Early January Environmental Odds And Ends

Pillsbury Winthrop Shaw Pittman LLP
Anthony B. Cavender

January 17, 2017

“The old order changeth, yielding place to new.” January 2017 has been a very active month, with several important environmental and federal administrative court rulings being issued, and many significant rules being proposed and finalized. Here’s a selection:

1. NPDES Permit Ruling. On January 9, the U.S. District Court for the Eastern District of Washington issued a ruling that a National Fish Hatchery operated by the U.S. Fish and Wildlife Service has, in effect, been discharging pollutants without a NPDES permit since 1979. The case is Center for Environmental Law and Policy, et al., v. U.S. Fish and Wildlife Service. A National Pollutant Discharge Elimination System (NPDES) permit was issued by the Environmental Protection Agency (EPA) in 1975, with an expiration date of August 31, 1979, but it was never renewed. In 1981, the Service received a letter from EPA stating that the old permit was automatically extended, and the terms of the old permit would remain in effect until a decision is made on a renewal application. EPA stated that this decision was made due to budgetary constraints. However, the permit was never renewed despite several applications being made. The District Court held that the 1981 letter was “manifestly incorrect,” and granted summary judgment to the plaintiffs.

2. Nearly $100 Million Awarded to Plaintiff Oil Companies By Federal Court of Claims. On January 6, the U.S. Court of Federal Claims awarded Shell Oil Company, Union Oil Company of California, Richfield Company and Texaco, Inc. nearly $100M in a breach of contract claim litigated before the Court of Federal Claims. Initially, in 1991, the Government filed Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9604–75 (CERCLA) cost recovery actions against the oil companies based on the aviation gas waste generated by their Southern California refineries in World War II. They were under contract to produce aviation gas in large quantities, and the resulting waste was disposed at the McColl Site, which was placed on EPA’s CERCLA national priorities list (NPL). The oil companies’ CERCLA defense, that the Government was also liable as an “arranger” under CERCLA, was unsuccessful, but, in 2005, the California federal court transferred their breach of contact claims to the Court of Federal Claims. Each of these World War II procurement contracts contained a “Tax Clause,” which the Court of Federal Claims Court held obligated the Government to reimburse the companies for these costs. The case is Shell Oil Company, et al., v, U.S.

3. Hazard Ranking System Amended. On January 9, EPA issued a final rule (effective February 8, 2017) to add a vapor intrusion component to the available analyses that can be utilized at CERCLA sites. The Final Rule was published in the Federal Register at 82 F.R. 2760. This change will enable sites with subsurface intrusion contamination to be evaluated for placement on the NPL. EPA states that this Final Rule will not affect the status of sites currently on or proposed to be added to the NPL.

4. Corps of Engineers’ Nationwide Permits Reissued. The reissued Clean Water Act nationwide permits (NWP) will be effective on March 19, 2017. The Federal Register notice is published in the Federal Register at 82 F.R. 1860. Two new nationwide permits have been added: a permit that will authorize the removal of “low-head dams” (NWP 53); and the construction and maintenance of living shorelines (NWP 54).

5. CERCLA Financial Responsibility Rules. On January 11, EPA published a Notice of Proposed Rulemaking requesting comments on various proposals that would require companies engaged in hard-rock mining to adhere to and satisfy new financial responsibility rules intended to provide financial assurance to the government that these entities have adequate financial resources to respond to CERCLA hazardous substance cleanup costs. The Notice of Proposed Rulemaking is published in the Federal Register at 82 F.R. 3388. Also on January 11, EPA published a Notice of Intent to Proceed with a proceeding to determine whether CERCLA financial responsibility rules should be promulgated for the chemical, petroleum and electric power segments. Although CERCLA has long required EPA to take such actions, it has not done so. The Notice of Proposed Rulemaking is published in the Federal Register at 82 F.R. 3512.

6. EPA Civil Penalty Amounts Adjusted. On January 12, EPA published a Final Rule effective on January 15, 2017 which generally adjusts upwards the level of civil penalty amounts the agency can assess under several environmental laws the agency administers. The Final Rule was published in the Federal Register at 82 F.R. 3633. The new statutory penalty levels will apply to all statutory civil penalties assessed on or after January 15, 2017 for violations that occurred after November 2, 2015, when the Federal Civil Penalties Inflation Adjustment Act was enacted.

7. House Enacts Regulatory Accountability Act of 2017. On January 11, the House of Representatives passed the “Regulatory Accountability Act of 2017” “to reform the process by which Federal agencies analyze and formulate new regulations and guidance documents, to clarify the nature of judicial review of agency interpretations, to ensure complete analysis of potential impacts on small entities of rules, and for other purposes.” The bill will now be forwarded to the Senate for its consideration. Section 706 of the Administrative Procedures Act regarding judicial review of agency regulations would be amended as follows: “the courts will decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions and rules made by agencies. Notwithstanding any other provision of law, this subsection shall apply in any action for judicial review of agency action authorized under any provision of law. No law may exempt any such civil action from the application of this section except by specific reference to this section.”

8. EPA’s Revised Clean Air Act Risk Management Program Regulations Published. EPA’s Final Rule re Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act was published in the Federal Register at 82 F.R. 4594. The Final Rule is effective on March 14, 2017.

9. EPA Proposes Prioritization Rule. In 2016, the Toxic Substances Control Act (TSCA) was amended, requiring EPA to prioritize and evaluate existing chemicals that had been “grandfathered” by the original law, enacted in 1976. EPA has now proposed a “prioritization rule” describing the processes the agency will employ to identify candidate chemicals for priority review. The proposed rule was published in the Federal Register at 82 F.R. 4825, and comments must be submitted to EPA by March 20, 2017.

This article is being provided for informational purposes only and not for the purposes of providing legal advice or creating an attorney-client relationship. You should contact an attorney to obtain advice with respect to any particular issue or problem you may have. In addition, the opinions expressed herein are the opinions of Mr. Cavender and may not reflect the opinions of Synergy Environmental, Inc., Pillsbury Winthrop Shaw Pittman LLP or either of those firms’ clients.


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