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On September 30, 2014, the U.S. District Court for the District of Columbia rejected a challenge to the decision of the U.S. Fish and Wildlife Service (FWS) to withdraw a proposed listing of the Dunes Sagebrush Lizard, a species found in many oil and gas producing areas, as an endangered species under the Endangered Species Act. The case is Defenders of Wildlife, et al. v. Jewell. The District Court held that the decision of the FWS was lawful, and comported with the requirements of the ESA and the FWS’ and National Marine Fisheries Service’s (NMFS) 2003 Policy for Evaluation of Conservation Efforts When Making Listing Decisions (PECE) for the Evaluation of Conservation Efforts When Making Listing Decisions. Of particular importance were three conservation mechanisms–the BLM’s Resource Management Plan Amendment, the “New Mexico Agreement”, and the “Texas Plan”. The New Mexico and Texas plans are Candidate Conservation Agreements that the Service approved.

The Texas Comptroller and several oil and gas associations intervened as defendants to support the Service and their own conservation plans. This decision is likely to be appealed, but it certainly seems to strengthen the case for the measures that are being proposed (and challenged) to protect the Lesser Prairie Chicken, a species that was listed as threatened earlier this year.

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On September 26, 2014, a divided panel of the U.S. Court of Appeals for the Third Circuit reversed the U.S. District Court of the Middle District of Pennsylvania, holding that Columbia Gas Transmission Company, an interstate natural gas company regulated by FERC, has the right of eminent domain granted by 15 U.S.C. § 717f(h) to obtain easements over the land of objecting landowners, even when such new easements would be located outside of the existing right of way, in order to replace a deteriorating pipeline that is now located in a heavily populated area of Pennsylvania. The case is Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Township, York County, Pennsylvania, Located on Tax ID# 440002800150000000 Owned by Dwayne P. Brown and Ann M. Brown, et al.

To obtain these easements, Columbia filed Complaints of Condemnation in federal court against four landowners. The District Court denied Columbia’s request, holding that the implementing FERC regulation was ambiguous, and the court therefore “looked outside the regulations” and determined that the agency’s interpretation was not entitled to deference. Columbia had received a “blanket” certificate of convenience and necessity from FERC, which the majority of the Court of Appeals held provided the holder of the certificate with the authority to conduct a routine activity of replacement without further authorization by FERC. According to the Court of Appeals , the applicable FERC rule was not ambiguous, and must be enforced, although the Court of Appeals also noted that this right was subject to certain limitations including environmental compliance. Referring to the Supreme Court’s recent decision in Utility Air Regulatory Group v. E.P.A., 134 S. Ct. 2427, 2442 (2014), the court held that the statute as a whole must be reviewed before its parts could be considered to be ambiguous. Finally, the Court of Appeals granted Columbia’s request for preliminary injunctions, allowing it to take immediate possession of these easements.

The dissenting opinion concluded with this observation: “It is disturbing and encouraging that, by today’s ruling, the Majority endorses a view of delegated sovereign power so broad that a private gas company, with no agency oversight or other significant procedural restraint, can take the property of other citizens far removed from that company’s original right of way”.

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On September 19, 2014, the U.S. Court of Appeals for the Ninth Circuit held that California Senate Bill 990 violates the Constitutional doctrine of “intergovernmental immunity” because it directly regulates the activities of the US Department of Energy in violation of the Supremacy Clause. S.B. 990 prescribes state radioactive cleanup standards at the Santa Susan Field Laboratory, a site which is undergoing extensive cleanup by the federal government. The case is The Boeing Company v. Movassaghi, Acting Director of the California Department of Toxic Substance Control, et al.

The federal government used the Santa Susan Field Laboratory site, located in Ventura County, to conduct nuclear research, operate nuclear reactors, build and test rockets, and conduct other defense-related work. According to the Ninth Circuit, all of these activities over the years “created a terrible environmental mess”, which the federal government and Boeing, as its contractor, are addressing. The soil, groundwater and bedrock were seriously contaminated.

California enacted S.B. 990, prescribes stringent cleanup standards, purporting to make the large site suitable for subsistence farming activities. However, the Ninth Circuit notes that the doctrine of intergovernmental immunity provides that the activities of the federal government are shielded by the Supremacy Clause from direct state regulation, and S.B. 990 violates this principle. It concluded that no provisions in the Atomic Energy Act, Resource Conservation and Recovery Act or Comprehensive Environmental Response, Compensation, and Liability Act indicate that Congress envisioned a role for the state as embodied in S.B. 990, and therefore the law is of no effect at this site.

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Four energy companies – Pathfinder Renewable Wind Energy, Duke-American Transmission, Dresser-Rand, and Magnum Energy – have jointly proposed an $8 billion plan to supply Los Angeles with more than twice the amount of electricity generated by the Hoover Dam. According to Duke Energy, the proposal would require construction of “one of America’s largest wind farms in Wyoming, one of the world’s biggest energy storage facilities in Utah, and a 525-mile electric transmission line connecting the two sites.” The compressed air storage facility in Utah – consisting of four vertical chambers, each approaching the size of the Empire State Building, carved from an underground salt formation – would yield 1,200 megawatts of electricity, which is enough to serve 1.2 million homes in the Los Angeles area.

