitioners contend that FERC, as a condition of granting the license, should have required NYPA to mitigate certain adverse environmental impacts allegedly caused by the project, but the Appeals Court said, "FERC mandated measures to mitigate any such impact. In short, FERC acted entirely reasonably in addressing possible adverse environmental impacts."
Fourth, petitioners assert that FERC should have considered the consequences of “off-license” agreements that NYPA reached with interested communities and organizations in the area saying, the "agreements represented NYPA’s not-so-subtle efforts to buy off community opposition." (e.g. NYPA promised to pay the Tuscarora Nation tribe, $21.8 million if FERC approved NYPA’s relicensing). The Appeals Court said, "But the off-license agreements are not related to project operations and are irrelevant to FERC’s statutorily mandated assessment of the relicensing application. . . Therefore, FERC properly refused to consider the off-license agreements in deciding whether to reissue the license to NYPA."

Finally, petitioners also appear to directly challenge the off-license agreements as "unlawful." The Appeals Court said, "The source of law on which petitioners are relying for this argument is rather murky. In any event, petitioners lack standing to bring such a claim against FERC. The parties to the off-license agreements were NYPA and certain communities and organizations affected by the project. FERC did not approve those agreements, and FERC does not and cannot control the agreements’ terms."

Access the complete opinion (click here).

Delaware Department of Natural Resources v. FERC

Mar 13: In the U.S. Court of Appeals, D.C. Circuit, Case No. 07-1007. Petitioner Delaware seeks review of two Federal Energy Regulatory Commission (FERC or Commission) orders by which the Commission conditionally approved an application to site, construct, and operate a liquid natural gas terminal near the mouth of the Delaware River. The Appeals Court dismissed the petition citing a "lack of jurisdiction: Delaware lacks standing because it has not suffered an injury-infact."

According to the background in the case, in September 2004, Crown Landing LLC, a wholly-owned subsidiary of BP America Production Company, filed an application with the Commission to site, construct, and operate a liquid natural gas import terminal at the mouth of the Delaware River. Onshore portions of the proposed project were to be located in New Jersey, but a pier designed for the unloading of tanker ships was planned to extend beyond New Jersey waters into that portion of the river which appertains to neighboring Delaware.

Section 3 of the Natural Gas Act (NGA), prohibits the importation of foreign natural gas without prior authorization by the Commission. The NGA specifically provides for the protection of rights granted to the states under the Coastal Zone Management Act of 1972 (CZMA), and the Clean Air Act (CAA). Crown Landing did not file a CZMA certification with Delaware but did request a status decision from the state.

On February 3, 2005, the Delaware Department of Natural Resources and Environmental Control, petitioner here, issued its decision and rejected the project. On appeal, Delaware’s Coastal Zone Industrial Control Board unanimously affirmed that decision. Meanwhile, New Jersey filed an original action before the Supreme Court challenging Delaware’s jurisdiction to regulate the Crown Landing terminal pursuant to its authority under the CZMA. The Supreme Court confirmed that Delaware indeed possesses this authority. New Jersey v. Delaware, 128 S. Ct. 1410, 1427-8 (2008) [See WIMS 3/31/08].

On June 20, 2006, the Commission issued an order approving Crown Landing’s application subject to some sixty-seven conditions precedent. The Commission acknowledged that the Crown Landing proposal is subject to coastal zone consistency reviews in New Jersey, Delaware, and Pennsylvania and thus concluded that the company must obtain the concurrence of the relevant state agencies prior to Commission approval of the commencement of construction.

The Appeals Court said finally, "In sum, because FERC’s order -- as it stands now -- cannot possibly authorize Crown Landing’s project absent the approval of Delaware, the state has suffered no injury-in-fact, and thus lacks standing. For the foregoing reasons, the petition for review is dismissed."

Access the complete opinion (click here).

Hempstead County Hunting Club v. Southwestern Electric Power

Mar 12: In the U.S. Court of Appeals, Third Circuit, Case No. 08-2613. Hempstead County Hunting Club (HCHC) filed a citizen's suit against Southwestern Electric Power Company (SWEPCO) pursuant to the Clean Air Act (CAA), seeking a preliminary and permanent injunction to prevent SWEPCO from commencing construction, constructing, or continuing construction of its 600-megawatt pulverized coal-fired power plant in Hempstead County, Arkansas, without first obtaining a Prevention of Significant Deterioration (PSD) permit as required by the CAA.

