On August 13, 2019, in a case that may have an impact on the leasing of federal lands for energy development in the future, the U.S. District Court for the Missoula, Montana Division, issued a ruling in the case of Western Organization of Resource Councils v. Bernhardt, which involves the application of the Federal Advisory Committee Act (FACA) to the Department of the Interior’s Royalty Policy Committee. This advisory committee, initially established in 1995 to provide advice to the Secretary on issues related to the leasing of federal and Indian lands for energy and mineral resources production, is subject to the provisions of FACA, codified at 5 U.S.C. app. Sections 1-16. The plaintiffs challenged the operations of this advisory committee, which was reestablished for two years beginning in 2017, because it allegedly “acts in secret and works to advance the goals of only one interest: the extractive industries that profit from the development of public gas, oil, and coal.” More specifically, the plaintiffs alleged that this advisory committee violated FACA because: (a) it was not properly established as provided in the implementing GSA rules (which are located at 41 CFR Section 102-3); (b) did not provide public notice of its meetings and publicly disseminate its materials; (c) ensure that its membership was fairly balanced; and (d) failed to exercise independent judgment without inappropriate influences from special interests.
The U.S. Court of Appeals for the DC Circuit decided the case of Allegheny Defense Project, et al. v. Federal Energy Regulatory Commission on August 2, 2019. In a Per Curiam opinion, the court denied petitions challenging the Commission’s orders permitting the Transcontinental Gas Pipe Line Company’s expansion of an existing natural gas pipeline which extends from northern Pennsylvania across the Carolinas into Alabama. The expansion is called the “Atlantic Sunrise Project.” In February 2017, FERC approved the expansion, and denied various petitions, filed by environmental organizations and affected landowners, who then challenged the decision in the DC Circuit. However, the court concluded, on the basis of the administrative record, that these challenges “cannot surmount the deferential standards of agency review and binding DC Circuit precedent.” Under the law, the Commission must consider whether the projected pipeline project meets a market need, and whether the public benefits outweigh the harms. If both criteria are satisfied, FERC will, as in this instance, issue a certificate authorizing the pipeline’s construction, and that certificate also empowers the certificate holder to exercise eminent domain authority under to the Natural Gas Act when necessary. It was the latter consequence of the FERC’s determinations that caused several Pennsylvania landowners to file their objections with the Commission and seek to stay construction.
In January 2017, the outgoing Solicitor of the Department of the Interior issued a memorandum which reaffirmed the Department’s “long-standing interpretation of the Migratory Bird Treaty Act that the MBTA prohibits the incidental taking of migratory birds.” In December 2017, following the change in administrations, the Department’s Primary Deputy Solicitor, exercising the authority of the Solicitor, issuing a new memorandum which withdrew and replaced the January 2017 interpretation. In response to this change in policy, the Fish and Wildlife Service issued new guidance as to what now constitutes a “prohibited take.” This change in policy has been challenged by several states, the National Audubon Society and the National Resource Defense Council. On July 31, 2018, the U.S. District Court for the Southern District of New York consolidated these challenges and denied the bulk of the Government’s motion to dismiss these petitions for review. This decision is National Resources Defense Council, et al. v,. U.S. Department the Interior.
On July 26, 2019, the U.S. Supreme Court ruled that the Trump administration can access $2.5 billion in Defense Department funds to replace and enhance sections of barrier along the southern border in Arizona, California and New Mexico. The Court’s 5-4 decision in Trump v. Sierra Club stayed an injunction and let the administration access funds that were frozen by decisions of a federal district court in California in May and the Ninth Circuit Court of Appeals (agreeing with the district court) on July 3. The significance of the decision is that the administration can now move forward with the work—for which contracts have already been awarded, but not finalized—while litigation brought by environmental groups proceeds in lower courts, a process that will take several months.
In a decision that will likely be welcomed by the electrical power, chemical manufacturing, and petroleum and coal products manufacturing industries, on July 19, 2019, the U.S. Court of Appeals for the District of Columbia Circuit held in the case of Idaho Conservation League et al., v. Wheeler, that EPA acted reasonably in deciding not to issue CERCLA financial responsibility regulations for the hardrock mining industry. CERCLA (a.k.a., Superfund) was enacted in 1980 and amended in 1986, and Section 108(b) of CERCLA provides that EPA shall promulgate requirements that classes of facilities establish and maintain evidence of financial responsibility “consistent with the degree and duration of risk” associated with the production, transportation, treatment, storage or disposal of hazardous substances. However, no action was taken to implement Section 108(b) until 2009, and then only as the result of litigation challenging EPA’s failure to act. EPA and the petitioners agreed to a schedule by which the agency would propose financial responsibility rules for the hardrock mining industry—which was the initial class of industry facilities selected for the possible application of these rules—and the DC Circuit approved this schedule in 2016, which contained the court’s caveat that EPA retained the discretion not to issue any rule at the conclusion of the rulemaking.
Even as tax incentives provided by the opportunity zone program in 2017’s Tax Cuts and Jobs Act offer the possibility of significant tax benefits when investing gains in Qualified Opportunity Funds (QOFs), such funds must comply with a wide variety of significant federal and state securities laws and regulations. In “Securities Law Guidance for Qualified Opportunity Funds (QOFs),” colleagues Ellen C. Grady and Robert B. Robbins discuss the joint statement recently issued by the Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) summarizing federal and state securities law considerations that may be applicable to QOFs.
On July 2, 2019, the U.S. Court of Appeals for the District of Columbia Circuit decided the case of California Communities Against Toxics, et al. v. EPA. In this decision, the court rejected the latest petition to strike or vacate EPA’s 2018 revisions to the Resource Conservation and Recovery Act (RCRA) hazardous waste recycling rules. In 1985, EPA promulgated a new regulatory definition of “solid waste,” which is the linchpin of the agency’s very stringent hazardous waste management rules. (See the rules located at 40 CFR Sections 260-268.) Unless a material is a “solid waste” as defined by the rules, it cannot also be a hazardous waste.
The availability of broadband internet service in multiple tenant environments (MTE) is always a bit of a balancing act between promoting competitive access to tenants and preserving adequate incentives for the initial service providers to deploy, maintain, and upgrade infrastructure. In “FCC Seeks Comment on Accelerating Broadband Deployment in Multi-Tenant Buildings and Preempts Wire-Sharing Requirement in San Francisco Ordinance,” colleagues Glenn S. Richards and Joseph A. Cohen examine the FCC’s recent Notice of Proposed Rulemaking (NPRM) and Declaratory Ruling on the subject.
With estimates that sea levels could rise two to six feet over the next century, states are incorporating adaptation and coastal resiliency into their planning and permitting regimes. In “INSIGHT: States Shift From Seawalls to Living Shorelines,” colleagues Eric Moorman, Norman Carlin and Ashleigh Acevedo examine the different strategies being considered and deployed by coastal states.
As usual, the last month of the Supreme Court’s term generated significant rulings on all manner of cases, possibly presaging the new directions the Court will be taking in administrative and regulatory law. Here’s a brief roundup: