Sidley Environmental Trends

Topics discussed this week:

  • California-EPA feud over air and water programs escalates
  • States sue Trump administration over Endangered Species Act rule changes
  • D.C. Circuit acts on EPA “good neighbor” regulation governing 2008 ozone standard
  • Sierra Club sues EPA alleging agency has failed to enforce “good neighbor” requirements for 2015 ozone standard

California-EPA feud over air and water programs escalates

In recent weeks, tensions between federal and California regulators have escalated as the U.S. Environmental Protection Agency (EPA) has challenged California’s ability to continue to regulate air and water program under its own standards. On September 24, EPA Administrator Andrew Wheeler wrote Mary Nichols, the Chair of the California Air Resources Board, asking the state to withdraw its backlog of “unapprovable” state implementation plans (SIPs) or risk EPA SIP disapproval, which can result in loss of federal highway funds and other sanctions. Then, on September 26, Administrator Wheeler requested that Gov. Gavin Newsom provide a remedial plan detailing the state’s efforts to address alleged environmental issues related to a growing homeless population in Los Angeles and San Francisco and control of sewage and stormwater flowing into the San Francisco Bay, hinting that EPA may withdraw California’s authority to establish its own regulatory programs under the Clean Water Act and Safe Drinking Water Act. Administrator Wheeler’s letter comes on the heels of EPA and the National Highway Traffic Safety Administration (NHTSA) announcement that 1) it is revoking California’s waiver under the Section 209 of the Clean Air Act to set its own vehicle tailpipe emissions standards and 2) California’s regulations setting fuel economy standards are preempted under the Energy Policy and Conservation Act. That action was published in the Federal Register on September 27. California, joined by 23 other states, is challenging the EPA and NHTSA action.

States sue Trump administration over Endangered Species Act rule changes

On September 25, a coalition of states and cities, led by California, filed suit in the U.S. District Court for the Northern District of California challenging three rules recently issued by the U.S. Fish and Wildlife Service and National Marine Fisheries Service under the Endangered Species Act (ESA). As reported in a previous update, these rules, published in August, revise how the federal government will designate critical habitat, provide for a case-by-case evaluation of protection required for threatened species and revise the interagency coordination process under Section 7 of the ESA. The rules also allow agencies to compile data on the economic effects of extending protections during the listing evaluation. In their complaint, the plaintiffs allege that these rules run contrary to the underlying goals of the ESA and roll back longstanding regulatory protections without adequate explanation or justification.

D.C. Circuit acts on EPA “good neighbor” regulation governing 2008 ozone standard

In two recent cases involving the Clean Air Act’s “good neighbor” provision, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) has sent back EPA’s Cross State Air Pollution Update Rule (CSAPR Update Rule) governing the 2008 ozone national ambient air quality standards (NAAQS) for further action by the agency. Section 110(a)(2)(D)(i)(I) of the Clean Air Act — known as the good neighbor provision — requires states to prohibit emissions that will contribute significantly to nonattainment or interfere with maintenance in any other state with respect to any primary or secondary NAAQS. In 2016 EPA issued the CSAPR Update Rule after a number of upwind states failed to submit timely or approvable state SIPs to comply with the 2008 ozone standard. The Update Rule imposed emission reduction requirements on a group of the upwind states. EPA said these emission reduction requirements would address some but not necessarily all of the upwind states’ good neighbor obligations with respect to the 2008 ozone NAAQS. Then, in 2018, EPA issued the CSAPR Close-Out Rule. The Close-Out Rule found that no further action was required, as downwind states would achieve compliance with the 2008 ozone standard by 2023 without further actions by upwind states and that any additional earlier actions by upwind states were not feasible. In Wisconsin v. EPA, the D.C. Circuit upheld the CSAPR Update Rule in many respects but remanded it holding that EPA failed to require upwind states to comply with the good neighbor provision in time to allow downwind states to meet their attainment deadlines for the 2008 ozone NAAQS. The court also recognized that the agency still had some flexibility under the act to justify a later attainment deadline for downwind states and for upwind states’ compliance with the good neighbor provision. Following that decision, in New York v. EPA, the court then vacated the Close-Out Rule without hearing oral argument. EPA must decide whether to seek rehearing en banc of these rulings by October 28.

Sierra Club sues EPA alleging agency has failed to enforce “good neighbor” requirements for 2015 ozone standard

In a further action related to the good neighbor requirements and ozone, on September 30, Sierra Club brought a Clean Air Act citizen suit against EPA in the U.S. District Court for the District of Columbia, alleging that EPA failed to perform its nondiscretionary duties to issue findings that 12 states have failed to submit complete SIPs that address the revised NAAQS for ozone issued in 2015. Sierra Club seeks an injunction requiring EPA to find that these states’ SIPs do not comply with federal law and to promulgate a federal implementation plan that imposes necessary requirements.