Environmental Law Diary

Ninth Circuit Invalidates State Implementation Plan

2012-01-22T16:21:00.000-08:00

California's Central Valley is once again without an approved State Implementation Plan for ozone. On Friday, January 20, the Ninth Circuit held, in Sierra Club v. US EPA, that EPA had acted arbitrarily and capriciously in approving the 2004 plan.

The Valley is an extreme non-attainment area for ozone, and has been a non-attainment area since 1991. California proposed a SIP for the Valley in 2004, but amendments to the plan and EPA's review took so long that by the time EPA approved the plan, which was based on 2004 data, in 2010 there was more current data that EPA chose not to consider in approving the SIP. The Ninth Circuit held that the SIP was required to be based on "current" and "accurate" data, and although that standard doesn't require constant updating, EPA could not ignore data that was collected in 2007 and in EPA's possession when it approved the SIP.

US Supreme Court decides AEP

2011-06-22T14:02:00.000-07:00

On Monday, June 20, 2011, the US Supreme Court issued its decision in American Electric Power Co., Inc. v. Connecticut. The Supreme Court reversed the Second Circuit Court of Appeals and held that the Clean Air Act displaces any potential claim under federal common law to restrain emissions of greenhouse gases. The Supreme Court remanded the case back to the lower courts to decide whether the plaintiffs (a group of states and private land trusts) could sue for the same relief -- a cap on GHG emissions by large power companies -- under state nuisance law. The opinion did not take any position on that issue, but it was clear that at least some members, and perhaps all, of the Court would be skeptical of any claim that judges should determine GHG emissions. The decision was unanimous, with Justice Sotomayor recusing herself because she had participated in the Second Circuit decision below.

The upshot of this opinion is that it will increase the impetus for EPA to pursue comprehensive GHG regulation, even in the absence of further federal legislation. The Court made it clear that EPA is the agency charged under current federal law with regulation of GHGs, and that "[i]t is altogether fitting that Congress designated an expert agency . . . as best suited to serve as primary regulator" of GHG emissions. The Court explained that any EPA decision not to regulate GHG emissions would be subject to judicial review, and ultimately would end up back in the Supreme Court.

--Morgan

More on Judge Goldsmith's ruling and its impact

2011-05-30T21:35:00.000-07:00

As the New York Times notes in this article, Judge Goldsmith's ruling is just part of a national retreat from a cap-and-trade approach.

--Morgan

GHG Regs

2011-05-18T15:39:00.000-07:00

The most effective enemy of the California Cap-and-Trade regulations is turning out to be the environmental community. First, environmental groups sued to stop the California Air Resources Board from promulgating the cap-and-trade regulation without a further CEQA analysis -- and won. Now, the Sierra Club has asked Governor Brown to re-assess cap-and-trade. So many cliches come to mind, it's hard to know where to start: with friends like these, who needs enemies, don't let the perfect be the enemy of the good, don't throw the baby out with the bath water, etc., etc. Whatever one's view of cap-and-trade, it seems obvious that without a successful AB 32 program in California, national action on climate change is far less likely. Thus, it's strange to see environmentalists lining up in opposition.

Green Chemistry

2010-11-17T09:44:00.000-08:00

There are two mammoth environmental programs wending their way through the rule-making process in California now, CARB's proposed cap-and-trade regulations and DTSC's green chemistry initiative. The latter promises to have a far larger effect on products sold in California even than Proposition 65, which has generated its own litigation specialty. DTSC's acting director has reportedly said that DTSC will release a new draft of its green chemistry regulations within the next few days with very short 15-day public comment period.

-Morgan

Declaratory Relief in CERCLA Actions

2010-08-03T11:20:00.001-07:00

The Ninth Circuit today held that a CERCLA plaintiff that fails to prove liability for recoverable response costs may not obtain declaratory relief for future response costs that it may incur. In City of Colton v. American Promotional Events, Inc., the Ninth Circuit first affirmed summary judgment for defendants on plaintiff's claims for responses costs because plaintiff had admittedly not complied with the National Contingency Plan. The court then held, in a case of first impression in the Ninth Circuit, that plaintiff was not entitled to declaratory relief for future costs.

-Morgan

Ninth Circuit Decides CERCLA Current Owner Issue

2010-07-28T13:08:00.000-07:00

In State of California Department of Toxic Substances Control v. Hearthside Residential Corp., the Ninth Circuit answers one of the unanswered questions of CERCLA liability -- is the "current owner" of a CERCLA facility, one of the four categories of responsible parties, the owner at the time a lawsuit is filed, or at some other time? The Ninth Circuit holds that the "current owner" is the owner at the time that response costs are incurred. The decision also provides a very handy statement of the various purposes of CERCLA, and will probably be cited far more for those purposes than for its holding. The decision makes sense, because costs are usually incurred from the time of discovery of a release, and any other rule would create a game of hot potato in which parties have an incentive to transfer the property after discovery of contamination but before a lawsuit is filed. One interesting ramification is that because costs may be incurred over a long period of time, there may be more than one "current owner," and perhaps many.

-Morgan

Draft Cap-and-Trade Regulations

2009-12-03T08:58:00.000-08:00

CARB's new very preliminary draft cap-and-trade regulations are now available on CARB's website. The draft regulations have placeholders for many of the most important provisions, such as how allowances will be distributed, how many will be auctioned and how many will be freely distributed. And CARB has not yet made a decision whether to include industrial emitters of less than 25,000 MTCO2e in the initial cap-and-trade phase from 2012 to 2015. CARB's overview summary provides a schedule for the promulgation of the regulations, which are scheduled to go into effect January 1, 2012.

-Morgan

Final GHG Reporting Regulations Published

2009-11-02T17:27:00.000-08:00

On October 30, 2009, EPA published its final greenhouse gas reporting regulations in the Federal Register. The regulations are described below in my September 28 post.

-Morgan

District Court Allows Katrina Victims to Pursue Climate Change Lawsuit

2009-10-19T16:45:00.001-07:00

In Comer v. Murphy Oil USA, residents along the Gulf Coast filed suit against numerous energy companies claiming defendants' business activities contributed to global warming that contributed to the destruction of their properties during Hurricane Katrina. J. Dennis rules that plaintiffs have standing to assert their public and private nuisance, trespass, and negligence claims, and that none of these claims presents nonjusticiable political questions. But plaintiffs' unjust enrichment, fraudulent misrepresentation, and civil conspiracy claims must be dismissed for prudential standing reasons.

-Morgan Gilhuly and Chris Jensen

New GHG Reporting Requirements

2009-09-28T10:51:00.001-07:00

On September 22, 2009, EPA issued final greenhouse gas reporting regulations. The text of the regulations, and some explanatory materials are available here.

In general, the regulations apply to certain industry categories and to generators of more than 25,000 metric tons of CO2 equivalent GHGs. Reporting is, for the most part, based on emissions from a specific facility (not an entire company) but there are exceptions, for example for automobile manufacturers. Certain industry categories (petroleum refineries, cement manufacturing) are required to report regardless of the threshold; other industries that were proposed for inclusion in draft regulations have been exempted (e.g., electronics manufacturing), and agricultural emissions are mostly exempt. Most building owners will not be required to report emissions from boilers and facility equipment because those sources, even for a large building, are unlikely to meet the 25,000 metric ton threshhold. Similarly, virtually all state and local government facilities are likely to fall below the reporting threshhold. EPA estimates that the reporting regulations will cover 85 percent of greenhouse gas emissions from the United States.

