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For contractors who often subject to one or more of federal environmental laws or regulations, below is a brief report on some the significant environmental law and administrative cases decided since late June of 2015 by jurisdiction:

District of Columbia

Energy Future Coalition, et al. v. EPA, et al., 793 F.3d 141 (D.C. Cir. July 14, 2015) — The U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit) rejected a challenge to 2014 EPA rules regulating emission testing requirements for new motor vehicles, 40 C.F.R. § 1065.701(a), concluding that EPA’s rules were simply reflecting the statutory scheme enacted by the Congress.

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Owners of some farms subject to EPA’s Spill Prevention, Control, and Countermeasures (SPCC) Regulation will be relieved to hear that some relief from the rigid requirements is here. EPA’s SPCC Regulation applies to nearly everyone—including farms—who manages “oil” in regulated quantities in locations where, due to the location of the oil storage facilities, any spill or release of that oil in harmful quantities could reasonably be expected to be discharged into the navigable waters of the United States in violation of the CWA. The SPCC Regulation requires the preparation of an SPCC plan that complies with 40 C.F.R. § 112.7, and can trigger training and plan certification by qualified engineers. For some farms, this is a burdensome and expensive compliance requirement.

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Everyone potentially exposed to civil penalties available under the Clean Water Act eight(CWA), 33 U.S.C. § 1321(b)(7), should familiarize themselves with the eight factors a court will consider when deciding what penalty should be assessed. In the case known as “Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010,” for Anadarko Petroleum Corporation, these factors made the difference between a penalty in the millions and one in the billions.

Upon consideration of the first six factors set forth in Section 1321(b)(8) of the CWA for the assessment of a civil penalty, on November 30, 2015, Judge Carl Barbier of the U.S. District Court for the Eastern District of Louisiana issued a ruling finding Anadarko Petroleum Corporation, a “co-owner” of the Macondo Well, liable to the United States for civil penalties in the amount of $159.5 million. The maximum penalty that could have been assessed was $3.5 billion, but Judge Barbier concluded, after weighing the eight factors, that a civil penalty of $159.5 million would be appropriate because, as a non-operating co-owner, Anadarko’s penalty should be limited to $50 per barrel, and not $1100 per barrel. 

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Developers subject to the Federal Power Act (FPA) should carefully consider the implications of the U.S. Court of Appeals for the District of Columbia Circuit’s recent opinion on the scope of the “municipal preference” under Section 7(a) of the FPA. The Court, in HydroelectricWestern Minnesota Municipal Power Agency, et al., v. FERC, recently considered the breadth of the “municipal preference” in Section 7(a) of the FPA, including the meaning of “municipality,” and declined to support the Federal Energy Regulatory Commission’s “geographic proximity test” for municipalities to qualify for the preference. Under the Court’s ruling, a municipality qualifies for the municipal preference regardless of their proximity to the location of the development. Developers may now be exposed to greater competition for developments with municipalities having a trump card because they qualify for the municipal preference.  As one would hope, the Court of Appeals restated the importance of the Court’s review FERC’s interpretation under the two-step framework of Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842–43 (1984).  The opinion, of course, also reflects the Supreme Court’s use of Chevron in deciding a number of important cases the past two terms. This opinion may also result in FERC being more careful in the future.

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A U.S. District Court  for the District of Columbia has joined the debate regarding whether the U.S. Fish and Wildlife Service is required to comply with the National Environmental Policy Act, 42 U.S.C. §§ 4321–4347 (NEPA), when designating critical habitat based upon the requirements of the Endangered Species Act (ESA). A geographically based distinction in agency policy has resulted from a split in the U.S. Courts of Appeals on the question of whether an environmental impact statement (EIS) is required for critical habitat designations. The Tenth Circuit Court of Appeals, in Catron County Board of Commissioners, New Mexico, v. United States Fish and Wildlife Service, et al., 75 F.3d 1429, 1436 (10th Cir. 1996), held that the Fish and Wildlife Service must comply with NEPA when designating critical habitat under the ESA. 75 F.3d at 1436. By contrast, the Ninth Circuit, in Douglas County v. Babbitt, et al., 48 F.3d 1495, 1502-07 (9th Cir. 1999), held that the Fish and Wildlife Service does not have to comply with NEPA when designating critical habitat. NEPA is generally understood to be a “procedural statute” that is designed to ensure that federal agencies make fully informed and well-considered decisions. While the U.S. Court of Appeals for the District of Columbia circuit has not had an occasion to rule on this NEPA issue, on November 13, 2015, the U.S. District Court for the District of Columbia issued a Memorandum Opinion agreeing with the Ninth Circuit that NEPA is not applicable to critical habitat determinations. The case is Otay Mesa Property, L.P., v. United States Department of the Interior.  Continue Reading ›