Renewable energy producers have long struggled with how to deliver electricity when times of high demand do not coincide with times of peak energy production. For example, solar power typically peaks during midday, when energy demand is lower. The wind power proposal for Los Angeles, however, boasts the desirable pairing of energy storage with renewable energy. Under the proposal, when power demand is low and wind is high, the storage facility would use the excess electricity from the wind farm to compress and inject high-pressure air into the chambers for storage. During times of high power demand, the facility would use the stored, compressed air, combined with a small amount of natural gas, to drive eight generators to produce electricity.

The proposal will be formally submitted to the Southern California Public Power Authority by early 2015 in response to the agency’s request for proposals to provide renewable energy and electricity storage for the Los Angeles area. With energy demand in the area predicted to rise by as much as 18 percent by 2024, this proposal, which has a target in-service date of 2023, could provide a desirable green solution to Los Angeles’s impending energy crisis. But this is hardly a done deal. The proposal must first be selected from the many expected to be submitted to the agency, and its sponsors must then be able to clear regulatory hurdles and secure financing by entering into agreements for the sale of power.

A video with more information about the proposal can be found here.

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UPDATE: Applications for the Position of the Registrar of Contractors must be received by 5:00 p.m. PST on November 17, 2014 and must include all required information.

The California Contractors State License Board invites applications for the position of Registrar of Contractors. The Registrar of Contractors is responsible for, among other things, carrying out the policies of the CSLB and for planning, organizing, and directing CSLB activities in the areas of administration, enforcement, information technology, and licensure. The position is located in Sacramento, California. All submissions must be received by 5:00p.m. on October 15, 2014, and must include both email and telephone contact information. For additional information review the invitation or contact Eileen Fuller at (916) 574-8385.

The current Registrar of Contractors, Steve Sands, announced on April 24, at the CSLB’s quarterly board meeting, that he planned to retire at the end of the year, after being “at the helm” of the CSLB since January 1, 2001.

Additional Resources: California CSLB Registrar of Contractors Announces Departure

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On September 18, 2014, a divided panel of the U.S. Court of Appeals for the Fifth Circuit decided another Deepwater Horizon case. The case is United States v. Transocean Deepwater Drilling, Inc., and involves the statutory authority of the U.S. Chemical Safety and Hazard Investigation Board (CSB) to issue administrative subpoenas to Transocean, the operator of the Deepwater Horizon drilling unit, following the disaster on the Deepwater Horizon drilling unit in the Gulf of Mexico.

Transocean argued that the CSB lacked any authority to issue these subpoenas. According to Transocean, this was a “marine oil spill” from a vessel over which the CSB has no jurisdiction under the Clean Air Act (CAA). The lower court held that the CSB was only investigating the release of airborne gases following this explosion and spill on the Outer Continental Shelf (OCS) in the Gulf of Mexico, and since the Deepwater Horizon was not in fact a “vessel”, the incident was not transportation-related and therefore the National Transportation Safety Board (NTSB) had no jurisdiction over the incident. By law, the CSB cannot investigate a “transportation-related” incident, but if the NTSB has no jurisdiction, then the CSB can step in.

The Fifth Circuit agreed, holding that while the drilling unit was a “vessel” for most purposes, it could also be considered to be a “stationary source” as that term is defined in the CAA because the Deepwater Horizon was physically attached to the seabed. Moreover, parsing the law, the Fifth Circuit held that there must be a category of marine oil spills that are not transportation-related and over which the NTSB lacks jurisdiction.

Judge Jones filed a strong dissent, remarking that virtually every Fifth Circuit decision to date has referred to the drilling unit as a “vessel”, and to call it a stationary source because it was attached to the seabed is to ignore the fact that it was constantly in motion. Judge Jones also disagreed with the majority’s ruling that the NTSB lacked authority to investigate this incident because it was not “transportation-related”. Finally, Judge Jones remarked that, as a result of this ruling, “nearly all non-standard offshore vessels involved in oil and gas production on the OCS will become subject to CAA regulation and reports, in addition to all of the regulatory requirements of ‘traditional vessels’ imposed by the Coast Guard.

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United States Supreme Court decisions provide guideposts for the exercise of environmental permitting and enforcement power by state and federal authorities. Whether a particular facility can be permitted often determines whether it can be built or modified after it has been constructed. In addition, a decision such as the Court’s ruling in the case of Marvin Brandt Revocable Trust v. US has a bearing on land use considerations. Even a decision by the Court not to take up a case will have these same consequences. For instance, the Court’s refusal to review the Mingo Logan Coal Company v. EPA leaves undisturbed the EPA’s asserted power to overturn a Corps of Engineers’ permitting decision, which may create disincentives to begin a project in the first place if it looks controversial.

