The Nickel Report

Uncertainty. Today nearly everything we thought we knew is uncertain. It’s good, then, that at least one regulatory program in California remains certain: Proposition 65. Plaintiffs continue to serve 60-day notices alleging violations, and the Office of Environmental Health Hazard Assessment (OEHHA) continues to tinker with safe harbor warning requirements. (Maybe certainty isn’t all that it’s cracked up to be).

When can Supreme Court precedent be overruled? Two recent decisions carry on a recent and lively debate among the Justices over the concept of “stare decisis,” and provide significant guidance on how Justices Thomas and Kavanaugh approach the question.

Yesterday the Supreme Court of the United States issued its most significant Clean Water Act decision in more than a decade, resolving a split among lower courts over the reach of the Clean Water Act’s “point source” or National Pollutant Discharge Elimination System (NPDES) program. Pollutants travel to bodies of water in many ways: by pipe, ditch, or runoff, for example. The Clean Water Act defines some of those ways of moving pollutants as “point sources”—specifically, pipes, ditches, and similar “discernible, confined and discrete conveyance[s]”—and bans the “addition of any pollutant to navigable waters from any point source” without an NPDES permit. But no similar permitting requirement applies to pollution added from nonpoint sources, which is instead controlled by state and other federal environmental laws.

On March 20, the California Water Boards issued guidance about complying with regulatory requirements during the COVID-19 shelter-in-place orders. We summarized that guidance here. In short, the guidance directs regulated entities to “immediately” notify the Board if compliance is not possible and to seek appropriate relief. Water Board staff committed to “do their best to respond within 24/48 hours.”

It has now been a month, and preliminary data about the extent to which regulated entities have sought relief, and how the Regional Water Boards have responded is available. The following information was presented today in a Bar Association of San Francisco’s Environmental Law Section Master Series Roundtable providing detail about extension requests and delays by regulated entities as of the week of April 20 (i.e., at the conclusion of the first month of the policy):

As reported on the Hunton Insurance Recovery Blog, much of the commentary on insurance issues arising from the COVID-19 crisis understandably has focused on recovery under first-party property policies providing business interruption coverage for losses incurred due to office closures, government orders, extra expenses, and other direct costs experienced by employers. There is a much broader range of possible claim scenarios arising from COVID-19 that may go to other kinds of coverages, however; most notably directors and officers liability, management liability ...

In the midst of an oil market experiencing an extraordinary downturn but citing a need for further review and coordination with other states and the federal government, the Railroad Commission of Texas (RRC) delayed a vote on oil production cuts at an open meeting held yesterday.[i] As previously reported, the RRC held a ten-hour long meeting on the issue of production cuts last week, hearing from more than 50 witnesses with wide-ranging opinions on the merits of moving forward with proration, a remedy that has not been employed since the 1970s.

Although no decision on proration was made, the establishment of a Blue Ribbon Task Force for Oil Economic Recovery (Task Force) was announced. The Task Force will be comprised of various Texas oil and gas trade associations charged with expeditiously exploring options that can be undertaken at the state level to assist operators and save jobs.[ii] During the meeting, a number of initiatives undertaken to date that provide relief to oil and gas operators were also highlighted, including those involving extensions of deadlines for various requirements and the consideration of enforcement discretion under certain circumstances. While discussing whether to prorate production, each of the three commissioners placed emphasis on different aspects of the overall issue.

This article was originally published on Law360.

On March 11, the U.S. Environmental Protection Agency completed an important rulemaking under Title VI of the Clean Air Act Amendments of 1990, revising its requirements applicable to the management of refrigerants in appliances and industrial process refrigeration.

The rulemaking corrects what the EPA states was an incorrect Obama-era interpretation of the Clean Air Act, that would have allowed the agency to issue sweeping and costly regulations for refrigerants that companies had invested in to alleviate the problem of ozone-layer depletion pursuant to the 1987 Montreal Protocol.

The U.S. Supreme Court ruled today in Atlantic Richfield Company v. Christian that private landowners at a Superfund site near Butte, Montana, can pursue state law claims in state court seeking “restoration damages” for cleanup actions that go beyond the EPA-selected remedial action. The Court also held, however, that these landowners are potentially responsible parties (PRPs) under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and, as a consequence, must obtain EPA approval of the restoration plans before they can be implemented. Chief Justice Roberts wrote the Court’s opinion, in which five other justices joined.  Justice Alito wrote a dissenting opinion declining to sign on to the majority’s conclusion “that state courts have jurisdiction [under state law] to entertain ‘challenges’ to EPA-approved CERCLA plans,” taking the position that it was unnecessary for the Court to address this question.  In a separate dissent, Justice Gorsuch, joined by Justice Thomas, disagreed with the conclusion that the landowners were “PRPs” who needed EPA’s approval to conduct more robust cleanup at their properties than otherwise required by EPA.

On April 15, 2020, the California Environmental Protection Agency (CalEPA), the umbrella agency for California’s environmental boards, departments, and offices (e.g., CARB, DPR, DTSC, OEHHA, SWRCB), issued a Statement on Compliance with Regulatory Requirements During the COVID-19 Emergency (CalEPA Statement). CalEPA’s Statement comes in the wake of numerous questions regarding environmental compliance obligations for California facilities impacted by COVID-19. It follows COVID-19 guidance issued by the United States Environmental Protection Agency (U.S. EPA) and various announcements by the state boards and local districts that are on the front lines of administering state, local, and federal environmental programs affecting public health and the environment, as well as companies operating facilities in California, like refineries, oil and gas terminals, mining, food processing, and other manufacturing operations.