Reporting will be required starting January 1, 2010, with the first report due March 31, 2011.

EPA's website has a list of frequently asked questions that help to answer some of the questions about applicability of the regulations, but this rule is just the beginning in what will likely be a more comprehensive set of reporting regulations.

-Morgan

Second Circuit Reinstates States' Nuisance Suits

2009-09-22T11:30:00.000-07:00

The Second Circuit has reversed a district court decision and reinstated a nuisance suit, under the federal common law, against electric power providers brought by several states and environmental organizations. A copy of the decision is available here. The Second Circuit panel originally included Justice Sotomayor, but because of her elevation to the Supreme Court the two judges remaining on the panel decided the matter themselves.

-Morgan

New Pew Update to IPCC

2009-06-19T08:41:00.000-07:00

And here's a new Pew Center report, updating the IPCC's Fourth Assessment Report on the effects of climate change. There's no good news here.

-Morgan

White House Report on Climate Change

2009-06-18T14:23:00.001-07:00

Thirteen federal agencies have published a new report on the impacts from global climate change. The key findings from the report, in very general form, can be found here. This report does not provide a prescription for legislative action, but its factual findings will support proponents of Waxman-Markey and other legislative action.

-Morgan

Scoping Plan

2009-05-22T15:23:00.000-07:00

The California Air Resource Board's Climate Change Scoping Plan is available here.

EPA Endangerment Finding

2009-04-17T10:56:00.000-07:00

EPA signed proposed endangerment and cause or contribute findings today. The proposed findings and the technical backup are available here. A sixty day comment period will begin when the proposed findings are published in the Federal Register. EPA is also holding two public meetings on the proposed findings. The west coast meeting will be held in Seattle on May 21.

--Morgan

More Rumors About An Endangerment Finding

2009-03-24T13:52:00.000-07:00

There are more rumors that an endangerment finding for greenhouse gases is imminent. Here's the latest from one of the New York Times' blogs.

-Morgan

Warming costs for California

2009-03-13T09:07:00.000-07:00

Here's a summary of the Climate Action Team's latest estimates of the cost of climate change for California: http://www.chicagotribune.com/news/nationworld/sns-ap-climate-change-california,0,4184482.story The final report is due out at the end of March.

New Federal GHG Reporting Rules Announced

2009-03-10T13:12:00.000-07:00

Its only March and the new administration is already laying the groundwork to address climate change. EPA proposed a rule today that requires mandatory reporting of greenhouse gas (GHG) emissions from large sources.

The rule would require that suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions submit annual reports to EPA. The gases covered by the proposed rule are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).

The preamble to the Rule, which hasn't yet been published in the Federal Register, is at: http://www.epa.gov/climatechange/emissions/downloads/MRRPreamble.pdf

The press release, announcing the rule is at: http://yosemite.epa.gov/opa/admpress.nsf/6424ac1caa800aab85257359003f5337/4bd0e6c514ec1075852575750053e7c0!OpenDocument

-Morgan

The End of California Agriculture?

2009-02-08T14:08:00.000-08:00

U.S. Secretary of Energy Steven Chu reportedly said this week that climate change could mean "no more agriculture in California." While Chu was referring to a worst-case scenario, in which the Sierra snowpack would be reduced by 90 percent, this a stark comment from a cabinet official.

-Morgan

Futures

2008-11-19T09:22:00.000-08:00

According to the Environmental Markets Newsletter, the Chicago Climate Exchange has begun trading in futures that will require, for contracts expiring in 2013 and later, the delivery of greenhouse gas emission allowances that would be usable for compliance with a mandatory U.S. greenhouse gas cap-and-trade program. (If there is no program by then, then other allowances may be delivered.) These contracts allow companies to hedge today against a future cap-and-trade program.

-Morgan

ABA Survey

2008-11-18T09:05:00.000-08:00

The American Bar Association is conducting a very brief survey of lawyer attitudes towards the recession. I will be interested in the results if for no other reason than to see how long lawyers as a group think a legal recession will last. If the "wisdom of crowds" research holds true, this collective prediction may be worth reading.

-Morgan

California's Price Tag

2008-11-17T11:17:00.000-08:00

The LA Times reports today on a study by two UC Berkeley researchers that puts the annual costs to California from climate change at $300 million to $3.9 billion. About $2.5 trillion of real estate assets in California are subject to threats associated with global warming.

-Morgan

Cap and Trade News

2008-11-11T09:22:00.000-08:00

http://www.bloomberg.com/apps/news?pid=20601072&sid=aa8POBVmixHg

California's blueprint to address global warming won't include details of an emissions-trading program as regulators try to build consensus on how best to organize the market-based system.
The California Air Resources Board will begin a rule-writing process after next month's approval of the so-called scoping plan and is seeking outside help from experts to recommend ways to build a cap-and-trade system, said Mary Nichols, chairwoman of the rule- making panel. Under state law, the program must be ready to begin by 2012.

Draft Cap and Trade Legislation

2008-10-30T09:51:00.000-07:00

The House Energy and Commerce Committee has released draft cap-and-trade legislation. On the key issue of whether allowances will be allocated by the government or auctioned, the draft legislation incorporates a range of possible alternatives, from mostly allocated to all auctioned. Under the latter scenario, 17.5 percent of the auction proceeds would be used to reduce the federal deficit with the rest distributed to consumers, energy efficiency and greenhouse gas reduction measures, and 0.5 percent for "management" -- federal agency management of the program.

-Morgan

Big Picture Facts

2008-08-18T08:22:00.000-07:00

The legal literature on climate change tends to focus on particular issues, and only rarely reads the big picture facts that drive the issue. A recent article in The New Yorker by Elizabeth Kolbert reported these key facts:

"This year, the world is expected to burn through some thirty-one billion barrels of oil, six billion tons of coal, and a hundred trillion cubic feet of natural gas. The combustion of these fossil fuels will produce, in aggregate, some four hundred quadrillion B.T.U.s of energy. It will also yield around thirty billion tons of carbon dioxide. Next year, global consumption of fossil fuels is expected to grow by about two percent, meaning that emissions will rise by more than half a billion tons, and the following year consumption is expected to grow by another two percent.

"When carbon dioxide is released into the air, about a third ends up, in relatively short order, in the oceans. . . . A quarter is absorbed by terrestrial ecosystems . . . and the rest remains in the atmosphere. . . ."

-Morgan

ARB Scoping Plan

2008-06-30T08:19:00.000-07:00

The California Air Resources Board has released its draft scoping plan.

Report Documents Current Effects of Global Warming

2008-05-29T09:51:00.000-07:00

An interesting report from the University of Maryland's Joint Global Change Research Institute documents the current effects of climate change in the U.S. This report is of interest because (1) it identifies effects that are specific enough that they might be the subject of litigation, and (2) it is authoritative, and therefore will likely be cited as a foundation for an expert opinion. Some of the effects that the report identifies are:

Increased risk of crop failures

Reduced productivity of livestock and dairy animals

Increasing forest fires, insect outbreaks and tree mortality

Changes in precipitation and drought patterns

Los Angeles GHG Credit Program Announced

2008-02-15T09:19:00.000-08:00

GHG credit markets are taking on a local flavor.