Recently, we published our advisory Supreme Court Roundup: Recent Environmental Law Rulings and Pending Cases. Our Advisory discusses the United States Supreme Court’s rulings affecting environmental law during the October 2013 Term. With significant pronouncements regarding EPA’s Clean Air Act regulatory authority among them, however, the October 2013 Term was far from uneventful. Several more cases slated for the October 2014 Term presage rulings across a broad spectrum of environmental and administrative law issues.

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On September 15, 2014, the Office of Federal Contract Compliance Programs (OFCCP) released its Notice of Proposed Rulemaking (“Proposed Rule“) implementing President Obama’s Executive Order 13665 (“EO 13665“) (April 8, 2014), banning federal contractors from taking adverse action against employees and applicants who discuss their pay. EO 13665 instructs that, within 160 days of the date of EO 13665, the Secretary of Labor shall propose regulations prohibiting federal contractors from discharging or discriminating against employees or applicants who inquire about, discuss, or disclose their own compensation or compensation of other employees and applicants. The Proposed Rule will apply to nearly all federal contracts exceeding $10,000 entered into or modified on or after the effective date.

Executive Order 13665 states that it is “designed to promote economy and efficiency in Federal Government procurement.” It explains that:

When employees are prohibited from inquiring about, disclosing, or discussing their compensation with fellow workers, compensation discrimination is much more difficult to discover and remediate, and more likely to persist. Such prohibitions (either express or tacit) also restrict the amount of information available to participants in the Federal contracting labor pool, which tends to diminish market efficiency and decrease the likelihood that the most qualified and productive workers are hired at the market efficient price. Ensuring that employees of Federal contractors may discuss their compensation without fear of adverse action will enhance the ability of Federal contractors and their employees to detect and remediate unlawful discriminatory practices, which will contribute to a more efficient market in Federal contracting.

In turn, OFCCP’s Fact Sheet on the Proposed Rules states that “[e]nabling the more than 28 million employees of Federal contractors and subcontractors to discuss their compensation without fear of adverse action can contribute to reducing pay discrimination and ensuring that qualified and productive employees receive fair compensation.”

The Fact Sheet provides “highlights” of the Proposed Rule:

  • Amends the Equal Opportunity Clause of Executive Order 11246 that requires certain information be included in Federal contracts and subcontracts. The amendment mandates inclusion of the requirement that Federal contractors and subcontractors refrain from discharging, or otherwise discriminating against, employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants. An exception exists where the employee or applicant makes the disclosure based on information obtained in the course of performing his or her essential job functions.
  • Requires that Federal contractors incorporate the nondiscrimination provision into their existing employee manuals or handbooks, and disseminate the nondiscrimination provision to employees and to job applicants.
  • Defines key words or terms such as compensation, compensation information, and essential job functions as used in the Executive Order.
  • Provides employers with two defenses to an allegation of discrimination: one based on enforcing rules against disruptive behavior; and the other based on the essential functions of the person’s job.

The Proposed Rule will be published in the Federal Register on September 17, 2014. Interested parties will have until December 16, 2014 to submit comments.

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A new California law effective July 1, 2015 requires employers to provide at least 3 paid sick days per year. Workers covered by valid collective bargaining agreements meeting certain requirements are exempt, but contractors should review their sick leave policies for all employees to ensure they are in compliance. Please click here for a helpful guide to the new law prepared by Pillsbury’s employment law group.

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On September 4, 2014, the U.S. Court of Appeals for the Ninth Circuit issued a decision rejecting the argument that a Clean Water Act (CWA) “permit shield” required the dismissal of a CWA citizen suit. The case is Alaska Community Action on Toxics, et al. v. Aurora Energy Services, LLC; Alaska Railroad Corporation, which had been argued less than a month before the ruling was made. The defendants own and operate a coal loading facility located on the northwest shore of Resurrection Bay in Seward, Alaska. Since 2001, the facility has been covered by an EPA “multi-sector” General Permit for Stormwater Discharges, and the defendants argued that any spills of coal from the facility into Resurrection Bat was covered by this permit and the “permit shield” provisions of Subdivision (k) of Section 1342 of the CWA (33 U.S.C. § 1342(k)). The lower court agreed with the defendants and granted summary judgment.

However, according to the Court of Appeals, a careful review of the provisions of the permit disclosed that these particular “non-stormwater” discharges were not, in fact, covered by the permit, and the decision of the lower court was reversed, and the case was remanded for further proceedings.

This is the second “permit shield” case to be decided by the Court of Appeals in the past few months. In July, the U.S. Court of Appeals for the Fourth Circuit also rejected the use of the permit shield defense in the case of Southern Appalachian Mountain Stewards, et al., v. A & G Coal Corporation, 2014 WL 3377687 (4th Cir. July 14, 2014), which involved the interpretation of an individual National Pollutant Discharge Elimination System (NPDES) permit and the disclosures the applicant made to the permitting authority. It is evident that the courts are subjecting this defense to an exacting review.

Additional Source: Aurora Energy Decision Deems Discharges Prohibited, Leaves Open Question of Permit Shield Applicability; “Permit Shield” Defense Unavailable When Presence of Pollutant Was Not Disclosed In Permit Application Process