Holland & Hart's Climate Change News

U.S. Supreme Court Unanimously Holds That Courts Cannot Limit GHG Emissions Under Federal Common Law

On June 20, 2011, the United States Supreme Court issued a decision reversing the decision of the U.S. Court of Appeals for the Second Circuit, which had held that federal common law provides a basis for eight states, New York City, and three nonprofit organizations to seek reductions in greenhouse gas emissions from large coal-fired power plants. American Electric Power Co. v. Connecticut, No. 10-174 (June 20, 2011).

The unanimous Court, in an opinion written by Justice Ginsburg, held that the Clean Air Act displaces federal common law claims seeking abatement of greenhouse gas emissions. Justice Sotamayor recused herself, having sat on the Second Circuit panel that heard oral arguments in the case.

California Court Removes Stay of Cap-and-Trade Program; CARB Releases New Analysis

by James Holtkamp

On June 24, 2011, the California Court of Appeals lifted a lower court order halting California’s cap-and-trade program. Ass'n of Irritated Residents v. CARB, Cal. Ct. App., No. A132165, 6/3/11. The lower court had ruled that the California Air Resources Board (“CARB”) had failed to comply fully with the California Environmental Quality Act in developing the proposed cap-and-trade program, which is the centerpiece of California’s comprehensive climate change program required under California Assembly Bill 32 (“AB 32”). In lifting the lower court stay pending a final decision on the appeal of the lower court order, the Court of Appeals granted the state’s request that CARB continue work on the program, which is scheduled to become effective in January 2012.

Montana Supreme Court Dismisses Climate Change Petition

By Bill Mercer

On June 15th, the Montana Supreme Court dismissed the petition for original jurisdiction in Barhaugh v. Montana, No. OP 11-0258, without reaching the merits. The petition is part of a nationwide initiative involving lawsuits and administrative petitions in all fifty states, the District of Columbia and the federal court in the Northern District of California. The initiative is primarily driven by an Oregon non-profit called Our Children’s Trust. The plaintiffs in the various actions argue that the state and federal government are trustees of the atmosphere and other common resources and thus have a duty to protect the atmosphere from the introduction of anthropogenic greenhouse gases by establishing limits on GHG emissions. The Montana Supreme Court ruling is the first significant response in the various lawsuits. The administrative petitions are still wending their way through the various state agency processes.

Federal Court Orders EPA to Issue Power Plant Permit Exempted From GHG Controls; EAB Review Potentially Bypassed

by Jim Holtkamp

On May 26, U.S. District Court Judge Richard Leon of the District of Columbia issued a ruling requiring EPA to issue a final air permit reviewable only in federal court for the 640-megawatt Avenal natural gas power plant in California by August 27. Judge Leon held that EPA had flagrantly violated a Clean Air Act requirement that EPA grant or deny permits within twelve months after receiving a completed application. The application has been pending since 2008.

Given that the application was pending as of January 2, 2011, the effective date of the EPA’s GHG Tailoring Rule, EPA offered to issue the permit without GHG requirements, a move adamantly opposed by environmental groups.

ENVIRONMENTAL LITIGATION; ENVIRONMENTAL COMPLIANCE: CLIMATE CHANGE LITIGATION: D.C. Circuit Sets Briefing Schedule for Consolidated Litigation Challenging EPA GHG Emissions Rules

By Emily Schilling

The United States Court of Appeals for the D.C. Circuit issued the briefing schedules this month for the Coalition for Responsible Regulation v. E.P.A. consolidated litigation challenging a suite of EPA’s greenhouse gas (“GHG”) rulemakings, with staggered briefing starting at the end of May. Holland & Hart is representing the Coalition for Responsible Regulation in each of these cases. The opening briefs for the case challenging the EPA’s finding that GHG endanger public health and welfare are due May 20th; with briefs challenging the EPA rule setting GHG standards for cars and light-duty trucks, and EPA’s “tailoring rule” (designed to initially limit GHG permitting to large emitters) and “timing” memorandum (designating the date on which mobile sources are regulated as the trigger for stationary source regulation) due June 3rd and June 20th, respectively. Briefing will be wrapped up by December 14, 2011 and oral argument is expected in early 2012. The panel hearing the cases may not be identified until the court sets a date for oral argument—likely in January of 2012.