At its February 1, 2008 meeting, the South Coast Air Quality Management District governing board approved a workplan for implementing a voluntary GHG emission reduction credit program, known as SoCal Climate Solutions Exchange Program.

An overview of the Program and workplan are available here: www.aqmd.gov/hb/2008/February/08023Aa.html

One likely use of the GHG credits would be in conjunction with the mitigation requirements imposed by CEQA. Concerns are already being raised about the compatibility of this Program with the cap-and-trade system being developed by the California Air Resources Board.

District staff intend to develop the contours of this Program, including protocols for measuring emission reductions, over the coming months with the goal of presenting the final plan to the District governing board for approval in September 2008.

- Brett

Fees for GHG Emissions

2008-02-11T09:25:00.001-08:00

The Bay Area Air Quality Management District has proposed a fee for emissions of GHGs from all facilities with stationary sources in its jurisdiction. The proposed fee has been cited in the press as in essence a carbon tax, but it is not. It is a cost-recovery fee to fund the Air District's GHG programs, principally developing an inventory of GHG emissions. The amount of the fee -- $0.042 per ton of CO2 equivalent -- is so low that it is not likely to have a significant effect on GHG emissions. The largest emitter of CO2 in the Bay Area will, according to the Contra Costa Times, pay less than $200,000 per year. Nevertheless, the fee is significant because it will be the first such fee imposed on CO2 emissions in California. More are sure to come.

-Morgan

CEQA Significance Determinations

2008-02-05T14:53:00.000-08:00

CEQA significance determinations have been the focus of much of the early climate change litigation in Calfiornia. The California Air Pollution Control Officers Association has a new white paper on how to determine whether greenhouse gas emissions from a project are significant under CEQA, how to measure GHG emissions, and how to mitigate GHG effects. The white paper is written as a guide for local agencies, but it may also interest project proponents. The white paper is available at http://www.capcoa.org/.

-Morgan

Fiat or Collaboration?

2008-01-16T18:22:00.000-08:00

We were recently contacted by PENNumbra, www.pennumbra.com, the University of Pennsylvania Law Review's online supplement about a debate it is featuring on the process of making environmental law -- should we continue the current regulatory process, in which regulated entities are subject to environmental requirements that are imposed by fiat and that usually cannot be negotiated, or should we adopt a collaborative process, in which regulated entities negotiate the requirements that will apply to their businesses? You can check out the debate between Professors Eric W. Orts, of Penn's Wharton School, and Cary Coglianese, of Penn's Law School here: http://www.pennumbra.com/debates/debate.php?did=13 Professor Orts's skepticism of the independence of political and other governmental actors in a world in which "lobbyists and campaign financiers . . . play large and often decisive roles in th[e public policymaking] process" leads him to conclude that "in many situations, it makes better sense to trust less in the traditional centralized process of environmental lawmaking and to consider . . . the alternative of engaging in collaborative environmental law." Professor Coglianese responds that, by making agreement the primary aim of policymaking, collaborative environmental law actually conveys a willingness to give in to interested parties in pursuit of the "holy grail" of consensus.

This debate is an interesting academic accompaniment to the current process of developing GHG regulations in California, in which the Air Board is conducting an unprecedented number of public workshops soliciting every type of public input regarding the development of regulations to implement California's Global Warming Solutions Act. In this case, the State is attempting to get as much buy-in as possible for regulations which will inevitably run into significant political
opposition. The State's top-down process is not in fact "collaborative" but the State is trying to give the process the trappings of a collaborative approach. It remains to be seen how much goodwill that process will generate.

-Morgan

Climate Change Effects

2008-01-03T12:57:00.000-08:00

In November, the California Air Resources Board staff held a workshop on the development of ARB's scoping plan under AB 32. One of the slides from that presentation describes the likely effects of climate change on California by the years 2070 to 2099. Even assuming the best case (meeting the Governor's target of an 80 percent reduction in emissions, presumably worldwide), California sea levels will rise 6 to 14 inches and there will be a 30-60 percent loss of the Sierra snow pack. With no reduction in emissions, sea levels will rise 2 to 3 feet, and there will be a 90 percent loss of the Sierra snow pack. You can see the slides for yourself here (they are posted on the ARB's scoping plan website).

-Morgan

Proposed Reporting Regulations

2007-11-26T13:41:00.000-08:00

The proposed reporting regulations make interesting reading. You can review the ARB staff's Initial Statement of Reasons and draft regulations here.

Interestingly, the ARB staff estimates a fairly low cost of compliance for the reporting obligations that the new regulations will impose -- on the order of $3,000 to $300,000 per facility, with the higher costs imposed on the larger more complicated facilities (see pages 82-85 of the PDF). The economic impact of AB 32 will not result from reporting GHG emissions, but from reducing them.

- Morgan

Will the IPCC and the Nobel Committee decide the next US Presidential election?

2007-10-12T09:21:00.000-07:00

Today, two related news stories broke that could decide the next US Presidential election.

First, greenhouse gases, which were not expected to cross the critical 450 ppm threshold for another decade, in fact are already at 455. The Intergovernmental Panel on Climate Change (IPCC) will report next month that earth passed the 450 threshold in mid-2005, according to Tim Flannery, an award-winning climate scientist who has reportedly seen the report's underlying data. Dr. Flannery was quoted by Reuters and the Christian Science Monitor as saying, "What the report establishes is that the amount of greenhouse gas in the atmosphere is already above the threshold that could potentially cause dangerous climate change." See http://www.csmonitor.com/2007/1011/p11s01-wogi.html for the Monitor's story.

Second, the Norwegian Nobel Committee announced that the Nobel Peace Prize for 2007 has been awarded jointly to the IPCC and Al Gore "for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change." See http://nobelpeaceprize.org/. The Committee went on to say:

"Al Gore has for a long time been one of the world's leading environmentalist politicians. He became aware at an early stage of the climatic challenges the world is facing. His strong commitment, reflected in political activity, lectures, films and books, has strengthened the struggle against climate change. He is probably the single individual who has done most to create greater worldwide understanding of the measures that need to be adopted.

"By awarding the Nobel Peace Prize for 2007 to the IPCC and Al Gore, the Norwegian Nobel Committee is seeking to contribute to a sharper focus on the processes and decisions that appear to be necessary to protect the world’s future climate, and thereby to reduce the threat to the security of mankind. Action is necessary now, before climate change moves beyond man’s control."

The Peace Prize is awarded by an Oslo-based committee of five, coincidentally the same number of (Washington-D.C.-based) people who decided the 2000 US Presidential election against Mr. Gore.

-Brian

Everything you know about carbon markets and taxes is wrong.

