The decision could complicate states’ ability to pursue groundwater natural resource damages actions.

By Kegan A. Brown, Gary P. Gengel, Thomas C. Pearce, and Taylor R. West

On November 22, 2021, the US Supreme Court held that equitable apportionment applies to a dispute between states about their respective interests in groundwater that flows through multiple states in Mississippi v. Tennessee.[1] The decision may have implications for natural resource damages (NRD) claims. Natural resource trustees often assert claims to pursue damages to groundwater. In assessing these claims, courts often must determine (1) whether the trustee has a trusteeship interest in the groundwater resource at issue, and (2) if so, the extent of the trustee’s interest in that groundwater resource relative to the interests of other trustees in the same groundwater.

Project applicants and agencies alike should think carefully about developing robust analyses that demonstrate the adequacy of water supply.

By Marc T. Campopiano, Diego Enrique Flores, and Lucas I. Quass

Mark Twain is often credited with saying, “Whiskey is for drinking; water is for fighting over.” This remains true in California, where drought conditions, climate change, and population growth throughout the state’s history have made water an increasingly valuable and regulated resource. The legal landscape involves complex questions related to water quality, water sustainability, and competing claims to water rights. One notable area of controversy involves the adequacy of water supply for new development projects.

Two decades ago, in 2001, the state legislature enacted Senate Bill (SB) 610 and SB 221 to promote sustainable long-term water planning. Collectively, SB 610 and SB 221 require public agencies to determine whether adequate water supply exists for certain large development projects as part of the environmental review process under the California Environmental Quality Act (CEQA) by, in part, requesting water supply assessments (WSAs) from water service providers.

California Natural Resources Agency adopts final amendments to CEQA Guidelines, providing additional clarifying revisions to GHG impacts, baseline, and deferral of mitigation amendments.

By Marc Campopiano, Winston Stromberg, and Samantha Seikkula

The California Office of Administrative Law recently approved a suite of amendments to the CEQA Guidelines, which are now in effect. Latham wrote about these amendments last year, when the Natural Resources Agency began the rulemaking process under the Administrative Procedure Act. During this rulemaking process,

WIFIA program — no longer a “pilot” — is set to grow.

By Joel C. Beauvais and David J. Penna

On October 23, 2018, President Trump signed into law the America’s Water Infrastructure Act of 2018 (AWIA 2018). This bipartisan legislation, among other elements, reauthorized the Water Infrastructure Finance and Innovation Act (WIFIA). WIFIA, which established a federal water infrastructure bank administered by the US Environmental Protection Agency (EPA), is intended to ramp up federal funding for large-scale projects. Under the program, EPA can make low-interest, long-term loans and loan guarantees for a broad range of water projects. Eligible users include private, public, or mixed public-private entities, projects generally must be US$20 million or larger, and loans or guarantees can cover up to 49% of eligible costs. For a broader overview, please see Latham & Watkins’ WIFIA White Paper.

Although WIFIA was enacted in 2014, Congress did not fund the program until Fiscal Year (FY) 2017. In FY 2017, Congress appropriated funding sufficient to provide more than US$3 billion in loans or guarantees, and in FY 2018 expanded this to support more than US$5 billion in loans or guarantees. WIFIA uses a two-step selection process, beginning with the project proponents submitting letters of interest to EPA; from these, EPA selects a subset of projects to make a full application, with the expectation that projects making a full application ultimately will be approved. EPA closed its first loan in April 2018 and recently selected 39 projects to apply for FY 2018 funding. The program enjoys robust bipartisan support, and appears poised to continue to grow in coming years. While the reauthorizing legislation made only modest changes to WIFIA, water project developers considering using the program should note three key takeaways.

Fourth and Sixth Circuit decisions give power plant operators additional defenses to citizen suits pending potential Supreme Court review of “groundwater conduit” theory.

By Joel C. Beauvais and Stacey L. VanBelleghem

Over the past month, two US Courts of Appeals have rejected Clean Water Act (CWA) citizen suits seeking to hold power companies liable for discharges of pollutants from coal ash disposal facilities “through” groundwater to waters of the US. Although the Fourth Circuit accepted that discharges through groundwater could be the basis for liability, it held that the relevant ash piles and impoundments were not “point sources” for purposes of the CWA. The Sixth Circuit likewise held that the ash disposal facilities at issue were not point sources, but — contrary to the Fourth Circuit — also held that discharges through groundwater were not actionable under the Act. Collectively, these recent decisions stand as a significant new obstacle to citizen suits against owner/operators of coal ash impoundments. At the same time, the decisions deepen a circuit split on the so-called “groundwater conduit” theory of CWA liability, helping to tee the issue up for possible Supreme Court resolution. If the Court does take this question up, the outcome will be critically important for many industry sectors, including electric power, oil and gas, manufacturing, and mining companies, among others. The CWA imposes strict liability, and citizen suits based on groundwater conduit claims can result in extremely costly remedies — including large civil penalties and injunctive relief.

