Vol. 50-2 Water Rights

By Emily Williams Rogers, Kimberly Kelley and Patrick Maloney

Water Rights

Texas Flood-Controlled Reservoirs

Introduction

Houston is located at the junction of the Buffalo Bayou and the White Oak Bayou, which drains into the Galveston Bay. As a result, Houston has a history of flooding and is familiar with flooding hazards. In response, Congress created flood control measures with the Rivers and Harbors Act of 1938.[1] Through this Act, the U.S. Army Corps of Engineers (the Corps) built both Addicks and Barker Dams and connected them to the Buffalo Bayou as part of an extensive flood control effort.[2] The purpose of the program was to protect Houston as it existed at the time the law passed, namely downtown Houston and the areas nearby.

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The city originally purchased substantial amounts of land upstream of the dams to create reservoirs to hold flood water.[3] While the Corps acquired a significant amount of upstream land, it acquired less than initially planned, meaning that “the dams were designed to contain more water than the acquired land could hold.”[4] The Corps diminished its land requirements based off a large 1935 storm, although the  risk of a more significant storm was considered—approximately the size of Hurricane Harvey—that could occur once every fifty years.[5] However, the Corps expected that the rural areas surrounding the reservoirs would stay rural, therefore mitigating the potential risk posed by flooding.[6] Despite the Corps’ original expectations, rapid urbanization ensued, and by the late 1970s, the area upstream of the reservoirs were no longer rural.[7]

 In 2017, Hurricane Harvey unexpectedly poured an average of thirty-four inches of water on Houston in four days.[8] The Corps followed its mandate and protected downtown Houston. Thus, the area upstream of the dams experienced significant flooding, causing extensive property damage.[9] According to the Corps, the dams functioned properly and per their original purpose.[10]        

Upstream Addicks and Barker Takings Claims

With the wave of litigation against the Corps that followed, the cases were split between the upstream properties and the downstream properties.[11] This article analyzes upstream property owners’ cases who successfully argued that the Corps is liable for taking. Interestingly, the claims court found the downstream property owners did not own a protected property interest and therefore could not recover.  

Takings derive from the Takings Clause of the Fifth Amendment, which states that “private property [shall not] be taken for public use without just compensation.”[12] The Takings Clause holds the government liable for negatively affecting the value of private property in exchange for a public purpose. There are two, layered elements to a takings analysis. The first element is whether the plaintiff has a property interest within the meaning of the Fifth Amendment.[13] The second element is whether the government’s action amounted to a compensable taking of that interest.[14] 

Property Interest

The court began its analysis by noting that the homeowners own private property without flowage easements, ultimately concluding that the plaintiffs maintained a property interest within the meaning of the Fifth Amendment.[15] The Corps provided three reasons why the homeowners do not hold compensable property interests, all of which the court rejected. First, the Corps argued that under Texas law, it has the right to mitigate floodwaters.[16] The court disagreed, explaining that the law the Corps cited was an exception for the specific circumstance of constructing or maintaining levees, not for consciously diverting water onto private property.[17]  Second, the Corps argued that the upstream homeowners purchased their property after the dams’ construction and therefore, cannot argue that they should be free from flooding.[18] The court disagreed, noting that this argument is more appropriate for analyzing the homeowners’ reasonable investment-backed expectations.[19] Third, the Corps argued that under the Flood Control Act of 1928, the homeowners’ right to compensation is limited. Again, the court disagreed, maintaining that the Flood Control Act did not override the Constitution’s requirement that the government compensate when it takes private property for public use.[20] With this analysis, the court established that the plaintiffs maintained a vested property interest under the Fifth Amendment.[21]

Takings

Whether government action requires compensation for taking requires considering six elements articulated by the Supreme Court in Arkansas Game and Fish Commission v. United States.[22] The factors include (1) time and duration, (2) intent, (3) foreseeability, (4) character of the land, (5) reasonable investment-backed expectations, and (6) severity.[23] The court addressed all factors except for the “character of the land.”

  1. Time and Duration

The time factor is highly weighted. When the taking is permanent, then a taking is virtually conclusive.[24] The court shot down the Corps’ argument that its actions only temporarily took the homeowners’ properties since the floodwater dissipated within days.[25] Instead, the court concluded that the Corps’ history with the dams, including construction, maintenance, and operation, demonstrates that the Corps took a permanent flowage easement.[26] The court reasoned that ever since the dams’ construction, the Corps’ actions subjected the upstream homeowners to the “probability” that the Corps will induce flooding.[27] That is, the time and duration does not mean the duration of the flooding; rather it involved the government’s permanent right to inundate the property with floodwater. But the court did not address the fact that the homeowners purchased their property after the construction of the dams.

  1. Severity

The court cited precedent holding that in “the flooding context, ‘property may be taken by the invasion of water where subjected to intermittent, but inevitably recurring, inundation due to authorized government action.’”[28] Flooding by means of flood control is defined as a taking when the government retains the right to flood it in the future, since reserving such a right is more than an “isolated invasion.” [29] It is essentially a flowage easement.[30] The Corps responded by arguing that each upstream property was repairable, and therefore, the damage was temporary.[31] Even if the properties are repairable, however, the court countered that the likelihood of a similar event in the future is determinative.[32] Some properties required months for repairs due to structural damage; furthermore, the fact that the owners can repair the property to its previous condition is irrelevant in a severity analysis, especially when the Corps may flood the property again.[33]

  1. Intent

Intent is defined as whether the Corps intended to occupy the homeowners’ property without authority or excuse, meaning that intent to occupy is sufficient without requiring intent to create a taking.[34] The court drew on the Corps’ failure to purchase the proper amount of land to affect the dams’ original design requirements.[35] Even though the Corps knew it did not have enough land upstream of the dams to prevent flooding for a storm the size of Harvey, it also knew that a storm the size of Harvey was probable.[36] Moreover, even though the Corps knew that if a storm like Harvey would occur, it never strayed from the primary objective to prevent downstream flooding.[37] The Corps’ decision to prevent downstream flooding, then, showed its intent to use the upstream homeowners’ properties for flood control because it knew a storm like Harvey would occur.[38]

  1. Foreseeability

The bulk of the court’s decision lies in its foreseeability analysis. Whether an invasion of private property is the foreseeable result of government action addresses whether the government intended to invade as the “direct, natural, or probable result of an authorized activity,” and not invasions incidental or consequential injuries from an action.[39] The distinction between intent and foreseeability is that the foreseeable result may not have been intended, but an action cannot be intended without being foreseeable.[40] As noted above, the court found intent, and therefore the taking was foreseeable.[41]

The court rejected two of the Corps’ important arguments. First, the Corps argued that the foreseeability analysis should focus on the time the Corps constructed the dams.[42] The Corps’ argument here focused on the fact that it could never have anticipated the vast urbanization that would occur in the late 20th century, and that while the upstream flooding was possible, it was not the “direct, natural, or probable result.”[43] The court responded by saying that foreseeability “should not be so constrained” because foreseeability is an objective measurement.[44] The court asked, “would an objective person reasonably foresee that the actual results which occurred would have been the direct, natural or probably results of the government’s actions? Whether the Corps subjectively foresaw the results may bear on objective foreseeability, but it is not the only consideration.”[45] The court eventually concluded that measuring the date of foreseeability is irrelevant because the Corps objectively should have known that the water would invade private property.[46] Moreover, the Corps’ ongoing operation and modification of the dams occurred even as the possibility of flooding increased.[47]

The second notable argument focused on the extent of damages. The Corps argued that “the claimed losses were not the direct, natural, or probably result” since the Corps could not have anticipated the urbanization upstream of the dams.[48] Instead, the Corps said it should not be liable for damages to businesses and homes that did not exist in the 1940s.[49] The court cast the Corps’ argument aside and stated that unforeseeable urbanization is irrelevant.[50] Instead, the court focused on the fact that the Corps should have foreseen that when it did not purchase all of the required by the original project’s design, it effectively guaranteed a taking of private property via flooding easement.[51]

  1. Reasonable Investment-Backed Expectations

Two factors are relevant to investment-backed expectations. First, the expectation must be objectively reasonable.[52] Second, the court must consider the extent that the Corps’ action interfered with reasonable expectations.[53] The court concluded that the homeowners’ expectations were reasonable, and notice does not immunize the government. Further, the court said that even if the various forms of notice were sufficient, the Corps did not show that the homeowners were aware of the scale of the risk.[54] Whether the Corps’ action interfered with reasonable expectations, the court concluded that the degree of interference was substantial.[55] Importantly, the court also noted that after Harvey, the Texas Legislature passed a statute mandating disclosure if a property is located in a reservoir.[56] An interesting question is whether such a disclosure would bar future claims of this sort by upstream homeowners.

Conclusion

The potential ramifications of this case are significant. In a world where the government necessarily has limited resources requiring it to make incremental decisions, this case appears to hold the government liable for the ripple effects of decisions made generations ago that were considered reasonable by the Corps at the time. The fact that the Corps knew at all times that it would need to flood private property eventually appears to be central to the court’s decision.  The fact that landowners may have had notice of the potential for flooding was equally unpersuasive, with the court noting that the government cannot escape liability by simply notifying the landowner of a potential taking. The court reserved the question of damages for later proceedings. 

Emily Williams Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

Patrick Maloney is a third-year student at The University of Texas School of Law and Articles & Notes Editor of the Texas Environmental Law Journal.

 

[1]               In re Upstream Addicks and Barker (Texas) Flood-Control Reservoirs, 146 Fed. Cl. 219 (U.S. Ct. of Fed. Claims 2019).  

[2]               Id. at 230. 

[3]               Id. at 230–33. 

[4]               In re Upstream Addicks and Barker (Texas) Flood-Control Reservoirs, 146 Fed. Cl. 219, 230-33 (U.S. Ct. of Fed. Claims 2019).  

[5]               Id.

[6]               Id. at 233. 

[7]               Id. at 256. In fact, a Corps’ report in 1974 stated, “Development of the area will eventually place the Government in the position of having to flood the area within the reservoir with the accompanying damages in order to protect downstream improvements in the event of a severe future storm.” Id.  

[8]               Id. at 227. 

[9]               Id. at 230. 

[10]             Id. 

[11]             Id. 

[12]             Id. at 247. 

[13]             Id. 

[14]             Id.

[15]             Id.

[16]             Id. at 249. 

[17]             Id.

[18]             Id.

[19]             Id.

[20]             Id.

[21]             Id.

[22]             568 U.S. 23 (2012). 

[23]             In re Upstream Addicks and Barker (Texas) Flood-Control Reservoirs, 146 Fed. Cl. at 248.

[24]             Id. at 249–50. 

[25]             Id.

[26]             Id.

[27]             Id.

[28]             Id. at 250. (citing Barnes v. United States, 538 F.2d 865, 870 (Ct. Cl. 1976)). 

[29]             Id. (citing U.S. v. Cress, 243 U.S. 316 (1917); Quebedeaux v. United States, 112 Fed. Cl. 317 (2013)). 

[30]             Id.

[31]             Id. at 251. 

[32]             Id. 

[33]             Id. 

[34]             Id. at 254–60.

[35]             Id.

[36]             Id.

[37]             Id.

[38]             Id.

[39]             Id. at 254–60.

[40]             Id.

[41]             Id.

[42]             Id.

[43]             Id.

[44]             Id.

[45]             Id. at 254–60.

[46]             Id.

[47]             Id.

[48]             Id.

[49]             Id.

[50]             Id.

[51]             Id.

[52]             Id. at 260–63. 

[53]             Id. 

[54]             Id.

[55]             Id.

[56]             Id.

Vol. 50-2 Natural Resources

By Patrick Leahy and Neha Singh

Natural Resources

Rapanos and the New Definition of “Waters of the United States”

Introduction

The Clean Water Act (CWA) defines “navigable waters” as “the waters of the United States, including the territorial seas,” hereafter referred to as WOTUS.[1] Through the CWA, Congress directed the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (the Corps) to protect “navigable waters.”[2] The Navigable Waters Protection Rule regulates these waters and the tributary systems that flow into them.[3] A clear definition of “waters of the United States” is necessary to determine the scope of federal jurisdiction over bodies of water and wetlands.[4] By redefining WOTUS, the rule restricts federal jurisdiction to only those waters that are sufficiently and visibly connected to traditionally navigable waters or seas.[5] This article discusses the reasoning behind the redefinition of WOTUS.

Background

The United States Supreme Court issued its opinion on WOTUS in Rapanos v. United States.[6] Justice Scalia, writing for a four-justice plurality, interpreted “waters of the United States” to include “only those relatively permanent, standing or continuously flowing bodies of water,” and only those wetlands with a “continuous surface connection” to jurisdictional bodies “so that there is no clear demarcation between ‘waters’ and wetlands.”[7] Essentially, the plurality held that an adjacent wetland is not within WOTUS just because that wetland has “a mere hydrologic connection” with the jurisdictional water.[8]

In his concurring opinion, Justice Kennedy took a different and broader interpretive approach. He stated that there is a “significant nexus” when tributaries or wetlands, “either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity” of traditionally covered bodies of water typically understood as navigable.[9] This created the “significant nexus” test, which originates from a combination of the Court’s decisions in Solid Waste Agency of Northern Cook County (SWANCC) v. United States Army Corps of Engineers and United States v. Riverside Bayview Homes, Inc.[10] The Court in SWANCC interpreted the Court’s decision in Riverside Bayview Homes as supporting a significant nexus theory: “it was the significant nexus between the wetlands and ‘navigable waters’ that informed [the Court’s] reading of the CWA in Riverside Bayview Homes.”[11] Rather than the surface-connection approach advanced by the plurality, Justice Kennedy articulated a test that gauges whether the wetlands that the EPA and the Corps’ seek to regulate have a significant enough negative impact on navigable waters.

But Justice Stevens—writing for the four-justice dissent—stated that the EPA and the Corps decided “that wetlands adjacent to tributaries of traditionally navigable waters preserve the quality of our Nation’s waters” and that EPA and the Corps’ decision “to treat these wetlands as encompassed within the term ‘waters of the United States’ is a quintessential example of the Executive’s reasonable interpretation of a statutory provision.”[12] The dissent declared that “waters” in “waters of the United States” is an ambiguous term, and the EPA and the Corps have “reasonably interpreted” federal jurisdiction to cover “nonisolated wetlands.”[13] Justice Stevens essentially eschewed a need for a separate test altogether, as long as federal jurisdiction over wetlands is reasonable under the CWA.

In 2015, in response to the Court’s interpretation of WOTUS in Rapanos, the EPA and the Corps provided a new basis for federal jurisdiction by applying Justice Kennedy’s “significant nexus” test in the clarifying document “Clean Water Rule: Definition of ‘Waters of the United States.’”[14] In support of Justice Kennedy’s test, the EPA and the Corps used the EPA’s “Connectivity Report,” a synthesis of 1,200 peer-reviewed articles on hydrologic connection.[15] According to the EPA and the Corps’ interpretation of the “significant nexus” test, waters under federal jurisdiction included ephemeral tributaries, their adjacent wetlands, and other waters that EPA and the Corps decided were jurisdictional using a categorical or case-by-case basis.[16] The 2015 Clean Water Rule addressed the major issue in Rapanos: can the connection between jurisdictional waters and adjacent wetlands be underground?  The EPA and the Corps incorporated certain accepted scientific principles of hydrology into the definition of jurisdictional waters and rejected the surface-connection theory as stated by the plurality in Rapanos.[17] 

Developments since Rapanos

In February 2017, President Trump issued an Executive Order directing the EPA and the Corps to conduct a rulemaking in order to redefine CWA jurisdiction “in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States.”[18] On October 22, 2019, the EPA and the Corps published a final rule to repeal the 2015 rule defining “waters of the United States.”[19] The final rule repealing the 2015 rule was published in the Federal Register on October 22, 2019, and became effective on December 23, 2019.[20]

On January 23, 2020, the EPA and the Corps finalized the new “Navigable Waters Protection Rule,” redefining WOTUS to comply with the president’s order, which became effective on June 22, 2020.[21] The final rule excludes from the definition of WOTUS, “groundwater, including groundwater drained through subsurface drainage systems; ephemeral features that flow only in direct response to precipitation, including ephemeral streams, swales, gullies, rills, and pools” and “waste treatment systems,” among others.[22] More generally, the rule states that federal jurisdiction will be restricted to those waters and wetlands that “maintain a sufficient surface water connection to traditional navigable waters or the territorial seas.”[23] This is the end, for now, of the “significant nexus” test within the CWA. Rather than a hydrological or ecological connection, the only connection that will allow for federal regulation over other waters and wetlands is one that is surface level.

