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The Insider

EPA is sparring in court with numerous other parties over multiple policies affecting different environmental media, including state climate change rules, biofuel production goals, water cleanups and industry liability for waste sites.

Developments over the past week have provided additional clarity on legal battles for various EPA policies, including ongoing challenges to the agency’s approach to preemption waivers for California’s vehicle emissions rules.

There, the agency is taking opposite approaches, defending its prior waiver for the Golden State’s “non-road” criteria pollution standards but also countering criticism of its decision to rescind a waiver for the state’s auto greenhouse gas requirements:

EPA Defends ‘Implicit’ Authority To Scrap California Auto GHG Waiver
The Justice Department (DOJ) is rebutting critics’ claims that EPA and the Transportation Department unlawfully preempted state vehicle greenhouse gas programs, arguing EPA has "implicit” authority to revoke California’s preemption waiver, and that there are not sufficient "reliance interests” to block the move.

EPA Argues California ‘Non-Road’ Air Waiver Justified Despite SAFE Rule
EPA is arguing that an Obama-era Clean Air Act (CAA) preemption waiver allowing California to implement stricter emissions rules for “non-road” diesel engines was “well-reasoned” and should be upheld, rebutting industry claims that the agency’s withdrawal of the state’s vehicle greenhouse gas rule waiver supports rescinding the off-road waiver.

In the GHG context, EPA is asserting it has "statutorily implicit” CAA authority to reconsider previously granted preemption waivers given conditions Congress set for granting such waivers.

"It would be illogical to bar EPA from amending waivers if EPA later determines them infeasible, especially since Congress did not limit a waiver’s duration,” the Justice Department (DOJ) writes in a Sept. 9 brief.

DOJ also questions petitioners’ claims that EPA lacks authority to revoke an existing preemption waiver, citing 2009 correspondence between California Air Resources Board Chairwoman Mary Nichols and EPA urging the agency to revisit the George W. Bush administration’s denial of the state’s GHG waiver request.

"Petitioners now strain to assert that EPA can reconsider to grant a waiver, but not to withdraw one. . . . This is unfounded. The text, structure, and logical operation allows no such distinction -- and the drafters’ legislative history is to the contrary.”

The brief was filed just says after DOJ on Sept. 4 defended EPA’s preemption waiver for California’s non-road rules in a long-running suit.

There, the construction and trucking sectors say the agency’s revocation of the state’s GHG waiver bolsters their case that courts should also strike the non-road waiver.

But EPA argues its standard for issuing waivers is different when it comes to conventional pollutants compared to climate-warming GHGs.

“Unlike the situation with greenhouse gases that was addressed in [the GHG preemption rule], particulate matter and ozone pollution do pose a particularized, state-specific problem in California that is in need of a particularized, state-specific solution,” EPA states.

In short, “applying the current legal interpretation that EPA now believes to be correct, EPA reasonably declined in the 2013 Decision to make a finding that California ‘does not need’ its off-road diesel fleet requirements ‘to meet compelling and extraordinary conditions.’ Therefore, the petitions for review should be denied.”

Speaking of states, several attorneys general and an environmental group are launching suit over the agency’s alleged failure to force other states to reduce their pollution contribution to the Chesapeake Bay:

CBF, Three States Sue EPA Over Alleged Chesapeake Bay Cleanup Inaction
The Chesapeake Bay Foundation (CBF) and the attorneys general (AGs) of Maryland, Virginia, Delaware and the District of Columbia are suing EPA for the agency’s alleged failure to enforce the terms of the Chesapeake Bay’s landmark cleanup agreement and ensure Pennsylvania and New York meet their cleanup targets.

“It’s very simple. We want EPA to do its job,” Maryland AG Brian Frosh (D) told reporters Sept. 10.

EPA has refused to enforce the terms of the bay’s total maximum daily load (TMDL) for nutrients and sediment and has rolled back water and air regulations that would help with the cleanup, CBF President William Baker said.

However, EPA Administrator Andrew Wheeler told the Senate Environment and Public Works Committee in May, following the states’ threat to sue over the issue, that suing over the TMDL before 2025, when states are to have met the final cleanup target, would be “premature” because no one will have failed to meet their cleanup agreements until that date.

In the waste arena, an appellate court is issuing a precedential ruling that could limit the liability “shield” that industry parties enjoy when settling cleanup claims from states:

Appeals Court Limits PRPs’ Shield From CERCLA Contribution Actions
In a precedential ruling, the U.S. Court of Appeals for the 3rd Circuit has found limits to the liability shield a potentially responsible party (PRP) obtains under the Superfund law when settling cleanup recovery actions brought by states, saying other PRPs may still pursue cost-recovery at the same site if those costs relate to separate, federal claims.

In the consolidated case New Jersey Department of Environmental Protection (NJDEP), et al. v. American Thermoplastics Corp., et al., the 3rd Circuit in a Sept. 8 ruling finds that “a settling-PRP is protected only insofar as a consent decree and a contribution action address the same matters. In effect, our decision encourages a PRP to settle with both the relevant State and Federal Governments."

The legal question at issue was “Whether a polluting party’s settlement with the State of New Jersey protects it from lawsuits seeking contributions toward expenditures made by the Federal Government on the same site?” Circuit Court Judge Thomas Ambro says in the unanimous opinion for a three-judge panel of the court. “Our answer here is no."

The decision sides with the U.S. government, which feared that affirming the district court’s ruling would undermine EPA’s ability to reach settlements with PRPs at Superfund sites and ensure prompt cleanups.

And in biofuels policy, small refiners are urging the Supreme Court to take up their appeal of an adverse appellate ruling that could curtail EPA’s use of compliance waivers for the renewable fuel standard (RFS) program:

Small Refiners’ High Court RFS Suit May Further Delay EPA Waiver Action
Small refiners are asking the Supreme Court to hear their appeal of a ruling that blocks EPA from issuing renewable fuel standard (RFS) compliance waivers to some companies, a request that may further delay the agency’s decision on whether to grant or deny almost 100 pending requests for waivers from RFS fuel production targets.

The Sept. 4 petition asks the justices to review the January ruling by the 10th Circuit, in which the regional appeals court blocked issuance of waivers to refiners that have not continuously held them since 2011. While the ruling is only binding in the 10th Circuit, if EPA applies the restriction nationally it would prevent issuance of almost any RFS compliance waivers for small refiners.

“Few, if any, small refineries can meet this judicially imposed test, and once a small refinery does not require EPA to extend it an exemption for a single year, it will be forever barred from receiving one,” says the high court petition. This means small refiners “will be crippled,” the petitioners say, warning of “eventual extinction” due to the ruling. The waivers are available under the Clean Air Act as a “safety valve” available “at any time,” they say.