Companies may need to carefully consider practical business concerns to comply with the updated Prop 65 regulations, effective August 30.

By Michael G. Romey, Lucas I. Quass, and James A. Erselius

New regulations governing the implementation of the Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop 65) will go into effect on August 30, 2018 that apply to products manufactured after the operative date of August 30, 2018. The new regulations update the content of the Prop 65 warning label that appears on products, in addition to other substantive changes.

Below is one example of how the new warning may look; however, the exact content will depend on the specifics of the exposure in question.

Officials seek to “improve the efficiency and cost effectiveness” of NRDAs — which could help expedite the resolution of claims.

By Janice M. Schneider, Gary P. Gengel, Joel C. Beauvais, Kegan A. Brown, and Thomas C. Pearce

On August 27, 2018, the US Department of the Interior (DOI) issued an Advance Notice of Proposed Rulemaking (ANPR) requesting comments by October 26, 2018 on potential changes to its natural resource damage assessment (NRDA) regulations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This law authorizes federal, state, and tribal trustees to recover natural resource damages (NRD) for injuries to natural resources resulting from hazardous substance releases. NRDAs that follow the DOI regulations are entitled to a rebuttable presumption of validity in later court proceedings.

In the ANPR, DOI seeks input on how to “improve the efficiency and cost effectiveness” of NRDAs and accelerate restoration of injured natural resources. While there are many areas in which to improve the regulations that will be considered, DOI specifically requests comment on the following six issues:

Latham lawyers discuss the forces driving transformation in the market and the key legal and regulatory issues.

By Tommy Beaudreau, Joel Beauvais, Joel Mack, Ryan Maierson, and Janice Schneider

Water management is becoming increasingly critical amid increasing oil and gas production in the Permian Basin and other regions of the United States. In particular, many companies are now seeking to manage larger quantities of produced water, and/or to secure water supplies for drilling activities — leading

Polluters of one of China’s most polluted waterways are increasingly facing prosecution through coordinated local and national efforts.

By Paul A. Davies and R. Andrew Westgate

Chinese authorities have been increasing their efforts to prosecute environmental offenders along the Yangtze River, the third-longest river in the world and the longest in Asia. The crackdown reflects China’s goal to make 70% of its surface water safe to consume by 2020.

Water Pollution: A Serious Problem for China

China’s government has good reason to take the problem of water pollution seriously. In 2012, a senior official from the water ministry acknowledged that 20% of China’s waterways were classified as toxic, while 40% were seriously polluted. The World Bank has further noted that water pollution could have “catastrophic consequences for future generations,” and that the problem is compounded by the fact that China does not have enough water for its population to safely consume. (For more information on China’s water supply, see Latham’s previous blog post).

Upstream entities will need to shoulder more responsibility in the warning process after August 30th.

By Michael G. Romey and Lucas I. Quass

As discussed in Latham’s previous post, August 30, 2018 will mark a significant change in the enforcement of the Safe Drinking Water and Toxic Enforcement Act of 1986, also known as Proposition 65 (Prop 65). California’s Office of Environmental Health Hazard Assessment (OEHHA), which is responsible for the implementation of Prop 65, published new regulations in 2016 (2016 Regulations) that will adjust how businesses provide what OEHHA deems “clear and reasonable” warnings to consumers about products that may result in an exposure to a chemical listed by the State as potentially causing cancer and/or reproductive harm. Among other obligations, the 2016 Regulations will require businesses to provide consumers with more information about chemicals listed under Prop 65 in consumer products, whether bought online or in person. The 2016 Regulations also explain which entities in the chain of commerce are primarily responsible for compliance with particular Prop 65 requirements.

Specifically, the 2016 Regulations impose more responsibility on upstream entities, such as manufacturers, distributors, packagers, importers, producers, and suppliers (Upstream Entities), shifting the primary burden away from retailers. See CAL. CODE REGS. tit. 27, § 25600.2(a) (2016). This increase in responsibility is based on OEHHA’s understanding that Upstream Entities possess superior knowledge about which chemicals are involved in producing consumer products. The 2016 Regulations also provide retailers with the opportunity to secure legal indemnity via written agreement with Upstream Entities. Id. § 25600.2(i).

This blog post is part of a continuing series on Prop 65 compliance issues aimed at entities within the California chain of commerce, as the 2016 Regulations become effective on August 30, 2018. The 2016 Regulations are applicable to products manufactured on or after August 30, 2018.