Environment, Land & Resources

Webcast – California’s 100% Zero Carbon Future: How SB 100 and EO B-55-18 Will Impact Businesses and Projects

Posted in Air Quality and Climate Change, California, Energy Regulatory, Environmental Regulation

Latham lawyers discuss the business implications of the new legislation.

By Tommy P. Beaudreau, Marc T. Campopiano, Michael J. Gergen, Joshua T. Bledsoe, and Jennifer K. Roy

Senate Bill 100, signed into law by Governor Jerry Brown on September 10, 2018, aims to raise California’s already ambitious renewable energy standards by 2030, with an ultimate mandate of 100% clean energy by 2045. On the same day, Brown issued Executive Order B-55-18, which sets a target of climate neutrality for the state by 2045. These developments, as well as other clean energy legislation recently signed into law, represent a major step in California’s long history as a national and global leader on clean energy and climate policy, and will have large-scale implications for electricity supply and demand and electricity infrastructure, wholesale electricity markets, land use development, and more.

Lawyers from Latham & Watkins’ Environment, Land & Resources and Finance Departments discuss the business implications of SB 100 and EO B-55-18 as well as other clean energy laws, including:

  • Energy supply and demand and electricity infrastructure
  • Wholesale electricity markets
  • Carbon markets and California climate programs
  • Land use development and transportation in a low-carbon economy

View the webcast or download the presentation slides on-demand at any time by registering here.

Insurance Coverage: US State Courts Rule for Insureds in Three Recent Policyholder Decisions

Posted in Air Quality and Climate Change, Environmental Insurance Coverage, Environmental Litigation

Companies facing products or environmental liability claims should immediately consider insurance coverage from current and historical policies in light of applicable state law.

By Christine G. Rolph and Laura J. Glickman

In recent months, the highest courts of several US states have issued important pro-policyholder decisions on insurance coverage issues. The following three cases illustrate important points for policyholders:

1. Xia v. ProBuilders: The Pollution Exclusion Has Limits

The Washington Supreme Court recently addressed the scope of the pollution exclusion in comprehensive general liability (CGL) policies in Xia v. ProBuilders Specialty Insurance Co. RRG, 400 P.3d 1234 (Wash. 2017). The Court recognized that pollution exclusions are “an important tool for insurers to avoid liability stemming from loss caused by pollutants acting as pollutants where the insured paid no premiums for such coverage.” The Court noted, however, that the ProBuilders pollution exclusion clause did not exclude all pollution. Under Washington law, the rule of efficient proximate cause provides coverage “where a covered peril sets in motion a causal chain.” The Washington Supreme Court held that, so long as the initial event in a causal chain is a covered risk, an insured has coverage under the policy regardless of whether subsequent events within the chain are excluded by the pollution exclusion.

In Xia, the Court considered the injuries of a policyholder stemming from the negligent installation of a water heater that led to a release of carbon monoxide gas. The Court recognized that carbon monoxide released into a home was a “pollutant” within the meaning of the pollution exclusion, since it was a gaseous vapor or fume that could adversely affect human health. But the efficient proximate cause of that release and the policyholder’s injury was the negligent installation of the water heater, which was a covered peril. The pollution exclusion did not eliminate coverage just because an uncovered peril appeared later in the causal chain. The Court thereby forestalled the insurer’s attempt to overuse the pollution exclusion to improperly deny coverage.

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7 Takeaways From California’s Extension of the Low Carbon Fuel Standard

Posted in Air Quality and Climate Change, Energy Regulatory

By Joshua T. Bledsoe and Kimberly D. Farbota

On September 27, 2018, the California Air Resources Board (CARB) passed Resolution 18-34, extending the Low Carbon Fuel Standard (LCFS) Program to 2030 and making significant changes to the design and implementation of the Program. This blog outlines seven takeaways for market participants and stakeholders.