In the final rule, the EPA and the Corps assert that “ensuring that States and Tribes retain authority over their land and water resources […] helps carry out the overall objective of the CWA and ensures that the agencies are giving full effect and consideration to the entire structure and function of the Act.”[24] The EPA and the Corps cite Justice Scalia’s opinion in Rapanos in support: “clean water is not the only purpose of the statute. So is the preservation of primary state responsibility for ordinary land-use decisions.”[25] While clean water may not be the only purpose of the CWA, it is arguably the primary one. However, because the EPA and the Corps “recognize that science cannot dictate where to draw the line between Federal and State waters,” perhaps ensuring clean water through scientific processes has become less important.[26]

While this new rule recently became effective, how it is implemented will most certainly be influenced by the Supreme Court’s recent decision in County of Maui v. Hawaii Wildlife Fund interpreting Rapanos and establishing the “functional equivalent” test for indirect discharges into WOTUS.[27]

Patrick Leahy is an Associate at Baker Botts (Austin) and works on a variety of environmental litigation matters at the administrative, state, and federal levels, permitting, regulatory compliance, and transactional support matters.

Neha Singh is a second-year student at The University of Texas School of Law and a staff member of the Texas Environmental Law Journal.

 

[1]               33 U.S.C. §1362(7).

[2]               Definition of “Waters of the United States” under the Clean Water Act, Envtl. Prot. Agency, https://www.epa.gov/cwa-404/definition-waters-united-states-under-clean-water-act (last visited Feb. 18, 2020).

[3]               Id. 

[4]               See Solid Waste Agency of Northern Cook Cty. v. U.S. Army Corps of Eng’rs, 531 U.S. 159 (2001); see also United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 134 (1985).

[5]               The Navigable Waters Protection Rule: Definition of “Waters of the United States,” 85 Fed. Reg. 22,250 (Apr. 21, 2020) (to be codified at 33 C.F.R. pt. 328 and 40 C.F.R. pts. 110, 112, 116, 117, 120, 122, 230, 232, 300, 302, and 401).

[6]               Rapanos v. United States547 U.S. 715 (2006).

[7]               Id. at 739.

[8]               Id. at 740.

[9]               Id. at 780.

[10]             See Solid Waste Agency of Northern Cook Cty. v. U.S. Army Corps of Eng’rs, 531 U.S. 159 (2001); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 134 (1985).

[11]             SWANCC, 531 U.S. at 167 (2001).

[12]             Rapanos, 547 U.S. at 788.

[13]             Id. at 798.

[14]             See Clean Water Rule: Definition of “Waters of the United States,” 80 Fed. Reg. 37,054 (June 29, 2015) (to be codified at 33 CFR pt. 328 and 40 CFR pts. 110, 112, 116, 117, 122, 230, 232, 300, 302, and 401).

[15]             Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific EvidenceEnvtl. Prot. Agencyhttps://cfpub.epa.gov/ncea/risk/recordisplay.cfm?deid=296414, (last visited May 22, 2020).

[16]             Clean Water Rule, 80 Fed. Reg. at 37,056.

[17]             Amy Kelly, Waters and Water Rights § 61.03 (Matthew Bender eds., 3rd ed. 2020).

[18]             Presidential Executive Order on Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the “Waters of the United States” Rule, White House (Feb. 28, 2017), https://www.whitehouse.gov/ presidential-actions/presidential-executive-order-restoring-rule-law-federalism-economic-growth-reviewing-waters-united-states-rule/.

[19]             Definition of “Waters of the United States” under the Clean Water Act, U.S. Envtl. Prot. Agency, https://www.epa.gov/cwa-404/definition-waters-united-states-under-clean-water-act (last visited Feb. 18, 2020).

[20]             Definition of “Waters of the United States”—Recodification of Pre-Existing Rules, 84 Fed. Reg. 56,626 (Oct. 22, 2019) (to be codified at 33 C.F.R. pt. 328 and 40 C.F.R. pts. 110, 112, 116, 117, 122, 230, 232, 300, 302, and 401). 

[21]             Final Rule: The Navigable Waters Protection Rule, Envtl. Prot. Agency, https://www.epa.gov/nwpr/final-rule-navigable-waters-protection-rule (last visited Feb. 18, 2020); see Presidential Executive Order on Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the “Waters of the United States” Rule, White House (Feb. 28, 2017) https://www.whitehouse.gov/presidential-actions/presidential-executive-order-restoring-rule-law-federalism-economic-growth-reviewing-waters-united-states-rule/.

[22]             The Navigable Waters Protection Rule: Definition of “Waters of the United States,” 85 Fed. Reg. 22,250 (Apr. 21, 2020) (to be codified at 33 C.F.R. pt. 328 and 40 C.F.R. pts. 110, 112, 116, 117, 120, 122, 230, 232, 300, 302, and 401).

[23]             Id. at 22,259.

[24]             Id. at 22,320.

[25]             Id.; Rapanos, 547 U.S. at 755–56.

[26]             Navigable Waters Protection Rule, 85 Fed. Reg. at 22,292.

[27] Cty. of Maui, Hawaii v. Hawaii Wildlife Fund, 140 S. Ct. 1462 (2020).

Vol. 50-2 State Casenote

By Stacie M. Dowell and Thomas Kagerer

State Casenote

State of Texas v. ITC

Introduction

The State of Texasacting on behalf of the Texas Commission on Environmental Quality (TCEQ), recently brought suit against International Terminals Company, LLC (ITC) for violations of the Texas Clean Air Act, the Texas Water Code, the Texas Solid Waste Disposal Act, and TCEQ rules implementing those statutes.[1] These claims arise from chemical fires that occurred at ITC’s plant in Deer Park, Texas in March 2019.[2] The case is currently pending trial in the 261st District Court of Texas.[3] The decision to sue ITC immediately after the chemical fires occurred is notable because the state has not pursued environmental claims as aggressively in the past.[4] 

Background

ITC owns and operates an independent storage facility for various petrochemical and chemical companies. According to ITC, one of their storage tanks caught fire on March 17, 2019 after a pipe began leaking naphtha, a flammable chemical distilled from petroleum.[5] This fire spread to several other tanks, and by March 19, 2019, ten of ITC’s tanks storing “naphtha and xylene (fuels used in gasoline and plastics), toluene (a volatile liquid used to make nail polish remover and paint thinner), pyrolysis gas, and blended oils” were ablaze.[6]

These fires resulted in “elevated levels of VOCs [Volatile Organic Compounds]” and the “release of several air contaminants including, but not limited to, PM2.5, PM10, benzene, NOx, toluene, and xylene.”[7] The air contaminants released by fires resulted in several school closures and two “shelter-in-place” orders, which required residents of Deer County and the surrounding areas to stay inside and avoid hazardous air quality in the area.[8] 

After the fires were contained, a “secondary containment area at the Site—that collected a mixture of foam, firefighting water, and petrochemicals, including, but not limited to, toluene, benzene, xylene, and naphthalene—collapsed and resulted in a release of wastewater from the Site.”[9] The wastewater was released into a drainage ditch that feeds into Tucker Bayou and the Houston Ship Channel.[10]

Claims

The State of Texas alleges that the release of these air contaminants, water pollutants, and solid wastes violates TCEQ permits and rules. The State of Texas is seeking civil penalties for: (1) “Unauthorized Air Pollution at the Site,” (2) “Unauthorized Outdoor Burning at the Site,” (3) “Nuisance,” (4) “Unauthorized Visible Emissions,” (5) “Unauthorized Discharge of Wastewater,” and (6) “Unauthorized Discharge of Industrial Solid Waste and Hazardous Waste.”[11] 

First, regarding the cause of action for unauthorized air pollution at the Site, the State of Texas alleges that “ITC caused, suffered, allowed, or permitted the emission of air contaminants from the Site in violation of Texas Health and Safety Code Section 382.085(a) and (b), and Texas Water Code section 7.101 each day from March 17, 2019, until at least March 22, 2019.”[12] These provisions restrict the emission of air contaminants to what the TCEQ authorizes or permits. The chemical fire caused levels of air contaminant emissions that exceeded ITC’s authorized levels.[13] 

Second, regarding the cause of action for unauthorized outdoor burning at the Site, the State of Texas alleges that “ITC caused, suffered, allowed, or permitted outdoor burning at the Site in violation of  Title 30 Texas Administrative Code Section 111.201 and Texas Water Code section 7.101 each day from March 17, 2019 until March 20, 2019, and on March 22, 2019.”[14] Similar to the first claim, ITC allegedly exceeded its permissible limits for outdoor burning during the chemical fires.[15] 

Third, the State of Texas has brought a nuisance claim against ITC. Texas alleges that the emissions from the fires created a nuisance when they caused “fatigue, dizziness, and headaches from short-term exposure” in people near the plant both when the two “shelter-in-place” orders were issued on March 17 and March 21, 2019 and when various public and private schools were forced to close in the area.[16] The State of Texas claims that this nuisance was created “in violation of  Title 30 Texas Administrative Code Section 101.4 and Texas Water Code Section 7.101.”[17]

Fourth, the State of Texas alleges that there were “Unauthorized Visible Emissions” as a result of the fires.[18] The State of Texas claims that a “large, dark emissions plume” was visible beyond the Site without a TCEQ permit.[19] As a result, Texas alleges that ITC “caused, suffered, allowed, or permitted unauthorized visible emissions at the Site in violation of Title 30 Texas Administrative Code Section 111.111 and Texas Water Code Section 7.101.”[20]

Fifth, the State of Texas alleges that ITC violated an important section of the Texas Water Code.

[U]nder section 26.121 (a) of the Texas Water Code, except as authorized by TCEQ, no person may: (1) discharge municipal, recreational, agricultural, or industrial waste into or adjacent to any water in the State: (2) discharge other waste into or adjacent to any water in the state which may cause pollution of the water; or (3) “commit any other act or engage in any other activity which in itself or in conjunction with any other discharge or activity causes, continues to cause, or will cause pollution of any of the water in the state.”[21] 

 

The State of Texas alleges that ITC violated this provision when it discharged wastewater into a drainage ditch that feeds into Tucker Bayou and the Houston Ship Channel without a TCEQ permit. Therefore, the State of Texas alleges that “ITC has caused, suffered, allowed, or permitted the discharge of wastewater from the Site in the waters of the state in violation of Texas Water Code Sections 26.121 and 7.101.”[22]

Sixth, and related to the discharge of wastewater, the State of Texas alleges that ITC “caused, suffered, allowed, or permitted the continual disposal of hazardous waste from the Site in a manner that caused: (1) the discharge or imminent threat of discharge of industrial solid waste into or adjacent to the waters in the state; (2) the creation and maintenance of a nuisance; or (3) the endangerment of the public health and welfare, in violation of Title 30 Texas Administrative Code section 335.4 and Texas Water Code Section 7.101.”[23] The hazardous waste entered into the “Waters of Texas” when the on-site storage pond collapsed and discharged into Tucker Bayou.[24]

Finally, all of these causes of action seek damages under the same provision, Texas Water Code Section 7.102.[25] Section 7.102 provides that “the State is entitled to civil penalties against ITC within the statutory range of not less than $50 nor greater than $25,000 for each day of each violation alleged.”[26] Additionally, the State of Texas seeks injunctive relief against ITC for continuing violations of the Texas Clean Air Act, the Texas Water Code, the Texas Solid Waste Disposal Act, and regulations promulgated by TCEQ.[27] Furthermore, the State seeks “reasonable attorney’s fees, investigative costs, and court costs incurred in relation to this proceeding.”[28] 

ITC has entered a “general denial to every allegation” and “demands that the plaintiff prove each allegation as applicable by law.”[29] Additionally, ITC has raised defenses “under the Eighth Amendment to the United States Constitution and Section 13. Article I of the Texas Constitution” as well as “the Fourteenth Amendment to the United States Constitution and by Section 19. Article I of the Texas Constitution,” stating that multiple claims for the same underlying event would impose excessive fines and violate due process protections.[30] The case is ongoing and awaiting trial in the 261st District Court of Texas.[31]

Enforcement Shift

Aside from being a disaster for both the State of Texas and ITC, this lawsuit is illustrative of a potential shift in enforcement against environmental violations. Emission events like this typically result in favorable settlements or non-enforcement of environmental statutes. For example, a report from Environment Texas concluded that from 2011 to 2017, less than three percent of emission events result in penalties.[32] Therefore, the decision to bring a suit against ITC so soon after the incident may be a signal that Texas is changing its enforcement procedures for environmental regulations.[33] 

The State’s petition was filed on March 26, 2019, just days after the fires at the ITC plant had been extinguished.[34] This is markedly faster than several similar incidents in the past. For example, after a chemical explosion at a fertilizer plant in West, Texas in 2013, the State of Texas and the TCEQ never sued at all.[35] Instead, individual cities, counties, and victims of the incident brought the bulk of the lawsuits.[36] The State has been criticized for other instances of lax enforcement, including: waiting over a year to sue after a 2005 explosion at a British Petroleum oil refinery,[37] requesting that counties refrain from suing Volkswagen after it cheated on the EPA emissions tests,[38] and waiting roughly three years to sue BP after the notorious 2010 Deepwater Horizon incident.[39] The promptness of the ITC suit is a sharp contrast from previous enforcement and may be a harbinger of stricter enforcement.[40] However, some critics have described the enforcement against ITC as selective-enforcement against a lesser-known company rather than as a shift in policy.[41] 

These concerns are informed by Ken Paxton’s record on environmental issues. Paxton has brought several suits on behalf of Texas against the EPA, such as opposing the Obama-era Clean Power Plan, challenging several ozone and sulfur oxide nonattainment determinations, and suing the EPA over regulations that aimed to cut methane emissions.[42] However, these are challenges against federal action rather than enforcement of state environmental statutes, and Mr. Paxton’s opinion on enforcement of Texas Environmental Law could still be in favor of greater enforcement. 

Regardless, it is important to note the promptness of the lawsuit against ITC and monitor how this could reflect a change in environmental enforcement across the state. Notably, several other lawsuits have been brought by the State of Texas against polluters for similar incidents,[43] indicating that the ITC case may not be an outlier, and undercutting the criticism that the ITC suit is merely selective enforcement against a lesser-known company. Looking forward, this lawsuit and the legal claims advanced could provide a blueprint for how Texas and the TCEQ will operate in future environmental suits against polluters involved in environmental disasters. 

Stacie M. Dowell is associate counsel for the Trinity River Authority of Texas and works on a wide variety of legal issues spanning contract, employment, business, property, and water law.

Thomas Kagerer is a second-year student at The University of Texas School of Law and a staff member of the Texas Environmental Law Journal.

 

[1]               State of Texas’s First Amended Original Petition and Application for Injunctive Relief, State of Texas v. Intercontinental Terminals Co., LLC, (No. D-1-GN-19-001593), 2019 WL 2869894 (261st Dist. Ct., Travis Cty, Tex. Mar. 26, 2019) [hereinafter ITC Plaintiff’s Petition].

[2]               ITC Fire Updates, Deer Park Emergency Services (last visited Feb. 11, 2020), https:// www.deerparktx.gov/1778/ITC-Fire

[3]               ITC Plaintiff’s Petition, supra note 1. 

[4]               Kiah Collier, Why has Texas suddenly decided to immediately sue industrial polluters?, Tex. Tribune (April 5, 2019), https://www.texastribune.org/2019/04/05/texas-attorney-general-ken-paxton-quickly-sue-industrial-polluters/. 

[5]               ITC Plaintiff’s Petition, supra note 1, at ¶ 5.2. 

[6]               Id. at ¶¶ 5.2–5.13. 

[7]               Id. at ¶ 5.12. 

[8]               Id. at ¶¶ 5.2–5.13.

[9]               Id. at ¶¶ 5.9–5.13. 

[10]             Id. 

[11]             Id.

[12]             Id. at ¶¶ 6.1–6.5. 

[13]             Id. 

[14]             Id. at ¶¶ 6.6–6.9. 

[15]             Id. at ¶ 5.6. 

[16]             Id. at ¶¶ 6.10–6.13.

[17]             Id. 

[18]             Id. at ¶¶ 6.14–6.17.

[19]             Id. 

[20]             Id. at ¶¶ 6.18–6.24. 

[21]             Id. 

[22]             Id. 

[23]             Id. at ¶¶ 6.25–6.32.

[24]             Id. at ¶¶ 6.5; 6.9; 6.13; 6.17; 6.24; 6.32.

[25]             Tex. Water Code Ann. § 7.102.

[26]             ITC Plaintiff’s Petition, supra note 1, at ¶¶ 7.1–7.4.

[27]             Id. at ¶ 8.1. 

[28]             Id. 

[29]             Defendant’s Original Answer, State of Texas v. Intercontinental Terminals Co., LLC, (No. D-1-GN-19-001593), 2019 WL 2869895 (261st Dist. Ct., Travis Cty, Tex. Apr. 15, 2019).

[30]             Id. 

[31]             Id. 