2007-10-03T07:31:00.000-07:00

Here's a thesis that's getting some attention: the growing focus on de-carbon-izing the atmosphere is distracting the world from its only hope of averting climate change disaster. That hope, according to Alan Carlin, a Senior Economist at USEPA, is solar radiation management, or SRM. Essentially a form of global climate engineering, SRM involves the introduction of particulate matter into the stratosphere to block incoming radiation and, thereby, turn down the planet's thermostat. As proof of the approach's efficacy, Mr. Carlin cites evidence that volcanic eruptions have caused measureable, sustained reductions in average world temperature.

Mr. Carlin's article, which appeared in the September/October 2007 issue of The Enviromental Forum (a publication of the Environmental Law Institute), can be found here: http://carlineconomics.googlepages.com/CarlinEnvForum.pdf.

Federal Judge Affirms State Regulation of Greenhouse Gas Emissions from Motor Vehicles

2007-09-13T12:40:00.000-07:00

Chalk up another victory to the states in their ongoing battle with the federal government over regulation of GHG emissions from motor vehicles. On Wednesday, District Court Judge William Sessions determined that the GHG regulations first enacted by California and later adopted by Vermont are not preempted by federal law.

In a massive, 240-page opinion following trial, the Court roundly rejected the automobile industry's challenges under various preemption theories. In particular, the Court held that: (1) California's regulations were not expressly preempted by either Section 209(b) of the federal Clean Air Act or the fuel economy standards of the Environmental Policy and Conservation Act; (2) federal law does not "occupy the field" of regulation of carbon dioxide emissions from motor vehicles; (3) the regulations do not sufficiently "conflict" with federal laws to warrant preemption; and (4) the regulations do not intrude upon or conflict with national foreign policy.

Conflict preemption was the primary focus of both the trial and the opinion. At trial, the automobile industry attempted to prove that the state regulations stood as an obstacle to EPCA's objectives and purposes by demonstrating that the regulations were technologically and economically infeasible. The Court was not persuaded: "In light of the the public statements of industry representatives, history of compliance with previous technological challenges, and the state of the record, the Court remains unconvinced automakers cannot meet the challenges of Vermont and California's GHG regulations."

The opinion can be found here: http://www.vtd.uscourts.gov/Cases/05cv302.html

____________________________
Brett S. Henrikson, Esq.
Barg Coffin Lewis & Trapp, LLP
One Market
Steuart Tower, Suite 2700
San Francisco, CA 94105
tel: 415.228.5400
fax: 415.228.5450
email: bh2@bcltlaw.com

Air District Regulations and Preemption

2007-08-26T20:48:00.000-07:00

On August 20, 2007, the Ninth Circuit held that South Coast Air Quality Management District requirements that California government agencies purchase low-emission vehicles for their fleets are not preempted by the federal Clean Air Act. The decision is based on California's right, under the "market participant doctrine," to choose the type of vehicles that the state will purchase for its own use. The Ninth Circuit did not reach the issue whether the same type of rules, as applied to private fleets, would be preempted, but instead remanded the case to the district court for a determination whether the "fleet rules" would be preempted. Although the decision's impact is limited, it is nevertheless an important precedent in the continuing tug of war between the federal government and California over emissions limitations.

-Morgan

Climate Change and Land Use

2007-08-14T11:22:00.000-07:00

Land use promises to be one of the hottest areas of controversy in the development of climate change policy. We have already seen efforts by California AG Jerry Brown to require local governments to incorporate climate change evaluations into the CEQA review process. Here's a blog entry describing an ABA discussion on the topic. The court decisions thus far have all focused on challenges brought after a project has already been approved. We're still waiting for the first decision to address a challenge brought pre-approval.

Morgan

Falling Prices For Emissions Credits

2007-07-11T15:15:00.000-07:00

One of the interesting phenomena of this early stage of the development of carbon trading markets is the long-term price trend. On the European market, there are forecasts that carbon offsets for the 2007-2012 period will fall to 8 Euros per ton from about 21 Euros per ton today. See article here. On the Chicago Climate Exchange, prices have fallen from over $4.50 last year to under $3.50 this year. While falling prices may be bad for the carbon trading markets, on a global level they are encouraging. These prices apparently reflect the ease with which industries are finding low cost methods of reducing and/or offsetting CO2 emissions. This price signal, together with the large flow of investment dollars into "green" climate change projects (see BBC article), will likely encourage further and more vigorous government action to reduce GHG emissions. As mandatory reductions take hold in California and elsewhere in the U.S., it will be interesting to watch the price signal, whether rising or falling, and to see whether and how government reacts to it.

Cap-and-Trade Is Whack-A-Mole Until Everyone's Bound By The Cap

2007-06-15T10:36:00.000-07:00

It may not be news, but now it's scientifically documented: when we export manufacturing to China and import the resulting goods back here, the net result is to increase greenhouse gas emissions. See the June 2007 paper by Carnegie Mellon University engineers Christopher L. Weber and Scott H. Matthews, published in the journal Environmental Science and Technology. Here's a link to a press release about the paper: http://www.eurekalert.org/pub_releases/2007-06/cmu-cmr061407.php.

This phenomenon is likely to accelerate as less-than-global cap-and-trade schemes are enacted.

--Brian

CCX announces formation of California Climate Exchange

2007-05-30T08:53:00.000-07:00

The Chicago Climate Exchange has announced that it is forming a California-specific exchange to handle any trading scheme that may develop under AB 32. Here's the press release:

http://www.chicagoclimateexchange.com/news.jsf?story=1401

Morgan

Climate Change & CEQA

2007-05-16T10:15:00.000-07:00

The California Attorney General has urged local officials to reject the Environmental Impact Report (EIR) for the Yuba Highlands development project because the EIR failed to address greenhouse gas emissions. The Attorney General asserted that this failure constituted a violation of the California Environmental Quality Act (CEQA).

http://www.appeal-democrat.com/news/yuba_48418___article.html/county_letter.html

Chief Energy Officer?

2007-05-10T16:56:00.001-07:00

According to a report by Hill & Knowlton, 82 percent of senior technology leaders from around the world said they "closely monitor" global warming news, but only 35 percent have an energy strategy to deal with it. The report suggests the creation of a corporate Chief Energy Officer position.

http://www.greenbiz.com/news/news_third.cfm?NewsID=35038

Morgan

More on the Climate Registry

2007-05-09T09:48:00.000-07:00

Following up on yesterday's news, here is the Climate Registry's press release on its new members:

http://www.theclimateregistry.org/The_Climate_Registry_Press_Release.pdf

Morgan

2007-05-08T15:21:00.000-07:00

Led by California, 31 states with over 70% of the U.S. population
announced a nearly-national greenhouse gas registry today.

http://www.latimes.com/news/local/la-me-greenhouse9may09,0,3341341.story
?coll=la-home-headlines

Morgan

Media coverage of climate change report

2007-05-04T08:12:00.000-07:00

Today's International Panel on Climate Change (IPCC) report, "Mitigation of Climate Change," outlines ways to mitigate global warming. http://www.ipcc.ch/

Wednesday's USA Today story previewing the report is headlined "Fixing climate carries big costs." http://www.usatoday.com/tech/science/environment/2007-05-02-climate-fix-cost_N.htm. As a result, many may resist taking action to fix climate change because they believe the costs are big.