On the same day that it filed its complaint, HCHC filed a motion for temporary restraining order and preliminary injunction. The
district court denied the motion, and HCHC filed an interlocutory appeal, arguing that the district court abused its discretion in
denying the preliminary injunction because "SWEPCO has proposed to construct and is constructing its Hempstead Plant, although it does not have a CAA permit."

SWEPCO filed a motion to dismiss the appeal, arguing that the appeal is moot because it has now received the CAA permit and has lawfully begun construction at the site, rendering HCHC's appeal of the denial of its motion for a preliminary injunction to halt preconstruction activities moot. The Appeals Court agreed and dismissed the appeal as moot.

The Appeals Court said, "HCHC's allegation that SWEPCO is acting illegally rests on its argument that SWEPCO is engaging in construction activities without a permit. Therefore, the present case is comparable to Mississippi River Revival in which, after the MPCA issued storm permits, the district court dismissed the environmental organizations' complaints as moot, as the complaints were based on the allegation that the Cities were discharging storm waters without required permits."

Access the complete opinion (click here).

Alaska Wilderness v. Kempthorne

Mar 6: In the U.S. Court of Appeals, Ninth Circuit, Case Nos. 07-71457, 07-71989, & 07-72183. In a brief order, the Appeals Court said, "The opinion and dissent filed on November 20, 2008, and published at 548 F.3d 815 (9th Cir. 2008), are hereby vacated and withdrawn [See WIMS 11/20/08]. Respondents’ petition for rehearing and suggestion for rehearing en banc is denied as moot. All pending motions to file amicus briefs in support of rehearing are likewise denied as moot. The opinion vacated and withdrawn will be replaced by a new opinion. Our denial of the petition for rehearing with suggestion for rehearing en banc is made without prejudice to any party who may wish to file a petition for rehearing or petition for rehearing en banc with regard to the new opinion."

The case involved six organizations that support environmental conservation, indigenous communities, and wildlife populations of Northern Alaska. They challenged the Minerals Management Service’s (MMS) approval of an exploration plan submitted by Shell Offshore Inc. (Shell). Shell seeks to drill multiple offshore exploratory oil wells over a three-year period in the Alaskan Beaufort Sea. In the November 20, split 2-1 decision the Appeals Court, vacated the Agency’s approval of Shell’s exploration plan, and remanded the case so that MMS can conduct the “hard look” analysis required by NEPA. The Appeals Court said MMS must prepare a revised EA "or, as necessary, an EIS."

Access the Order (click here).

Sierra Club v. EPA

Feb 25: In the U.S. Court of Appeals, Sixth Circuit, Case No. 07-4485. According to the summary provided by the Sixth Circuit in its opinion, the Clean Air Act requires the U.S. EPA to object to an air-pollution permit if any person “demonstrates” to the EPA “that the permit is not in compliance” with the Act’s requirements. 42 U.S.C. § 7661d(b)(2). In August 2006, the Sierra Club petitioned the EPA Administrator to object to a permit issued by the Kentucky Division of Air Quality to the East Kentucky Power Cooperative, claiming it had “demonstrate[d]” non-compliance because the EPA previously had issued a notice of violation to the same company (about the same plant) in January 2003 and had filed a federal-court complaint against the same company (about the same plant) in January 2004.

The Appeals Court said, "The EPA declined to object. Because it reasonably interpreted § 7661d(b)(2) to mean that the agency may alter its position about a power plant’s compliance with the Act based on intervening events and because the Sierra Club does not challenge the impact of these intervening events on the power plant’s compliance with the Act, we deny the petition for review."

This case arises from the power company’s request for a renewal of its Title V permit for one of the coal-powered steam generators, known (not so descriptively) as Unit 2, at the Spurlock Station power plant in Maysville, Kentucky. The Kentucky agency granted the permit in 1999. In 2003, apparently after discovering these changes to the plant, the EPA issued a notice of violation, informing the company that its Unit 2 permit failed to address the PSD requirements stemming from these modifications.

