A Court-Side Seat: “Inholdings” Upheld, a Pecos Bill Come Due and Agency Actions Abound



Here are some significant environmental and regulatory rulings and administrative actions from December 2020.


Texas v. New Mexico
On December 14, 2020, the U.S. Supreme Court decided a water rights controversy involving sharing the water of the Pecos River. The 1949 Pecos River Compact provides for the equitable apportionment of the use of the Pecos River’s water by New Mexico and Texas, and a “River Master’s Manual,” approved by the Court in 1988, implements the Compact. These are very dry areas, and access to this water is very important. In 2014, a rare tropical storm drenched the Pecos River Basin, and Texas asked New Mexico to temporarily store the water that would otherwise flow into Texas. A few months later, New Mexico released the water to Texas, but the quantity was reduced because some of the water held by New Mexico had evaporated. The River Master awarded a delivery credit to New Mexico, and after Texas objected, Texas “in response” filed the Original Jurisdiction of the Court, suing New Mexico and seeking a review of the River Master’s determination. The Court held for New Mexico, deciding that this dispute was subject to and resolved by the Manual. This case is important because it highlights the high value the states place on the equitable apportionment of water that flows through different states.

The Federal Appellate Courts

The U.S. Court of Appeals for the Fourth Circuit

Edmonds, et al. v. CSX Transportation
On December 15, 2020, the court decided a class action brought by residents and businesses located in Lumberton, North Carolina, who alleged that the actions of CSX caused their properties to be flooded during two hurricanes because of the location of a CSX rail line. The city of Lumberton is divided by the Lumberton River, and the south side is prone to flooding. An agreement was reached with the railroad in 1978, which provided that a strategically placed levee could be closed when there was an imminent danger of flooding. However, in 2011 and 2015 it was alleged that CSX refused to allow access to its right-of-way, and severe flooding resulted. Both the trial and the appeals court held that any tort claims the plaintiffs may have against the railway were preempted by provisions in the Interstate Commerce Commission Termination Act, which placed the exclusive power to change the location of a rail line to the Surface Transportation Board; see 49 U.S.C. § 10501(b). However, the court did not decide a related contract claim, which was remanded to the trial court.

The U.S. Court of Appeals for the Fifth Circuit

Southern Recycling, LLC. v. Aguilar, et al.
The court decided a case of involving a “ship-breaking operation” which resulted in the death of one worker and an injury to another. The claimants filed a lawsuit in the Texas courts, but Southern Recycling sought liability relief pursuant to the provisions of the Limitations of Liability Act, 46 U.S.C. § 30501. The claimants moved to dismiss, arguing that the vessel was a “dead ship” and not a vessel subject to this statute. The Fifth Circuit upheld the lower court’s dismissal of Southern Recycling’s invocation of this Act, noting that federal jurisdiction here depends on the court’s general admiralty jurisdiction (28 U.S.C. § 1333(1), and that the vessel, which had a gaping hole open to the sea, “could not navigate over water” so there was no federal jurisdiction.

State of Texas, et al., v. EPA
This case involved the agency’s “nonattainment” designation for Bexar County under the Environmental Protection Agency’s (EPA) 2005 ozone NAAQS standard. The court upheld this designation, although Texas insisted that certain Clean Air Act modeling determination concluded that Bexar County should be classified as being in attainment (If a county is determined to be out of compliance, then there can be significant regulatory consequences.) The Sierra Club also filed a challenge in the D.C. 4842-8498-2230.v1 Circuit regarding other Texas ozone determinations, but the Fifth Circuit also held that since this was primarily a local matter, the Fifth Circuit’s jurisdiction was not preempted by the D.C. Circuit’s special jurisdiction under the Clean Air Act.

The U.S. Court of Appeals for the Ninth Circuit

Northern Alaska Environmental Center, et al., v. the U.S. Department of the Interior
On December 22, 2020, the court amended an earlier ruling and denied a petition for an en banc review. This is a dispute over the Bureau of Land Management’s 2017 offer and sale of oil and gas leases in the Alaskan National Petroleum Reserve. The agency based its environmental review on the provisions of a 2012 Environmental Impact Statement, which the Ninth Circuit held was a reasonable exercise of the agency’s discretionary authority. This Ninth Circuit precedent could be very important in the future.

The U.S. Court of Appeals for the Tenth Circuit

Defenders of Wildlife, et al, v. Iverson, Director of the National Park Service, et al.
On December 30, 2020, the court decided this dispute, which involved the 312,000-acre Grand Teton National Park in Wyoming. 99% of this land is owned by the Federal Government, but the remaining one percent, described as “inholdings,” is owned by the State of Wyoming or private parties. The National Park Service has taken the position that its federal wildlife management programs do not apply in these inholdings, which was challenged by a number of environmental plaintiffs. After reviewing an elaborate administrative history, the appeals court concluded that the agency did not act in an arbitrary or capricious manner contrary to the Administrative Procedure Act when it excluded these “inholdings” from the agency’s Elk Reduction Program or other federal wildlife management plans. It was also clear to the court that the State of Wyoming, when it approved the law establishing this national park, did not cede its jurisdiction over its property to the federal government. 4842-8498-2230.v1 II.


The Environmental Protection Agency

EPA has released its determination that it will not impose additional Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) financial responsibility requirements on chemical, petroleum, coal products and the electric power industry. See 85 FR 77384.

EPA has requested comments on its draft guidance on how the National Pollutant Discharge Elimination System (NPDES) program intersects with the Supreme Court’s County of Maui decision on discharges to groundwater. See 85 FR 79489.

EPA has proposed a rulemaking to consider how much flexibility states possess in devising rules that criminally enforce negligent discharges into covered waters under their CWA delegated authority. See 85 FR 80713.

EPA’s new Clean Air Act cost/benefit framework rule has been promulgated and was effective on December 23, 2020. See 85 FR 84130.

The Department of Energy

The DoE has issues new National Environmental Policy Act (NEPA) rules that will apply to LNG production and export. See 85 FR 78197.

The DoE has revised and modified its regulatory definition of “showerhead” that implements some of the energy conservation requirements of the Energy Policy Act. See 85 FR 81341.

The Department of Transportation

The DoT has modified its hazardous material transportation rules. See 85 FR 81411.

The DoT has promulgated “FAST Act” environmental review standards, effective on January 27, 2021. See 85 FR 84213. K. EPA has promulgated its final Ozone National Ambient Air Quality Standards (NAAQS), effective as of December 31, 2020. See 85 FR 87256.

The Department of Justice has codified its civil settlement procedures, which will affect the use of Supplemental Environmental Projects (SEPs). See 85 FR 81409.

The Department of Defense has released its Per-and polyfluoroalkyl substances (PFAS) cleanup guidelines, under the authority of recent National Defense Authorization Act (NDAA) legislation. See 85 FR 83554.