1. CARB Appears Committed to the LCFS

While California’s Cap-and-Trade Program attracts the lion’s share of attention in the trade press, CARB may view the LCFS as an equally important greenhouse gas (GHG) emissions reduction measure. According to CARB, the Cap-and-Trade Program’s traditional role in the state’s overarching scheme has been to backstop GHG reductions, not drive them. Under this interpretation, the Cap-and-Trade Program has acted as an insurance policy guaranteeing the state’s GHG emissions reduction trajectory via operation of the program’s hard cap in the event that other, more direct emissions reduction measures fail to achieve expected reductions (e.g., the Renewables Portfolio Standard, Advanced Clean Car Standards, Title 24 Energy Efficiency Standards, the LCFS, etc.).

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California Court of Appeal Upholds Use of Climate Scoping Plan as Threshold of Significance

Posted in California, CEQA, Environmental Litigation, Uncategorized

By Kimberly D. Farbota, Jennifer K. Roy, and Christopher Garrett

CEQA Case Report: Understanding the Judicial Landscape for Development[i]

In an unpublished opinion issued August 28, 2018, Forest Preservation Society v. Department of Forestry and Fire Protection, Case. No. SCUK-CVPT-15-66284, the California Court of Appeal affirmed the trial court’s judgment and upheld the California Department of Forestry and Fire Protection’s (Cal Fire’s or Department’s) approval of a Timber Harvest Plan (THP 80) proposed by real party in interest Mendocino Redwood Company (MRC). Petitioner Forest Preservation Society (Petitioner) requested for writ of mandate, arguing that the Department:

  • Used an improper baseline for evaluating the impacts of THP 80 on climate change
  • Showed no substantial evidence to support its finding that THP 80 would not significantly impact climate change
  • Failed to fulfill its duty to create an enforceable mitigation and monitoring plan to alleviate the impacts on climate change

The trial court rejected these arguments and denied the petition, and the Court of Appeal upheld the denial. In summary, the Court of Appeal determined:

  • The Department did not abuse its discretion by relying on the California Air Resources Board’s Climate Change Scoping Plan — rather than the state’s 2020 and 2050 greenhouse gas (GHG) emission reduction targets — as the threshold of significance for evaluating the cumulative impacts on climate change resulting from project-related GHG emissions.
  • Substantial evidence, in the form of analyses showing that growth was scheduled to outpace logging across MRC’s ownership, supported the Department’s finding that the project’s cumulative impacts on global warming would be insignificant.
  • The Department does not have a duty to enforce mitigation and monitoring of potential impacts on climate change if there are no significant cumulative impacts. Additionally, THP 80 requires that all future MRC timber-harvesting plans and projects be subject to environmental review.

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European Parliament Looks to Broaden Plastics Ban

Posted in Environmental Regulation

By Paul A. Davies and Michael D. Green

The Parliament voted in favor of a single-use plastics ban and added its own amendments.

Plastics continue to face widespread regulatory attention in the EU. The European Commission (the Commission) released its Plastics Strategy in January 2018 and built on that effort with a proposed ban on 10 single-use plastics in May 2018 (a number of Member States have proposed similar national initiatives). The Commission’s proposals are currently the subject of the EU’s legislative procedure, which includes a review by the European Parliament (the Parliament). The Parliament is looking to materially extend the banned list.

The Commission’s May 2018 proposals include:

  • Banning plastics in certain products (such as cotton buds, straws, cutlery, plates, etc.)
  • Creating consumption-reduction targets for food and drink containers
  • Imposing obligations on producers in relation to the costs of waste management and building awareness
  • Implementing collective targets for single-use plastic bottles
  • Imposing standardized labeling concerning the presence of plastics, their negative environmental impact, and how such waste should be disposed
  • Developing awareness-building measures

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California Appeals Court Upholds Dismissal of Duplicative CEQA Claim

Posted in California, CEQA, Environmental Litigation, Environmental Regulation, Project Siting and Approval

By Christopher W. Garrett, Daniel P. Brunton, Jennifer K. Roy and Derek Galey

CEQA Case Report: Understanding the Judicial Landscape for Development[i]

In an unpublished opinion issued September 14, 2018, Inland Oversight Comm. v. City of San Bernardino, Case No. E064836, the California Court of Appeal affirmed the trial court’s decision dismissing the Inland Oversight Committee (IOC), CREED-21, and Highland Hills Homeowners Association’s (HOA’s) (collectively, Petitioners’) appeal challenging the City of San Bernardino’s (City’s) approval of real party in interest First American Title Insurance Company’s (Developer’s) changes to a proposed development. In summary, the court determined:

  • In the CEQA context, the doctrine of res judicata applies if two actions involve the same episode of purported noncompliance.
  • Adequacy of representation for privity purposes is measured by inference, in other words, examining whether the party in the suit which is asserted to have a preclusive effect had the same interest as the party to be precluded, and whether that party had a strong motive to assert that interest.
  • The Water Code does not require a water supply assessment if a proposed development is not subject to CEQA review.

