Environmental and Approvals

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By Michael Feeley, Winston Stromberg, Ann Claassen, Lucas I. Quass, John Morris, and Samantha Seikkula

On December 12, 2016, EPA published the final Formaldehyde Standards For Composite Wood Products Rule (the Rule) in the Federal Register. The compliance date for most aspects of the Rule is December 12, 2017, with a sell-through provision for wood composite products manufactured or imported prior to that date. The Rule limits formaldehyde emitted into the air from certain composite wood products, which are products made by binding strands, particles, fibers, veneers, or boards of wood together with adhesives.  Domestic and foreign companies operating in the U.S. use composite wood products to manufacture a wide variety of consumer products such as furniture, flooring, cabinets, children’s toys, and more.

EPA promulgated the Rule to implement the 2010 Formaldehyde Standards for Composite Wood Products Act (the Act), which Congress enacted as Title VI of the Toxic Substances Control Act (TSCA). The Act established emission standards that mirror the California Air Resource Board’s (CARB) Phase II standards for composite wood products—including hardwood plywood (HWPW), medium-density fiberwood (MDF), and particleboard (PB).[1]  Similar to the California requirements, the new federal Rule regulates composite wood products from initial manufacture to final sale by (1) imposing emissions restrictions; (2) regulating product labeling, chain of custody, non-compliant product sell-through, recordkeeping and enforcement; and (3) requiring certification by EPA-approved third-party certifiers (TPC) that conduct quality assurance activities, emissions testing, inspections and auditing services.

By Sara Orr, Jennifer Roy and Francesca Bochner

On December 14, 2016, the US Fish and Wildlife Service (FWS) finalized its proposed revisions to the Eagle Rule (Final Rule) and released its Record of Decision (ROD). The Final Rule allows companies and others to obtain 30-year incidental take permits under the Bald and Golden Eagle Protection Act of 1940 (the Act) in exchange for committing to conservation measures designed to reduce impacts to eagles.

As discussed in our previous articles (here and here), this is FWS’ second attempt at revising the Eagle Rule to allow for 30-year permit terms. The draft version of the revisions and the Draft Programmatic Environmental Impact Statement (DPEIS) were originally released on May 2, 2016. FWS accepted public comments on the proposed revisions and DPEIS until July 5, 2016, receiving over 700 comments from other agencies, public interest groups, industry organizations, and private citizens.

By Sara Orr, Jennifer Roy and Francesca Bochner

On July 5, 2016, the public comment period closed for the US Fish and Wildlife Service’s (FWS) proposed revisions to the rules authorizing eagle take permits under the Bald and Golden Eagle Protection Act (Eagle Act) and accompanying Draft Programmatic Environmental Impact Statement (PEIS), paving the way for FWS to complete and release a final rule, possibly as early as the end of this year.

FWS originally released the revised proposed rules on May 6, 2016, as discussed more fully in our previous post. FWS received over 700 comments on the proposed revisions and Draft PEIS from other agencies, public interest groups, industry organizations, and private citizens.

By Christopher W. Garrett, David Amerikaner, Lucas I. Quass and Samantha Seikkula

In an opinion by Justice Kruger, the Supreme Court of California unanimously reversed the Court of Appeal in Friends of the College of San Mateo Gardens v. San Mateo County Community College District, Cal. Supreme Court, Case No. S214061 (September 19, 2016). The Court concluded the Court of Appeal erred in its application of a “new project” test in determining whether a subsequent or supplemental environmental impact report (EIR) is appropriate.

The Court held that the California Environmental Quality Act (CEQA) does not authorize courts to invalidate an agency’s CEQA action when it proposes changes to a previously approved project, based solely on the court’s own independent evaluation of whether the agency’s proposal is a new project, rather than a modified version of an old one. Instead of focusing on a possibly abstract characterization of whether the project is “new” or “old,” the court must evaluate the lead agency’s determination of whether the previous environmental document retains any relevance in light of the proposed changes, and if any major revisions to the document are required due to the involvement of new, previously unstudied significant environmental effects. Importantly, the Court clarified

