Tag: judicial review

Upholding Clean Energy in Colorado—and Hopefully Beyond

McNishBy Samantha Caravello—November 17 at 7:26 a.m.

Acting as laboratories for energy policy, some states have been much more effective than the federal government in promoting renewable energy development, often through the enactment of Renewable Portfolio Standards (“RPS”). RPSs require electricity-selling companies to generate a minimum percentage of their electricity from renewable sources. These minimum targets generally increase over time, growing clean energy development and decreasing reliance on fossil fuels. RPSs are currently in place in 29 states and the District of Columbia, but a number of these state policies have been targeted by legal challenges.

Earlier this year, the pro-free market group Energy and Environment Legal Institute (“EELI”) filed a lawsuit challenging Colorado’s Renewable Energy Standard (“RES”), which was approved by Colorado voters in a 2004 ballot initiative and subsequently codified into state law. The RES creates a “Renewables Quota” for electricity retail utilities, requiring them to “generate, or cause to be generated, electricity from eligible energy resources” in specified amounts.[1]

In the lawsuit, Energy and Environment Legal Institute v. Epel (“EELI”),[2] EELI claimed that the Renewables Quota violates the dormant Commerce Clause, which is a doctrine that courts have implied from Constitution’s Commerce Clause. The dormant Commerce Clause prohibits states from unlawfully burdening or discriminating against interstate commerce. In the Tenth Circuit, there are three ways a statute may violate this doctrine: first, if it clearly discriminates against interstate commerce in favor of intrastate commerce; second, if it has the practical effect of regulating wholly outside the state; and third, if it imposes a burden on out-of-state commerce which is excessive in relation to the local benefits it creates.[3] Plaintiffs’ complaint focused on the second potential violation, alleging that the Renewables Quota improperly regulates wholly extraterritorial commerce.[4]

In May, the federal district court for the District of Colorado ruled in favor of state defendants and intervening environmental and renewable energy organizations and upheld the validity of the Colorado law. The court rejected plaintiffs’ extraterritoriality claims, concluding that the RES regulates only Colorado entities and those extraterritorial entities that choose to do business with Colorado entities.[5] The RES does not require out-of-state entities to do business in any particular manner, but simply determines whether energy purchased from an out-of-state generator will count towards a Colorado utility’s Renewables Quota.[6] Concluding that this did not amount to extraterritorial regulation, the court granted summary judgment in favor of defendant Colorado and intervening environmental and renewable energy organizations.[7]

This decision was a success for clean energy—Colorado’s renewable energy sector is growing, jobs are being created, and public opinion supports the RPS. Unsurprisingly, though, plaintiffs appealed the decision to the Tenth Circuit Court of Appeals. In briefs filed over the past few months, plaintiffs argued that the district court improperly relied on a “factually inapposite, nonbinding case” from the Ninth Circuit instead of a Minnesota federal district court case that would have been more favorable to the plaintiff-appellants. The state and nonprofit respondents in the EELI case argue—convincingly, in my opinion—that plaintiffs have this wrong. (Not to mention that neither the Minnesota nor the Ninth Circuit case is binding on the District of Colorado or the Tenth Circuit.)

In the Ninth Circuit case, Rocky Mountain Farmers Union v. Corey,[8] that court upheld California’s Low Carbon Fuel Standard (LCFS). Although the LCFS encouraged out-of-state entities to offer low carbon ethanol that would allow them access to the California market, the court determined that because there was no requirement for an out-of-state entity to meet particular standards, there was no extraterritorial regulation. In the District of Minnesota case, North Dakota v. Heydinger,[9] that court considered a Minnesota statute prohibiting the importation of electric power that would increase statewide carbon dioxide emissions, and it concluded that the statute did impermissibly regulate wholly out-of-state commerce. As the court held in EELI, the Colorado RES regulates only the Colorado market and affects out-of-state entities only insofar as they choose to respond to RES-created incentives. This feature makes the Colorado RES more similar to the California LCFS than to the Minnesota prohibition.

