In the News Law360

The Biggest Environmental Rulings of 2021: Midyear Report

Jonathan Kidwell is quoted in Law360 regarding two important environmental law decisions from the first half of 2021.

A U.S. Supreme Court ruling that narrowed the ways the federal government can avoid liability in Superfund lawsuits was just one of several important environmental law decisions to come down in the first half of 2021.

Amid the change in presidential administrations and the flurry of stays granted in litigation challenging Trump-era environmental rules, courts were still able to make headlines, including a D.C. Circuit decision that held the Trump administration illegally interpreted the scope of the U.S. Environmental Protection Agency's authority under the Clean Air Act. A Montana federal judge also ruled the EPA misused an obscure federal law to avoid public comment on a rule.

At the Supreme Court, justices issued a ruling making it harder for the public to access some internal agency scientific documents. And the high court issued important procedural rulings in climate change liability lawsuits filed by cities against energy companies, though they have steered clear of the merits of those claims.

Here, Law360 breaks down some of the most significant environmental-related court decisions from the first half of 2021.

EPA Loses Superfund Defense Suit

In a May unanimous decision, the high court overturned the D.C. Circuit's conclusion that Guam's 2017 claims under the Comprehensive Environmental Response, Compensation and Liability Act were barred because of a 2004 settlement with the federal government under the Clean Water Act.

The court said because the previous settlement resolved claims under a different statute, Guam isn't barred from seeking money from the federal government under CERCLA. The law requires resolution of a CERCLA-specific liability to trigger a three-year statute of limitations.

The EPA had argued the Clean Water Act settlement started the clock running on the statute of limitations.

The justices focused on the D.C. Circuit's finding that Guam's 2004 settlement gave rise to a Section 113(f) "contribution claim," which allows parties that have resolved their liability to the federal government to attempt to recover costs from another responsible party. The D.C. Circuit read the law too broadly and departed from Congress' intent by interpreting the provision to include things like Clean Water Act settlements, according to the high court's opinion.

Gregory Tan, a shareholder at Greenberg Traurig LLP, said the ruling has implications for both future and past non-CERCLA remediation settlements.  

"In negotiating future settlements, parties must weigh two different interests," Tan said. "Settlements may be drafted to explicitly resolve CERCLA liability, in which case the party obtains the comfort of that protection and establishes a contribution claim under Section 113(f)(3)(B). Or, if the settlement does not resolve CERCLA liability, the three-year statute of limitations on contribution claims will not be triggered, and a cost recovery claim with a six-year limitations period may instead be available. However, the apparent bright-line holding raises ambiguities that will likely be litigated."

He said it remains to be seen whether past and future non-CERCLA settlements with broad liability releases covering all related claims arising from the same transaction or occurrence will be interpreted to trigger the three-year statute of limitations without an explicit reference to CERCLA. 

The case is Government of Guam v. U.S., case number 20-382, in the Supreme Court of the United States.

Greens Lose FOIA Case

In March, the high court overturned the Ninth Circuit's finding that the federal government was required to turn over documents concluding that a proposed EPA regulation for power plant cooling was likely to put protected species at risk.

Seven justices sided with the U.S. Fish and Wildlife Service and National Marine Fisheries Service, which contended that their documents, created in response to a proposed version of the EPA's cooling water intake structure rule, are exempt from disclosure under the Freedom of Information Act because they were part of the agencies' deliberative process.

The Sierra Club filed a FOIA suit for access to documents related to the proposed rule, including the 2013 biological opinions — that state whether an action is likely to jeopardize wildlife — from the FWS and NMFS.

Jonathan Kidwell, a partner at Kirkland & Ellis LLP, said the decision strengthens agency protections over their own internal data and reflects an appreciation for the deference to agency decision-making.

"It means that certain types of scientific data, in particular in-house biological opinions at an agency level, are not necessarily subject to disclosure under FOIA," Kidwell said. "It raises the prospect that more agency scientific data may be withheld from disclosure under FOIA."

And Jeffrey Wood, a partner at Baker Botts LLP, said the ruling clarifies that "FOIA does not give carte blanche access of information to the public over internal agency deliberations."

The case is U.S. Fish and Wildlife Service et al. v. Sierra Club Inc., case number 19-547, in the Supreme Court of the United States.