By Marc Campopiano, Lucas I. Quass and Samantha Seikkula

In a published decision, following the Supreme Court’s decision in California Building Industry Association v. Bay Area Air Quality Management District (2015) 62 Cal.4th 369, the First District Court of Appeal upheld California Environmental Quality Act (CEQA) thresholds of significance adopted by the Bay Area Air Quality Management District (the District) in California Building Industry Association v. Bay Area Air Quality Management Dist. (2016) 2016 Cal. App. LEXIS 683. While the Court upheld limited use of the District’s thresholds, it determined that the thresholds “may not be used for the primary purpose envisioned by District, namely, to routinely assess the effect of existing environmental conditions on future users or occupants of a project.”

Adopted in 2010, the District’s thresholds set “construction-related” and “operational-related” significance levels for TACs and PM2.5 emissions, broken down into four separate categories, including categories for new receptors (Receptor Thresholds). The District also published new “CEQA Air Quality Guidelines” (District Guidelines), which include the thresholds and suggest methods of assessing and mitigating impacts found to be significant. The California Building Industry Association challenged the Receptor Thresholds on the grounds that CEQA does not require an analysis of an existing condition’s impact on a project’s future occupants. The Supreme Court agreed, finding that CEQA does not require an agency to consider a project’s existing conditions on future users and residents of a proposed project. The Supreme Court remanded the case to the Court of Appeal to determine whether the Receptor Thresholds were consistent with its decision.

By Jean-Philippe Brisson, Josh Bledsoe, Michael Dreibelbis and Andrew Westgate

On July 12, 2016, the California Air Resources Board (CARB) proposed amendments to the California Cap-and-Trade Program (17 CCR 95800 et. seq.) for the first time since 2014. The amendments include major substantive changes to compliance requirements as well as new program initiatives such as post-2020 caps, additional linking, and Clean Power Plan (CPP) compliance provisions.

In an unusual move, CARB has provided a “Preliminary Draft Proposed Regulation Order and Staff Report” prior to formally initiating the rulemaking. CARB will release a draft of the formal regulatory package on July 19 for Office of Administrative Law review prior to opening the formal comment period. “Final” draft documents will be posted on August 2, and the formal public comment period will begin on August 5.

2021-2031 Emission Cap

CARB has proposed to set emissions caps for 2021 to 2031. The caps decline annually at a linear rate from 2020 to 2030. CARB set the post-2020 caps by calculating the ratio of the 2020 cap in the current regulation (334.2 MMTCO2e) to the statewide GHG target for 2020 (431 MMTCO2e) as set forth in the Scoping Plan. CARB then extrapolates that ratio—77.5 percent—using the goal of 258.6 MMTCO2e established by Governor Jerry Brown in Executive Order B-30-15. The final cap for the 2030 using this methodology is 200.5 MMTCO2e.

By Sara Orr, Daniel Brunton, Marc Campopiano and Andrea Hogan

On April 15, 2016, the US Fish and Wildlife Service (FWS) issued its Draft Midwest Wind Energy Multi-Species Habitat Conservation Plan (Plan) and Draft Environmental Impact Statement (EIS) proposing a regional approach to Endangered Species Act (ESA) compliance process in response to the growth of Midwestern wind energy development. The Plan is intended to streamline the incidental take permitting process for certain bird and bat species.  Comments on the draft Plan and draft EIS are due on July 14, 2016.

Background

With its abundant wind resources, the American Midwest is an attractive region for renewable energy development. In addition to state and local permitting requirements, Midwestern wind energy facilities must also comply with federal natural resource laws, including ESA and the Bald and Golden Eagle Protection Act (Eagle Act). Under Section 10 of the ESA, the FWS may issue permits to authorize the “incidental take” of federally listed fish and wildlife, including bird and bat species potentially affected by wind energy development. “Incidental take” is defined as take that is incidental to, and not the purpose of, carrying out an otherwise lawful activity. Likewise, under the Eagle Act, the FWS may issue a permit to authorize take of individual eagles and their nests.