Both EELI and Heydinger are currently on appeal, and the outcome of these cases may impact similar challenges in other states and determine the likelihood of Supreme Court review on this issue. In June, the Supreme Court declined to hear Rocky Mountain Farmers Union,[10] leaving California’s LCFS in place, and perhaps indicating an unwillingness to decide whether state renewable energy incentives violate the dormant commerce clause. Or perhaps the Court, flooded with petitions warning of economic disaster due to environmental regulations, is just waiting until more circuit courts have spoken—and split—on the issue. Depending on how EELI and Heydinger turn out, these cases could provide sufficient reason for the Supreme Court to get involved. Given the states’ innovative leadership in this arena and Congress’s inability to take comprehensive action on climate and energy policy, the fate of Colorado’s RES may have significant implications for clean energy in this country.

UPDATE: The Tenth Circuit has scheduled oral argument for EELI v. Epel for January 21, 2015.

Harvard Law School’s Environmental Policy Initiative is tracking these cases and more at the State Power Project. The author relied on the State Power Project website to find some of the case briefs cited in this blog.

[1] Colo. Rev. Stat. Ann. § 40-2-124 (West 2013).
[2] No. 11–cv–00859–WJM–BNB, 2014 WL 1874977 (D. Colo. May 9, 2014).
[3] Id. at *3.
[4] Id.
[5] Id. at *6.
[6] Id.
[7] See id. at *7. The court also granted summary judgment for defendants on their claims that the RES does not discriminate against interstate commerce, id. at *5, and does not improperly burden interstate commerce relative to local benefits, id. at 9. The court concluded that plaintiffs had failed to show any burden imposed by the RES on interstate commerce. Id.
[8] Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013), reh’g en banc denied, 740 F.3d 507 (9th Cir. 2014), and cert. denied, 134 S. Ct. 2875 (2014).
[9] No. 11–cv–3232 (SRN/SER), 2014 WL 1612331 (D. Minn. Apr. 18, 2014).
[10] Rocky Mountain Farmers Union v. Corey, 134 S. Ct. 2875 (2014).

There’s More than Just Climate: People Need Protection Against Air Toxics, Too

By Seth Johnson — November 13 at 10:39 a.m.

file0001225592472(1)Seth Johnson is a Senior Associate Attorney with Earthjustice and a graduate of Harvard Law School, where he served as Editor-in-Chief of the Harvard Environmental Law Review.

Climate change is the environmental issue of the day and it, deservedly, is the focus of great attention. But many domestic air pollution issues remain, and millions of Americans await long-overdue protections against toxic and cancer-causing air pollutants like dioxins, mercury, cadmium, chromium, lead and benzene. These issues are often in the shadow of climate change discussions, even though the legal fights over how to regulate these pollutants have been going on for decades and will continue.

One issue that is now the subject of litigation consists of four cases, all relating to how much protection people will receive against hazardous air pollution emitted from industrial boilers—power and heat plants for industrial facilities—and facilities that burn nonhazardous commercial or industrial waste (“waste-burners”). Millions of Americans live, work, pray, and play near these air pollution sources. EPA was required to establish emission standards for the waste-burners in 1994 and for all the industrial boilers by 2000, but it still has not issued lawful versions of these rules.

Per the Clean Air Act (and the D.C. Circuit), a waste-burner is any facility that burns for any reason any nonhazardous commercial or industrial “solid waste,” and EPA defines “solid waste” under the Resource Conservation and Recovery Act (RCRA). If a facility is a waste-burner, it must meet very protective “MACT”-level standards, which must reflect what the best-performing sources actually achieve, under Clean Air Act § 129. Such facilities also must have an operating permit that gives the public information about what the facility burns and emits, and makes it easier for the public to hold the facility accountable.

If a facility is not a waste-burner, but is a conventionally fueled industrial boiler, cement plant, or power plant, it may be subject to less restrictive regulation under Clean Air Act § 112. Though some of these facilities are “major sources” under Clean Air Act § 112 and thus also subject to very protective “MACT”-level standards, most are “area sources” that EPA can regulate under the less-protective regime known as “generally available control technology” (GACT). Area sources also do not need to obtain the same operating permits as major sources and waste-burners. So, there is more protection against emissions from waste-burners than there is against emissions from area sources.

