Tag: Supreme Court

U.S. Supreme Court Takes Up the Issue of Greenhouse Gas Emissions Regulation in Coalition for Responsible Regulation v. EPA

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On October 15, 2013, the U.S. Supreme Court granted certiorari in Coalition for Responsible Regulation v. EPA (2012) 684 F.3d 102. It is regarded as the most important federal case involving greenhouse gas emissions after its predecessor, Massachusetts v. EPA (2007) 549 U.S. 497.

Background

The case below involved a number of the U.S. EPA’s Clean Air Act rules regulating greenhouse gas emissions from stationary sources, such as large industrial plants, refineries, and factories. A three-judge panel of the United States Court of Appeals for the D.C. Circuit unanimously upheld the EPA’s rules in June 2012. Specifically, the court upheld the EPA’s endangerment finding for greenhouse gases and the agency’s decision that the endangerment finding made greenhouse gases an “air pollutant” for purposes of the Prevention of Significant Deterioration (PSD) program. The court also held that plaintiffs lacked standing to challenge how the rule is phased in.

Various interest groups and states submitted a total of nine petitions for certiorari, seeking to overturn the D.C. Circuit’s decision. The Supreme Court accepted six of these petitions.

The Court will consider the narrow issue of whether the EPA acted within its authority in determining that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements for stationary sources under the Clean Air Act. This means that the Court will leave some of the lower court’s findings undisturbed, including the endangerment finding and the “tailpipe rule,” which sets emissions standards for automobiles.

Issues

The challenged Clean Air Act provisions are the “timing” and “tailoring” rules, which together exempt small stationary sources from the greenhouse gas regulations that would otherwise apply. As enacted, the Act regulates every “source” of greenhouse gases emitting 100 tons of a single pollutant, including homes, apartment buildings, and small businesses. The EPA determined that regulating every source at that emission level would be both impractical and politically unpopular, so it created the tailoring rule to confine application of the Act to new sources emitting at least 100,000 tons of greenhouse gases per year and modifications of existing sources that increase emissions by 75,000 tons.

The industries and states challenging the tailoring rule argue that the rule is unlawful, since it relieves sources emitting between 100 and 100,000 tons from regulation when the statute clearly says those sources must be regulated. They also argue that the PSD provisions of the Act under which the EPA is regulating the larger emitters do not apply to greenhouse gases. The challengers believe the PSD provisions only apply to those pollutants on the National Ambient Air Quality Standards’ criteria pollutants list, which does not include greenhouse gases.

The criteria pollutant list is selective; it contains only six air pollutants which have a demonstrable effect on human health, such as lead and carbon monoxide. However, after the Court held that greenhouse gases are air pollutants under the Clean Air Act in the 2007 case Massachusetts v. EPA, the EPA found six greenhouse gases that must be regulated due to their threat to public health and welfare. Thus, though greenhouse gases are not technically listed as a criteria air pollutant, they have been found to be dangerous to human health. In fact, the PSD already applies to non-criteria pollutants, albeit more obscure ones like sulfuric acid mist. Plus, the EPA’s interpretation of its own statutes will be accorded significant deference under Chevron, which makes the challengers’ position an uphill battle.

The lower court never reached the substance of the challengers’ arguments because it found that they did not have standing, reasoning that regulating larger businesses while exempting smaller ones did not injure the larger businesses. In fact, the Court found that the tailoring rule could even help states like Texas – one of the states challenging the rule – because it would lessen the state’s burden in administering the Clean Air Act permitting program.

A ruling on the statutory interpretation issues could help to clear some of the ambiguities plaguing the Clean Air Act, which has not been amended since 1990. With the increasing national and international focus on climate change, environmentalists and industry alike would benefit from more guidance on how the Act applies to greenhouse gases. The Court will hear arguments in early 2014 and is anticipated to issue a ruling by July.

California Supreme Court holds that exhaustion of administrative remedies is required for challenges to categorical exemptions under CEQA where public hearings are held.

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On June 14, 2012, the California Supreme Court decided Tomlinson v. County of Alameda (Case No. S188161), holding that the requirement for exhaustion of administrative remedies found in Public Resources Code section 21177, subdivision (a) of the California Environmental Quality Act (CEQA) applies to an agency’s decision that a project is categorically exempt from compliance with CEQA, so long as the public agency gives notice of the grounds for its exemption determination, and that determination is preceded by a public hearing at which members of the public had the opportunity to raise objections to the project.

In its decision the Court carefully considered conflicting holdings in Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165 and Hines v. California Coastal Commission (2010) 186 Cal.App.4th 830.

Azusa held that section 21177’s exhaustion requirement does not apply to a challenge to a public agency’s decision that a project is categorically exempt from CEQA compliance, whereas Hines held to the contrary.

Procedurally, the issue is that while section 21777 requires that petitioners exhaust their administrative remedies during the public comment period or during a public hearing on the project before issuance of a notice of determination, CEQA does not provide for a public comment period prior to an agency’s determination of a categorical exemption. Further, no public hearing typically precedes the agency’s notice of determination in this situation, because a notice of determination is not generally filed for a categorical exemption.

Under Hines, an exhaustion provision does apply for categorical exemptions, where there was ample notice of a public hearing. The Court followed Hines rather than Azusa because it found that in this case, as in Hines, the agency did hold public hearings on the project which gave interested parties the opportunity to raise objections to the project before the agency’s exemption finding.

The Supreme Court did not reach the petitioners’ arguments that the public agency’s description of the requirements for the infill exemption was misleading, where the County omitted any mention of the infill exemption’s criterion requiring that the project be located “within city limits.” In Tomlinson, the County did not quote the full language in CEQA Guidelines section 15332 in any of its notices and staff reports. Instead, it substituted “in an established urban area” for the exemption’s language “within city limits” in all of its summaries of the exemption criteria in project materials. Petitioners asserted that this substitution misled and prevented them from raising the specific issue of whether the “city limits” restriction disqualified the project from using the infill exemption. The Court also did not address the argument that the petitioner’s extensive objections to the project on multiple issues at public hearings were sufficient to satisfy the exhaustion requirement.

The Court remanded the case to the Court of Appeal to determine whether the claims the petitioners raised were adequate to put the County on notice that the infill exemption did not apply, and whether the County’s omission of key criteria for a categorical exemption excuses the petitioner’s duty to exhaust on that issue.

This case continues to have important precedential value: it is still important to resolve whether an agency must provide full and accurate information in order to successfully assert the affirmative defense of failure to exhaust administrative remedies in CEQA litigation. The Tomlinson petitioners were represented by RMM partner Sabrina V. Teller.

 

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