What is missing from the headline, however, is any consideration of the costs of not taking action. As the report's "Summary for Policymakers" states, "The projected mitigation costs do not take into account potential benefits of avoided climate change." http://www.ipcc.ch/SPM040507.pdf, p. 10. Moreover, available evidence, notably the Stern report, indicates that "the benefits of strong and early action far outweigh the economic costs of not acting." http://www.hm-treasury.gov.uk/media/999/76/CLOSED_SHORT_executive_summary.pdf.

To be fair, USA Today's story beneath the headline went on to say, "The report will underline the environmental and financial benefits of quick action to cut emissions." But the headline is an example of how incomplete analysis can paint a misleading picture.

--Brian

Toward a US Cap And Trade System

2007-05-03T09:26:00.000-07:00

David Hayes, former Deputy Secretary of the Interior, has an interesting report on the Public Policy Institute's website on how the US should structure a carbon cap and trade system, and the benefits to the US of setting up a market now. Hayes argues that the US's failure to join the Kyoto parties has put the US behind in an important developing market, and he identifies lessons that the US should learn from the development of carbon markets to date.

On that note, the World Bank reports that the global carbon market tripled from $11 billion to $30 billion in 2006, with the EU accounting for about 75 percent of that amount. http://www.iht.com/articles/2007/05/02/business/carbon.php.

Morgan

Biofuels and unintended consequences

2007-04-30T08:46:00.000-07:00

As is so often the case in matters of environmental policy, the law of unintended consequences is rearing its problematic head in the much-hyped bio-fuels arena. Whether and how much bio-fuels may help solve global warming depends on many factors, Mike Corder of the Associated Press reported yesterday:

In the rush to develop biofuels, forests are burned in Asia to clear land for palm oil, and swaths of the Amazon are stripped of diverse vegetation for soya and sugar plantations for ethanol.

http://www.washingtontimes.com/world/20070428-105649-1097r.htm.

Mr. Corder's article goes on to explain that a Dutch commission has developed a framework designed to ferret out whether a given bio-fuel production process is doing more harm than good.

--Brian

British Columbia Reported To Join Western Region Climate Initiative

2007-04-29T20:21:00.000-07:00

Reuters reported on April 25 that British Columbia has joined California and five other states in the Western Region Climate Initiative, a carbon trading market promoted by Governor Schwarzenegger.
http://news.yahoo.com/s/nm/20070425/wl_canada_nm/canada_environment_britishcolumbia_ca_col_1

Proposed Early Actions Under AB 32

2007-04-24T17:13:00.000-07:00

The California Air Resources Board has issued a report regarding proposed Early Actions under AB 32 to mitigate climate change. The report is one of many resources on CARB's Climate Change page.

There are a number of additional interesting documents, including the Governor's executive orders regarding the Low Carbon Fuel Standard and the Western Regional Climate Action Initiative, on the Governor's energy page.

Climate Change: A New Job

2007-04-09T07:36:00.000-07:00

Climate change legislation and regulations (and possibly litigation) will be the most important environmental law trend in the next decade. California passed the first state legislation, Assembly Bill No. 32, to cap and reduce greenhouse gases in 2006. AB 32 by itself will have little direct effect on industry, but it sets in motion a planning and regulatory process that will eventually affect every business that uses energy -- electricity, any type of vehicle besides a bicycle, even potentially a leaf blower. Surprisingly, many lawyers I know, even environmental lawyers, have not read the statute. It's a short, easy read, and here's what it provides in a nutshell:

AB 32 adds a new Division 25.5 to the Health & Safety Code, starting at Section 38500. Part 1, Sections 38500 to 38505, contains a short title (the "California Global Warming Solutions Act of 2006"), findings and declarations, and definitions. The Act defines greenhouse gases to include not only carbon dioxide and methane, but also nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

Part 2, Section 38530, authorizes the State Air Resources Board to adopt regulations requiring the reporting and verification of greenhouse gas emissions. The regulations may apply to all "greenhouse gas emissions sources," and the State Board has discretion to determine which sources are significant enough to be regulated. Thus, the statute ducks the question of whether greenhouse gas regulations should apply to sources at the level of leaf blowers and lawn mowers, or just to large industrial users. The statute does require, however, that the State Board "[a]ccount for all electricity consumed in the state."

Part 3, Sections 38550 and 38551, requires the State Board to determine the state's level of greenhouse gas emissions in 1990, set that level as a target for emissions in 2020, and continue reductions after 2020.

Part 4, Sections 38560 to 38565, sets forth the tools that the State Board may use to reduce greenhouse gas emissions. First, the State Board's regulations must be designed to "achieve the maximum technologically feasible and cost-effective greenhouse gas emission reductions from sources or categories of sources." Second, subject to that standard, the State Board shall publish a list by June 30, 2007 -- three months from now -- of "early action" measures that can be implemented in regulations to be adopted by January 1, 2010. Third, by January 1, 2009, the State Board shall prepare a "scoping plan," which will be updated every five years, to reduce greenhouse gas emissions. Fourth, by January 1, 2011, The State Board shall adopt regulations, which will become effective January 1, 2012, to achieve the plan. The Act includes principles to guide the Board in developing regulations (minimizing costs and maximizing benefits), and in particular AB 32 requires in Part 5, Section 38570, that the State Board consider a cap-and-trade emissions system.

Parts 6 and 7 contain enforcement and miscellaneous provisions; the Board is empowered to mpose fees on greenhouse gas sources, and there is an escape clause that allows the Governor to postpone deadlines set by the State Board in one-year increments. There's more detail, but that's the gist of it.

Here in summary is the time-table:

June 30, 2007: Identification of early action measures
January 1, 2009: State Board to prepare scoping plan
January 1, 2010: Early action measure regulations to be adopted
January 1, 2011: Adopt regulations to achieve scoping plan
January 1, 2012: Regulations become effective

Some companies have already begun to incorporate greenhouse gas planning into their business decision-making, but most businesses seem to think this process will happen to someone else. It's possible that some small businesses may not be much affected, but every large business should be following the regulatory process and identifying those key strategic business decisions that may be affected by greenhouse gas emissions regulations. If you're in environmental law, especially if you work in California, this is likely to be your new job.

Environmental Enforcement Through Strict Liability

2006-12-07T09:11:00.000-08:00

My year 2006 was mostly consumed with a trial and post-trial briefing in City of Modesto v. Dow. As a result, this blog has been dormant. I do intend, however, to resume posting in 2007.

One of the trends in the late 1990's and early 2000's that we have seen in our practice is the use of state product liability tort claims as an enforcement tool for municipalities to address environmental contamination. In City of Modesto, for example, the City sued product suppliers for PCE contamination in Modesto. These claims beg the question whether strict liability was ever intended to encompass claims for environmental contamination by a public entity. They also raise a host of questions regarding the policy bases on which the strict liability doctrine was founded -- for example, should the strict liability doctrine apply outside the context of a commercial sale of a product -- i.e., when the product is still in the product "pipeline"?

In Nelson v. Exxon Mobil, the trial court was convinced that strict liability should not apply to a product that was still in the product pipeline:

“While California law permits bystanders injured by a product, in certain circumstances, to recover under strict product liability, it has apparently only been when that injury was attendant to the use or consumption of the product, not while the product was still possessed and stored by a participant in the stream of commerce.”