D.C. Circuit Fells EPA Power Plant Rule

The D.C. Circuit in January vacated the Trump administration's rollback of Obama-era greenhouse gas emission standards for existing power plants and the rule intended to replace them, finding the actions were based on "a mistaken reading of the Clean Air Act."

In a 2-1 ruling, U.S. Circuit Judges Patricia Millett and Cornelia Pillard said the EPA's rescission of the 2015 Clean Power Plan and its subsequent promulgation of the 2019 Affordable Clean Energy rule were illegal because they were based on an incorrect assertion that Congress, through the Clean Air Act, intended to limit the agency's authority to control GHG emissions to the imposition of at-the-source measures.

Both rules sought to control carbon dioxide emissions through efficiency improvements at coal-fired power plants, but the Trump administration's version eliminated the Clean Power Plan's "beyond the fenceline" options for states, such as pushing out fossil fuels in favor of renewable energy sources and participating in emissions credit-trading programs.

Joanne Spalding, who is acting director of the Environmental Law Program at the Sierra Club and worked on the case, said the D.C. Circuit's ruling that the Trump administration interpreted the Clean Air Act too narrowly gives the Biden administration an opportunity to craft its own rule that may have more in common with the Clean Power Plan.

"That doesn't mean that the Biden EPA is going to go and come up with a new rule that's essentially a new version of the Clean Power Plan," Spalding said. "But it does give the administration a lot more leeway to craft a rule that's going to be effective and actually achieve emissions reductions. There are ways to craft really ambitious rules that achieve significant carbon pollution reductions using EPA's core authority under the Clean Air Act."

The case is American Lung Association et al. v. U.S. Environmental Protection Agency et al., case number 19-1140, in the U.S. Court of Appeals for the District of Columbia Circuit.

'Science Transparency' Rule Fails In Federal Court

In February, a Montana federal judge sided with environmental groups and found that a Trump-era rule intended to make it more difficult for the EPA to rely on research with confidential data was improperly promulgated because it bypassed public comment.

U.S. District Judge Brian Morris granted a motion for summary judgment to stay the Trump rule in a suit brought by the Environmental Defense Fund, the Montana Environmental Information Center and the Citizens for Clean Energy. Judge Morris said the government could not back up its claim that the Federal Housekeeping Statute allowed it to skip a customary 30-day waiting period for implementing the rule.

Since the agency didn't show that the rule fell into any of the exemption categories for bypassing that period — it wasn't simply an internal procedure modification, for instance — the federal agency had unlawfully moved too fast, Judge Morris said. So the judge put the rule on hold until that 30-day mark.

"The basis of the ruling was that you can't use the Federal Housekeeping statute for substantive rules, which I think is at least a clarification of what that statute can be used for," Kidwell said.

The case is Environmental Defense Fund et al. v. U.S. Environmental Protection Agency et al., case number 4:21-cv-00003, in the U.S. District Court for the District of Montana.

Climate Change Liability Lawsuits

Local governments have been exploring ways to recover the costs of infrastructure projects initiated in response to the effects of climate change, including litigation in both state and federal court.

Energy companies such as Chevron Corp. and ExxonMobil Corp., which are defendants in the various suits, have repeatedly sought to remove lawsuits filed in state court to federal court. But while the suits have enormous potential impacts for both plaintiffs and defendants, the Supreme Court so far has dodged answering head-on whether state or federal courts are the proper venue.

This month the justices refused to review a Ninth Circuit ruling that suits filed by San Francisco and Oakland, California, against major oil companies over climate change liabilities belong in state court.

And in May, the high court nixed the Fourth Circuit's decision to send Baltimore's climate change tort against BP, Chevron, Exxon and other energy giants to state court, but avoided answering a broader question of which courtroom such lawsuits actually belong in. That decision had the added effect of forcing the First, Ninth and Tenth circuits to redo their reviews of lower court orders remanding to state court.

So while not deciding the core issues of the cases, the Supreme Court's position has had the effect of allowing the litigation to proceed in lower courts, for the time being.

The case are Chevron Corp. et al. v. City of Oakland et al., case number 20-1089, and BP PLC et al. v. Mayor and City Council of Baltimore, case number 19-1189, both in the Supreme Court of the United States.