Articles Posted in Environmental

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On May 17, 2016, the Supreme Judicial Court of Massachusetts, in Isabel Kain & Others v. Department of Environmental Protection, held that the various existing greenhouse gas rules and initiatives promulgated by the Commonwealth of Massachusetts Department of Environmental Protection (DEP) did not satisfy the strict requirements of the state’s Global Warming Solutions Act. The purpose of the Act “is to attain actual, measurable, and permanent emissions reductions in the Commonwealth.” According to the Court, the unambiguous language of Section 3 (d) of the Act “requires the department to promulgate regulations that establish volumetric limits on multiple greenhouse gas emissions sources, expressed in carbon dioxide equivalents, and that such limits must decline on an annual basis.” DEP’s duty under the law was described by DEP as being mostly aspirational, but the Court held this was insufficient.

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According to the Ninth Circuit Court of Appeals, in Ash Grove Cement Co. v. Liberty Mutual Ins. Co., an unpublished opinion applying Oregon law, an insurer’s duty to defend begins with a “104(e) letter” from the EPA and continues for the duration of the regulatory process. In A “Suit” by Any Other Name: Ninth Circuit Rules CERCLA 104(e) Letter Triggers Duty to Defend, Pillsbury attorney discusses the Ash Grove ruling.

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This blog, although not brief, is a brief report on some of the significant environmental law and administrative cases decided in late December and the first quarter of 2016.

U.S. SUPREME COURT

FERC Final Rule re Demand Response Valid. On January 25, the Court, in FERC v. Electric Power Supply Assoc., reversed the D.C. Court of Appeals which had held that a final rule of FERC governing the “demand response” in which operators of wholesale electricity markets (regulated by FERC) pay electricity consumers (arguably subject only to state regulation) for commitments not to use electricity at certain times (such as those times when the demand for this power is greatest) was invalid. The Court held that the rule does not cross the lines setting the boundaries between the states and the federal government regarding the exercise of regulatory power over the sale of electricity.

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In Implications for the Power Sector of Recent Rulings by U.S. Supreme Court and FERC, Pillsbury attorney Michael Hindus, discusses an important issue the power industry is currently facing — the tension federal and state roles in power supply planning. Of note, is the U.S. Supreme Court’s April 19 decision in Hughes v. Talen Energy Marketing LLC et al. wherein the Court struck down on federal pre-emption grounds a Maryland program intended to support construction of a new 725 MW natural gas-fired generating plant in Maryland after concluding that the program invaded “FERC’s [exclusive] regulatory turf” over determination of wholesale rates for electricity. This was followed within days by FERC blocking the implementation of two Purchase Power Agreements approved by the Ohio Public Utilities Commission just days later. The tension likely will continue, and the sparring over this issue could intensify, given the states’ efforts to support continued operation of existing generating units and construction of new plants.

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In EPA Charts Middle Path for Making “Stationary Source” and “Major Source” Determinations, Matt Morrison and Bryan Stockton discuss the EPA’s new final rule applicable to upstream and midstream emission sources in the oil and gas sector. In particular, they discuss the EPA’s new definition of “adjacent,” a definition that is a key factor in determining whether there is a single “stationary source” for purposes of the Prevention of Significant Deterioration and Nonattainment New Source Review programs or a “major source” for purposes of the Clean Air Act Title V operating permit program.

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Builders and contractors may be interested to learn that, in the past few days, the Supreme Courts of Texas capitoland Colorado, and the U.S. Court of Appeals for the DC Circuit have issued significant rulings addressing the separation of powers at the state and federal level.

An Ordinance’s Overreach
On April 29, the Supreme Court of Texas, in BCCA Appeal Group, Inc. v. City of Houston, Texas, held, in an 8 to 1 ruling, that the Texas Clean Air Act (TCAA) and the TCAA’s enforcement mechanisms imbedded in the Texas Water Code preempt a City of Houston ordinance that required emissions-emitting facilities located within the city limits to register their facilities with the City of Houston, and to pay registration fees. Although the TCAA expressly provides that municipalities like the City of Houston can pass air quality ordinances, the Court noted that they cannot pass local laws inconsistent with the TCAA and the Texas Commission on Environmental Quality’s (TCEQ) enforcement policy and procedures. Indeed, the City of Houston’s ordinance makes unlawful what the TCAA allows. While the ordinance expressly incorporated the air quality rules of the TCEQ, this was not enough to save the ordinance from being invalidated to the extent that registration was required that could result in criminal enforcement by the City of Houston. The consequences of this decision may result in a concentration of air quality enforcement authority in the TCEQ, and cities in Texas will need to exercise caution in promulgating local ordinance that could conflict with state policy.

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In New York High Court Gives the Bronx Cheer to Insurers’ Pro Rata Allocation and Exhaustion Arguments, Pillsbury attorney  discusses New York State Court of Appeals’ decision in In re Viking Pump, Inc. The Court of Appeals accepted two certified questions from the Delaware Supreme Court. As noted by Ben, “in a New York minute,” the Court of Appeals has “leveled the playing field by endorsing the ‘all sums’ and ‘vertical exhaustion’ approach to allocation advocated by a policyholder, at least as to policies containing ‘non-cumulation’ and ‘prior insurance’ provisions.” This ruling will be of interest to those who have encountered in New York barriers to insurance coverage where multiple policies over multiple policy terms are implicated, including, but not limited to, coverage for environmental or asbestos liabilities.

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In late April, U.S. District Court Judge Mark A. Goldsmith, in Concerned Pastors for Social Action, et al. v. Nick A. Kouri, et al., FlintRiverissued an interesting Order Regarding Disqualification. During an April 6, 2016 status conference in this matter, the Court to the parties “information regarding its consumption of water whose source was the Flint River, during the period of April 2014 to August 2014, a time period when its duty station was at the Flint Divisional courthouse.”  On the same day, the Court issued an order instructing “the parties to file any objections pertaining to the Court’s continued participation in the matter.” At issue was Title 28 U.S.C. § 455(a), which provides that any judge “of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.”

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UPDATE: When Attorneys General Attack II

In When Attorneys General Attack, Pillsbury attorneys Sheila McCafferty Harvey, Joseph Jean, Carolina Fornos and Benjamin Tievsky discuss the New York State Office of the Attorney General’s and other jurisdictions’ power to aggressively scrutinize energy companies’ public statements on the subject of climate change. In the alert, they provide strategies for managing and obtaining insurance coverage for these investigations.

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skialtaOn April 19, 2016, the U.S. Court of Appeals for the Tenth Circuit, in Wasatch Equality, et al., v. Alta Ski Lifts Company, et al., affirmed the lower court’s dismissal of a lawsuit claiming that the U.S. Forest Service, in routinely approving a permit to operate the Alta Ski area in Utah, unconstitutionally discriminated against a group of snowboarders who were banned from using these ski lift facilities by an edict of the ski resort’s operators. Ultimately, the Court of Appeals concluded that “[e]ven if we grant all reasonable inferences in Wasatch’s favor, the pleaded facts at best establish that each year the Forest Service—with knowledge of the snowboard ban—reviews and approves Alta’s site plan and receives from Alta a usage fee. This isn’t enough to establish state action for purposes of the Fourteenth Amendment.”

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