A report released recently by Law360 addressed environmental litigation in 2015. It was said in the report prepared by Juan Carlos Rodriguez that several decisions in high-profile environmental lawsuits sent “shockwaves” through the legal community last year. These decisions range from a U.S. Supreme Court ruling knocking down mercury emissions regulations to dueling circuit court rulings about the federal government’s jurisdiction under the Clean Water Act. The following cases are the biggest environmental decisions of 2015, according to Law360.
Michigan v. EPA
The U.S. Supreme Court in June rejected the U.S. Environmental Protection Agency (EPA) landmark rule limiting mercury and other toxic emissions from power plants, saying in a 5-4 decision that it should have considered the rule’s billion-dollar compliance costs first.
Writing for the majority, Justice Antonin Scalia said that even under the standard established in Chevron USA Inc. v. Natural Resources Defense Council Inc., which grants significant deference to federal agencies in interpreting ambiguous laws, the EPA in this case “strayed far beyond those bounds” when it read Section 112(n)(1) of the Clean Air Act to mean that it could ignore cost when deciding whether to regulate power plants. Nicholas Targ, a partner at Holland & Knight LLP, said:
In the short run, the court’s decision sends EPA’s rule back for further review, causing delay in implementation. Depending on the outcome of 2016 presidential election, this delay could be critical. As a legacy case, Michigan v. EPA suggests, first, that an agency that does not expressly evaluate the cost of compliance upfront does so at its own peril. Second, the case may represent a further erosion of Chevron deference.
The case is now back at the D.C. Circuit where a panel must oversee how the EPA complies with the high court’s decision. The agency recently studied the costs and proposed a revision to the rule that includes the analysis, and asserted that even after taking costs into consideration, the rule doesn’t have to be changed. An industry group has called the revision “inconsistent with the Supreme Court’s opinion.”
Corps of Engineers v. Hawkes
In April, the Eighth Circuit Court of Appeals found that courts can review the U.S. Army Corps of Engineers’ so-called approved jurisdictional determinations about whether a body of water is subject to its authority, overturning a lower court and splitting from the Fifth Circuit on the question. The parties in both cases have petitioned the U.S. Supreme Court to hear their cases.
Hawkes Co. Inc. wants to mine peat from wetland property owned by two affiliated companies in northwestern Minnesota, but the Corps derailed that plan when it issued an approved jurisdictional determination that the property constitutes “waters of the United States” under the Clean Water Act (CWA) and ordered the company to get a permit to discharge dredged or fill materials.
The company challenged the Corps but a district judge agreed with the agency that a jurisdictional determination was not a final agency action and therefore was not subject to judicial review.
While the Eighth Circuit appeal was pending, the Fifth Circuit Court of Appeals held that a jurisdictional determination is not reviewable final agency action under the Administrative Procedures Act and therefore not eligible for judicial review, lining it up with the Ninth Circuit. Neal McAliley, a partner at White & Case LLP, said:
These cases have the potential to significantly reduce the Corps and EPA’s ability to define what areas are within their regulatory jurisdiction. If the Supreme Court were to rule that a person can challenge a jurisdictional determination, then courts would be given a greater role in determining the scope of waters subject to jurisdiction under the Clean Water Act.
BP Deepwater Horizon Settlement
In October, the U.S. Department of Justice (DOJ) unveiled the final terms of BP Exploration & Production Inc.’s agreement to pay more than $20 billion to settle federal and state claims stemming from the 2010 Deepwater Horizon disaster, and sent the largest pollution judgment in U.S. history to a Louisiana federal judge for approval. Our firm was heavily involved in this litigation
The consent decree filed by the DOJ resolves claims made by the federal government, as well as the states of Alabama, Florida, Louisiana, Mississippi and Texas, and also more than 400 local government entities. The settlement, first announced in July, must still be approved by U.S. District Judge Carl J. Barbier, who is overseeing the sprawling multidistrict litigation over the massive oil spill in the Gulf of Mexico, after a 45-day public comment period.
BPXP said in July that it had agreed to a global settlement over its role in the largest oil spill in U.S. history, following its failure to persuade the U.S. Supreme Court to reconsider its Clean Water Act (CWA) liability as determined by Judge Barbier in 2012. That ruling from Judge Barbier formed the foundation of a three-part proceeding on liability for the spill.
In November 2012, BP pled guilty to 11 felony manslaughter charges, environmental crimes and obstruction of Congress for its role in the disaster, and was sentenced to pay $4 billion in criminal fines and penalties, restitution and community service.
In December 2012, Judge Barbier approved a $9.2 billion settlement for a class that alleged economic and property damages. BP has made several unsuccessful attempts to undo the settlement since then, citing unfairness and fraud in the claims process. BP’s problem, however, is that it agreed to the settlement and urged Judge Barbier to approve it.
Shearwater v. Ashe
A California federal judge in August struck down the U.S. Fish and Wildlife Service (FWS) rule lengthening the duration of permits to “take” – kill or harm – bald and golden eagles from five years to 30 years, a measure opposed by environmental groups and Native American tribes. The judge faulted the agency for never conducting an environmental review.
U.S. District Judge Lucy Koh said that instead of completing a National Environmental Policy Act (NEPA)-compliant environmental impact statement or environmental assessment before promulgating the final 30-year rule, the service improperly relied on a two-part “categorical exclusion” taken from U.S. Department of the Interior regulations to bypass the review process.
The American Bird Conservancy and several of its members sued the service in June 2014 over the rule and asserted that it was promulgated specifically to respond to the wind power industry’s desire to facilitate the expansion of wind energy projects in areas occupied by eagles.
Cynthia Stroman, a partner at King & Spalding LLP, said the decision spotlights the tension between two environmental objectives – the protection of species and facilitating development of renewable energy. She said:
The court’s decision reverting the permit duration back to five years reinserts the disconnect between the length of a typical wind project and the duration of its permit. Unless and until a [National Environmental Policy Act]-compliant rule is in place, project proponents will have to monetize the risk of additional requirements during the project’s lifespan.
Ms. Stroman said it is important to note that the court did not say that FWS could not issue a 30-year eagle take permit rule, and that if the agency explains its change in position in a manner that passes muster under NEPA, the agency could achieve the result it wants. The FWS has appealed the case to the Ninth Circuit.
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