The California Court of Appeal reversed, holding that sale of the product to an "ultimate consumer" is not required for the imposition of strict liability:

"In short, there is no basis for a narrow construction of the class of 'user' that supports imposition of strict liability. Our conclusion is consistent with caselaw recognizing, in other contexts, that there are reasonably foreseeable incidental and attendant uses of a product, such as storage and disposal."

The court also stated that "California provides broad, protection to bystanders and does not limit strict liability to situations occurring after sale of the product or equivalent transaction."

Nelson suggests that at least on the issue of whether strict liability applies to pre-consumer use, the courts may apply the strict liability doctrine broadly. But it does not address the policy issues that arise when a public entity plaintiff employs strict liability as an environmental enforcement tool. In Nelson, the plaintiffs were the owners of a private water company, and thus the court had no occasion to consider whether the policies supporting strict liability would support a claim that is in essence environmental enforcement. That issue has yet to be addressed.

Agency Supervision Does Not Necessarily Satisfy Public Participation Requirement

2006-01-30T09:53:00.000-08:00

In Carson Harbor Village v. Unocal, decided January 12, 2006, the Ninth Circuit addressed one of those oft-repeated but largely untested assumptions of environmental law: that agency supervision of a cleanup is sufficient to meet the public participation requirement of the National Contingency Plan for the purposes of recovering CERCLA response costs. The Ninth Circuit held that Regional Board oversight of the cleanup in Carson Harbor was not sufficient to meet the public participation requirement. The court left open whether greater involvement would have been sufficient, but from the opinion it appears that the Board's supervision in this case was typical of Board involvement in voluntary cleanup cases.

Proposition 65 Safe Harbor Warnings Upheld

2005-11-30T09:44:00.000-08:00

In Environmental Law Foundation v. Wykle Research, Inc., the California Court of Appeal affirmed a decision awarding summary judgment to Wykle Research, which used one of Proposition 65's "safe harbor" warnings to warn of lead in dental amalgam. ELF challenged the warning, which used the safe harbor language verbatim, on the grounds that it was not likely ever to reach the ultimate consumer. The court acknowledged that, as many dentists are not subject to Proposition 65's warning requirements, it was possible that some consumers would never receive the warning. But it concluded that the safe harbor warnings were designed to provide certainty to product sellers and that this purpose would be frustrated by holding that a manufacturer must use not just a safe harbor warning, but also the best possible warning. Proposition 65's warning requirements are often difficult to interpret for specific sellers, and any decision that brings greater certainty to Proposition 65's requirements is welcome.

Supreme Court Agrees to Review Three Clean Water Act Cases

2005-10-11T11:53:00.000-07:00

The Supreme Court is taking a rare excursion into environmental law to review three Clean Water Act decisions. See the AP article here. These cases will give the Supreme Court an opportunity to decide the scope of federal power in environmental cases. The decisions may also determine the reach of the Commerce Clause in other, non-environmental contexts.

After Aviall, and with possibly two new justices on the Court, almost nothing that the Supreme Court might decide in these cases would suprise me. It will be an interesting year.

Regulatory Activity Related to Air Emissions from Petroleum Refineries

2005-09-30T15:49:00.000-07:00

By Brett S. Henrikson

Starting October 1, 2005, Bay Area refineries face new wastewater collection and reporting requirements. Regulation 8, Rule 8 of the Bay Area Air Quality Management District was adopted on September 15, 2004, to reduce air emissions from wastewater collection systems by focusing on transportation and separation equipment. The Rule is found here: http://www.baaqmd.gov/dst/regulations/rg0808.pdf BAAQMD has issued an advisory to assist refineries in meeting the upcoming deadlines. The Advisory is available at:
http://www.baaqmd.gov/enf/compliance_assistance/advisories/adv_091405_refinery_wastewater.pdf
Rule 8-8 is not the only recent regulation on Bay Area refineries. Just 2 months ago, BAAQMD issued a new rule regulating emissions from refinery flaring. Petroleum refineries use flaring for the safe disposal of gases generated during the refining process. BAAQMD originally identified refinery flaring as a potential regulatory target in the San Francisco Bay Area 2001 Ozone Attainment Plan. New Regulation 12, Rule 12 governing refinery flaring can be found here: http://www.baaqmd.gov/dst/regulations/rg1212.pdf and further regulatory history, including the BAAQMD Staff Report and Environmental Impact Report, can be found here: http://www.baaqmd.gov/pln/ruledev/regulatory_public_hearings.htm The Bay Area 2001 Ozone Attainment Plan can be found here http://www.baaqmd.gov/pln/plans/ozone/2001/index.htm.
Air emissions from petroleum refineries will also be the target of federal regulators in the coming months. As part of a proposed Consent Decree, U.S. EPA has committed to update the New Source Performance Standards for petroleum refineries. Section 111 of the federal Clean Air Act (42 U.S.C. § 7411) requires U.S. EPA to establish initial NSPSs for certain industrial classes that contribute significantly to air pollution. http://www4.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00007411----000-.html U.S. EPA generally must also review an existing NSPS every 8 years to determine if updates are necessary. U.S. EPA has not reviewed the NSPS for petroleum refineries since 1974. Under the terms of the settlement agreement, EPA must propose revisions to the NSPS (40 CFR Part 60, Subpart J) within 18 months, with the final rule due within 30 months. http://www.access.gpo.gov/nara/cfr/waisidx_05/40cfr60_05.html
The lawsuit leading to the settlement is Our Children's Earth Foundation, et al. v. U.S. EPA, Case No. C05-00094 (N.D. Cal.). The settlement agreement was published in the Federal Register on August 29, 2005 (70 Fed. Reg. 51040).

SBREFA

2005-09-13T10:07:00.000-07:00

Have any of you had any experience using the Small Business Regulatory Enforcement Fairness Act (SBREFA) as a tool in settlement negotiations with federal agencies? The act has a provision regarding civil penalties that states:

Each agency regulating the activities of small entities shall establish a
policy or program within one year of enactment of this section to provide
for the reduction, and under appropriate circumstances for the waiver, of
civil penalties for violations of a statutory or regulatory requirement by a
small entity. Under appropriate circumstances, an agency may consider
ability to pay in determining penalty assessments on small
entities.

EPA has implemented this statute through a handful of self-reporting policies (see this report), but it seems to me that the statute also expresses a Congressional policy that might be useful in negotiations with EPA or other federal agencies. I would be very interested in anyone's experience in this regard.

Damages for Nothing

2005-07-29T14:06:00.000-07:00

Some of the most interesting cases in environmental law arise when contamination does not occur. Two such cases came across my desk recently. In Doyle v. Town of Litchfield, 2005 WL 1342794 (D. Ct. May 31, 2005), Judge Hall held on a summary judgment motion that a property owner may be entitled to recover some CERCLA response costs even though his property had not been contaminated by the defendant's release of hazardous substances. The court cited Artesian Water Co. v. New Castle County, 851 F.2d 643 (3rd Cir. 1988), and Lansford-Coaldale Joint Water Auth. v. Tonolli Corp., 4 F.3d 1209 (3rd Cir. 1993), and concluded that a plaintiff may recover monitoring and evaluation costs under CERCLA, even if no contamination ever occurred.