[32]             Grant Durow & Luke Metzger, Major Malfunction Air Pollution from Industrial Malfunctions and Maintenance in Texas in 2017, Env’t Tex. (Jan. 2019), https://environmenttexas.org/sites/ environment/files/reports/TX_MajorMal_scrn.pdf.  

[33]             Patrick Michels, Is Ken Paxtion an Environmental Champion?, Sierra Club Lone Star Chapter (Sept. 16, 2019), https://www.sierraclub.org/texas/blog/2019/09/ken-paxton-environmental-champion (describing Ken Paxton’s change in environmental enforcement). 

[34]             ITC Plaintiff’s Petition, supra note 1.

[35]             Id.

[36]             See Jarod Cassidy, West, Texas Receives $10 Million In Fertilizer Plant Explosion Lawsuit, Thomas J. Henry, https://thomasjhenrylaw.com/blog/workplace-accidents/west-texas-receives-10-million-fertilizer-plant-explosion-lawsuit/ (last visited May 22, 2020); see also Paul J. Gately, West: Only a few explosion lawsuits remain unsettled, KWTX (Apr. 7, 2018), https://www.kwtx.com/content/misc /West–Only-a-few-explosion-lawsuits-remain-unsettled-480030113.html.

[37]             See Morgan Smith, The Other BP Catastrophe, Tex. Tribune (Aug. 20, 2010), https:/ /www.texastribune.org/2010/08/20/beleBP-texas-city-refinery-faces-two-lawsuits/.

[38]             See Jim Malewitz, Harris County to Paxton: We’re Still Suing Volkswagen, Tex. Tribune (Oct. 19, 2015), https://www.texastribune.org/2015/10/19/harris-county-paxton-well-continue-volkswagen-suit/.

[39]             P.J. Huffstutter, Texas joins flood of states suing BP over 2010 Gulf spill, Thompson Reuters (May 18, 2013), https://www.reuters.com/article/us-usa-bp-texas-lawsuit/texas-joins-flood-of-states-suing-bp-over-2010-gulf-spill-idUSBRE94H0CE20130518.

[40]             Collier, supra note 4.

[41]             Id.

[42]             Michels, supra note 33.

[43]             See Defendant’s Original Answer, State of Texas v. KMCO, LLC, (No. D-1-GN-19-001795), 2019 WL 2607534 (261st Dist. Ct., Travis Cty, Tex. Apr. 29, 2019); see also Petition at 1, State of Texas v. Valero Energy Corp. & The Premcor Ref. Grp., Inc., No. D-1-GN-19-004121 (419th Dist. Ct., Travis County, Tex. Jul. 19, 2019).

Vol. 50-2 Federal Casenote

By Amanda Halter and Meredith Luneack

Federal Casenote

Not A Drop to Drink: Water Scarcity and Climate Change

Consequences at the US-Mexico Border

Introduction

Climate change is a cognizable, widely recognized source of insecurity globally.[1] At the US-Mexico border, climate change is already negatively impacting the ability of inhabitants to access and control water at this crucial boundary area. As climate change intensifies, the Rio Grande and Colorado Rivers—the primary sources of water for much of the US-Mexico border—will likely face increasing aridity and heightened water insecurity and demand.[2] Climate scientists predict that, if greenhouse gas emissions continue unabated, there is a ninety-nine percent chance that a “mega-drought” will hit the Southwest region of the United States before the end of the twenty-first century.[3] One study concluded that, as drought occurs and becomes more severe and more likely, these conditions will negatively impact both northern Mexico water supplies and groundwater recharge.[4] Water scarcity will potentially displace millions of people; scientists predict that lack of water and extreme temperatures may force residents living in the border region may be forced to move within the next eighty years.[5]

The Issue and Compiling Factors

Six million residents and two million acres of farmland in the Rio Grande Valley on the eastern end of the US-Mexico border rely on the Rio Grande River as their primary water source; yet, the Rio Grande remains one of the most endangered rivers in the country.[6] Scientists predict that residents of the Rio Grande Valley will face a water supply shortage of 600,000 acre-feet (or, 1.955106e+11 liquid gallons) by 2060.[7] This reduction will likely result in conflict over the remaining water resources amongst farmers, ranchers, and residents of the quickly-urbanizing region. Already, this conflict has begun. According to one 2015 study, five of the irrigation districts serving about 340,000 acres of farmland in the Rio Grande Valley were at “the highest risk of needing push water”[8] during periods of drought.[9] This uptick in agricultural water needs runs up against human consumers of water in the Valley, thirty-five percent of whom live below the poverty line.[10] According to the same study, “there are likely to be significant public health and economic impacts” if cities in the Valley cannot secure water for their residents.[11]

The public health impact could likely be even more acute in border colonias. These unincorporated, low-income neighborhoods often sit far from established cities and towns and lack access to typical municipal services such as water and electricity hookups.[12] In colonias along the border in New Mexico, residents rely on hand-dug wells for drinking water, which cannot access water as deeply as professionally-installed wells.[13] Because of this, when the water table drops below the deepest point of colonia wells during the hottest months of the year, colonia residents do not have access to any groundwater whatsoever.[14] The State of New Mexico faces some of the most acute water stress in the world, comparable to that of the United Arab Emirates.[15]

Thus, how should water resources be distributed between residential and agricultural consumers? What is the correct crisis response if an aquifer dries up? Such questions are even more complicated for border states; due to their immediate proximity to Mexico and their reliance on shared water resources, solutions to water scarcity problems inherently must be binational and reflective of the intertwined nature of water dependence. Texas and Mexico alone share fifteen aquifers, for example.[16] The population concentration along the border only exacerbates the problem; there are fourteen discrete “binational urban systems” that feature dense, interconnected populations that are particularly vulnerable to water scarcity.[17] The potential for systemic water scarcity along the entire US-Mexico border is magnified when meaningful water management and climate change policies are not pursued and implemented.

Potential Solutions

The federal governments of both Mexico and the United States have recognized the need for a bilateral response to water management. Bilateral cooperation, political and scientific, as well as agreements, formal and informal, are the best available tools for navigating an increasingly complex resource management future, and there are noteworthy successes, too. For example, the Climate Assessment for the Southwest (CLIMAS), a National Oceanic and Atmospheric Administration (NOAA) program housed at the University of Arizona, often works with Mexican academic counterparts, such as the Colegio de Sonora and the Universidad de Sonora, on climate science research undertakings.[18]

Furthermore, the International Boundary and Water Commission (IBWC) is successfully pursuing binational cooperation in water management. With a Mexican section based in Ciudad Juarez, Chihuahua, and an American section based in El Paso, Texas, the IBWC is a binational body charged with monitoring and managing the implementation of water-related treaties between the United States and Mexico.[19] While the IBWC boasts a thick catalog of treaties and evidence of cooperation and agreement between the United States and Mexico—the IBWC in its original form was created soon after the original drawing of the border line in the Treaty of Guadalupe Hidalgo[20]—critics have characterized it as anachronistic and insufficiently responsive to the modern environmental challenges that face binational negotiators today.[21] An audit of much of the IBWC’s recent work reveals that it perhaps best functions as a mechanic rather than as a strategist; that is, it is calibrated to implement the specifications of a broader water policy, not to create the policy itself. As such, despite its staying power as a source of binational negotiation, the IBWC may not be the right place to turn for a source of policy when faced with imminent water scarcity (though it is certainly a major player in policy fulfillment); this is perhaps exemplified by the fact that the majority of the American IBWC Commissioners have had professional and academic backgrounds in engineering, hydrology, geology, and topography.[22]

If broader policy is not in the wheelhouse of the IBWC Commissioners, then perhaps it belongs in a more political sphere. The Agreement on Cooperation for the Protection and Improvement of the Environment in the Border Area (the “La Paz Agreement”), signed in 1983 by then-U.S. President Ronald Reagan and Mexico’s President Miguel de la Madrid, is the chief political-level agreement made between the two countries that still shapes and underscores modern approaches to water management and environmental protection more broadly at the border. The stated objective of the La Paz Agreement is to “establish the basis for cooperation between the Parties for the protection, improvement and conservation of the environment and the problems which affect it, as well as to agree on necessary measures to prevent and control pollution in the border area, and to provide the framework for development of a system of notification for emergency situations.”[23] Functionally the La Paz Agreement has served as a launching pad for a number of binational programs aimed at environmental protection and water conservation, including most recently the Border 2020 initiative, launched as a partnership between the American Environmental Protection Agency (EPA) and Mexico’s Secretaría del Medio Ambiente y Recursos Naturales (SEMARNAT).[24]

Introduced in 2012, Border 2020 set out to achieve a number of “sustainable development” goals, one of which was to improve access to clean drinking water for the inhabitants of the border region.[25] Border 2020 also made explicit mention of involving stakeholders from all levels as program partners, implementing a regional, “bottom-up” approach to goal setting and implementation.[26] Border 2020 works primarily through grant-funded initiatives financed by the North American Development Bank (NADB), and regional EPA offices oversee its implementation, providing resources and accountability for the community-level programs working on water protection and conservation.[27]

Despite its lofty goals, the Border 2020 initiative has been plagued with a number of problems, including insufficient reporting on outcomes, a lack of transparency, and failure to monitor important environmental indicators, according to the EPA Inspector General (IG) office. Chief among these challenges is the absence of meaningful documentation of progress. Regarding the composition of regional action plans meant to keep track of the grant-funded programs, for example, the IG reported that they were frequently inconsistent in format, lacked the requisite information, or failed to provide updated information.[28] The EPA also failed to share any metrics on success with the public, or any information on which programs received grants and whether or not they were successful.[29] Finally, despite the initiative’s stated goal of protecting the environment and public health in the border region, Border 2020 has failed to track how its work, or lack thereof, has affected the area’s environmental health; the most recent overview available on the environmental conditions at the border is a 2016 interim report.[30] Many of these failures can be attributed to a lack of funding; according to the IG, the EPA reported that it did not have the resources to track progress in the way that it should, and that “[w]ithout an additional means to track established Border 2020 Program environmental indicators, the program remains unable to determine whether it is accomplishing its stated goals and objectives.”[31]

A Holistic Approach

But because the above agreements are between countries as equal partners, cooperation and inclusion must be not only vertical, with regional and municipal stakeholders, but respected in good faith horizontally by both country partners. Such respect is difficult to consistently achieve, as political turnover occurs much more quickly in both countries than it often takes to achieve meaningful progress. Additionally, consistent violation of binational agreements can decrease goodwill between signatories; for example, some critics argue that the American pursuit of the construction of a border barrier across administrations violates the letter and spirit of the La Paz Agreement.[32] Is there a happy medium between the granular consistency of the IBWC and the political volatility of the La Paz Agreement and its ilk? With so many stakeholders with so many interests at so many levels, it is difficult to conceive of an agreement that could possibly take all perspectives into account. But perhaps as the danger of aridity and water shortages becomes increasingly stark and imminent, interests will coalesce, and differences between stakeholders will not matter as much as the existential need to secure water, in a sustainable way, for those living at the US-Mexico border.

Amanda Halter is managing partner of the Houston office of the international law firm of Pillsbury Winthrop Shaw Pittman, a member of the firm’s Environmental & Natural Resources practice section and co-leader of the firm’s Crisis Management team. Amanda helps companies resolve environmental liabilities and negotiate compliance conditions, as well as manage financial and reputational losses associated with a crisis. Her experience includes a diverse array of environmental regulatory, litigation and crisis matters, including contamination investigations and remedial actions, natural resource damages assessments and claims, environment, health and safety compliance counseling, mass toxic tort actions, permitting and planning for large-scale industrial projects, and project impacts mitigation and restoration strategies. Amanda is a native of Houston, a graduate of Rice University and The University of Texas School of Law.

Meredith Luneack is a third-year student at The University of Texas School of Law and a senior editor of the Texas Environmental Law Journal.

 

[1]               The National Security, Military, and Intelligence Panel on Climate Change of The Center for Climate and Security, A Security Threat Assessment of Global Climate Change 6 (Feb. 2020). 

[2]               Naveena Sadasivam, One of the Fastest Growing Regions of the US Could Run Out of Water, Quartz & The Tex. Observer (Aug. 21, 2018), https://qz.com/1353697/one-of-the-fastest-growing-regions-of-the-us-could-run-out-of-water/. 

[3]               Robinson Meyer, A Mega-Drought is Coming to America’s Southwest, The Atlantic (Oct. 11, 2016), theatlantic.com/science/archive/2016/10/megadroughts-arizona-new-mexico/503531/.

[4]               Margaret Wilder et al., In Assessment of Climate Change in the Southwest United States: A Report Prepared for the National Climate Assessment ch. 16 (G. Garfin et al. eds., Island Press 2013).

[5]               Meyer, supra note 3.

[6]               Zoe Schlanger et al., In a Warming World, The Fight for Water Can Push Nations Apart—Or Bring Them Together, Quartz & The Tex. Observer (Aug. 16, 2018), https://qz.com/1353831/in-a-warming-world-the-fight-for-water-can-push-nations-apart-or-bring-them-together/.

[7]               Sadasivam, supra note 2.

[8]               Id. “Push water” is a source of surplus water to be tapped into during periods of drought. 

[9]               Id.

[10]             Jason Cohen, Rio Grande Valley Tops List of “America’s Poorest Cities”, Texas Monthly (Jan. 21, 2013), https://www.texasmonthly.com/articles/rio-grande-valley-tops-list-of-americas-poorest-cities/.

[11]             Sadasivam, supra note 2.

[12]             Daniel Salinas, Drinking Water Along The US-Mexico Border Threatened by Global Warming, KBPS San Diego (Jun. 12, 2017), https://www.kpbs.org/news/2017/jun/12/drinking-water-along-us-mexico-border-threatened-g/. 

[13]             Id.

[14]             Id.

[15]             Morgan McFall-Johnsen, New Mexico faces extreme water scarcity on par with the United Arab Emirates. Experts warn more ‘day zeros’ are looming, Business Insider (Aug. 7, 2019), https:// www.businessinsider.com/new-mexico-faces-extreme-water-stress-2019-8.

[16]             Schlanger, supra note 6. 

[17]             Greg Garfin et al., Assessment of Climate Change in the Southwest United States, Southwest Climate Alliance 343 (2013). 

[18]             Id.

[19]             Nicole T. Carter et al., U.S.-Mexican Water Sharing: Background and Recent Developments, Congressional Research Service 5 (2017).

[20]             History of the International Boundary and Water Commission, Int’l Boundary & Water Comm’n, https://www.ibwc.gov/About_Us/history.html, (last visited Mar. 15, 2020).

[21]             Helen Ingram & David R. White, International Boundary and Water Commission: An Institutional Mismatch for Resolving Transboundary Water Problems, 33 Nat. Res. J., 153, 153 (1993). 

 

[22]             History of U.S. Section Commissioners, Int’l Boundary & Water Comm’n, https://www.ibwc.gov/About_Us /Commish_History.html (last visited Apr. 6, 2020).

[23]             Agreement on Cooperation for the Protection and Improvement of the Environment in the Border Area, U.S.-Mex., art. I, Aug. 14, 1983, 35 U.S.T. 2916. 

[24]             U.S. Envtl. Prot. Agency & Mex. Sec. of Env. & Nat. Res., EPA-160-R-12-001, Border 2020: U.S.-Mex. Envtl. Program (2012).

[25]             Id. at 1.

[26]             Id. at 8.

[27]             U.S. Envtl. Prot. Agency Off. of the Inspector Gen., 20-P-0083, Border 2020: Mgmt. Controls Needed to Verify and Rep. Border 2020 Program Accomplishments 3 (Feb. 18, 2020).

[28]             Id. at 8–9.

[29]             Id. at 10–11.

[30]             Id. at 9.

[31]             Id. at 10.

[32]             Oscar Ibanez & Stephen P. Mumme, U.S.-Mexico Environmental Treaty Impediments to Tactical Security Infrastructure Along the International Boundary, Nat. Res. J., 817-18 (2009). 

Vol. 50-2

By Josh Katz and Emily Meier

Recent Publications

An Analysis of “Private Energy” by Yael R. Lifshitz

Introduction

In her article “Private Energy,” Yael R. Lifshitz contributes to the growing legal discussion around distributed generation. Distributed generation (DG) encompasses various technologies that generate electricity at or near where it will be used.[1] Using this approach, Lifshitz evaluates the DG market through the lens of a private law regime[2] and  focuses on aspects of property law and the apparent connection to energy. Lifshitz argues that the role of property law in energy production and consumption is often ignored, and this oversight stands in the way of effective policy.