The four rules being challenged (1) define nonhazardous solid waste, (2) set standards for waste-burners, (3) set standards for major source industrial boilers, and (4) set standards for area source industrial boilers. The nonhazardous solid waste definition is the key regulatory switching provision for the other three rules.

For defining solid waste under RCRA, everything hinges on the meaning of the word “discarded.” EPA has decided that tires people dispose of at the tire shop, used motor oil people get rid of at the service station, wooden debris from when people tear down houses, and anything that is thrown out—even just household garbage—that eventually gets processed and burned for energy are not discarded and thus are not solid waste. As a result, facilities can burn these materials without being considered a waste-burner and are not subject to protective standards limiting emissions of noxious pollutants.

Environmental groups challenge EPA’s determination of what constitutes solid waste, since “discarded” unambiguously has its plain meaning—abandoned, thrown away, or disposed of—and would encompass many materials that EPA determined are not solid waste. Environmental groups also challenge the other three rules as unlawfully under-protective (some of these arguments are summarized here and here). Unsurprisingly, some industry groups challenge all the rules as forcing them to reduce emissions too much. Briefing in the solid waste definition case has ended; briefing in the three other cases will wrap up in March 2015. Oral arguments have not been scheduled yet, but the same D.C. Circuit panel will hear all the cases.

These cases are important not only because of their ramifications for the health of millions of Americans, but also as pure legal issues. The case concerning the definition of solid waste may clarify some rather confusing D.C. Circuit precedent on RCRA. The other cases come after EPA’s approach to air toxics was repeatedly weighed and found wanting, both for how EPA set standards and for EPA’s efforts to allow “malfunctions” to escape control. EPA adjusted, and the D.C. Circuit has upheld EPA’s standard-setting methodology in many—though not all—of EPA’s more recent air toxics rules.

EPA’s approach to regulating air toxics has thus been changing as EPA, environmental groups, and industry groups press their readings of the Clean Air Act in light of judicial decisions. Thanks in part to the colossus of climate change, that ongoing story is playing out, as the first volume did, in some shadow. But the story is interesting, and extremely important.

ELR Article Receives Praise in JOTWELL

TREES_Fall trees_New Haven_MHoldenBy Meg Holden — Oct. 30, 2013 at 3:42pm

If you’ve been reading the ELR blog, you might also be interested to know that all of our articles from Volume 37.2 are now available in print and on our website! One article, Administrative Proxies for Judicial Review: Building Legitimacy from the Inside-Out, by Emily Hammond and David Markell, recently received a favorable review in JOTWELL. Hammond and Markell’s piece explores how to build legitimacy from the “inside-out” when judicial review of agency actions is unlikely or unavailable. The article presents an empirical study of an EPA process that allows parties to petition EPA to withdraw a state’s authority to administer environmental statutes (which EPA has the authority to do if the state is inadequately implementing environmental laws). EPA’s decision to withdraw authority is within its enforcement discretion, and is largely not subject to judicial review. Hammond and Markell evaluated a set of petitions that spanned a 25-year period to determine whether EPA takes actions to legitimize its decisions with regard to the petitions. The authors found that despite the absence of judicial review (and the unlikelihood that EPA would actually withdraw a state’s authorization to implement the law), EPA independently engages in behaviors to create internal legitimacy. EPA works to resolve the petitions informally, investigating the concerns raised in the petitions and negotiating with states to reach substantive outcomes. Hammond and Markell draw a number of lessons from this case study, and highlight institutional design features that might enhance “inside out” legitimacy.

In its review of the piece, JOTWELL states that the article is “a thought-provoking and admirable” piece of scholarship, noting that it raises central questions of administrative governance, offers a theoretical framework for evaluating the performance of agencies within the administrative state, and ambitiously seeks to connect theory with practice.  With respect to this last feature of the article in particular – its connection of theory with practice – the JOTWELL reviewer notes that “[r]ather than articulating a theoretical framework and stopping there, the authors use their framework to structure their examination of actual agency process, to see how well the data fits the theory. This is good work. We need more of it.”

Don’t forget to check out the article, as well as the others in Volume 37.2, here!