A similar question was presented in Jaasma v. Shell Oil Co., No. 04-2095 (3rd Cir. June 28, 2005). There the plaintiff owned property that was leased for a service station. When the lessee removed its tanks shortly before the lease expired, some contamination was found in the tank pit and partially excavated. After more than two years of sampling and reporting, the New Jersey Department of Environmental Protection issued a no further action letter, without ordering any further active remediation, which implied that the contamination that remained at the lease expiration (i.e., after the tank removal and excavation) had always been below the level requiring cleanup. The Third Circuit held that despite these facts the lessor was entitled to damages. The lease required lessee to return the property to lessor in its "original state," and, the court held, that there was a question of fact whether lessee was required to obtain a no further action letter in order to satisfy that requirement.

While the Town of Litchfield could not have avoided Doyle's claim, the claim in Jaasma resulted entirely from the language of the lease. While perhaps no one could have anticipated the Third Circuit's ruling, it is something to keep in mind the next time that you are reviewing the environmental provisions of a lease.

The Oldest Question In Environmental Law

2005-07-25T09:38:00.000-07:00

The oldest question in environmental law is "how clean is clean?" It's a question that environmental practitioners are tired of discussing, and that quickly leads to glazed eyeballs at any environmental meeting. So I shouldn't be discussing it -- but there is a new development worth notice. Under state law, the Regional Water Quality Control Boards have a two-part cleanup target for contaminated groundwater: clean up to background levels, or to health-based levels, such as the maximum contaminant level (drinking water standard) or public health goal. Which of these goals (background or health) is selected for a particular site is not often an issue of substantial dispute because in practice usually neither of them can be achieved, at least with active remediation in a reasonable time.

In May, however, the State Water Resources Control Board confronted the issue in a context where the issue does have practical consequences: should a "discharger" be required to provide alternate water supplies to persons affected by contamination that is below health standards but higher than the naturally occurring level? The case involved an Olin Corporation site in Morgan Hill, and the chemical was potassium perchlorate, which occurs naturally, if at all, only at undetectable levels. Olin and another discharger were ordered by the Regional Board to provide alternate drinking water supplies to residents whose water contained perchlorate at or above 4 ppb, even when the level of perchlorate was below the new public health goal of 6 ppb established by OEHHA. The PHG is supposed to be a level at which a person may be exposed to a chemical for a lifetime with no deleterious effects.

The State Board decided that in this context the Regional Boards should defer to OEHHA, and should not require a discharger to provide an alternate water supply. The decision includes many caveats, and the State Board expressly limits its opinion to replacement water supply decisions ("This Order applies only to requirements for water replacement and not to groundwater or soil cleanup levels required under State Water Board Resolution 92-49"), but the decision nevertheless seems to mark an important choice. The Board could have required Olin to continue providing alternate drinking water supplies, even without a health-based reason to do so. But it chose instead to conserve societal resources for another day and another threat, a threat supported by scientific evidence.

Extraterritoriality

2005-07-22T14:36:00.000-07:00

Can CERCLA be used to recover response costs incurred in a foreign nation? No is the answer, by implication from a recent case decided by the Ninth Circuit, Arc Ecology v. United States Dept of the Air Force, in which Philippine plaintiffs sought to compel the United States to conduct a preliminary assessment of Subic Bay and Clark Air Force Base in the Philippines. The Ninth Circuit found no express answer to the question of extraterritoriality in the statute, but the law presumes that a statute will be applied only within the territory of the United States. The court also found many provisions of CERCLA that suggested that Congress was thinking of the United States when it passed CERCLA.

Weird Science

2005-07-08T13:12:00.000-07:00

One of the things that often leaves out-of-staters speechless about California is Proposition 65. It's not that a citizens group can sue a company for failing to warn of the presence of a chemical in a product that bothers out-of-staters, it is that there is no agreed safe level above which a warning is required. Prop 65 allows a product seller to forego a warning if there is "no significant risk," but determining whether there is significant risk is an expensive science project. To a single product seller, that science project usually isn't worth the money. The end result is that in deciding whether to place a warning on a product, a seller usually ignores the likely dose, and therefore ignores the true risk. Thus, Proposition 65 encourages companies to place warnings on products that, practically speaking, don't pose a threat to anyone, and that often pose very small or nonexistent risks in relation to the real toxicological risks that people face everyday, such as drugs, smoking, air pollution and workplace exposures to chemicals. There is no prioritization of risks under Proposition 65. Sometimes enforcers go after real risks and sometimes not, and there is no regulatory authority to guide enforcement towards real risks.

The absence of prioritization is becoming clearer now as OEHHA (Office of Environmental Health Hazard Assessment) struggles to deal with acrylamide in foods. Acrylamide is produced in many foods, such as bread and french fries, when they are cooked. The levels present in cooked foods are many times higher than the levels that OEHHA has determined to pose no significant risk. The food industry is pushing to exempt acrylamide in cooked foods from Prop 65's warning requirement on the grounds that the acrylamide is "naturally occurring," while environmentalists are arguing that OEHHA has no authority to create an exemption.

Whoever prevails, the argument just highlights the arbitrariness of Prop 65 warnings. There are no warnings under Prop 65 on naturally occurring carcinogens in peanut butter and many other foods, but there are warnings, when you get into an elevator in California for example, that point out that there is a theoretical risk from chemicals in indoor air. Now we may get a warning that bread is "known to the State of California to cause cancer." It is highly unlikely that a rational regulatory agency would structure enforcement in this manner.

New 17200 Case

2005-06-27T12:17:00.000-07:00

One of the most versatile and poorly understood statutes in California law, Business & Professions Code Section 17200, has been the subject of much attention in recent years. Section 17200 allows a plaintiff to sue for violation of any California law. Proposition 64 recently limited the class of persons that can bring a 17200 claim, and the remedies under Section 17200 have also been limited by court decisions -- and they are getting more limited all the time. In Madrid v. Perot Systems, the court of appeal addressed two questions about the scope of available relief under Section 17200. First, the court held that "non-restitutionary disgorgement" is not available. Non-restitutionary disgorgement is disgorgement of profits that were not obtained from the plaintiffs. Section 17200 only authorizes restitutionary disgorgement of money obtained from the plaintiffs. Second, the court held that Section 17200 authorizes only prohibitory injunctions to stop an ongoing or threatened unfair business practice. If there is no threat of an ongoing or future unfair business practice, then no injunctive relief is available.

Nagging Question

2005-06-15T16:56:00.000-07:00

There are many issues in the law that are important to practitioners but that never seem to be addressed by courts. In California environmental cases, lawyers have been using continuing nuisance and continuing trespass cases to avoid the bar of the statute of limitations for decades, but there don't seem to be any cases that define the time period covered by a continuing tort claim: is it only the three years preceding the filing of the claim? or the three years preceding the filing of the claim up through trial? The latter rule would make much more sense, but try finding a plain statement of it in the cases.

