A Court-Side Seat – Case Law Update (February 2022)

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It is already early in 2022, but several important environmental cases have already been decided by the federal district and federal appellate courts.

THE COURTS OF APPEAL

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

West Virginia State University Board of Governors v. The Dow Chemical Company, et al.
On January 10, 2022, the court decided this case, in which Dow and the other defendants attempted to remove a state groundwater contamination lawsuit to federal court, citing the federal officer removal statute and the presence of a significant federal question. Both the federal district court and the appellate court rejected these arguments and remanded the lawsuit to the state court. For many years, Dow and other parties had been engaged in a RCRA hazardous waste cleanup at an industrial site located in Institute, West Virginia. RCRA permits and corrective action authorizations were issued or supervised by EPA. The plaintiffs complained that the groundwater cleanup, insofar as it affected their property, was deficient, which compelled them to supplement the ongoing federal cleanup with a lawsuit based on West Virginia causes of action and unique to their property. After a careful review of the record, the Fourth Circuit held that the defendants were not acting under the “subjection, guidance or control” of the EPA, and therefore the federal officer removal statute did not apply. Moreover, there was no federal question to resolve as the separate state lawsuit did not challenge a CERCLA cleanup nor did it arise from the RCRA remedial measures that had been taken.

Southern Power Company v. Cleveland County
On January 14, 2022, the court decided this case involving the county’s 2007 agreement to enter into an “Incentive Development Agreement” with Southern Power to construct and operate a new natural gas plant. Soon after the agreement had been executed, the North Carolina Legislature passed a new law which affected this agreement. The new plant began operations in 2012, but the county refused to pay Southern Power the cash incentives it had agreed to pay because the agreement was inconsistent with the 2007 state law. Southern Power filed a lawsuit in federal court, but both the trial and the appellate court held that the Agreement was not a valid agreement and Cleveland County was entitled to the protections of state sovereign immunity.

Sierra Club, et al. v. U.S. Forest Service
Finally, on January 25, 2022, the Fourth Circuit rejected another federal interstate pipeline authorization. Both the Forest Service and the Bureau of Land Management issued a decision approving the revised plans of the Mountain Valley Pipeline to cross three-and-one-half miles of the Jefferson National Forest on Virginia and West Virginia. The court had earlier directed these agencies to reconsider the potential environmental impacts. This time, the court vacated the decisions of these agencies because they failed to adequately consider the actual sedimentation and erosional impacts of the pipeline; prematurely authorized the “conventional bore method” to construct stream crossings and failed to comply with the Forest Service’s 2012Planning Rule. In a footnote, the court notes that it has earlier vacated several decisions of state and federal agencies approving the Atlantic Coast Pipeline’s construction.

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

Residents of Gordon Plaza, Inc. v. LaToya Cantrell, Mayor of New Orleans
This case, decided on February 1, 2022, concerns a RCRA citizen suit complaint filed against the City of New Orleans in connection with the ongoing remediation of the Agriculture Street Landfill. The city operated this landfill for many years before it was developed as a site for residential use. The site became a Superfund site and EPA fenced off the site and took measures to protect the residents of Gordon Plaza. In 2005, Hurricane Katrina caused significant damage at the site, and EPA and the City entered into a Superfund Consent Decree in 2008. According to the court, a Superfund five-year review of this remedy concluded that the City was in compliance with its responsibilities under the Consent Decree. In 2020, the plaintiffs sued in federal court pursuant to the citizen suit provisions of RCRA, requesting that the City take additional actions at this site, and also sought a declaration of imminent and substantial endangerment. The city argued that this lawsuit was precluded by the provisions of RCRA that placed a statutory bar on such waste removal actions. In response, the plaintiffs argued that the ongoing action was not in fact a “response action” as that term has been interpreted by EPA. The Fifth Circuit held that the plaintiffs failed to establish that EPA had authoritatively interpreted “response” as the plaintiffs contended. In addition, the court agreed with the trial court that the plaintiffs’ current lawsuit was characterized by a failure to cure its pleadings and a lack of overall litigation diligence and must be dismissed.