By Christopher Garrett, Daniel Brunton and Shannon Lankenau

On May 4, 2016, the California Supreme Court heard oral argument in Friends of the College of San Mateo Gardens v. San Mateo County Community College District (Case No. S214061), which addresses the standard of review that applies when a lead agency decides that changes or additions to a previously approved project can be treated as a modified version of the original project instead of as an entirely new project. Under the California Environmental Quality Act (CEQA), a modified version of a project will often be analyzed with an expedited “addendum” to the previous CEQA document while an entirely new project may require starting the CEQA review from the beginning.  The Supreme Court’s opinion will likely provide important guidance on this frequently encountered situation. The Court is expected to issue its opinion by early August.

Factual and Procedural Background

Friends of the College of San Mateo Gardens (Friends) challenged the San Mateo County Community College District’s (the District) decision to demolish a building complex on the District’s College of San Mateo campus. The District previously approved a project plan to renovate ten campus buildings and demolish sixteen others, using a mitigated negative declaration to address the project’s environmental impacts. The District later revised its plans to include demolition of one building that had been set for renovation and renovation of two buildings previously slated for demolition. The District evaluated the possible environmental consequences of the change in plans, concluded that the revisions were not extensive enough to require preparation of a subsequent Environmental Impact Report (EIR), and adopted an addendum to the previously approved mitigated negative declaration.

By Sara Orr, Jennifer Roy and Francesca Bochner

On May 2, 2016, the US Fish & Wildlife Service (FWS) announced its second attempt to revise its rules authorizing eagle take permits under the Bald and Golden Eagle Protection Act (Eagle Act). The rule would extend the maximum eagle take permit term from 5 to 30 years to better correspond to the typical lifetime of major projects. The proposed revisions are intended to provide clarity on eagle permit regulation, improve permit implementation and increase regulatory compliance while providing strong protection for eagles. Public comments are due by July 5, 2016.

The Bald and Golden Eagle Act

The Eagle Act (16 USC 668-668d) was enacted in 1940 to prohibit the take of bald and golden eagles, except pursuant to federal regulations. The Eagle Act allows the Secretary of the Interior to issue regulations authorizing “take” of eagles for various purposes, with potentially significant fines for violations. Such take must be “compatible with the preservation of bald or golden eagles.” The current “preservation standard” is that the take must be “consistent with the goal of maintaining stable or increasing breeding populations.”

By Christopher Garrett, Andrea Hogan, Daniel Brunton, and Daniel Aleshire

On February 22, 2016, in a 2-1 decision, the US Court of Appeals for the Sixth Circuit determined it has jurisdiction over the numerous legal challenges to the Clean Water Rule (the Final Rule), thus siding with the position of the agencies that promulgated the Final Rule, the US Environmental Protection Agency (EPA) and the US Army Corps of Engineers (together, the Agencies). The Final Rule was issued on May 27, 2015 and defines “waters of the United States,” a threshold term that determines the Clean Water Act’s (CWA) scope and application. Previously, on October 9, 2015, the Sixth Circuit stayed the implementation of the Final Rule nationwide, concluding that the challengers demonstrated a substantial possibility of success on the merits. In a fragmented decision, two of the panel’s judges found that under the Sixth Circuit precedent in National Cotton Council of America v. U.S. E.P.A., 553 F.3d 927, 933 (6th Cir. 2009), the Sixth Circuit had jurisdiction over review of the Final Rule.

Sixth Circuit Issues Splintered Decision

Judge David W. McKeague delivered the Sixth Circuit’s opinion and concluded that the court has jurisdiction over challenges to the Final Rule under both 33 U.S.C. § 1369(b)(1)(E) and (F). Section 1369 identifies the seven types of actions by the EPA Administrator that are reviewable directly in the federal circuit courts.  Sections 1369(b)(1)(E) and (F) provide for review of actions “in approving or promulgating any effluent limitation or other limitation” under certain CWA sections and actions “in issuing or denying any permit under section 1342,” which governs the issuance of permits for the discharge of pollutants. In concluding that the Sixth Circuit had jurisdiction over review of the Final Rule under both provisions, Judge McKeague relied on a “functional” rather than “formalistic” construction of the CWA’s judicial review provision, an approach that the opinion states has been favored by courts, including the Supreme Court and the Sixth Circuit, over the past 35 years.