Last week a new case came out that at least by implication adopts the "through trial" rule. The case was Watson v. Shell, and it concerned whether Shell would have to pay damages for the "benefit" it received from causing contamination beneath Watson's land. (Answer: no.) But tucked into the decision is this statement: "According to the jury, the amount Watson should receive for remediation was $3,915,851, and the value of the benefits obtained by Shell as a result of the gasoline contamination it caused at the Watson Center from June 1, 1993, to June 30, 2001, was $14,275,237." (Slip op. at 7.) Other portions of the opinion (unpublished unfortunately) show that trial was conducted in 2001. Because the case was tried on a continuing trespass theory, this statement strongly implies that the trial court allowed the plaintiff to seek damages up to the time of trial. The unanswered question is not directly answered, but we have a clue.

Takings

2005-06-05T21:21:00.000-07:00

In Lingle v. Chevron, the U.S. Supreme Court cut a branch out of its takings jurisprudence. Twenty-five years ago in Agins v. City of Tiburon, the Supreme Court suggested that a regulatory law could effect a taking of private property if it did not "substantially advance legitimate state interests." This formulation led the lower courts into inquiries about whether particular laws made rational sense. Indeed, in Lingle, the district court conducted just such an inquiry and concluded that Hawaii's Act 257 limiting gasoline service station rents made no economic sense, and thus constituted a taking. Lingle, however, held that the focus in a takings case should be on whether a particular regulatory act impinges upon property rights to such a degree that it effects a taking, not on whether the law is good policy.

What's left when cleanup is done?

2005-06-01T07:53:00.000-07:00

In Hogan v. United States, a Sixth Circuit decision published on May 10, the court addressed one of those problems that lurks in environmental law but never seems to be directly addressed – whether the owner of contaminated property has sustained damage even after his property has been cleaned up. Indeed in Hogan, the question is never directly answered. In Hogan, the United States conceded that it had inadvertently sold Hogan radioactive thorium alloy that Hogan had intermixed with scrap metal and soil at his salvage yard. The cleanup of the property could not remove all of the thorium, and so the US left Hogan with a barrel in which he could place radioactive waste whenever he found it on his property. Unlike many radioactive materials, the “mag-thor” alloy on Hogan’s property did not pose a health threat unless inhaled, but there was nevertheless no dispute that there remained radioactive waste on Hogan’s property. The district court, and the Sixth Circuit, both decided that despite the presence of this waste, Hogan was not damaged. Hogan argued that “’common sense and every day experience’ suggest that the remaining mag-thor ‘certainly would have some affect [sic] upon the purchase price.’” The Sixth Circuit acknowledged that “Hogan’s position has a certain intuitive appeal, [but] the evidence presented at trial persuaded the district court to the contrary.” Ultimately, this case like many turned on the burden of proof. Hogan had the burden, and he was unable to produce credible evidence that in the absence of a health threat the remaining mag-thor had caused damage.

MTBE Cleanup Costs

2005-05-18T09:25:00.000-07:00

The Association for Environmental Health and Sciences (AEHS) issued a press release yesterday about a soon-to-be published ENSR study on the cost to cleanup all MTBE sites nationwide. "By trending the EPA confirmed release data for the past 20 years, evaluating the history of nationwide cleanup costs, and then incorporating forecasts for streamlined technologies and cleanup methods, a national total cost of MTBE remediation over the coming 30 years is predicted to be in the range of $1 to $3 billion," according to AEHS.

The Next Big Thing

2005-05-17T10:29:00.000-07:00

One of the enduring features of the environmental law field is that there is always a “next big thing” on the horizon. When our firm’s lawyers first started in the environmental law business over twenty-five years ago, the new thing was CERCLA, which occupied a generation of environmental professionals, and as discussed in my May 12 entry, still occupies environmental lawyers today. But there is much less new about CERCLA today than there was in the 1980’s, when it took armies of lawyers to handle what we would think of today as a very small environmental problem. Once daunting problems, solved in prior cases, do not need to be solved again; the solutions are on the shelf.

Of course, there have been other new things over the years, each of which has become the work of a new class of environmental lawyers. I started in the 1980’s with toxic tort cases, in which we spent thousands of hours defending cases based on doubtful or non-existent causation claims – cases no rational plaintiffs’ lawyer would file today. And along the way there were electromagnetic field claims, which never sparked to life; asbestos, the litigation tsunami that is not considered an “environmental” issue because it is grounded in state tort law, but which has employed vast numbers of environmental lawyers over the years; MTBE cases, which changed ordinary gas tank leaks into multi-million dollar litigation; and in California, Proposition 65 cases, which are a special California blend of environmentalism and economic waste.

But what is the next big thing now? There is no obvious candidate for a transformative event that will occupy the legal profession in the years to come. Asbestos litigation will either terminate soon or gradually diminish over time, and while Aviall will occupy CERCLA lawyers for a while, it is unlikely that there will be any push towards CERCLA enforcement from the Bush administration. In California, there will be CERCLA issues associated with base closings, and plaintiffs will continually add new flavors to the menu of groundwater contamination litigation, but none of these events is substantial enough to occupy a generation of new lawyers. Will they all become intellectual property lawyers instead?

There is one event that while slow to develop will eventually dwarf all other environmental issues, if we live to see it, and that is global warming. Elizabeth Kolbert’s recent three-part piece in the New Yorker discusses among other things the markets that are even now developing for global warming products and services – for example, floatable houses in the Netherlands. While the effect on lawyers is arguably one of the most trivial effects of global warming, it will be a profound effect nonetheless. Imagine California with an 80 to 100 percent chance of drought each year, as one of the experts that Kolbert cites predicts. Kolbert’s article implies that the world will be lucky not to descend into anarchy as a result of global warming. If that dire result is to be avoided, environmental lawyers will be very busy.

Aviall Fallout

2005-05-12T12:54:00.000-07:00

Ever since the Supreme Court's decision in Cooper Industries v. Aviall, district courts around the country have been wrestling with how to apply it. Aviall knocks out one of the pillars of CERCLA jurisprudence -- that any PRP can bring a contribution claim against any other PRP even when there has been no government action or claim under CERCLA Section 107.

It's interesting to see how the district court's are dealing with this problem. In Metropolitan Water Dist. v. Lake River Corp., 2005 WL 925680 (N.D. Ill. April 12, 2005) and Vine Street LLC v. Keeling, 2005 WL 675786 (E.D. Tex. March 24, 2005), the courts decided that CERCLA Section 107 provides authority for a PRP to sue. CERCLA Section 107 allows the government or "any other person" to recover response costs. In the Metropolitan Water District case, the court's decision adopted a broad reading of the statute, but also seemed to hinge on the fact that there was no circuit authority directly prohibiting a PRP from bringing a Section 107 claim.

In other recent decisions, however, the courts have held that Section 107 does not provide authority for a PRP to sue another PRP. See City of Waukesha v. Viacom Int’l, Inc., 2005 WL 712423 (E.D. Wisc. March 23, 2005); Elementis Chemicals Inc. v. TH Agriculture & Nutrition, LLC, 2005 WL 236488 (S.D.N.Y. Jan. 31, 2005). These decisions are based on pre-Aviall circuit precedent prohibiting PRPs from bringing Section 107 actions. That precedent may be revisited in light of Aviall, but any change will likely have to take place at the circuit court level, not in the district courts.

Beginnings

2005-05-11T22:14:00.000-07:00

This blog will contain news on environmental law topics for lawyers and environmental law professionals.