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

Center for Community Action, et al. v. Federal Aviation Administration
Delivered on November 18, 2021, and in a fairly routine administrative law case, this decision involved an FAA action that determined that the construction and operation of a new Amazon air cargo facility at the San Bernardino Airport would have no significant adverse environmental impact. Instead of a NEPA environmental impact statement, the agency used an Environmental Assessment to satisfy NEPA, and seems to have addressed all of the technical arguments against the EA as made by the petitioners. However, Judge Rawlinson filed a passionate dissent, stating that this case “reeked of environmental racism,” Judge Rawlinson noted that San Bernardino County is one of the “most polluted corridors” in the entire United States and it is populated “overwhelmingly” by people of color. Consequently, the FAA’s environmental analysis was skewered, and a full-blown EIS was called for. Judge Bumatay, in his concurrence, noted that none of the parties themselves raised the issue of environmental racism, and the court was accordingly unable to address the issues raised by Judge Rawlinson.

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

Board of County Commissioners, et al. v. Suncor Energy (USA, Inc.) et al.
Our last case, decided on February 8, 2022, is another climate change damages case filed in state court and addresses the defendant energy companies attempt to remove the case to federal court. This case was remanded to the Tenth Circuit to be reviewed in accordance with the Supreme Court’s decision in a similar matter, BP v. Mayor and City Council of Baltimore. The appellate court again rejected the defendant energy companies’ arguments that ether specifically the federal officer removal provisions of 28 USC Section 1441, or federal question jurisdiction more generally, compelled the removal of this case to federal court. At this time, none of the federal courts reviewing these cases through the lens of the BP Supreme Court ruling have agreed that federal removal of these climate change damages cases was appropriate.

THE U.S. DISTRICT COURTS

The U.S. District Court for the District of Columbia

Friends of the Earth, et al. v. Debra Haaland, Secretary of the Interior, et al.
On January 27, 2022, the court decided an important NEPA case, issuing a very long ruling vacating the Department of the Interior’s Bureau of Ocean Energy Management’s (BOEM) decision to proceed with Lease Sale 257 pursuant to the Outercontinental Shelf Lands Act (OCSLA). Lease Sale 257, part of a five-year OCSLA leasing plan, would make over 80 million acres in the Gulf of Mexico available for oil and gas leasing and development. In connection with this planned sale, BOEM conducted a programmatic Environmental Impact Statement (EIS), and a Supplemental EIS for lease sale 257 in 2018. Then in 2020, BOEM utilized a unique BOEM procedure, a “Determination of NEPA Adequacy” in September 2020, but not a supplemental EIS. The plaintiffs, a group of environmental organizations, challenged the lease sale in court, primarily alleging that the decision to issue the leases violated the Administrative Procedure Act and NEPA. Other deficiencies were alleged as well, but NEPA compliance shortcomings were front and center. With regard to NEPA, the court agreed with the plaintiffs that BOEM’s analysis of projected greenhouse gas emissions was arbitrary and capricious and a violation of the APA because the NEPA-required assessment of the alternative “No Action Alternative”—meaning that the agency must consider the merits of simply deciding not to proceed with the lease sale—was defective because the agency did not calculate the number of greenhouse gas emissions that would be reduced if no oil and gas was produced and consumed by customers in foreign countries. Instead of making this calculation, the agency used a market simulation model, and concluded that foreign greenhouse gas emissions would increase even if the sale did not take place. In response, the court held that a supplemental EIS should have been prepared that would provide a more complete analysis of greenhouse gas emissions that would result from the completion of Lease Sale 257. Noting that the market simulation model used by BOEM had been rejected by other courts, the court vacated the Record of Decision for Lease Sale 257 and remanded the matter to the agency for further proceedings.

The U.S. District Court for the Southern District of Texas, Galveston Division

The State of Texas, et al. v. Joseph R. Biden, et al.
On January 6, 2022, the court agreed with the Department of Justice that a challenge to the President’s revocation of Presidential authority to construct the Keystone Pipeline must be dismissed. In 2008, TransCanada (now TC Energy) first applied for a permit to build facilities in Northern Montana where the pipeline crosses the border with Canada. The application was subjected prolonged environmental review by the State Department, and finally President Trump issued a permit in 2019. However, President Biden quickly revoked the 2019 permit after he took office, and this litigation, brought by Texas and 22 other states was filed in the Galveston federal district court. On June 9, 2021, TC Energy announced that the Keystone XL Pipeline Project was terminated. This action caused the court to determine that the controversy was moot, and therefore granted the Government’s motion to dismiss the case.


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