Lifshitz’s Analysis

Lifshitz begins her discussion by pointing out the function of property entitlements in the realm of the energy industry.[3] She highlights the importance of the locations that energy production and consumption take place. Property entitlements provide access to these unique locations. For example, oil production is ruled by the ability of developers to gain “mineral rights” to drill. Compare this to wind energy, which requires developers to gain “wind rights” to build a large-scale wind farm.   In sum, the different energy resources require distinct property entitlements.[4]

Next, Lifshitz connects property entitlements to the greater energy market and its management, examining the influence of property law on the field of energy.[5] For example, according to the National Renewable Energy Laboratory, over one third of households and commercial enterprises nationwide rent or lease their dwellings.[6] The typical rental or lease agreement prohibits renters from participating in the distributed generation market making it impossible to host a solar photo-voltaic system.[7] Lifshitz calls this the “renters’ problem,” and proposes a change in the standard landlord-tenant leases to include “distributed energy enabling clauses.” These clauses would allow renters to safeguard a right to use solar panels through their lease agreements. [8]

Lifshitz also suggests a novel solution to the renters’ problem called “we-solar.” Under this model, renters would share an interest in pooled-energy and distributed generation resources.  Analogous to a carshare program or a co-working space,[9] we-solar would allow renters to access distributed energy when and where they need it.[10] Lifshitz’s model differs from “community solar” because it allows for a broader range of energy resources—off-site projects, on-site projects, microgrids, and crowd-funding solar.[11]   Moreover, this model gives renters—or even homeowners who do not have the necessary property rights to install solar panels—access to distributed energy.[12]

Finally, from a policy standpoint, Lifshitz establishes three pillars for which policy makers should pay attention if they wish to advocate for the use of distributed generation in their respective states and municipalities. [13] First, they should focus on property entitlements throughout the entire energy cycle, from production, to transmission, and ultimately consumption.[14] Second, policy makers should look to private law tools when approaching the interaction of energy policy and climate change.[15] Third, policy makers need to think about property law as a facilitator and shaper of public policy.[16]

Conclusion

Lifshitz’s proposal utilizes property law in energy production and consumption in a way that has never been considered. Her novel policy proposals could affect the general public’s access to solar energy in the future, and she even considers potentially expanding into implications of the peer-to-peer trading we are currently seeing. Research plays an important role in shaping how policy is formed and how legal communities will need to increasingly utilize creative problem-solving skills.

Josh Katz is a partner at Bickerstaff Heath Delgado Acosta LLP and represents public and private entities before agencies and in state and federal court in the areas of environmental law, municipal law, water rights, and utilities.

Emily Meier is a third-year student at The University of Texas School of Law and a staff member of the Texas Environmental Law Journal.

 

[1]       Distributed Generation of Electricity and its Environmental Impacts, Envtl. Prot. Agency, https://www.epa.gov/energy/distributed-generation-electricity-and-its-environmental-impacts (last visited Mar. 20, 2020).

[2]       Yael R. Lifshitz, Private Energy, 38 Stan. Envtl. L.J. 119 (2019).

[3]       Id. at 128.

[4]       Id. at 129.

[5]       Id.

[6]       Id. at 140–42.

[7]       Id. at 126.

[8]       Id.

[9]       Id. at 146.

[10]     Id. at 149.

[11]     Id. at 153–56.

[12]     Id.

[13]     Id. at 127.

[14]     Id.

[15]     Id.

[16]     Id.

Vol. 50-2 Air Quality

By John Turney and Jacob Gildan

Air Quality

TCEQ Adopts Proposed Bexar County 2015 Eight-Hour Ozone Nonattainment Area FCAA, §179B Demonstration SIP Revision

Summary

On July 1, 2020, the Texas Commission on Environmental Quality (TCEQ) adopted the propose State Implementation Plan (SIP) Revision for Bexar County concerning the 2015 Eight-Hour National Ambient Air Quality Standard (NAAQS) for Ozone.[1] The SIP revision demonstrates, pursuant to Section 179B of the Federal Clean Air Act (FCAA), that the Bexar County marginal ozone nonattainment area would attain the 2015 standard “but for” anthropogenic emissions emanating from outside the United States.[2]  Given emissions and air flow trajectories, the proposal concludes sufficient ozone transport occurs from Mexico to prevent Bexar County’s from attaining the standard.[3]

Background

Brief Overview of the Ozone Standards Under the FCAA

As authorized by the FCAA, the United States Environmental Protection Agency (EPA) issues NAAQS that individual states are required to meet by proposing and completing SIPs.[4] Previously, the EPA’s requirements for ozone levels were based on a one-hour standard, but this was phased out in favor of eight-hour standards.[5]

The 1997 eight-hour standard was 0.08 parts per million (ppm), or 80 parts per billion (ppb).[6] In 2008, the standard was lowered to 0.075 ppm (75 ppb) and in 2015, it was lowered again to 0.070 ppm (70 ppb), with anti-backsliding requirements for areas that did not qualify as attaining the standard.[7] Under the ozone standard, nonattainment areas can be designated as marginal, moderate, serious, severe, or extreme—depending on the extent of exceedance.[8]

Bexar County’s Status Under the 1997 EPA Eight-Hour Ozone NAAQS

The San Antonio area, along with twelve other Early Action Compact areas, reached attainment under the EPA’s 1997 Eight-Hour Ozone Standard in 2008.[9] Upon reaching this attainment, the one-hour ozone standard was revoked for the San Antonio area in April 2009.[10] As a result of being designated as attainment for the 1997 standard, the San Antonio area was no longer required to make any additional SIP revisions if the area continued to monitor attainment for the standard.[11]

Purpose of the Bexar County SIP Revision Proposal

Bexar County is currently working toward attainment under the 2015 Eight-Hour Ozone NAAQS and proposed a SIP revision to adjust its requirements for satisfying this standard.

On September 24, 2018, EPA designated Bexar County as marginal nonattainment (the least severe nonattainment level) under the 2015 NAAQS eight-hour ozone standard of 0.070 ppm, with a deadline of September 24, 2021 to achieve attainment.[12] Under EPA’s standards, attainment is measured based on three full years of monitoring data for marginal nonattainment areas, so Bexar County will need to meet the NAAQS standard based on its monitor data in 2018, 2019, and 2020.[13]

For nonattainment areas that might be influenced by emissions sources outside of the United States, states are allowed to submit to the EPA an analysis of the influence of international emissions on the nonattainment areas under FCAA §179B, and seek relief from some of the NAAQS requirements.[14] If a nonattainment area can show that it is affected by emissions from outside of the United States, EPA has discretion to approve a plan that demonstrates that the area will achieve NAAQS standard attainment by the required date, without including these international emissions in the calculation.[15] This is very beneficial for a nonattainment area because if the EPA approves such a revision, the area would no longer be required to meet certain benchmarks that normally apply, such as mandatory reclassification provisions for failing to reach the NAAQS standard by the deadline.[16]

Bexar County’s SIP Revision

The Bexar County’s 2015 eight-hour ozone nonattainment area is seeking this EPA approval under FCAA §179b to prevent being reclassified from marginal to moderate nonattainment if the area were not to meet the NAAQS standard during the 2018-2020 monitoring period.[17] With EPA approval, the area would still be designated as marginal nonattainment until it ultimately meets the 2015 standard, even if it doesn’t meet the requirements during the 2018-2020 monitoring period.[18]

 To determine the extent of international emissions on Bexar County’s 2015 eight-hour ozone nonattainment area, TCEQ conducted an analysis that examined several factors.[19] The analysis looked at the nonattainment area’s modeled 2020 future-year design value (DVF), the estimated international anthropogenic contribution, the effect of local versus boundary conditions, and the area’s current monitored design value.[20] The analysis included sophisticated photochemical modeling utilizing meteorological and detailed emission inputs to simulate the formation and transport of ozone.[21] TCEQ determined that while most of the air flow trajectories across Mexico correspond to monitored ozone concentrations under the 70 ppb standard, a sufficient number of those trajectories corresponded to concentrations above 70 ppb, to compromise Bexar County’s status.[22]  Accordingly, the analysis concludes that the Bexar County nonattainment area would achieve the NAAQS standard by the end of the 2018-2020 monitoring period, “but for” international anthropogenic contributions.[23]

A complicating factor affecting the proposal is that the EPA has not yet published guidance regarding FCAA §179B transport demonstrations, though such guidance is under development.   The proposal notes this lack of guidance and commits to appropriate amendments when it is issued.[24]

Bexar County officials supported the TCEQ analysis and requested its submittal to the EPA as sufficient under the requirements of FCAA §179B, as discussed above.[25] On January 15, 2020, the TCEQ approved this request.[26] Following TCEQ approval, the proposed SIP revision was subject to a public comment period from January 17 through February 19, 2020. There was a public hearing scheduled for February 18, 2020. TCEQ adopted the SIP revision on July 1, 2020.[27]

John Turney is retired Senior Counsel of Richards Rodriguez & Skeith and represented regulated companies in a variety of environmental and administrative matters before the TCEQ and other regulatory agencies. He is a graduate of Texas A&M University and The University of Texas School of Law.

Jacob Gildan is a third-year student at The University of Texas School of Law and a senior editor for the Texas Environmental Law Journal.

 

[1]               San Antonio: Latest Ozone Planning Activities, Tex. Comm’n on Envtl. Quality (Aug. 11, 2020), https:/ /www.tceq.texas.gov/airquality/sip/san/san-latest-ozone.

[2]               Id.

[3]               See Tex. Comm’n on Envtl. Quality, Agenda Item Request for Proposed Revision of the State Implementation Plan 1 (Jan. 15, 2020).

[4]               Evan Z. Pearson & John B. Turney, TCEQ Redesignation Request and Maintenance Plan for the HGB Area’s One-Hour and 1997 Eight-Hour Ozone National Ambient Air Quality Standards, 49 Tex. Envtl. L.J. 339 (2019).

[5]               Id.

[6]               Id.

[7]               Id.

[8]               Id.

[9]               San Antonio: Latest Ozone Planning Activities, Tex. Comm’n on Envtl. Quality (Aug. 11, 2020), https://www.tceq.texas.gov/airquality/sip/san/san-latest-ozone.

[10]             Id.

[11]             Id.

[12]             Tex. Comm’n on Envtl. Quality, Agenda Item Request for Proposed Revision to the State Implementation Plan at 1 (Jan. 15, 2020).

[13]             Id.

[14]             Id.

[15]             Id.

[16]             Id.

[17]             Id.

[18]             Id.

[19]             Id. at 2.

[20]             Id.

[21]             Revisions to the State of Texas Air Quality Implementation Plan for the Control of Ozone Air Pollution at 2-3, supra note 3. 

[22]             Id. at 2–41.

[23]             Tex. Comm’n on Envtl. Quality, Agenda Item Request for Proposed Revision to the State Implementation Plan at 2 (Jan. 15, 2020).

[24]             Id. at 3.

[25]             Id. at 2.

[26]             Id.

[27]             San Antonio: Latest Ozone Planning Activities, Tex. Comm’n on Envtl. Quality (Aug. 11, 2020), https://www.tceq.texas.gov/airquality/sip/san/san-latest-ozone#Bexar179B2020.

Vol. 50-1 Solid Waste

By Alisha Mehta and Nicholas D. Ray

Solid Waste

Important remaining steps in the EPA’s PFAS Action Plan

 

The Environmental Protection Agency’s (EPA) current approach to regulating per- and polyfluoroalkyl substances (collectively, PFAS) neither sets a drinking water standard for these two common PFAS nor does it declare them to be hazardous substances.[1] Detectable levels of PFAS in the human body are associated with numerous negative health outcomes, including serious forms of cancer.[2] However, the EPA has made modest strides to regulate individual PFAS. In 2018, it announced a comprehensive plan to address PFAS pollution.[3]

Background on PFAS

PFAS refers to a class of per- and polyfluoroalkyl substances.[4] The chemical properties of PFAS —specifically the chains of strong carbon-fluorine bonds—makes them highly resistant to water, oil, and heat.[5] These properties make PFAS useful in a wide variety of commercial and industrial applications, including in non-stick pans and electronics manufacturing.[6] However, because of their strong carbon-fluorine bonds, PFAS can bioaccumulate and are highly environmentally persistent.[7] When a chemical is environmentally persistent, it degrades very slowly or not at all, extending the period in which the chemical can affect human and environmental health.[8] For example, PFAS were detected on an Air Force base twenty years after firefighting foam containing PFAS was used there.[9]

Because of their wide use and environmental persistence, PFAS contamination is widespread.[10] In the United States, it is estimated that 99% of people have PFAS in their blood, based on representative blood serum testing.[11] PFAS have also been detected in locations as remote as the Arctic Circle and the Tibetan Plateau.[12] People are exposed to PFAS in a variety of ways.[13] For instance, non-stick cookware and water- and stain-resistant textiles are an avenue for household exposure.[14] Workers in industrial facilities are exposed through common industrial processes or from fire suppression systems.[15] Firefighting foam containing PFAS is a source of contamination for groundwater, as are other point sources such as landfills.[16] Plants and animals that bioaccumulate PFAS are a source of exposure when humans eat them.[17] Even breastmilk is an exposure vector for PFAS in infants.[18]

PFAS are associated with a wide variety of negative health effects; however, different varieties and concentration levels of PFAS have different effects on the body.[19] Notably, PFAS can affect puberty, birth weight, immune functioning, and thyroid activity, and they can even cause liver disease and testicular and kidney cancer.[20] Unfortunately, “for most [varieties of] PFAS[,] there is limited or no toxicity information.”[21]

Previous EPA Actions Regarding PFAS

Despite widespread contamination and the risk of environmental persistence and bioaccumulation, regulating PFAS has not been straightforward. The EPA successfully eliminated the production of two PFAS chemicals—perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)—through voluntary phase-out programs.[22] Under the EPA’s PFOA Stewardship program, eight manufacturers and processors met the program goal of eliminating PFOA manufacture and use by 2015.[23] A similar PFOS phase-out started in 2000 after the scope of exposure was discovered.[24] Although PFOA and PFOS are still detectable in serum samples, the concentration has decreased substantially between 1999–2016.[25]

Although it was successful, the PFOA Stewardship program was voluntary and addressed only one out of hundreds of PFAS.[26] In contrast with the PFOA Stewardship program, the current plan to address PFAS is more comprehensive and significantly wider in scope.

PFAS Action Plan

In February of 2019, the EPA released its PFAS Action Plan (the Action Plan) which details the administration’s approach to address PFAS regulation challenges.[27] EPA Administrator Andrew Wheeler characterized the Action Plan as “the most comprehensive cross-agency plan ever to address an emerging chemical of concern” and declared nearly a year after its release that the EPA was “aggressively” implementing the plan.[28]

The Action Plan includes approximately twenty agency actions including: setting short- and long-term research goals, communicating with the public and other stakeholders regarding PFAS risks, developing of toxicity assessments for seven additional PFAS, setting national drinking water standards for PFOA and PFOS, and declaring PFOA and PFOS “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).[29] While the EPA has already met some of the Action Plan goals such as setting guidelines for groundwater quality, [30] the agency has not taken two critical actions: setting drinking water standards and declaring PFOA and PFOS “hazardous substances.” [31]

EPA has failed to set adequate drinking water standards for PFOS and PFOA.

The EPA met its deadline to set guidelines for groundwater quality, but it has not established PFOA and PFOS drinking water regulations.[32] Critically, the EPA has not set a Maximum Contaminant Level (MCL), an enforceable standard under the Safe Drinking Water Act (SDWA), which would empower the EPA and states to address PFOA and PFAS.[33]

In December 2019, the EPA released its interim recommendation on groundwater contaminated with PFOA or PFOS.[34] It eventually finalized the goal for remediation of groundwater sources at 70 parts per trillion (ppt).[35] The EPA’s decision is consistent with its 2016 Lifetime Drinking Water Health Advisory (2016 Health Advisory) at 70 ppt for PFOA and PFOS.[36] However, if the EPA relies on the 2016 Health Advisory when setting the MCL, the standard may be insufficient to protect human health. [37]

The Agency for Toxic Substances and Disease Registry (ATSDR) created a toxicological assessment of PFOA and PFOS that suggested the 70 ppt guideline for PFOA and PFOS would be insufficient to protect human health. [38] The ATSDR assessment estimated the maximum exposure to PFOA and PFOS that would not cause any harmful effects.[39] In creating the 2016 Health Advisory and setting the 70 ppt guideline, the EPA factored in a maximum safe exposure estimate for PFOA and PFOS, which were 6.7 and 10—higher than those estimated by the ATSDR.[40] The ATSDR estimate was similar to the estimate used by New Jersey when defining its pending state-wide MCL.[41] New Jersey set its MCL at 14 ppt and 13 ppt for PFOA and PFOS, respectively.[42] The ATSDR assessment suggests that the appropriate level of PFOS and PFOA is significantly lower than the EPA is currently suggesting.[43]

Some states have set their own MCLs for PFOA and PFOS which are significantly more strict than the EPAs Health Advisory figure.[44] The MCL for PFOA and PFOS are 12 ppt and 15 ppt in New Hampshire, 10 ppt and 40 ppt in California, 10 ppt and 10 ppt in New York, 8 ppt and 16 ppt in Michigan, and 14 ppt and 13 ppt in New Jersey under a pending rule.[45] Together with the ASTDR study, the trend among states suggests that 70 ppt would be an insufficient standard for drinking water despite the 2016 Health Advisory.[46]

The EPA has failed to designate PFOA and PFOS “hazardous substances.”