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In Sixth Circuit Rejects Clean Air Act Preemption of State Common Law Claims: Four Things to Know, Pillsbury attorneys Matt Morrison and Bryan Stockton explore the Six Circuit Court of Appeals recent rejection of Clean Air Act, 42 U.S.C. §§ 7401 et seq. (CAA), preemption of state common law claims in Merrick, et al. v. Diageo Americas Supply, Inc. and Little et al. v. Louisville Gas & Electric Company; PPL Corporation. The takeaway is that a facility that is otherwise in compliance with CAA emission requirements can still face lawsuits by neighboring landowners for traditional torts such as nuisance and trespass. Merrick and Little add to the foundation of precedent across the Second, Third, and Sixth Circuits, and Iowa Supreme Court.

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The “Conflicts Minerals” rule  was enacted, with very little debate, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  This rule places new regulatory requirements on the nation’s financial system in the wake of the 2008 economic emergency.  To many observers, the most troublesome aspect of the rule involves the federal government’s authority to compel the regulated community—in this instance, companies that may have some connection to the civil wars in the Congo—to label what they do in censorious terms as part of public SEC filings.  In particular, the SEC’s conflict minerals  rule purports to compel certain disclosures affecting the acquisition of certain minerals produced in the Democratic Republic of the Congo. How far can the government go, consistent with the First Amendment, to require companies and corporations to say what the government rules that that must say?

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Early this year, Governor Andrew M. Cuomo signed a bill requiring assessors and contractors in the mold remediation industry to be licensed and their workers properly trained, effective January 1, 2016.  The bill was amended later in the year, but the date it goes into effect remains the same.  The new law requires the licensing of assessors, contractors and workers, and a written mold remediation plan, prepared by a licensed mold assessment contractor, to ensure the proper remediation of mold. Additional information about the Mold Program is available on the New York State Department of Labor’s website.

Additional Source:  January 2016, New Hampshire Will Require Mold Assessment Certification

 

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Just in time for the holidays, the Nevada State Contractors Board has issued an Industry Bulletin confirming that, beginning this week, it will begin issuing a one-time refund check to eligible licensed contractors as of June 30, 2015. It will disburse approximately $2.6 million in excess funds to nearly 15,000 current active and inactive licensees on a pro-rata basis of their license fees paid over the past 5 years. It confirmed that contractors who have maintained an active or inactive license over the past 5 years with no lapse are expected to receive an estimated refund between $39 and $198.

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UPDATE:  The California Contractors State License Board has confirmed that all currently licensed contractors contractor’s bonds must be increased to $15,000 by January 1, 2016.  Contractors Urged to Make Sure They Increase Bond Coverage to $15,000 Before End of Year; Applies to All Licensees, Industry Bulletin 15-14.

A California contractor’s bond is a requirement for the issuance of an active license, reactivation of a license, and for the maintenance of an actively renewed license. Effective January 1, 2016, the required amount of a contractor’s bond will increase from $12,500 to $15,000, as a result of California Senate Bill 467 (Hill). As a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, SB 467 requires the Contractors State License Board to require the applicant and/or licensee to file or have on file a contractor’s bond in the sum of $15,000. Contractors should contact their bond agent or broker, or existing bond company for guidance on increasing their bond amount to comply with this new requirement. In addition, we expect the CSLB to provide further instructions on contractor’s compliance obligations in the coming months.

Additional Source:  CSLB, Bond Requirements