In August 2006, the Sierra Club petitioned the EPA to object to the permit, arguing (as it did in its comments to the state agency) that the proposed permit was deficient because it failed to address the PSD requirements. In support, the Sierra Club relied solely on the fact that the EPA previously had issued a notice of violation and had filed a civil-enforcement action based on the same allegations.

In August 2007, while the parties waited for the district court to approve the consent decree, the EPA reached a decision on the Sierra Club’s petition. Although it granted the petition in part (on an unrelated issue), it declined to object to the power company’s failure to address the PSD requirements. Acknowledging its prior notice of violation and enforcement action, the EPA explained that they were “initial steps” in the enforcement process and did not reflect the agency’s final position as to whether the Title V permit for Unit 2 needed to include a PSD compliance schedule.

The Appeals Court said, "The question is this: Does the Act require the EPA to object to a permit request when the agency previously has filed a notice of violation and enforcement action regarding the same allegations about the same plant? The answer turns on the meaning of a statute that the EPA administers and thus turns on an application of the familiar Chevron framework. Unless the statute’s terms “directly address[] the precise question at issue,” Chevron says that we must defer to the EPA’s “reasonable” interpretation of the provision. Chevron, USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843–44 (1984). . .

"Under these circumstances, the EPA acted within its authority in addressing the Sierra Club’s objection. Consistent with Chevron, the EPA reasonably construed § 7661d(b)(2) to mean that a prior notice of violation and enforcement action did not by themselves require it to object to a permit request. And consistent with the APA, the EPA did not arbitrarily or capriciously deny the Sierra Club’s request, after accounting not only for the agency’s prior actions but also for developments in that litigation."

Access the complete opinion (click here).

Moshe Leib v. Hillsborough County Public Transportation

Feb 19: In the U.S. Court of Appeals, Eleventh Circuit, Case No. 08-14271. Moshe Leib (Leib) appealed from the district court’s dismissal of his suit, brought under 42 U.S.C. § 1983, against the Hillsborough County Public Transportation Commission (HCPTC, or the Commission) for denying him permission to operate a Toyota Prius as one of the limousines offered by his transportation service. Leib argues that the HCPTC violated his due process and equal protection rights, and that the Commission’s rules are unconstitutionally vague and impermissibly burden interstate commerce. The district court dismissed Leib’s complaint under Rule 12(b)(6) and the Appeals Court affirmed the decision.

Leib owns and operates TB Limo.com, a limousine service in the Tampa Bay area. Seeking to offer customers an "environmentally-friendly” alternative to traditional limousines, Leib bought a Prius. In order to operate the Prius as a limousine within Hillsborough County, Leib had to obtain a permit from the HCPTC, the administrative agency charged by the Florida State Legislature with regulating the operation of public vehicles on Hillsborough County’s public highways. The Commission denied Leib’s request on the ground that the Prius did not qualify as a “luxury” vehicle, and thus did not meet the definition of “limousine” in HCPTC Taxi Rule 1.15. A subsequent waiver request was also denied by HCPTC.

The Appeals Court said, ". . .Leib’s argument rests on a factual mistake: he argues that 'environmentally-friendly passengers that desire to utilize ecologically superior transportation are left with no alternative options whatsoever as a result of the HCPTC’s complete prohibition of eco-friendly vehicles for use as limousines.' This is simply false: an environmentally-friendly vehicle may qualify as a limousine so long as it meets Rule 1.15’s luxury and other requirements. Accordingly, Leib’s interstate commerce claim was properly dismissed."

Access the complete opinion (click here).

Piedmont Environmental Council v. FERC

Feb 18: In the U.S. Court of Appeals, Fourth Circuit, Case Nos. 07-1651, 07-1864, 07-1865, and 07-1866. This important case involving dozens of states, NGOs, electric utilities and associations. Two state utilities commissions and two community interest organizations petition for review of several rulemaking decisions made by the Federal Energy Regulatory Commission (FERC or the Commission) in connection with FERC’s implementation of the new § 216 of the Federal Power Act (FPA) and the National Environmental Policy Act (NEPA).

Section 216 of the FPA, which was added in 2005, gives FERC jurisdiction in certain circumstances to issue permits for the construction or modification of electric transmission facilities in areas designated as national interest corridors by the Secretary of Energy. The majority opinion reversed in part, affirmed in part, vacated in part, dismissed in part without prejudice, and remanded the opinion. The wrote a separate opinion concurring in part and dissenting in part.

