Sidley Environmental Trends

Topics discussed this week include:

  • Administrator Pruitt releases new source review guidance memo, clarifying when emissions decreases are to be considered in the review process.
  • California federal judge orders remand to state court of climate-change-related state tort claims — creating split in district court.
  • Congress’s omnibus spending bill preserves the EPA budget and addresses other environmental issues such as pesticide funding and biomass emissions.
  • DC Circuit upholds Cross-State Air Pollution Rule as part of EPA’s regional haze rule.

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English Court Rules on 2002 ISDA Master Close Out Provisions

The English court of first instance has provided important guidance on the close-out provisions under the 2002 ISDA Master Agreement. Particular findings of note which will be of interest to all users of the 2002 form where English law is selected are:

  • The determining party must use objectively reasonable processes and must also reach an objectively reasonable result when making close-out calculations under the 2002 ISDA Master. This contrasts with the 1992 ISDA Master, where the English courts have found the more subjective standard of “rationality” applies.
  • Although the 2002 ISDA Master permits the use of indicative quotations, it is not commercially reasonable for a determining party to rely on them when it proposes to enter into a replacement transaction shortly afterward.
  • Once a party has submitted a calculation following termination, it is not open to that party to withdraw and replace it. However, the court may take into account revised calculations when determining what range of results a calculation in line with the ISDA Master would have arrived at.
  • The judge was unwilling to accept mark-to-market valuations or modeled evaluations as evidence for the price at which a replacement transaction would have been available in the market where they differed from actual quotations obtained from leading dealers in the market at the relevant time.

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Sidley Environmental Trends

Topics discussed this week include:

  • U.S. Court of Appeals sides with industry on definition of solid waste rule.
  • Climate change nuisance suit to remain in federal court.
  • Mandamus denied in climate change litigation.
  • EPA proposes to allow aerosol can recycling.
  • EPA dismisses civil rights claim against coal ash landfill.
  • EPA finalizes selected changes to fugitive emission requirements for oil and natural gas sector.
  • Bisphenol A has minimal health effects, FDA says.
  • Court blocks Prop 65 labeling for glyphosate on free speech grounds.

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Energy Enforcement Update

This week’s enforcement update covers:

  • Powhatan and Chen file motion to dismiss FERC’s amended complaint;
  • FERC and Silkman/CES file motions for summary judgment regarding statute of limitations;
  • FERC Staff finds no withholding of pipeline capacity in New England markets;
  • BP files reply to FERC answer regarding on statute of limitations; and
  • FERC and ETRACOM stay discovery pending mediation.

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Sidley Environmental Trends

Topics discussed this week include:

  • Waters of the United States challenges proceed in district courts.
  • Court dismisses challenge to “two-for-one” executive order.
  • BLM proposes significant revisions to gas venting and flaring rule.
  • Court preliminarily enjoins BLM methane suspension rule.
  • EPA seeks comment on Clean Water Act discharges via groundwater.
  • Environmental groups challenge offshore general discharge permits.
  • EPA looks to settle renewable fuel standards suit.
  • Environmental groups challenge Louisiana regional haze plan.
  • Court ruled that EPA unlawfully extended deadline for formaldehyde rule.
  • White House legislative outline attempts to speed infrastructure construction.
  • Supreme Court denies certiorari for five environmental cases.
  • Colorado issues new rules for gathering lines.

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