Both the Action Plan and remarks by EPA Administrator Scott Pruitt at the PFAS Summit in 2018 expressed EPA’s intent to designate PFOA and PFOS as hazardous substances.[47] The EPA’s Action Plan update, released in February of 2020, reiterated that it was moving forward in the process of designating PFOA and PFAS as hazardous substances.[48]

Because PFOA and PFOS are not yet designated as hazardous substances, many affected communities have been unable to access the resources available under CERCLA, including private causes of action.[49] For example, the Air Force has refused to clean-up contamination from PFOA- and PFOS-containing firefighting foam in Georgia, New Mexico, and Michigan because PFOA and PFOS are not hazardous substances as defined under CERCLA.[50] The Navy successfully moved to dismiss a suit for medical costs in Pennsylvania by arguing that, because PFOA and PFOS were not hazardous substances, the plaintiff had no cause of action.[51]

Legislative Actions Related to PFAS

The EPA has been working towards designating PFOA and PFOS hazardous substances since the 2018 PFAS Summit.[52] In the meantime, legislators became impatient. In January of 2020, the United States House of Representatives passed the PFAS Action Act of 2019 (the PFAS Action Act).[53] If the PFAS Action Act became law in its current form, it would designate PFOA and PFOS as hazardous substances, bypassing the administrative process that the EPA has delayed for the past two years.[54] Additionally, the act would give the EPA five years to make a determination on designating the hundreds of remaining PFAS—a significant acceleration of the current regulation rate.[55] The PFAS Action Act would also require the EPA to regulate the substances under the SDWA.[56] While it has only been referred to the Senate Committee on Environment and Public Works, the current administration has expressed its opposition to the legislation.[57] The Trump Administration rejected the PFAS Action Act as undermining the administrative processes built into CERCLA and other federal regulation.[58]

Conclusion

The EPA has made some strides in addressing PFAS exposure in the United States. The PFOA Stewardship program successfully reduced the manufacture of PFOA, and the EPA has released groundwater standards for some PFAS levels. However, the EPA has not taken two critical steps in the Action Plan: setting MCLs for PFOS or PFOA and designating PFOS and PFOA as hazardous substances under CERCLA. Setting an MCL for PFOS and PFOA would create an enforceable standard under SDWA. Additionally, because PFOA and PFOS have not been designated hazardous substances, CERCLA and other remedial statutes remain out of reach for affected communities, and contaminated sites will continue to affect human and environmental health. PFAS can cause a variety of negative health effects including reduced immune functioning and cancer, and the EPA has not met the bold goals stated in the PFAS Action Plan.

Alisha Mehta is an attorney in the Environmental and Legislative section of Jackson Walker’s Austin office. She focuses on permitting and water matters, including real estate developers and special utility districts and counsels clients on transactional and regulatory issues before the Public Utility Commission of Texas.

Nicholas D. Ray is a second-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.

 

[1]  Basic Information on PFAS, Env’t Prot. Agency, https://www.epa.gov/pfas/basic-information-pfas (last visited Dec. 12, 2020) [hereinafter Basic Information].

[2] Id.

[3] U.S. Env’t Prot. Agency, EPA’s Per- and Polyfluoroalkyl Substances (PFAS) Action Plan 9 (2019) [hereinafter Action Plan].

[4] Basic Information, supra note 1.

[5] Action Plan, supra note 3, at 11.

[6] Id. at 9–12.

[7] Id. at 9.

[8] Id.

[9] Danni Cui, Xuerong Li, & Natalia Quinete, Occurrence, fate, sources and toxicity of PFAS: What we know so far in Florida and major gaps, 130 TrAC Trends in Analytical Chemistry 115976 (2020).

[10] See Action Plan, supra note 3, at 1.

[11] Id.

[12] Jianjie Fu et. al., Occurrence, temporal trends, and half-lives of perfluoroalkyl acids (PFAAs) in occupational workers in China, 6 Sci. Reports 38039 (2016).

[13] Action Plan, supra note 3, at 12.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id. at 13.

[20] Id.

[21] Id. at 10.

[22] Id. at 9, 14.

[23] Id. at 14.

[24] Alissa Cordner et. al., Guideline levels for PFOA and PFOS in drinking water: the role of scientific uncertainty, risk assessment decisions, and social factors, 29 J. of Exposure Sci. & Env’t Epidemiology 157, 158 (2019).

[25] See U.S. Ctr. Disease Control & Prevention, Fourth National Report on Human Exposure to Environmental Chemicals, Updated Tables, January 2019, Volume 1, 405–407, 413–415 (2019).

[26] Action Plan, supra note 3, at 12.

[27] Id. at 9.

[28] Aggressively Addressing PFAS at EPA, Env’t Prot. Agency https://www.epa.gov/newsreleases/
aggressively-addressing-pfas-epa (last visited Dec. 12, 2020); Multimedia: PFAS National Leadership Summit, Administrator Pruitt’s Remarks at PFAS Summit, Env’t Prot. Agency, https://archive.epa.gov
/epa/newsroom/multimedia-pfas-national-leadership-summit.html (last updated Mar. 2, 2020).

[29] Action Plan, supra note 3, at 3–7.

[30] U.S. Env’t Prot. Agency, EPA PFAS Action Plan: Program Update 8 (2020) [hereinafter Program Update].

[31] Pamela Goodwin et. al., INSIGHT: EPA Moves Toward Setting Drinking Water PFAS Health Standard, Bloomberg Law (Apr. 9, 2020), https://news.bloomberglaw.com/environment-and-energy/insight-epa-moves-toward-setting-drinking-water-pfas-health-standard.

[32] Program Update, supra note 30, at 9.

[33] Goodwin et. al., supra note 31.

[34] Id.

[35] Id.

[36] Id.

[37] Cordner et. al., supra note 24.

[38] Annie Snider, White House, EPA headed off chemical pollution study, Politico (May 14, 2018), https://www.politico.com/story/2018/05/14/emails-white-house-interfered-with-science-study-536950.

[39] Cordner et. al., supra note 24.

[40] Id.

[41] Goodwin et. al., supra note 31.

[42] Id.

[43] Cordner et. al., supra note 24.

[44] Goodwin et. al., supra note 31.

[45] Id.

[46] Cordner et. al., supra note 24.

[47] Aggressively Addressing PFAS at EPA, supra note 28.

[48] Program Update, supra note 30, at 9.

[49] Sharon Lerner, Did the White House Stop the EPA From Regulating PFAS?, The Intercept (Sept. 29 2020), https://theintercept.com/2020/09/29/epa-white-house-pfas-pfoa-pfos/.

[50] Id.

[51] Id.

[52] Aggressively Addressing PFAS at EPA, supra note 28.

[53] PFAS Action Act of 2019, H.R. 535, 116th Cong. (2020).

[54] Id. at § 2(a).

[55] Id. at § 2(b).

[56] Id. at § 5.

[57] Office of Mgmt. and Budget, Statement of Administration Policy H.R. 535 – PFAS Action Act of 2019 2 (2020).

[58] Id.

Vol. 50-1 Recent Publications

By Joshua Katz and Caleb Ray

Recent Publications

EPA Rule: Navigable Water Protections Rule and Ongoing Litigation

Introduction

The Clean Water Act (CWA) is the primary United States federal law governing water pollution. Under the CWA, the federal government has jurisdiction over all “navigable waters,” which the Act defines as “the waters of the United States, including territorial seas.”[1] The CWA does not further define navigable waters or the waters of the United States (WOTUS). Instead, a combination of Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers regulations and U.S. Supreme Court decisions have defined and redefined WOTUS, thereby determining what waters fall within CWA federal regulatory jurisdiction.[2]

The most recent update to the definition of WOTUS came in the EPA’s publication of the Navigable Waters Protection Rule (NWPR), which took effect June 22, 2020, and replaced the 2015 Clean Water Rule (CWR).[3] The NWPR reduces the scope of the CWA and limits federal jurisdiction to waters that are sufficiently and visibly connected to traditionally navigable waters.[4] Predictably, the NWPR faces several legal challenges in federal district court. The challenges fall into two main categories. In the first category, which this article broadly labels as those with conservation interests, the plaintiffs are states, environmental groups, and tribes.[5] These conservation plaintiffs are challenging the NWPR’s interpretation of WOTUS as waters with a physical, surface water connection to traditional navigable waters as a violation of the Administrative Procedure Act (APA) because a majority of the U.S. Supreme Court has already rejected that definition.[6] In the second category, which this article broadly labels as those with industry interests, the plaintiffs are agricultural groups.[7] These industry plaintiffs are challenging on the grounds that the CWA specifically regulates navigable waters, which Congress meant to mean waters that are navigable-in-fact, while the NWPR includes bodies of water that are not themselves navigable.[8] This article provides a brief background of the recent changes to the definition of WOTUS and an overview of the ongoing legal challenges to the NWPR.

Recent History of WOTUS: Rapanos v. U.S., Clean Water Rule, and Navigable Water Protection Rule

In Rapanos v. U.S., the U.S. Supreme Court’s most recent holding on the CWA and WOTUS, the Court issued a four-Justice plurality opinion that the CWA only provided jurisdiction over waters with a continuous surface connection to traditional jurisdictional waters.[9] Writing for the plurality, Justice Scalia defined WOTUS to mean “relatively permanent, standing, or continuously flowing bodies of water” and specifically excluded intermittent or ephemeral bodies of water resulting from precipitation.[10] Wetland and other remote waters, Scalia reasoned, were not within federal jurisdiction unless they had “continuous surface connection” to a relatively permanent WOTUS, “making it difficult to tell where the water ends and the wetland begins.”[11] A mere hydrologic connection to a body of water within federal jurisdiction under the CWA, the plurality held, was insufficient for a water body to fall within federal jurisdiction.

Justice Kennedy, in his concurring opinion, articulated the analysis of the Court’s prior WOTUS holdings and defined a WOTUS as a body of water with a significant nexus to a water that falls within federal jurisdiction.[12] Because Congress enacted the CWA to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters,” Justice Kennedy reasoned that bodies of water fall within federal jurisdiction under the CWA if they “significantly affect the chemical, physical, and biological integrity of other covered waters.”[13] According to Justice Kennedy’s significant nexus test, a body of water falls within federal jurisdiction if it has hydrological connection significant enough to affect the water quality of traditional navigable waters.[14]

Rapanos provides the basis for both the CWR and the NWPR. In the CWR, the EPA formalized Justice Kennedy’s significant nexus test to determine jurisdictional waters under the CWA on a categorical and case-by-case basis.[15] Per the CWR, “significant nexus means that a water, including wetlands, either alone or in combination with other similarly situated waters in the region, significantly affects the chemical, physical, or biological integrity of” traditionally navigable waters.[16] This includes categorical waters, such as wetlands adjacent to other waters and noncontinuous tributaries, and waters not otherwise excluded by the rule on a case-by-case basis.[17] The NWPR dispenses with the CWR’s implementation of Kennedy’s significant nexus analysis and instead presents a federal jurisdiction over “those waters and wetlands that maintain a significant surface water connection to traditional navigable waters.”[18]

Challenges to the NWPR

The NWPR was challenged in two federal district court cases on April 27, 2020, six days after the final rule was published.[19] In the first case, Chesapeake Bay Found. v. Wheeler, plaintiffs with conservation interests challenged the rule on the grounds that its interpretation of WOTUS violated the APA and was too narrow.[20] Eight similar cases have since been filed in different district courts.[21] In the second case, New Mexico Cattle Growers’ Association v. EPA, plaintiffs with industry interests challenged the rule on the grounds that its interpretation of WOTUS was too broad, as it provided federal jurisdiction over waters not navigable-in-fact.[22] Two other similar cases have since been filed.[23]

Plaintiffs with conservation interests, have filed the nine suits challenging the NWPR seeking to have the rule overturned for being too narrow.[24] The plaintiffs’ reasoning in each complaint is similar.[25] For example, in California v. Wheeler, the complainant states argued that the NWPR violates the APA by applying Justice Scalia’s plurality opinion in Rapanos.[26] In Rapanos, a minority of the Court agreed with Justice Scalia that the CWA only extends federal jurisdiction to “relatively permanent, standing or continuously flowing bodies of water.”[27] While Justice Kennedy agreed with the result, he did not agree with the reasoning and instead would have relied on the significant nexus test to determine the outcome.[28]  As a result, the complainant states argued that the court should enjoin the NWPR because the rule is improperly “based on the plurality opinion in Rapanos even though a majority of the Justices in Rapanos found that the plurality’s interpretation of ‘waters of the United States’ was inconsistent with the CWA’s text and purpose.”[29] In Wheeler, the U.S. District Court for the Northern District of California denied the plaintiffs’ request for an injunction on the grounds that the complainants were likely to fail on the merits.[30] In Colorado v. EPA, however, the U.S. District Court for Colorado enjoined the NWPR, reasoning that it was in the public interest to maintain the status quo while the case was decided on the merits.[31] Both cases were appealed and all nine cases are ongoing.[32]

The three cases brought by plaintiffs with industry interests argue that the courts should enjoin the NWPR because it defines navigable waters too broadly.[33] They allege that the term navigable waters in the CWA is similar to the phrase “navigable capacity of the waters of the United States” in the Rivers and Harbors Act of 1899, and Congress, therefore, intended them to be interpreted in the same way.[34] The language in the Rivers and Harbors Act applies to navigable-in-fact waters that can be used for transportation in commerce, and plaintiffs argue that the CWA should not extend to waters that do not meet that same threshold.[35] Because the NWPR allows for federal jurisdiction over waters that are not navigable-in-fact, the plaintiffs ask the courts to hold that the rule is an unlawful interpretation of the CWA.[36] The U.S. District Court for Oregon dismissed one such lawsuit for lack of standing.[37] The two other cases are ongoing.[38]

Uncertainty and the Possible Patchwork Definition of Jurisdictional Waters

Uncertainty about the WOTUS definition and, therefore, what waters are under federal jurisdiction is likely to continue for the near future. While the NWPR is active in every state except for Colorado, eleven cases challenging the rule are ongoing in different jurisdictions. If federal district or circuit courts reach different conclusions, as courts already have in Colorado and California, it would create an unpredictable patchwork of jurisdictional waters rules across the country.[39] The definition of WOTUS and the corresponding scope of federal jurisdiction will remain uncertain at least until the ongoing cases challenging the NWPR reach their conclusions and potentially long afterwards.

Joshua Katz is an attorney at Bickerstaff Heath Delgado Acosta LLP in Austin, TX. He practices in the areas of environmental law, administrative law, water law, electric utility regulation, and civil litigation.

Caleb Ray is in his fourth and final year of a dual degree program pursuing a Master of Global Policy Studies from the LBJ School of Public Affairs and a JD from the University of Texas School of Law. He is an Articles and Notes Editor for the Texas Environmental Law Journal.

 

[1] 33 U.S.C. § 1362(7).

[2] About the Waters of the United States, Env’t Prot. Agency, https://www.epa.gov/nwpr/about-waters-united-states (last visited Nov. 26, 2020).

[3] The Navigable Waters Protection Rule: Definition of “Waters of the United States,” 85 Fed. Reg. 22,250, 22250 (Apr. 21, 2020).

[4] Id. at 22,252.

[5] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[6] See, e.g., Wheeler, 467 F.Supp.3d at 873; Complaint, Cal. v. Wheeler, No. 3:20-cv-03005 (N.D. Cal. May 1, 2020).

[7] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[8] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019).

[9] Rapanos v. U.S., 547 U.S. 715, 739 (2006).

[10] Id. at 716.

[11] Id.

[12] Id. at 759; see also Solid Waste Agency of N. Cook County v. U.S. Army Corps of Eng’rs, 531 U.S. 159 (2001); U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985).

[13] Rapanos, 547 U.S at 780 (quoting 33 U.S.C. § 1251(a)).

[14] Id. at 784.

[15] Clean Water Rule: Definition of “Waters of the United States,” 80 Fed. Reg. 37,055–56 (June 29, 2015).

[16] Id. at 37,106.

[17] Id. at 37,105–06, 37,018.

[18] The Navigable Waters Protection Rule: Definition of “Waters of the United States, 85 Fed. Reg. 22,250, 22,252 (Apr. 21, 2020).

[19] First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr, 27, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); 85 Fed. Reg. 22250.

[20] Complaint at 24–25, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020). 

[21] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[22] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019).

[23] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[24] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[25] See id.

[26] Cal. v. Wheeler, No. 3:20-cv-03005 at *6 (N.D. Cal. 2020).

[27] Rapanos, 547 U.S. at 716.

[28] Id. at 716.