The Fourth Circuit majority in this case summarized its decision as follows: "First, we reverse FERC’s expansive interpretation of the language in FPA § 216(b)(1)(C)(i) that grants FERC permitting jurisdiction when a state commission has 'withheld approval [of a permit application] for more than 1 year.' The phrase does not include, as FERC held, the denial of an application. Second, we affirm FERC’s determination that it was not required to prepare an environmental assessment or an environmental impact statement in connection with its issuance of procedural regulations dealing with the content of permit applications under § 216 of the FPA. Third, we conclude that FERC violated Council on Environmental Quality (CEQ) regulations when it failed to consult with the CEQ before amending its (FERC’s) NEPA implementing regulations to cover § 216 permit applications. We therefore vacate the amendments to the NEPA regulations and remand for FERC to engage in the required consultation with the CEQ. And fourth, we dismiss without prejudice, because it is not ripe, the part of one petition for review that seeks to challenge the content of the amendments (which we are vacating) to FERC’s NEPA-implementing regulations."

The minority dissent in part said, "because I believe that FERC correctly interpreted 'withheld approval [of a permit application] for more than 1 year' in 16 U.S.C.A. § 824p(b)(1)(C) (West Supp. 2008) to include the failure or refusal to grant a permit application for more than one year in cases in which the permit application was denied, I respectfully dissent from the contrary holding."

According to a report in the Mid-Hudson News, U.S. Senator Charles Schumer (D-NY) said the decision was a victory and indicated, “This decision puts the kibosh on NYRI’s effort to do an end-around local law and correctly determines that New York State should have the preeminent role in siting projects like NYRI. NYRI’s proposed path remains unduly intrusive and would have damaging impacts on parks, vista and communities from Utica to Chenango to the Catskills to Orange County.”

Christopher Miller, President of the Piedmont Environmental Council (PEC) said, "The decision directly upholds a State's right to reject a transmission line project without fear of the federal government stepping in to overrule that State's determination. In plain language, the utilities do not get a second chance if the State rejects a line based upon the merits. The court also ruled that FERC must consult with the Council on Environmental Quality to ensure compliance with the National Environmental Policy Act."
PEC indicated the Court's decision "overturns FERC's hard-charging, environment-be-damned approach to fast-tracking transmission line siting throughout the northeast and southwest corridors. The Court's decision is a blow against heavy-handed federal preemption and the ruling restores a semblance of federal-state balance in the overall transmission line-siting process."

PEC indicated that the FERC lawsuit was the first of two filed by PEC against the previous Administration's attempt "to fast-track transmission line siting through much of the U.S." The second, which seeks to overturn the Department of Energy's designation of multi-state corridors for transmission line siting [See WIMS 3/7/08], is pending before the Ninth Circuit Court of Appeals in San Francisco.

Access the complete opinion and partial dissent (click here). Access the Mid-Hudson News (click here). Access a release from PEC (click here).

Ohio Valley Environmental Coalition v. Elk Run Coal Co.

Feb 13: In the U.S. Court of Appeals, Fourth Circuit, Case Nos. 07-1355, 07-1479, 07-1480, 07-1964, 07-2112. This is a high profile case on the controversial issue of mountaintop mining, involving dozens of parties Plaintiffs-Appellees Ohio Valley Environmental Coalition, the Coal River Mountain Watch, and the West Virginia Highlands Conservancy (hereinafter referred to collectively as OVEC) challenge the U.S. Army Corps of Engineers (Corps) issuance of four permits allowing the filling of West Virginia stream waters in conjunction with area surface coal mining operations.

Granting judgment for OVEC, the district court rescinded the permits as violations of the Clean Water Act (CWA), the National Environmental Policy Act (NEPA), and the Administrative Procedure Act (APA). The court also enjoined all activity under those permits and remanded to the Corps for further proceedings consistent with its order. Separately, in an order dated June 13, 2007, the district court provided declaratory relief to OVEC, holding that the stream segments linking the permitted fills to downstream sediment treatment ponds were "waters of the United States" and that the Corps lacked authority under the CWA to permit discharge from the fills into the stream segments.