The U.S. Environmental Protection Agency (EPA) is attempting to thread the needle in responding to the COVID-19 pandemic: offering clarity about ongoing federal environmental obligations to the broad swath of regulated entities faced with the threat of significant disruptions and other challenges, while contending with intense opposition from others who perceive its temporary enforcement policy as a “free pass to pollute” and a failure to enforce legal requirements. Notwithstanding the mounting scrutiny from U.S. Senators, states, and citizens groups, and now a legal challenge, EPA’s Office of Enforcement and Compliance Assurance (OECA) has continued implementing its temporary policy regarding the exercise of enforcement discretion due to the COVID-19 pandemic via issuance of additional guidance on National Pollutant Discharge Elimination System (NPDES) reporting. Other state and federal agencies, including the U.S. Department of Justice (DOJ), the Texas Commission on Environmental Quality (TCEQ), the Railroad Commission of Texas (RRC), and the California Environmental Protection Agency (CalEPA) (addressed in a separate blog post) have followed EPA’s lead in issuing their own temporary policies related to the pandemic.

On Sunday, April 12, Virginia Governor Ralph Northam signed into law the Virginia Clean Economy Act and the Clean Energy and Community Flood Preparedness Act. These two new laws will require Virginia to transition to 100 percent carbon-free energy by 2050 and join the Regional Greenhouse Gas Initiative (RGGI), among other things.

When I was a kid, Californians, particularly those from SoCal, would be teased for their standard way of saying goodbye to people in person or on the phone – “Have a nice day!” Even in today’s text message society, texts often close with the yellow “smiley face” emoji. There’s been significant debate too about whether this phrase is “rude” by commanding someone to have a nice day rather than as it is largely intended, to wish someone a nice day.

In a COVID-19 world, I’ve found that “have a nice day” has been supplanted by “stay safe.” In just a few weeks, our focus has shifted from a desire for a pleasant experience to a safe one, which recognizes that something many people simply have taken for granted, our health and safety, is not a given in our current world.

With oil prices plummeting and markets battered by the disruptions caused by the COVID-19 pandemic, two oil and gas producers filed a joint motion late last month for the Railroad Commission of Texas (“RRC”) to consider curtailing oil production (“Joint Motion”), an extraordinary remedy that has not been employed since the 1970’s.[1] In response, the RRC convened an initial public meeting yesterday to consider the request and comments filed by more than 50 stakeholders with, not surprisingly, wide-ranging views on the subject.[2] The RRC took care to include in the notice of meeting a statement that the initial meeting would not be “a meeting to conduct a hearing under the Administrative Procedure Act” signaling that no determinations would be made at the initial meeting.[3] Nevertheless, due to the significance of the issues under discussion and the potential impact on not only oil and gas producers, but also the midstream and downstream sector, the ten-hour long meeting drew a substantial audience across the country and the globe.[4]

Today, April 10, 2020, the U.S. Environmental Protection Agency (EPA) issued its anticipated interim guidance on impacts to operations at cleanup sites due to the COVID-19 pandemic.  The guidance memorandum, issued jointly by the heads of EPA’s Office of Land and Emergency Management (OLEM) and Office of Enforcement and Compliance Assurance (OECA) and directed to Regional EPA Administrators, focuses on adjusting response activities at cleanup sites under a number of EPA administered programs and emergency responses due to the COVID-19 situation and the myriad of state and local shelter-in-place and business curtailment orders.

Following months of development and building on a host of previous renewable and alternative energy portfolio programs intended to incrementally decarbonize the electric sector, Massachusetts is poised to codify a Clean Energy Peak Standard (CPS) in the summer of 2020. In contrast to the existing Massachusetts programs, which have incentivized renewable and alternative energy sources simply to “show-up,” the CPS takes aim at incentivizing new and existing generation resources to “show-up at the right time” in order to further reduce greenhouse gas (“GHG”) emissions. Electricity generators and commercial, industrial and residential energy consumers alike should understand this new incentive program.

Facing growing criticism that they impede sustainable development goals, investment protections afforded by traditional international investment agreements (IIAs) are steadily eroding. Increasingly, the trend is toward provisions allowing host states greater flexibility to regulate environmental, transparency, human rights and other social impacts. At the same time, enhanced corporate social responsibility (CSR) obligations have become more common in recent IIAs.

Commentary regarding the US Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance (OECA) memorandum articulating a temporary policy applying enforcement discretion in light of the COVID-19 pandemic has been significant this week. Proponents and critics alike have misinterpreted the scope of the policy as reaching far beyond what OECA’s memorandum actually stated. As we stated in Deciphering EPA’s Temporary Enforcement Discretion Policy for COVID-19 and as the EPA has now confirmed, the “temporary policy” of exercising enforcement discretion for noncompliance “resulting from the COVID-19 pandemic” is not a free pass to pollute, despite opponent’s musings to the contrary.