[29] Complaint, Cal. v. Wheeler, No. 3:20-cv-03005 (N.D. Cal. May 1, 2020).

[30] Cal. v. Wheeler, No. 3:20-cv-03005 at *8 (N.D. Cal. 2020).

[31] Colo. v. Env’t Prot. AgencyNo. 1:20-cv-01461 at *1313 (D. Colo. 2020).

[32] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[33] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[34] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019) (quoting Rivers and Harbors Act, 33 U.S.C. § 403).

[35] Id.

[36] Id. at 5, 22.

[37] N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Aug. 7, 2020).

[38] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[39] See, e.g., Congressional Research Service, “Waters of the United States” (WOTUS): Current Status of the 2015 Clean Water Rule 6 (2018) (explaining that the 2015 Clean Water Rule is in effect in twenty-two states and enjoined in twenty-eight states).

Vol. 50-1 Water Rights

By Emily Willms Rogers, Kimberly Kelley, and Rachel C. Nipper

Water Rights

Groundwater Permitting

Introduction

Under Texas law, a person’s property rights include ownership of groundwater beneath his or her property.[1] A recent Fifth Circuit case concluded these property rights are subject to Fifth Amendment takings claims.[2] In Stratta v. Roe, the Fifth Circuit reversed and remanded a district court’s dismissal of a landowner’s claim that a groundwater-conservation district (GCD) violated the Constitution’s Equal Protection and Takings clauses by allowing a city to drain groundwater from underneath the landowner’s property without compensation.[3]

Stratta v. Roe

The Brazos Valley Groundwater Conservation District (BVGCD) is a state political subdivision that manages, protects, and conserves water resources within its jurisdiction.[4] Both the Texas Constitution and the Texas Water Code provide for such GCDs,[5] which create groundwater-management plans regulating water production and conservation, govern water use, study water quantities flowing into and out of aquifers, and minimize waste.[6] Under this authority, BVGCD created new rules in December 2004 governing landowners’ groundwater production.[7] Through spacing requirements and production limitations, BVGCD regulates the amount of water landowners can withdraw from a well.[8] The rules differentiate between existing wells, new wells, and wells with historic use[9]  and regulate groundwater pumpage apply in each category.[10] For instance, the rules cap the amount of allowable production for new wells based on a formula that calculates the number of contiguous acres required to be assigned to the well site.[11]

Almost a week after BVGCD’s new rules took effect, the City of Bryan drilled a well on a 2.7-acre land tract located less than 3,000 feet from appellant Fazzino’s property.[12] The city applied for a permit to operate the well at a groundwater-production rate of 3,000 gallons per minute (gpm).[13] Under the currently-enacted rules, the city would have been required to own a 649-acre tract to pump water at that rate from a “new” well.[14] However, BVGCD classified the city’s well as an “existing” well—one for which drilling or significant development began before the effective date of the rules[15]—and conditionally granted the permit, authorizing production of 4,838 acre-feet annually at the requested rate.[16] BVGCD later reissued an identical conditional permit in 2013, despite the fact that there was no growth of city acreage around the well and even though, before the rules took effect, the well at most existed “in the form of ‘significant development,’ at least on paper.”[17] Had the city’s well been classified as a “new” well, the rules would have capped the well’s maximum allowable production at over fifteen times less than what the conditionally-granted permits allow.[18]

BVGCD created the new rule’s spacing and production requirements to minimize “the drawdown of the water table and the reduction of artesian pressure, to control subsidence, to prevent interference between wells, to prevent degradation of water quality, and to prevent waste.”[19] However, as the new rules do not apply to the city’s well, they do not operate to protect Fazzino from the potential threat of dissipation from the city’s pumping; as water comes from a well, it creates a cone-of-depression impact, and Fazzino’s property is within the city well’s anticipated cone of depression.[20] Fazzino filed a complaint challenging BVGCD’s designation of the well as an “existing” or “historical use” well, but the State Office of Administrative Hearings found that he did not have standing to assert such a claim.[21] Therefore, in an effort to “offset” the production, Fazzino applied for a permit to operate the well on his larger piece of property at the same groundwater-production rate as the city.[22] BVGCD twice denied Fazzino’s request, citing insufficient acreage—Fazzino owned 26 contiguous acres, but like any “new” well owner, he must own or control 649 acres to support production at the requested 3,000 gpm rate.[23] Fazzino then sued BVGCD and its directors under 42 U.S.C. § 1983, alleging violations of the Equal Protection and Takings clauses.[24]

Jurisdictional Objections

Eleventh Amendment Immunity

First, the Fifth Circuit held that the district court erroneously concluded that BVGCD is an arm of the state and immune from suit in federal court under the Eleventh Amendment.[25] A court looks to six factors identified in Clark v. Tarrant County to determine whether a governmental agency qualifies for Eleventh Amendment immunity.[26] The first Clark factor considers whether state statutes and case law view the agency as an arm of the state.[27] The Fifth Circuit held that a GCD is a political subdivision rather than a state agency, and most political subdivisions are not entitled to this immunity.[28] Because one of Eleventh Amendment’s goals is to protect state treasuries, the second Clark factor considers the source of the entity’s funding.[29] The Fifth Circuit concluded that GCDs lack any meaningful financial relationship with the Texas treasury—weighing against immunity.[30] The third Clark factor considers the entity’s degree of local autonomy.[31] While GCDs have broad authority to make and enforce rules,[32] the Texas Water Development Board and the Texas Commission on Environmental Quality provide assistance,[33] and the Texas Water Development Board must approve local groundwater management plans.[34] A state auditor[35] and the state legislature also occasionally audit GCDs’ operations.[36] The Fifth Circuit reasoned that all these facts considered together “at most merely offset each other.”[37]

The fourth Clark factor considers whether the entity deals mostly with local rather than state problems.[38] The fact that an entity deals with local problems suggests that it is not an arm of the state.[39] Because GCDs can exercise their authority only within their territorial boundaries, the Fifth Circuit reasoned this factor weighed against granting immunity to BVGCD.[40] The Fifth Circuit set aside the fifth and sixth Clark factors, considerations of whether the entity has authority to sue and be sued in its own name and its right to hold and use property, because all parties and the district court agreed they weighed against granting immunity.[41] The Fifth Circuit thus concluded that the district court erred in dismissing the landowners’ action for lack of jurisdiction in this regard.[42]

Ripeness for Adjudication

Second, the Fifth Circuit concluded that, contrary to the district court’s findings, Fazzino’s takings claim was ripe for adjudication.[43] The district court had relied on Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, a case recently overturned by the Supreme Court, in its dismissal of Fazzino’s takings claims as unripe.[44] The Fifth Circuit reasoned that not only had Fazzino already pursued available administrative remedies, but the Supreme Court had also held that a property owner can bring a federal-court claim at the time he or she suffers a violation of Fifth Amendment rights, and a landowner is said to have suffered such a violation when the government takes his or her property without just compensation.[45]

Abstaining under Burford

Third, the Fifth Circuit concluded that the district court abused its discretion when it decided to abstain under Burford.[46] Burford allows a federal court to dismiss cases presenting “difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar” or if “its adjudication in a federal forum ‘would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial state concern.’”[47] A Burford analysis involves five considerations.[48] Fazzino’s claims allege constitutional violations, satisfying the first consideration—whether the cause of action arises under federal or state law—in favor of federal jurisdiction.[49] The second consideration involves “whether the case requires inquiry into unsettled issues of state law or into local facts.”[50] The district court reasoned there was an unsettled issue in state courts pertaining to the applicability of Texas oil and as common law to GCDs’ regulations.[51] However, the Fifth Circuit reasoned that the Texas Supreme Court has already settled that landowners own the groundwater beneath their properties and that such ownership “may be enforced in takings law and under doctrines of equal protection.”[52]

Because Fazzino asked that BVGCD either apply its rules equally to landowners or give landowners just compensation, the Fifth Circuit reasoned his lawsuit “poses little threat to the general state interest,” the third Burford consideration.[53] The fourth consideration involves the state’s need for a coherent policy, here regarding groundwater regulations.[54] Because GCDs are “decentralized” and “fragmentary” to enforce their own rules in their local areas, the Fifth Circuit concluded Fazzino’s lawsuit does not threaten a coherent policy.[55] Lastly, the Fifth Circuit reasoned that the fifth consideration involving the presence of a special state forum for judicial review did not apply because state courts review GCD decisions.[56]

Merits of the Case

The district court dismissed Fazzino’s takings and equal protection claims because it concluded “they rested on unsettled questions” regarding the application of oil and gas law to a landowner’s rights in groundwater beneath his or her property.[57] However, the Fifth Circuit concluded that the law is settled enough for Fazzino’s claims to be heard because such a formulation of his claims “is at too high a level of generality.”[58]

Takings Clause

The Fifth Circuit recognized that Fazzino’s property rights “constitute whatever he has that BVGCD may not constitutionally ‘take’ without compensation.”[59] The Texas Supreme Court in Edwards Aquifer Authority v. Day held that a landowner’s property rights, subject to takings claims, include ownership of the groundwater beneath his or her land.[60] Indeed, the Texas Water Code specifies that nothing in the code can be “construed as granting the authority to deprive or divest a landowner . . . of the groundwater ownership and rights” described in the section.[61] It requires groundwater districts, like BVGCD, to consider many factors in permitting groundwater production, including the effect on the supply and other permit holders.[62] Thus, giving groundwater owners their fair shares involves more than considering surface area.[63] Fazzino claimed BVGCD “took” his groundwater without compensation when it allowed the City of Bryan to drain water from an area far outside its surface ownership, including the surface area of Fazzino’s property.[64] The Fifth Circuit reasoned it to be the task of the district court to assess whether BVGCD’s groundwater regulation scheme resulted in a “taking” of Fazzino’s interest.[65]

Equal Protection Clause

The Fifth Circuit concluded that Fazzino’s property rights provide “the baseline by which to determine whether he has been treated ‘unequally’ by the district vis a vis the City’s permit.”[66]  The Texas Water Code requires GCDs like BVGCD to consider groundwater ownership and rights and to develop rules that are fair and impartial.[67] Indeed, one of the purposes of groundwater regulation is to afford fair shares to owners in common reservoirs.[68] Fazzino alleged that BVGCD unequally applied its new rules by exempting the City of Bryan from the production limit’s surface-area formula while enforcing it against Fazzino, resulting in what the Fifth Circuit considered “dramatic” results.[69] Fazzino also alleged that BVGCD had no rational basis for treating him differently, implying the disparate treatment resulted from the relationship between BVGCD board members and the City of Bryan.[70] A class-of-one equal protection claim like this involves “whether the plaintiff was ‘intentionally treated differently from others similarly situated’” and “whether there was a ‘rational basis’” for the difference.[71] Because Fazzino sufficiently alleged disparity and intentional conduct, the Fifth Circuit reasoned the allegations’ substance needs to be tested by discovery and further proceedings, and it reversed the dismissal.[72]

Emily Willms Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

Rachel C. Nipper is a third-year student at The University of Texas School of Law and Managing Editor of the Texas Environmental Law Journal.

 

[1] Edwards Aquifer Auth. v. Day, 369 S.W.3d 814, 817 (Tex. 2012).

[2] Stratta v. Roe, 961 F.3d 340, 359 (5th Cir. 2020).

[3] Id. at 346.

[4] Id.; Home Page, Brazos Valley Groundwater Conservation Dist., https://brazovalleygcd.org/ (last visited Nov. 25, 2020).

[5] Tex. Const. art. XVI, § 59(b); Tex. Water Code Ann. §§ 36.0015, 36.011.

[6] Stratta, 961 F.3d at 347.

[7] Id. 

[8] Id.

[9] Brazos Valley Groundwater Conservation Dist., Rules of the Brazos Valley Groundwater Conservation Dist., Rule 1.1 (Nov. 9, 2017) [hereinafter Brazos Valley Rules].

[10] See, e.g., Brazos Valley Rules, supra note 9, at Rule 7.1(c), Rule 8.3(g). 

[11] Id. at Rule 7.1(c).

[12] Stratta, 961 F.3d at 346, 347.

[13] Id. at 347.

[14] Id. 

[15] Brazos Valley Rules, supra note 9, at Rule 1.1(16). 

[16] Stratta, 961 F.3d at 348.

[17] Id.

[18] Id.

[19] Brazos Valley Rules, supra note 9, at Rule 6.1(a).

[20] Stratta, 961 F.3d at 348.

[21] Id.

[22] Id.

[23] Id.

[24] Id. at 350.

[25] Id. 

[26] Id. at 350.

[27] Clark v. Tarrant Cty., Tex., 798 F.2d 736, 744 (5th Cir. 1986).

[28] Stratta, 961 F.3d at 352.

[29] Clark, 798 F.2d at 744.

[30] Stratta, 961 F.3d at 354. 

[31] Clark, 798 F.2d at 744.

[32] Tex. Water Code Ann. § 36.101(a).

[33] Id. § 36.1071(c).

[34] Id. § 36.1072.

[35] Id. § 36.061.

[36] Id. § 36.302.

[37] Stratta, 961 F.3d at 355.

[38] Clark, 798 F.2d at 745.

[39] Stratta, 961 F.3d at 355.

[40] Id.

[41] Id. at 356.

[42] Id.

[43] Id.

[44] Id.; see Williamson Cty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), overruled by Knick v. Twp. of Scott, Pennsylvania, 139 S. Ct. 2162 (2019).

[45] Stratta, 961 F.3d at 356.

[46] Id. at 358.

[47] Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 707 (1996).

[48] Stratta, 961 F.3d at 357.

[49] Id.

[50] Id.

[51] Id.

[52] Id.

[53] Stratta, 961 F.3d at 358.

[54] Id.

[55] Id.

[56] Id.

[57] Id. at 358–59.

[58] Id. at 359.

[59] Stratta, 961 F.3d at 359.

[60] Edwards Aquifer Auth. v. Day, 369 S.W.3d 814, 817 (Tex. 2012).

[61] Tex. Water Code Ann. § 36.002(c).

[62] Id. § 36.113(d)(2).

[63] Day, 369 S.W.3d at 841.

[64] Stratta, 961 F.3d at 360.

[65] Id.

[66] Id. at 359.

[67] Tex. Water Code Ann. § 36.101(a)(2)–(3).

[68] Day, 369 S.W.3d at 840.

[69] Stratta, 961 F.3d at 361.

[70] Id.

[71] Id. at 360.

[72] Id. at 361.

Vol. 50-1 Washington Update

By Jacob Arechiga and Kylan MacLeod

Washington Updates

Executive Order to Accelerate the Nation’s Economic Recovery by Expediting Infrastructure Investments

Introduction

On July 4, 2020, President Trump issued the Executive Order entitled Accelerating the Nation’s Economic Recovery from the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities (“EO”).[1] The EO’s stated intent is to streamline regulations, thus limiting regulatory delays, in response to the economic crisis resulting from the COVID-19 pandemic.[2] The EO instructs federal agencies to use emergency powers to expedite project approvals, directing they should: (1) use their emergency authority and statutes’ emergency provisions to expedite projects; (2) provide a report listing expedited projects; and (3) provide status updates with further reports due every thirty days.[3]

This article discusses the content of the EO, and its requirements on agencies to encourage accelerated infrastructure development. Part I discusses the EO and the requirements that agencies must meet. Part II discusses the effects of the EO on industry and the environment. Part III discusses the future potential impact of the EO.