The Corps appealed the two orders and in a split decision, the Fourth Circuit reversed and vacated the district court’s opinion and order of March 23, 2007, and vacated the district court’s injunction. Additionally, the Fourth Circuit reversed the district court’s June 13, 2007, grant of declaratory relief and remanded the case for further proceedings consistent with its opinion.

The Appeals Court provides a straightforward explanation of the controversial practice of mountain top removal coal mining saying,"The mountaintop removal method of surface coal mining, pioneered in West Virginia, involves the blasting of the soil and rock atop a mountain to expose coal deposits below. While mining operations are ongoing, the overburden is hauled or pushed into adjacent valleys. This excavated overburden is known as "spoil." Once the coal has been extracted, efforts are made to re-contour the mountaintop by replacing the removed overburden, but stability concerns limit the amount of spoil that can be returned to the area. In its natural state, the spoil material is heavily compacted; once excavated, however, the loosening of the rock and soil and incorporation of air causes significant swelling. As a result, large quantities of the blasted material cannot be replaced, and this excess spoil (overburden) remains in the valley, creating a 'valley fill' that buries intermittent and perennial streams in the process.

"Water that collects in the fill must be moved out to ensure the fill’s continued stability. Thus, an underdrain system is constructed by placing large boulders up to and above the ordinary high-water mark of the stream. The collected water is then channeled into a treatment pond, where sediment from the runoff is allowed to settle. Sediment ponds usually are constructed in existing streambeds, using earth and rock to create an embankment. After sediments have settled out of the fill runoff, the treated water is discharged from the sediment pond back into existing streams. When practicable, a sediment pond will be constructed in the streambed immediately adjacent to the end (or "toe") of the fill. But, because West Virginia’s steep, mountainous topography often prevents this kind of positioning, a short stream segment is frequently used to move runoff from the fill downstream to the sediment pond. Once a valley fill is stabilized, the embankments of the sediment pond are removed, and the ponds and the stream segments are restored to their pre-project condition."

On appeal, the Corps contends that it is entitled to deference on its determination about the scope of its NEPA analysis and that its findings on individual and cumulative impacts and mitigation were not arbitrary or capricious. The agency further argues that its interpretation of its CWA regulations -- treating stream segments and sediment ponds as part of a unitary waste treatment system and thus excepting them from separate CWA § 402 permitting -- was entitled to deference. Intervenors have raised these same challenges to the district court’s ruling, but also argued that OVEC’s stream segment claim was barred in the first place under principles of res judicata [a matter already decided by the court].

The majority Appeals Court indicates that, "A complex statutory framework undergirds the regulation of valley fills and associated sediment ponds, and it is this framework that provides the foundation for our opinion." The Appeals Court says it appreciates "the statutory tightrope that the Corps walks in its permitting decisions" and rules, "The Corps, in permitting sediment ponds and accompanying stream segments under its § 404 authority, is attempting to harmonize the two statutes’ [Clean Water Act & Surface Mining Control and Reclamation Act] goals: ensuring that mining operations can proceed while maintaining the highest level of water quality possible outside of the mining area."

On the issue of "in-stream sediment ponds," the Appeals Court ruled, "Sediment ponds represent the 'best technology currently available' for the treatment of sedimentary runoff from surface mining valley fills. In fact, the regulations of the Department of the Interior’s Office of Surface Mining specifically contemplate the use of in-stream sediment ponds. 30 C.F.R. § 816.46(c) (2008). While ideally these ponds would be located immediately adjacent to the fills, the steep Appalachian terrain often does not allow this result. The topographical realities of the area make stream segments a necessary component of the construction of a waste treatment system for valley fill runoff. (See, e.g., J.A. 653.) This system, in turn, is necessary to ensure that water released from the mining area into existing streams meets CWA § 402 standards. The Appeals Court ruled "the Corps’ interpretation of its authority was reasonable in light of the CWA" and the Agency is "entitled to deference."

The dissenting minority opinion, which concurred in the parts of the majority opinion upholding the scope (or physical boundary) of the Corps’ NEPA analysis and the Corps’ interpretation of its regulatory definition of "waters of the United States,"the dissenting justice said, "In upholding the Corps’ interpretation of its obligations under § 230.11(e), the majority declines to give effect to the unambiguous requirements of the regulations. . . By failing to require the Corps to undertake a meaningful assessment of the functions of the aquatic resources being destroyed and by allowing the Corps to proceed instead with a one-to-one mitigation that takes no account of lost stream function, this court risks significant harm to the affected watersheds and water resources. . ."

