26 August 2019

Sidley Environmental Trends

Topics discussed this week include

  • DOJ limits use of supplemental environmental projects in settlements with state and local governments
  • D.C. Circuit limits EPA’s ability to roll back or freeze ozone national ambient air quality standards
  • Trump administration updates Endangered Species Act regulations
  • Citizen suit alleging a permit was issued or extended in violation of state and federal regulations cannot be brought against the holder of a valid permit

DOJ limits use of supplemental environmental projects in settlements with state and local governments. On August 21, the U.S. Department of Justice (DOJ) Environment and Natural Resources Division (ENRD) released a memo rejecting claims that supplemental environmental projects (SEPs) are excluded from DOJ’s November 2018 policy governing civil consent decrees and settlement agreements with state and local governments. The November 2018 policy stated that consent decrees “must not be used to achieve general policy goals or to extract greater or different relief from the defendant than could be obtained through agency enforcement authority or by litigating the matter to judgment.” The August 21 memo affirmed the November 2018 policy, rejecting arguments that (1) the 2018 America’s Water Infrastructure Act approved use of SEPs when it authorized municipalities to streamline Clean Water Act compliance obligations through integrated planning, and (2) the November 2018 policy exempts SEPs because EPA will agree to SEPs in non-judicial administrative settlements. Accordingly, ENRD must approve SEPs included in settlements with governmental entities, which will be determined on a case-by-case basis. In addition to requirements for approval provided in earlier policy statements, the August 21 memo adds four additional requirements: (1) the SEPs must be “discrete projects representing a small component of the overall settlement,” (2) a settlement would not be reached without the SEP, (3) the SEP provides benefits to the whole community, and (4) the governmental entity certifies that the SEP does not violate any legal restrictions. Even if all requirements are met, ENRD will approve SEPs with governmental entities in rare circumstances only. This memo is intended to be a guide during an “interim period” as ENRD continues its review of the SEP policy, which may result in further limits to the use of SEPs in consent decrees.

D.C. Circuit limits EPA’s ability to roll back or freeze ozone national ambient air quality standards (NAAQS). On August 23, a panel of the U.S. Court of Appeals for the District of Columbia held that EPA did not adequately justify the decision to lower the secondary, environment-based ozone NAAQS in 2015. EPA lowered the 2015 secondary NAAQS to 0.07 ppm from the 2008 secondary standard of 0.075 ppm and, in the process, chose not to follow the Clean Air Scientific Advisory Committee (CASAC) recommendations on the form and standard of the secondary NAAQS. In Murray Energy v. EPA, the court upheld the 2015 primary, health-based standard but remanded the secondary standard to EPA, finding that EPA failed to explain its decision to use a three-year average for the standard and failed to justify its decision not to set a more stringent standard to protect against tree damage. In remanding the secondary NAAQS standard, the court directed EPA to either lower the standard or explain a departure from CASAC’s advice.

Trump administration updates Endangered Species Act regulations. On August 12, the U.S. Fish and Wildlife Service (FWS) and National Marine Fisheries Service issued three new rules that revise how the federal government will address critical habitat designations, protections for threatened species and interagency coordination under the Endangered Species Act (ESA). As discussed here, there are three key elements to these new rules. First, FWS will now consider appropriate protections for threatened species on a case-by-case basis instead of automatically extending the same protections as those for endangered species. Second, both agencies revised the manner in which they designate critical habitat and the criteria for listing or removing a species from the Lists of Endangered and Threatened Wildlife and Plants. Third, the agencies amended regulations governing ESA Section 7 consultation. The agencies’ decisions have not yet been published in the Federal Register, but prepublication versions can be found here. The regulations will become effective 30 days after publication, but stakeholders have already challenged the rules in Center for Biological Diversity, et al. v. Bernhardt, et al. (ND Calif.).

Citizen suits alleging a permit was issued or extended in violation of state and federal regulations cannot be brought against the holder of a valid permit. A West Virginia federal judge recently dismissed a citizen suit against Republic Energy LLC that claimed Republic Energy’s mining permit for Coal River Mountain in southern West Virginia expired as a matter of law eight years ago and has been unlawfully extended. In Coal River Mountain Watch, et al. v. Republic Energy, LLC (SD WV), environmental groups argued the mining permit was invalid under the Surface Mining Control and Reclamation Act because no mining had occurred by 2011, three years after the permit’s initial issuance, and the West Virginia Division of Environmental Protection had unlawfully granted a retroactive extension of the permit in 2012. The court dismissed the case because state and federal agencies determined the permit was valid, and, accordingly, any alleged misconduct rests with the regulatory agency that issued the permit.

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