ALL: Climate Change Happenings on the Hill

By: Nils Johnson, Director, Legislative & Regulatory Affairs

What does the potential for a shutdown of non-essential functions of the federal government have to do with climate change? A lot, as it turns out.

The Federal Government is currently operating under a continuing funding resolution (CR) that expires March 4, 2011. If the non-essential functions of government (which include just about everything but health and safety spending) are to remain in operation after that date, Congress must pass and the President must sign legislation to either extend government funding on a short term basis or through the end of the current fiscal year that ends midnight September 30, 2011.

CLIMATE CHANGE LITIGATION: U.S. Supreme Court Case Could Open the Door to Public Nuisance Suits Against Emitters of GHG

By: Maryt Fredrickson

The United State Supreme Court is poised to decide a landmark climate change case this term that could have a substantial effect on all industries that emit greenhouse gases, particularly Holland & Hart’s energy clients. In Connecticut v. American Electric Power Co., the Court will decide whether industries that emit greenhouse gases can be sued under a federal common law theory of public nuisance. See generally, 582 F.3d 309 (2d Cir. 2009). If the Court opens the door to these public nuisance suits, the prospect exists that courts would (1) grant injunctive relief in the form of a judicially-imposed reduction of greenhouse gas emissions, and/or (2) hold greenhouse gas emitters jointly and severally liable for damages resulting from their contribution to global warming.

ALL: Wyoming Sues EPA Challenging GHG Permitting Program

By: Jim Holtkamp

On February 10, the State of Wyoming filed petitions for review with the D.C. Circuit Court of Appeals challenging EPA rules authorizing EPA to administer the GHG permitting program in states that do not establish their own permitting programs for GHGs from major sources and major modifications of existing sources of GHGs. Texas filed similar petitions for review with the Fifth and D.C. Circuits late last year. There are seven states which failed to change their permitting programs by specified deadlines. In those states, EPA will implement a Federal Implementation Plan to administer the GHG permitting program.

ALL: New Mexico Supreme Court Orders Governor Martinez to Publish Cap-and-Trade Rules

By: Jim Holtkamp

Last month we reported that New Mexico Governor Susana Martinez had blocked the publication of GHG cap-and-trade rules that had been promulgated by the State environmental Improvement Board (“EIB”), had fired all of the members of the EIB, and appointed former U.S. Senator, astronaut, and vocal climate change skeptic Harrison Schmit as secretary of the New Mexico Energy, Minerals and natural Resources Department.

On January 26, the New Mexico Supreme Court ordered the publication of the cap-and-trade rules, which apply to facilities that emit in excess of 25,000 metric tons of CO2 per year, with the objective of reducing emissions by 3 percent per year from 2010 levels beginning in 2013.

Also on January 26, Governor Martinez announced the appointment of the new members of the EIB.

On February 10, Harrison Schmitt resigned from Governor Martinez’s cabinet rater than submit to the background check required for Senate confirmation.

ALL: California State Court Puts Hold on Climate Change Plan Implementation

By: Jim Holtkamp

On January 21, a California state judge issued a proposed decision holding that the California Air Resources Board failed to com0ply with the California Environmental Quality Act in its adoption of the plan for implementation of AB32, California’s comprehensive climate change law. Ironically (although not surprisingly), the lawsuit was brought by environmental plaintiffs, who argued that the proposed B32 rules fail to require maximum technologically feasible reductions in GHGs. Essentially, they oppose the cap-and-trade program proposed under the statute, as not achieving sufficiently stringent reductions in GHGs.

According a senior industry lawyer familiar with the case, the expectation is that the district court will either withdraw the ruling or that it will be overturned on appeal.