Earthjustice, the public interest law firm representing several of the environmental organizations in the case issued a release saying, "The ruling will permit mining companies to conduct devastating mountaintop removal coal mining operations without acting to minimize stream destruction or conducting adequate environmental reviews. As a result, Appalachia could now be facing up to 90 new mountaintop removal coal mining operations, which would destroy huge swaths of the Appalachian Mountains." Steve Roady, Earthjustice attorney said, "We believe the decision is wrong on the law and the science. This fight is not over until mountaintop removal mining is over. We will continue to litigate, and in addition, the new administration must take immediate steps to curb the terrible practice of mountaintop removal mining and undo the mistakes of the past."

Access the complete opinion and dissent (click here). Access a release from Earthjustice and link to additional information (click here). Access links to various media reports on the ruling (click here).

Devon Energy Corp v. Kempthorne (Interior Secretary)

Dec 23: In the U.S. Court of Appeals, D.C. Circuit, Case No. 07-5299. The case arises from a final order issued by the United States Department of the Interior (DOI) requiring Devon Energy Corporation (Devon), retroactively to recalculate royalties owed to the Government pursuant to its lease to extract coalbed methane from Federal land in Wyoming. At issue is the agency’s interpretation of its “marketable condition rule.”

The rule was included as a part of DOI’s 1988 Revision of Gas Royalty Valuation Regulations, which establish the framework for calculating the royalty value of coalbed methane gas production. In its disputed order, DOI held that the marketable condition rule precluded Devon from deducting certain costs associated with compression and dehydration when calculating the “gross proceeds” upon which royalties are owed.

In its rationale, DOI determined that gas cannot enter a pipeline and move to a purchaser unless it meets the requirements of the pipeline, which typically requires compression to raise its pressure and dehydration to reduce its water content. Thus, DOI concluded that if gas is not sufficiently compressed and dehydrated to be deliverable to the point of purchase through the pipeline, it is not in marketable condition. Devon filed suit in the District Court to challenge Interior’s order. The District Court denied Devon’s motion for summary judgment and granted the Secretary’s cross-motion.

On appeal, Devon argues that DOI’s order is "inconsistent with the plain language of the marketable condition rule, and also inconsistent with DOI’s own prior interpretation of the rule." The Appeals Court ruled, "We affirm the judgment of the District Court. First, we find that Interior’s interpretation of the marketable condition rule reflects a perfectly reasonable construction of the rule. It is clear that the agency’s order is not at odds with the plain language of the rule, nor does it effectively 'amend,' rather than reasonably construe, the rule."

Second, the Appeals Court says, ". . . we reject Devon’s claim that DOI’s order conflicts with a prior interpretation of the marketable condition rule. Devon argues that its position finds support in guidance documents distributed by agency personnel after DOI’s promulgation of the 1988 regulations. However, as Devon concedes, these contested guidance documents were distributed by agency individuals who had no authority either to amend the marketable condition rule or to issue authoritative guidelines on behalf of the agency."

Access the complete opinion (click here).

American Forest Paper Association v. FERC

Dec 23: In the U.S. Court of Appeals, D.C. Circuit, Case No. 07-1328. In its brief summary, the Appeals Court says, "Petitioners insist the term 'markets' as used in the recent amendment to the Public Utility Regulatory Policies Act (PURPA) must always denote a competitive market. The Federal Energy Regulatory Commission (FERC) interprets the word 'markets' to encompass both competitive and non-competitive markets." The Appeals Court said that "FERC’s interpretation is reasonable" and denied the petition for review.

The Appeals Court further explains, "Section 824a-3(m)(1) [of PURPA] refers to 'markets' several times. In a formal rulemaking, FERC interpreted the term 'markets' in subparagraph (m)(1)(A) as encompassing both competitive and non-competitive markets. . . The fact that FERC chose to adopt certain rebuttable presumptions via rulemaking, rather than by case-by-case adjudication, does not violate any of the statute’s requirements. And, as we have long held in such scenarios, the 'decision whether to proceed by rulemaking or adjudication lies within the [agency’s] discretion.”

Access the complete opinion (click here).