The Nickel Report

In Southern Appalachian Mountain Stewards et al. v. Red River Coal Co., Inc., 2021 WL 1182464 (4th Cir. Mar. 30, 2021), a unanimous Fourth Circuit panel recently affirmed a district court holding that an operator cannot be held liable under the Surface Mining Control and Reclamation Act (Surface Mining Act) for a discharge that is otherwise shielded from liability by the Clean Water Act (CWA).  The court’s opinion expressly relied on the Sixth Circuit’s decision in Sierra Club v. ICG Hazard, LLC, 781 F.3d 281 (6th Cir. 2015), which reached the same conclusion.

As noted previously in the October 2020 edition of Baseload, the capital markets have seen explosive growth in the issuance of ESG debt in recent years. The advantages to utilities have been generally twofold: (1) provide access to a larger investor base than would otherwise be available (i.e. those investors with ESG-focused criteria) and (2) provide evidence of good corporate citizenship regarding certain of the issuer’s projects.

On Monday, the State of California launched a new group out of Governor Newsom’s office – the Climate-Related Risk Disclosure Advisory Group just as CERES (Coalition for Environmentally Responsible Economies), a non-profit organization that has been a significant voice over the past decade on climate and sustainability economic issues, issued a report entitled, Turning Up the Heat, The need for urgent action by U.S. financial regulators in addressing climate risk.

Barack Obama was seven months into his first term as President of the United States, the World Health Organization had declared a H1N1 flu pandemic, and the California State Water Resources Control Board (State Board) adopted the current Construction General Permit for Stormwater Discharges (Permit or CGP).  It was September 2009.  Now, having administratively extended the Permit since 2014 when, by its terms, the Permit expired, the State Board may, under a schedule released late last year, soon release a new draft CGP for public comment, with a goal of adopting it late this summer.

Environmental, social and corporate governance (ESG) – like climate change and environmental justice – has been a hot topic of discussion in the early days of the Biden administration. Illustrating the interconnectedness of the trending issues, climate change and environmental justice are pillars of ESG.

Environmental justice and equity issues have taken center stage as part of the national conversation on the environment, climate change and racial equality. As we have explained, environmental justice will be a central focus of the Biden administration, as reflected in a recent Executive Order that declares federal agencies:

shall make achieving environmental justice part of their missions by developing programs, policies, and activities to address the disproportionately high and adverse human health, environmental, climate-related and other cumulative impacts on disadvantaged communities, as well as the accompanying economic challenges of such impacts.

Late last year, New Jersey became the first state to require via legislation that its environmental state agency evaluate the contributions of certain facilities to existing environmental and public health stressors in overburdened communities when reviewing certain permit applications. California, never to be outdone, has begun its own legislative process to further incorporate environmental justice into state decision-making.

The EPA Office of Water has taken a major step towards further regulation of per- and polyfluoroalkyl substances (PFAS) under the Clean Water Act.  On March 17, it published an advance notice of a proposed rulemaking (ANPRM) that could lead to development of effluent limitations guidelines (ELGs), pretreatment standards, and new source performance standards for PFAS manufacturers, formulators, and possibly other industries now being studied by EPA.  86 Fed. Reg. at 14,560.  These industries include pulp and paper manufacturers, textile and carpet manufacturers, metal finishing companies, and commercial airports.  The ANPRM is open for public comment through May 17.

On March 18, 2021, the Massachusetts House joined the Senate in passing a revised, historic climate legislation that appears to finally have enough support from the Governor’s office to be signed into law.  As we have highlighted in this blog previously, complete agreement between the Commonwealth’s executive and legislative branches on the Next-Generation Roadmap for Massachusetts Climate Policy S.9 (the “Bill”) has proven elusive.  When we last left this topic, the Governor of Massachusetts was faced with a decision to: (1) sign the Bill; (2) veto it for a second time; or (3) return the Bill to the Legislature with recommended amendments.  On February 7, 2021, the Governor did the latter, returning the Bill to the Legislature with approximately 50 recommended changes to various sections within the Bill.  On March 15, the Senate adopted certain further amendments to the original Bill, which the House then likewise adopted on March 18^th, and again laid the Bill before the Governor. This leaves the Governor another ten days to either sign the Bill or veto it for the third time and face the possibility of a Legislative override.

In April 2020, the Supreme Court issued its opinion in County of Maui v. Hawaii Wildlife Fund et al., 140 S. Ct. 1462 (2000), vacating the Ninth Circuit’s decision.  The appeals court had affirmed a district court’s finding of Clean Water Act (“CWA”) liability for the County’s alleged failure to obtain a discharge permit for subsurface releases of pollutants into groundwater that conveys pollutants to navigable waters.  In vacating the judgment below, the Supreme Court rejected the Ninth Circuit’s “fairly traceable” test and set forth a new standard for determining when a source needs an NPDES permit:  “the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”  Id. at 1468 (emphasis added).  In other words, “an addition falls within the statutory requirement that it be ‘from any point source’ when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means.”  Id. at 1476 (emphasis added).