PART I: REQUIREMENTS OF THE EO

The EO instructs various federal agencies to exercise emergency authority provisions to expedite decision making, providing instructions that agencies should follow as well as reporting requirements that the agencies must undertake.[4]

In Sections 3–5, the EO designates steps that specific executive departments must take to expedite project development.[5] Listed are the Secretaries of Transportation, the Army, Defense, the Interior, and Agriculture.[6] Each department must “expedite work on, and completion of, all authorized and appropriated [projects] that are within the authority of the Secretaries.”[7] These projects include “highway and other infrastructure projects,” “civil works projects,” “and infrastructure, energy, environmental, and all natural resources projects,” depending on the Secretary’s authority.[8]

The EO requires the Secretaries to provide reports. Each Secretary must provide a “summary report[] listing all such projects that have been expedited . . . to the [Office of Management and Budget (OMB)] Director, the Assistant to the President for Economic Policy, and the Chairman of [the Council of Environmental Quality (CEQ)]” within thirty days of the EO.[9] Within thirty days of the first report, the Secretaries must “provide a status report to the [same officials] that shall list any additions or other changes.”[10] Reports are continuously required “at least every thirty days for the duration of the national emergency.”[11]

In Sections 6–8, the EO instructs agency heads to apply various environmental statutes’ emergency provisions.[12] The EO specifically addresses the National Environmental Policy Act’s (NEPA) emergency regulations and emergency procedures, the Endangered Species Act’s (ESA) emergency consultation, and the Clean Water Act’s (CWA) and other statutes administered by the U.S. Army Corp of Engineers’ (the Corps) emergency regulations and nationwide permits.[13] All agencies must “identify planned or potential actions to facilitate the Nation’s economic recovery that may be subject to the” NEPA and ESA emergency provisions, with the Corps also being subject to additional requirements under the CWA.[14]  The agencies are required to provide summary status reports on thirty-day intervals, outlining planned or potential actions to various cabinet secretaries and other individuals exerting oversight.[15]

The EO’s Section 9 requires agencies to “review all statutes, regulations, and guidance documents that may provide for emergency or expedited treatment . . . with regard to agency actions pertinent to infrastructure, energy, environmental, or natural resource matters.”[16] After, agencies must “identify planned or potential actions, including actions to facilitate the Nation’s economic recovery, that may be subject to emergency or expedited treatment.”[17] These actions must be listed in a summary report “to the OMB Director, the Assistant to the President for Economic Policy, and the Chairman of CEQ.”[18] Updated reports are also required every 30 days under this section.[19]

PART II: PURPOSES AND EFFECTS OF THE EO

The Trump Administration has made several efforts to expedite the process of approving infrastructure projects. As stated in the EO, it is another step towards “reforming and streamlining [the approval process which the Administration refers to as] an outdated regulatory system that . . . [has] hindered American infrastructure investments.”[20] Infrastructure permitting often “takes years of planning and construction.” [21] The EO’s goal is to accelerate this time-consuming process and provide project developers a means to avoid this lengthy process.[22]

It is still unclear if, how, and to what extent, agencies will implement these expedited procedures and whether project developers will want such expedited review and approval of its projects. Some are concerned that the EO could not survive a legal challenge, with commentators noting that “the legal support for the . . . EO appears dubious and likely to be challenged.”[23] As such, projects accelerated under the EO may “be subject to increased scrutiny and heightened litigation risk from third parties,”[24] as courts have applied the relevant emergency powers narrowly in the past.[25] The judiciary has limited the use of these powers to projects responding to emergencies that posed an “imminent hazard to human health and the environment.”[26] While certain developers are wary of possible legal challenges, some projects are moving forward under the EO, including an oil-drilling project in Alaska and a private spaceport in Florida.[27]

Environmental organizations have voiced their own concerns, arguing the EO will allow projects to avoid environmental regulations and that expedited approval will harm the environment.[28] Gina McCarthy, former EPA Administrator, and the current President and CEO of the Natural Resources Defense Council, stated: “Abusing emergency powers to deep-six necessary environmental reviews is utterly senseless. . . . Getting rid of them will hit those who live closest to polluting facilities and highways the hardest.”[29] The Center for Biological Diversity also expressed its concerns in a letter to the Trump Administration.[30] The Center said that it would seek litigation if the Administration did not revoke the order.[31] Litigation that may emerge from the Center and other organizations is likely to slow projects that seek to be accelerated. It remains to be seen whether the costs and time lost in litigation outweigh the EO’s benefits.

PART III: THE FUTURE OF THE EO

The November 2020 Presidential election probably determined the EO’s future. The president has the power to revoke Executive orders. The President can revoke Executive Orders alone.[32] Because former Vice President Joe Biden won the election, he is likely to revoke the order and may even impose more stringent standards on expedited projects in the future. A shifting standard poses an additional complication for projects that hope to benefit from the EO.

Jacob Arechiga is a Special Counsel in Duane Morris LLP’s Austin, Texas office. His practice is focused on complex commercial matters, particularly those in the energy and electric power industries.

Kylan MacLeod is a second-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.

 

[1] Exec. Order No. 13927, 85 Fed. Reg. 35165 (June 4, 2020).

[2] Id.

[3] See id. at 35165–70.

[4] See id.

[5] See id. at 35166–67.

[6] Id.

[7] Exec. Order No. 13927, 85 Fed. Reg. 35165, 35166–67 (June 4, 2020).

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id. at 35167–69.

[13] Exec. Order No. 13927, 85 Fed. Reg. 35165, 35167–69 (June 4, 2020).

[14] Id.

[15] Id.

[16] Id. at 35169–70.

[17] Id. at 35169.

[18] Id.

[19] Exec. Order No. 13927, 85 Fed. Reg. 35165, 35170 (June 4, 2020).

[20] Id. at 35165.

[21] Rachel L. Lipinski, Jonathan D. Simon, & Tyson C. Cade, Executive Order Seeks to Promote Economic Recovery by Expediting Environmental Reviews for Project Development, Van Ness Feldman LLP (June 8, 2020), https://www.vnf.com.

[22] Exec. Order No. 13927, 85 Fed. Reg. 35165 (June 4, 2020).

[23] United States: Trump Administration Issues Executive Order Seeking to Expedite Environmental Reviews for Infrastructure Projects, Baker McKenzie (June 12, 2020), https://www.bakermckenzie.com [hereinafter Trump Administration].

[24] Lipinski et al., supra note 20.

[25] Trump Administration, supra note 20.

[26] Id.

[27] See Rebecca Beitsch & Rachel Frazin, Major Drilling Projects Among Dozens Fast-Tracked after Trump Order, The Hill (Sept. 2, 2020), https://thehill.com/policy/energy-environment/514809-major-drilling-projects-among-dozens-fast-tracked-after-trump-order; see also FAA Fast Tracks EIS, Will not Seek Comments, News-Leader (Sept. 22, 2020), https://www.fbnewsleader.com/regional/faa-fast-tracks-eis-will-not-seek-comments#:~:text=The%20Federal%20Aviation%20Administration%20has,fast%
20track%20the%20licensing%20decision..

[28] See, e.g., Mark Drajem, NRDC: Trump Tries to Throw Out Environmental Reviews While Nation in Crisis, NRDC (June 4, 2020), https://www.nrdc.org/media/2020/200604; see also Letter from the Center for Biological Diversity to President Donald Trump (June 9, 2020), https://www.biologicaldiversity.org/campaigns/esa_attacks/pdfs/NOI-to-President-Trump-regarding-his-violations-of-the-Endangered-Species-Act.pdf [hereinafter Letter]. .

[29] Drajem, supra note 28.

[30] Letter, supra note 28.

[31] Id.

[32] Vivian S. Chu & Todd Garvey, Congressional Research Service: Executive Orders: Issuance, Modification, and Revocation, 7 (2014).

Vol. 50-1 Federal Casenotes

By Amanda Halter and Matthew Frederick

Federal Casenotes

Cooperation or Retaliation: California’s Recent Push for Electric and Zero Emissions Vehicles Highlights the Trump Administration’s Attack on Clean Air Act Waivers

Introduction

After a record-smashing six weeks of wildfires, heat waves, and even some black-outs in California and the western U.S., on September 23, 2020, California Governor Gavin Newsom issued Executive Order N-79-20 (EO), declaring California’s intent to accelerate the transportation sector’s energy transition by setting a goal that all cars and trucks sold in the state be zero-emission by 2035 and medium- and heavy-duty vehicles by 2045.[1] Subsequently touted as a “ban on gas-guzzlers”[2] for its attention-grabbing zero emissions vehicles targets, not to mention its signing atop a Ford Mustang Mach-E electric crossover,[3] the order directed state agencies to plan for, encourage, and develop broader build-outs of sustainable transportation infrastructure and called for rulemaking to protect communities and workers from oil extraction impacts.[4] The EO reflects Governor Newsom’s latest effort to ensure that California meets its GHG reductions targets by challenging deadlines.[5]

Many industry and political commentators have used the headline “Newsom bans gas-powered cars by 2035,” even though the EO does not in fact impose a ban, reflecting some fear that the goals could be unrealistic and end up hurting California businesses and consumers.[6] However, some California automotive industry workers approve of the EO, recognizing that it is not a ban and may help Californians solve their transportation emissions problem.[7] Notwithstanding the support of some proponents, the major takeaway from the EO is that California is in for a steep climb to equip its power grid to handle the projected increase in electric vehicles (EVs).[8]

While the EO directs state agencies—including the California Public Utility Commission (CPUC), responsible for ratemaking and regulation of the state’s Investor Owned Utilities—to “accelerate deployment of affordable fueling and charging options for zero-emission vehicles,” “update the biennial statewide assessment of zero-emission vehicle infrastructure,” and “develop a Zero-Emissions Vehicle Market Development Strategy . . . that ensures coordinated and expeditious implementation of the system of policies, programs and regulations necessary to achieve the goals and orders established by this Order,” it stops shy of addressing how the demand and supply will be balanced to meet the new goals.[9] The CPUC and the California Air Resources Board (CARB) have their work cut out in attempting to juggle all of California’s energy, population, and pollution regulations while paving the way for 100% EV sales.[10] The EO appears to presuppose further developments on battery storage technology and EV cost reduction.[11]

Regardless of technological feasibility, the fact remains that it is now and, unless overturned by California’s legislature or a court, will remain,[12] California’s policy that all in-state automobile sales should be sales of zero emissions vehicles (ZEVs) by 2035.[13] Governor Newsom has instructed CARB to continue refining, “to the extent consistent with State and federal law,”[14] its regulations mandating certain percentages of annual vehicle sales consist of ZEVs.[15] However carefully Governor Newsom treaded the line between the executive and legislative action by calling upon CARB to go no further than the law already allows, the EO clearly did not emerge in a political vacuum. The EO comes in the midst of a political fire-storm over California’s status as the nation’s air pollution control technology driver.[16]

Clean Air Act Waivers – Past and Present

California has been able to set its own mobile source air emissions standards, “to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare,” since 1977.[17] Since then, other states have been able to voluntarily conform their regulations to California’s, rather than the federal, standard.[18] The U.S. Environmental Protection Agency (EPA) has historically granted California waivers, required under the Clean Air Act § 209 to set air emissions standards more stringent than the EPA’s, to include ZEV standards[19] and, more recently, GHG standards.[20] That is, recent EPA and National Highway Transportation Safety Administration (NHTSA) rulemaking reinterpreted those portions of the Energy Policy and Conservation Act of 1975 pertaining to national fuel economy standards as preempting the State’s ability “to limit or prohibit tailpipe GHG emissions or establish ZEV mandates.”[21]  That rulemaking premised its conclusion on another recent determination by the EPA— that California, and thereby the 177 States,[22] cannot obtain the § 209 waivers that regulated GHGs and set ZEV targets.[23] Litigants challenging the rulemaking in federal court called attention to the rulemaking’s litany of faults and over-reaches under the federal Administrative Procedure Act and National Environmental Policy Act; perhaps most salient is the charge that the EPA and NHTSA did not adequately address their sudden reversal of decades of collaboration between California, the federal government, and industry.[24] They simply read broad preemptive effects (extending to tailpipe emission standards historically set by California and adopted by the 177 States) into the Energy and Policy Conservation Act’s national fuel economy regulations portion and bolstered their interpretation by giving a new restrictive view of California’s § 209 waivers.[25] Adding to the pressure is discord within the regulated community, with some automakers decrying the governor’s decision[26] and some staunchly in support[27]; the fight over California’s waivers and mobile source emissions targets has never been more fierce.

Predictably, given that the tumult between the EPA and the NHTSA and California, the 177 States, and industry has spilled from the administrative realm to the judicial,[28] Andrew Wheeler, the EPA Administrator, responded a few days after the EO’s issuance with a barrage of accusatory and conclusory statements in a letter to Governor Newsom.[29] The thrust of this letter—that California’s electric grid and charging infrastructure is not prepared to scale up to support an increasingly electric vehicle fleet—has reverberated across the media landscape.[30] Citing recent blackouts as evidence, the EPA Administrator envisions scenarios where the state is forced to choose between keeping the A/C on in the hot summer and powering California’s transportation sector.[31]

Renewable energy proponents point out, though, that there is a perfectly good explanation as to why 400,000 customers recently lost power during some of the hottest weather on record across the West and Great Basin:

Critics of renewable energy such as President Trump point to the state’s supposed over-reliance on solar and wind power. The criticism is misplaced, however. The outages the California ISO ordered during a heat wave Aug. 14 and 15 were the product of an unusual combination of circumstances. These included the unexpected shutdown of a natural gas-fueled generating plant, an unexpected delay in returning a second plant to service, smoke from wildfires that reduced the generating capacity of solar units, and the regional nature of the heat wave, which increased air conditioner use in states that ordinarily would be exporting electricity to California.[32]

While these circumstances may recur and may become likelier with climate change affects, citing to the first “capacity-driven outages since the energy crisis of 2000 and 2001”[33] as evidence of ongoing failure lacks resonance. At its heart, though, Wheeler’s letter exemplifies the battle between federal and state control over energy policy. The Administration’s view is that when California regulates GHG emissions from mobile sources, it acts beyond its delegated scope under the CAA.[34] Litigation awaits, while imperatives to address climate change mount.[35] 

Conclusion

The resolution of this discord between federal and state has significant potential implications for acceleration of the clean energy transition and the regulation of air pollutants. Moreover, how California fares in this dispute will have impacted each of the 177 States and opposes the narrative that uniform standards are necessary to ensure smooth industrial function across the many states. The argument goes, if each state has a different emissions standard, we’ll need to make a different car for every state: A classic slippery slope. The history of mobile source regulation under Section 209 shows the exact opposite: states are left free to choose either the federal standard or adopt California’s more stringent standards. The issues that conflicting standards create has not risen yet, save in the limbo that the rulemaking and subsequent laws have created.[36] Likewise, automakers have been and are ready to collaborate both with California and the 177 States to market low-emission vehicles and with the federal government to market higher emissions vehicles that “customers desire,”[37] reinforcing the conclusion that the previous cooperation between the states and the federal government under the CAA was successful.[38] 

Governor Newsom’s EO is a bold experiment on climate change action given Congress’s hesitancy to setting national mobile source emissions standards. Meanwhile, the NHTSA and the EPA may fail in their assault on California’s regulatory approach, both through strained reinterpretation of the CAA and by publicly denigrating the EO, as much of the world, including the auto industry, is rapidly embracing both the imperatives and opportunities of the clean energy transition.

Amanda Halter is managing partner of the Houston office of the international law firm of

Pillsbury Winthrop Shaw Pittman, a member of the firm’s Environmental & Natural

Resources practice section and co-leader of the firm’s Crisis Management team. Amanda

helps companies resolve environmental liabilities and negotiate compliance conditions, as well as manage financial and reputational losses associated with a crisis. Her experience includes a diverse array of environmental regulatory, litigation and crisis matters, including contamination investigations and remedial actions, natural resource damages assessments and claims, environment, health and safety compliance counseling, mass toxic tort actions, permitting and planning for large-scale industrial projects, an project impacts mitigation and restoration strategies. Amanda is a native of Houston, a graduate of Rice University and The University of Texas School of Law.

 

Matthew Frederick is a third-year student at The University of Texas School of Law and a senior editor of the Texas Environmental Law Journal.

 

[1] Exec. Order N-79-20, Exec. Dep’t – State of Cal. (Sep. 23, 2020), [hereinafter Executive Order].

[2] Cal Matters, Will Gov. Newsom’s ‘Audacious’ Ban on Gas Guzzlers Help Trump Win in Midwest? Times of San Diego (Sep. 26, 2020), https://timesofsandiego.com/politics/2020/09/26/will-gov-newsoms-audacious-ban-on-gas-guzzlers-help-trump-win-in-midwest.

[3] Audrey LaForest, California’s fossil fuel ban likely in for long fight; 2035 ZEV goal up against the election and logistics, Automotive News (Sep. 28 2020), https://www.autonews.com/regulation-safety/californias-fossil-fuel-ban-likely-long-fight.

[4] Executive Order, supra note 1.

[5] California Global Warming Solutions Act of 2006, Cal. Health & Safety Code § 38500; see 17 Cal. Code Regs. § 95460 (2020) (regulating methane capture and flaring at municipal landfills as part of fulfilling the state’s climate objectives).

[6] LaForest, supra note 3.

[7] Id.

[8] Michael Hiltzik, Will California have enough electricity for all its EVs? Yes – but it will take work, LA Times (Oct. 1, 2020), https://www.latimes.com/business/story/2020-10-01/california-electricity-evs; see also Wheeler Criticizes California, China Plans for Reducing Greenhouse Gases, Inside EPA Weekly Report (Sept. 24, 2020).

[9] Executive Order, supra note 1, at §§ 3–5.

[10] Hiltzik, supra note 8.

[11] Id.

[12] See John C. Duncan, Jr., A Critical Consideration of Executive Orders: Glimmerings of Autopoiesis in the Executive Role, 35 Vt. L. Rev. 333, 362–63 (2010) (indicating that congressional acquiescence to presidential executive orders “amounts to ratification,” thereby permitting the inference that gubernatorial executive orders remain in effect until overturned by the state legislature or, of course, future governors).

