There were many notable decisions, reversals, and agency adjustments in the first quarter of 2022.
FEDERAL CIRCUIT
U.S. Court of Appeals, D.C. Circuit – Food & Water Watch v. Federal Energy Regulatory Commission
The FERC case was ruled by the court on March 11, 2022. On December 19, 2019, the Commission issued a Certificate to Tennessee Gas Pipeline and determined that a “modest expansion” and upgrade of the existing 11,000-mile natural gas pipeline would have no significant environmental impact. However, one of the Commissioners filed a partial dissent, arguing that the Commission’s treatment of the climate change impacts was inadequate. A petition for review was filed, and now the court has decided that the Commission erred in not accounting for the indirect effects of the expansion, namely the downstream emissions of greenhouse gas generated by the pipeline’s delivery of the gas to its customers. Consequently, NEPA’s requirement that a rigorous environmental assessment be made before the authorization was granted was violated. However, the court decided against vacating the Commission’s orders, which would have had a “disruptive effect” on the project which is, or soon will be, operational.
The U.S. Court of Appeals for the Sixth Circuit – Mann Construction v. United States of America
This tax case ruling was published by the on March 3, 2022. It is important in part because it demonstrates, once more, the importance to comply with the Administrative Procedure Act. This is fundamental for the development and implementation of environmental regulation. In 2007, the IRS was authorized by Congress to take action against certain “tax avoidance” schemes, and a Notice was released by the Service in 2007 regarding “abusive trust arrangements.” Based on this Notice, the plaintiffs were assessed penalties and their administrative appeals were denied. They then filed this lawsuit, and now the court of appeals has released an opinion agreeing with the plaintiffs that the Service’s failure to employ the APA’s notice and comment procedures before issuing this Notice for what was, after all, a “legislative rule” required that the Notice be set aside.
The U.S. Court of Appeals for the Tenth Circuit – TCI Pacific Communication, LLC vs Cyprus Amax Minerals Company
On March 7, 2022, the decided this Superfund cost recovery case by “piercing the corporate veil.” Cyprus is cleaning up the Tulsa Fuel and Marketing Site in Collinsville, Okla., and has sued the former owners and operators of Tulsa Fuel and Marketing, which operated a zinc smelter in this area almost a century ago. The lower court found that TCI, now part of Comcast telecommunications company, was tied to the New Jersey Zinc Company. TCI is a successor to New Jersey Zinc. Accordingly, TCI is a “covered person” under CERCLA, and may be liable for as much as $14 million in cleanup costs and a large share of future cleanup costs as well.
The U.S. Court of Appeals for the Eleventh Circuit – The Glynn Environmental Coalition, Inc., et al. v. Sea Island Acquisition, LLC
In a March 3, 2022, decision, the appeals court reversed the lower court’s ruling dismissing the lawsuit of a local environmentalist “who regularly visits an area of wetlands to recreate and enjoy their natural beauty,” and whose standing is based on her aesthetic interest in the wetland. The defendant received a permit from the U.S. Army Corps of Engineers to fill in a wetland “with outside materials.” The plaintiffs also alleged that Sea Island’s applications may have been misleading. However, the lower court dismissed the complaint because no “injury in fact” was demonstrated. The Eleventh Circuit reversed and vacated the court’s ruling because at this stage of the proceedings, the plaintiff’s loss of aesthetic pleasure is sufficient to establish an injury in fact.
TEXAS CASES
The Texas Supreme Court
Texas Commission on Environmental Quality, Maverick County, and others.
On February 11, 2022, the court reversed the ruling of the Austin state appeals court that the Texas Commission on Environmental Quality (TCEQ) permit applicant, in this case, Dos Republicas Coal Partnership (DRCP), was not eligible to file for a wastewater discharge permit because, in the view of the appellate court, DRCP was not an “operator” of the mine. In a unanimous decision, the Texas Supreme Court held that the lower court erred by “substituting a judicially-crafted definition of ‘operator’” which was at odds with the relevant TCEQ rule. Indeed, the Court stated that a “court’s duty is to stick to the test chosen by the rule-makers, without adding to it or subtracting from it.”
CenterPoint Energy Resources Corporation v. Ramirez, et al.
In another reversal reported on February 11, 2022, in a personal injury matter, the Texas Supreme Court held that a limitation of liability provision in a utility tariff granted by the Texas Railroad Commission “bars the utility’s liability for damages suffered by a house guest of residential customer of the defendant,” not as a matter of contract, but as “a matter of law.”
The Texas Fifth Court of Appeals – Panda Power Generation Infrastructure Fund, et al. v. Electric Reliability Council of Texas, Inc.
On February 23, 2022, ERCOT (the Electric Reliability Council of Texas Inc.) was declared ineligible for sovereign immunity. The plaintiffs’ claims were not subject to Texas Public Utility Commission’s exclusive jurisdiction. This was an en banc decision of this court, overruling a previous decision relating to ERCOT’s claim of sovereign immunity under Texas law. This issue is extremely important and the Texas Supreme Court will likely be asked to review it.
REGULATORY NOTICES FEDERAL
Federal Emergency Management Agency (FEMA)
FEMA issued a final ruling on March 3, 2022. It became effective April 4, 2022. This update was to FEMA’s rulemaking procedures. These have been sometimes criticised for being too opaque. The agency announced that it would modify its use of the APA exception relating public loans, grants, and contracts. See 87 FR 12971.
Environmental Protection Agency (EPA)
- The EPA published a final direct rule amending the Standards and Practices for All Appropriate Investigations on March 14, 2022. This was in response to ASTM standards for CERCLA Phase 1 cleanups. 40 CFR Part 312, is being amended. (See 87 CFR 14174.)
- Also, on March 14, 2022, the EPA published a Notice of Decision that it has reconsidered a 2019 decision to withdraw California’s exemption from the federal authority to regulate emission control standards for new motor The EPA Administrator has determined that the 2019 decision to withdraw California exemption was flawed in its assessment of the controlling law and the facts at issue. The notice also states that petitions must be filed by May 13th 2022 to review this decision. (See 87 FR. 14332.
- Finally, a new GAO report, “Chemical Accident Prevention: EPA Should Ensure Regulated Facilities Consider Risks from Climate Change,” has been released. The report number is GAO-22-104494.