[13] Executive Order, supra note 1, at § 1 (“It shall be a goal of the State that 100 percent of in-state sales of new passenger cars and trucks will be zero-emission by 2035. It shall be a further goal of the State that 100 percent of medium- and heavy-duty vehicles in the State be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. It shall be further a goal of the State to transition to 100 percent zero-emission off-road vehicles and equipment by 2035 where feasible.”).

[14] Executive Order, supra note 1; see, e.g., A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) (“. . . the recuperative efforts of the federal government must be made in a manner consistent with the authority granted by the Constitution.”).

[15] Cal. Health & Safety Code § 43018(a) (2020).

[16] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019); Complaint, California et. al. v. Chao et. al., No. 1:19-cv-02826 (D.D.C 2019); California et. al. v. Wheeler et. al., No. 20-1357 (D.C. Cir. 2020).

[17] Motor and Equipment Mfrs. Ass’n v. Env’t Prot. Agency, 627 F.2d 1095, 1110 (D.C. Cir. 1979) (evaluating congressional intent in amending the Clean Air Act to include a waiver provision for California in 1977).

[18] Pub. L. No. 95-95, § 129(b), 91 Stat. 685, 750 (1977).

[19] E.g., 58 Fed. Reg. 4,166 (Jan. 13, 1993); see 71 Fed. Reg. 78,190, 78,190-91 (Dec. 28, 2006); see also 76 Fed. Reg. 61,095, 61,095-96 (Oct. 3, 2011); see also 78 Fed. Reg. 2,112, 2,114-15 (Jan. 9, 2013).

[20] Cal. Health & Safety Code § 42823, 43018.5; 74 Fed. Reg. 32,744 (Jul. 8, 2009).

[21] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019).

[22] The 13 so-called 177 States are: Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.

[23] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019); Complaint, Chao et. al., No. 1:19-cv-02826.

[24] See Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (finding that administrative agencies decisions’ reversing long-term regulatory policy face a higher standard of review); Complaint, Chao et. al., No. 1:19-cv-02826 (referencing the interplay between Section 209, waivers, and 177 states in setting mobile source emissions targets; explaining EPA/NHTSA’s reassertion of argument that failed in federal courts (Green Mountain and Central Valley) about applicability of waiver provisions to GHG/ZEV regulations).

[25] Complaint, Chao et. al., No. 1:19-cv-02826.

[26] LaForest, supra note 3 (citing Chevy and other manufacturers who haven’t adopted tougher standards under the agreement to cut vehicle emissions).

[27] Id. (citing Ford and other manufacturers who have embraced collaboration with California).

[28] Chao et. al., No. 1:19-cv-02826; Wheeler et. al., No. 20-1357.

[29] Andrew R. Wheeler, Letter to Governor Gavin Newsom (Sep. 28, 2020), https://ww2.arb.ca.gov
/sites/default/files/2020-10/Wheeler_to_Newsom_9-28-2020.pdf [hereinafter Letter].

[30] Wheeler Warns California Over Plan to Ban New Gasoline Cars in 2035, Inside Cal/EPA (Oct. 2, 2020).

[31] Letter, supra note 29.

[32] Hitzik, supra note 8.

[33] Id.

[34] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019).

[35] Kyoto, COP 22, other climate benchmarks that the U.S. has committed itself to have elapsed, and the Trump Administration is in the process of withdrawing from the Paris Climate Accord.

[36] Complaint, Chao et. al., No. 1:19-cv-02826; Preemption Rule, 84 Fed. Reg. 51310 (Sep. 27, 2019).

[37] Laforest, supra note 3.

[38] See Pub. L. 95-95, Title II, §§ 207, 221, Aug. 7, 1977, 91 Stat. 755, 762; Pub. L. 101-549, Title II, § 222(b), Nov. 15, 1990, 104 Stat. 2502.

Vol. 50-1 Air Quality

by John Turney and Maxwell W. Anderson

Air Quality

New Air Quality Permit in Brownsville, Texas

Background

On March 24, 2016, Texas LNG Brownsville LLC (Texas LNG) submitted an application to the Texas Commission of Environmental Quality (TCEQ) for a new air quality permit authorizing construction of a natural gas liquefaction and export terminal, to be located in the Brownsville Ship Channel in Cameron County, Texas.[1] Texas LNG’s facility is one of three such facilities to be constructed in the area. Emissions from such facilities, predominantly those from pipeline-quality natural gas, include nitrogen oxides (NOx), carbon monoxide (CO), volatile organic compounds (VOC), sulfur dioxide (SO2), particulate matter (PM) at 10 and 2.5 micrograms, and hydrogen sulfide (H2S).[2] The operation would not be a major source requiring review under the federal Prevention of Significant Deterioration new source review program.[3] The TCEQ’s Executive Director (ED) issued a draft permit for Texas LNG’s application.[4] Following a public meeting, the TCEQ received comments and requests for a hearing, and ultimately, Vecinos Para el Bienestar de la Comunidad Costera (Vecinos), and the City of Port Isabel (Port Isabel), among others, were admitted as protestant parties.[5] The protestants argued that the draft permit was deficient and should be rejected, or, alternatively, that it should be revised to better protect air quality, human health, and property.[6] Nonetheless, the Administrative Law Judges (ALJs) recommended that the TCEQ approve the draft permit with one revision.[7]

Proposal for Decision

Burden of Proof and Prima Facie Demonstration

Texas LNG’s application was filed after September 1, 2015, making it subject to Texas Government Code § 2003.047(i-1)–(i-2) (SB 709),[8] which states:

(i-1)     [I]n a contested case regarding a permit application referred under Section 5.556 [of the Water Code] . . . the draft permit prepared by the [ED], the preliminary decision issued by the [ED], and other sufficient supporting documentation in the administrative record of the permit application establishes a prima facie demonstration that:

  1. the draft permit meets all state and federal legal and technical requirements; and
  2. a permit, if issued consistent with the draft permit, would protect human health and safety, the environment, and physical property.

(i-2)      [A] party may rebut a demonstration under Subsection (i-1) by presenting evidence that:

  1. relates to . . . an issue included in a list submitted under Subsection (e) in connection with a matter referred under Section 5.556, Water Code; and 
  2. demonstrates that one or more provisions in the draft permit violate a specifically applicable state or federal requirement.[9]

Under SB 709, the ED’s draft permit on Texas LNG’s application established a prima facie demonstration and created a presumption that the permit, if issued, would meet all legal and technical requirements.[10] This shifts the burden of production onto the protestants in a contested case; however, the ultimate burden of proof remains with the ED and the applicant to prove by a preponderance of the evidence that the applicant satisfies all applicable requirements.[11] The protestants, therefore, may rebut the presumption by presenting evidence related to a referred issue and demonstrating that the draft permit violates an applicable state or federal requirement.[12] The ALJs concluded on two issues that the Protestants failed to overcome the prima facie demonstration established by the ED’s Draft Permit.[13] On the third issue, the ALJs concluded that the Protestants overcame the prima facie demonstration only in part.[14] 

The ALJs rejected Port Isabel’s contention that draft permits issued without clear adherence to the application review process should not be granted the presumption of compliance set forth by SB 709.[15] Port Isabel asserted several deficiencies in the application review process,[16] including that Texas LNG’s permit had been passed off by two different permit engineers over the course of two years, and that no engineer was available during the response to comments or permit contest who could vouch for the permit’s technical review adequacy.[17] The only documentation of a technical review was the “Construction Permit Source Analysis & Technical Review,” which lacked any date of completion or signature.[18] Port Isabel argued that such a review is essentially a draft memo and should not be considered a prima facie demonstration under SB 709.[19] Nonetheless, the ALJs found that SB 709 creates a presumption and shifts the burden of production so long as the TCEQ reviewed the application and held an open meeting.[20]

Referred Issues and ALJ Analysis

The following three issues were referred for hearing:

1. Whether the Draft Permit contained adequate conditions to protect against adverse effects on the health and safety of Port Isabel’s residences and employees, including sensitive subgroups;

(2) Whether the Draft Permit contained adequate conditions to protect against adverse effects on plants, marine and aquatic organisms, animals, wildlife . . .[and]

(3) Whether [Texas LNG’s application] properly calculated and addressed potential emission sources, emission rates, and background concentrations . . . .[21]

Air Quality Analysis and Air Dispersion Modeling (Issue 1)

Port Isabel argued that Texas LNG was required under the Texas Clean Air Act (TCAA) and Title 30, Section 116.11 of the Texas Administrative Code to conduct a Modeling and Effects Review Applicability (MERA) analysis and that emissions of benzene from flares were not adequately detailed in Texas LNG’s MERA analysis.[22] Texas LNG contended that a MERA analysis was not required for emissions from ‘“boilers, engines, or other combustion units fueled only by pipeline-quality natural gas’ and from ‘flares, heaters, thermal oxidizers, and other combustion devices burning gases only from onshore crude oil and natural gas processing plants.’”[23] Nonetheless, Texas LNG conducted a MERA analysis and contended that emissions from the plant met the law’s applicable requirements.[24] Both parties’ experts testified about the adequacy of the MERA analysis calculations, and some evidence existed that, if speciated, the benzene flare emissions  would not have met applicable law.[25] 

The ALJs found that Texas LNG’s facility qualified for an exemption in MERA for boilers, engines, and other combustion units fueled by pipeline-quality natural gas, and that the benzene-admissions did not rebut the prima facie demonstration that the permit met all legal requirements.[26]

Wildlife and Vegetation Impacts (Issue 2)

Port Isabel argued that Texas LNG failed to inform the TCEQ of how closely located the site is to the Laguna Atascosa National Wildlife Refuge, and it should have conducted an ecological risk assessment and bioaccumulation study to determine the true impact on the refuge.[27] Texas LNG contended that the TCEQ only requires applicants to submit a U.S. Geological Survey map, and that Texas LNG did so.[28] Furthermore, Texas LNG contended that its facility was compliant with the Environmental Protection Agency’s (EPA) secondary National Ambient Air Quality Standards (NAAQS), which the TCEQ uses to evaluate the environmental impacts of facilities.[29] Secondary NAAQS are set at levels protective of public welfare, including impacts on soils, water, crops, vegetation, animals, wildlife, visibility and climate.[30] Texas LNG also argued that a sufficient ecological risk assessment was already adequately conducted by the Federal Energy Regulatory Commission in its preparation of the site’s Environmental Impact Statement.[31]

Port Isabel’s expert testified that even if the facility was in compliance with secondary NAAQS, the NAAQS “‘are not protective for nitrogen and sulfur deposition into the environment’ or for ‘the bioaccumulation of persistent organic pollutants or heavy metals.’”[32] The EPA has recognized that NOx and SO2 have interrelated impacts on plants, soils, lakes, and streams, and that there is scientific support for developing a standard to limit acidifying deposition of these pollutants to sensitive aquatic ecosystems.[33] Texas LNG’s expert also testified that the EPA has questioned whether secondary NAAQS standards should be revised but that they have not been revised yet.[34]

The ALJs found that Texas LNG performed the required modeling to demonstrate compliance with secondary NAAQS.[35] Even with scientific evidence of the interrelated impacts of NOx and SO2, without EPA revision to the NAAQS, the ALJs determined that Texas LNG had no duty to self-impose additional restrictions.[36] Therefore, Texas LNG’s application met the requirements of applicable law.

Emissions Controls and BACT Analysis (Issue 3)

Vecinos, joined by Port Isabel, argued that Texas LNG failed to demonstrate use of the Best Available Control Technology (BACT) required under the TCAA.[37] The TCEQ defines BACT as:

An air pollution control method for a new or modified facility that through experience and research, has proven to be operational, obtainable, and capable of reducing or eliminating emissions from the facility, and is considered technically practical and economically reasonable for the facility.[38]

In determining whether a control option is BACT, the TCEQ requires that applicants compare emissions reduction performance levels to those of options previously accepted as BACT in recent reviews for the same industry.[39] The TCEQ implements a three-tiered approach in BACT analysis.[40] Crucially, Tier I requires that sites implement BACT, but allows owners to consider the cost effectiveness of a given control option.[41] In contrast, Tier III requires owners to implement control options with the Lowest Available Emissions Rate (LAER) without consideration of costs.[42] Texas LNG’s facility was subject to Tier I review.

Vecinos asserted various faults with Texas LNG’s BACT demonstration. Vecinos argued that Texas LNG’s demonstration, which described the BACT comparison with previously accepted BACT as a case-by-case basis between entire sites, ignored the specialized meaning of the term “facility” within the TCAA as a “discrete or identifiable structure, device, item, equipment, or enclosure that constitutes or contains a stationary source. . .”[43] That is, Vecinos argued that Texas LNG must demonstrate that it will implement BACT on each “facility” on its site. Vecinos then listed four facilities that Texas LNG failed to implement BACT—flares, hot oil heaters, thermal oxidizers, and fugitive emissions controls.[44] The ALJs only agreed with Vecinos that Texas LNG had failed to consider BACT on hot oil heaters and the discussion of the heaters is illustrative of BACT considerations generally.[45]

Texas LNG proposed the use of hot oil heaters with emissions limits of NOx of 0.024 lb/MMBtu, which exceeded the limit of 0.01lb./MMBtu described in TCEQ’s current BACT requirements.[46] Vecinos argued that Texas LNG failed to perform a proper BACT analysis by failing to consider the hot oil heaters implemented at Freeport LNG, which were permitted in 2011 for a NOx emissions limit of 0.006 lb./MMBtu.[47] Texas LNG contended that the Freeport LNG was subject to LAER, the more restrictive technology standard for nonattainment areas, and that comparison of the two facilities was inapt.[48] The ALJs concluded that although Freeport LNG is subject to LAER, use of LAER control methods would be consistent with BACT under Tier I so long as the control method was economically feasible,[49] and proposed that the draft permit be revised to require Texas LNG to apply the more stringent limit to its hot oil heaters.[50] At its meeting on May 6, 2020, the TCEQ approved the Proposal for Decision, including the revised emission limit, and entered an order issuing the permit.[51]

Conclusion

Ultimately, Texas LNG’s permit survived the contest despite the ALJs noting several deficiencies in the application process. In each case, the ALJs noted that the relevant evidence presented by the Protestants did not overcome the presumption established by SB 709. The contest illustrates the high bar a protestant now faces in contesting a permit once a draft has been approved by the ED. Port Isabel recently filed suit in the Travis County District Court against the TCEQ regarding the issuance of the permit to Texas LNG.[52]

John Turney is retired Senior Counsel of Richards Rodriguez & Skeith and represented regulated companies in a variety of environmental and administrative matters before the TCEQ and other regulatory agencies.

Maxwell W. Anderson is a second-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.

 

[1] Proposal for Decision, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 1 (2020) [hereinafter PFD].

[2] Id. at 2, 11.

[3] Id. at 20.

[4] Id.

[5] Id.

[6] Id.

[7] Id. at 20.

[8] Act of Sept. 1, 2015, 84th Leg., R.S., ch. 116 §§ 1, 5, 2015 Tex. Sess. Law Serv. (S.B. 709), at 1 (codified at Tex. Gov’t Code § 2003.047).

[9] Id.

[10] PFD, supra note 1, at 4.

[11] Id.

[12] Tex. Gov’t Code § 2003.047(i-1)–(i-3).

[13] PFD, supra note 1, at 16–17, 24.

[14] Id. at 55 (stating that “the ALJs find that the Application properly calculated emissions sources and established appropriate conditions related to control technologies, with the exception of the hot oil heaters.”).

[15] Id. at 8.

[16] Closing Argument of the City of Port Isabel, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 2–6 (2020).

[17] Id. at 3.

[18] Id.

[19] Id. at 6.

[20] PFD, supra note 1, at 8.

[21] Id. at 6.

[22] Id. at 13.

[23] Id. at 11.

[24] Id.

[25] PFD, supra note 1, at 12–16.

[26] Id. at 16.

[27] Closing Arguments of the City of Port Isabel, Texas, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 16–17 (2020).

[28] PFD, supra note 1, at 18.

[29] Id. at 19; see also Reviewing National Ambient Air Quality Standards (NAAQS): Scientific and Technical Information, Env’t Prot. Agency, https://www.epa.gov/naaqs (last visited Dec. 3, 2020).

[30] PFD, supra note 1, at 19.

[31] Id. at 19, 21–22.

[32] Id.

[33] Id.

[34] Id.

[35] Id.

[36] Id. at 24

[37] Id.; see also Tex. Health & Safety Code § 382.0518(b).

[38] 30 Tex. Admin. Code § 116.10(1).

[39] PFD, supra note 1, at 27.

[40] Id. at 25.

[41] Id. at 28

[42] Id.

[43] Id. at 29; see also Tex. Health & Safety Code § 382.003(b); 30 Tex. Admin. Code § 116.10(4)).

[44] PFD, supra note 1, at 31.

[45] Id. at 55.

[46] Id. at 41.

[47] Id. at 44.

[48] Id.

[49] Id. at 46.