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New JRC Report Reviews Progress in Tackling Soil Contamination

Posted in Contaminated Properties & Waste, Environmental Regulation, European Environmental and Public Law, Project Siting and Approval

The report supports the efforts of the EU’s Seventh Environment Action Programme.

By Alexander Wilhelm

According to a report prepared by the Joint Research Centre (JRC) — the European Commission’s science and knowledge service — countries across Europe are making progress on tackling soil contamination. The report[i] states that the management of contaminated sites in Europe has improved substantially. The survey prepared by the JCR scientists included 39 countries, of which 25 are EU Member States. Within the EU there are an estimated 2.8 million sites where artificial surface indicates that polluting activities have occurred in the past. According to national and regional inventories of countries that replied to the report’s questionnaire, more than 650,000 sites are registered where polluting activities took or are taking place. The number of remediated sites or sites under aftercare measures has increased from 57,000 to 65,500 in the last five years. Although these inventories are more accurate than ever before, investigations of more than 170,000 sites are still pending.

Soil contamination means reduced soil quality because harmful substances resulting from human activity are present. In general, such contamination violates private or public interests, and can even harm human health or the environment. According to the report, mineral oils and heavy metals are the most frequent contaminants. The excavation and the off-site disposal of contaminated plots are the most frequently used remediation techniques — also known as “dig-and-dump.” With the help of the provided data, JCR scientists have revealed that an average of €4.3 billion is spent to tackle soil contamination in the surveyed countries, of which more than 42% is taken from public funds. According to the report, this is due to the divergent application of the “polluter-pays” principle, which is applicable to historical contamination only in a few countries. Those differences in the legal treatment of historical contamination should be assessed carefully not only by the current owner, but also by any prospective buyer. Continue Reading

California Court of Appeal Upholds CEQA Exemption for Alterations to Archery Range

Posted in California, CEQA

By James L. Arnone, Benjamin J. Hanelin, Lucas I. Quass, and Christopher Adam Martinez

CEQA Case Report: Understanding the Judicial Landscape for Development[I]

In an unpublished opinion issued August 30, 2018, Stewards of Public Land v. City of Pasadena, et al., Case No. B277996, the California Court of Appeal affirmed the trial court’s denial of a writ of mandate challenging two Notices of Exemption (NOE) issued by the City of Pasadena (City) for minor physical and programmatic changes to the operation of an archery range in a City park (the Project). The court held that the City properly relied upon the Category 1 Exemption for minor alteration to existing structures or facilities, and that neither the historical resources or unusual circumstances exception to the exemption applied.

Petitioner Stewards of Public Land (Stewards) argued that the City failed to comply with its historical preservation ordinance, failed to comply with state planning and land use laws, and wrongly determined the Project was categorically exempt from CEQA. Stewards also argued several municipal law claims, which the court found to be without merit. As to the Stewards’ CEQA claims, the court unanimously determined:

  • The general effects of the longstanding operation of an archery range on subsequently developed residences did not constitute unusual circumstances and that no exception to a CEQA exemption applied.

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China Announces Establishment of Hazardous Chemicals Department

Posted in Chemical Regulation, China

The new department will assume broad oversight responsibilities as part of a broader government restructuring.

By Paul A. Davies and R. Andrew Westgate

China’s Ministry of Emergency Management (MEM) has announced the establishment of a new department responsible for the safety, supervision, and management of hazardous chemicals. The MEM replaced the former State Administration of Work Safety (SAWS), and took over responsibility for product safety relating to fireworks, pharmaceuticals, and the chemical industry.

The creation of the new department reflects increasing focus on chemical safety after the 2015 explosion at the Port of Tianjin, which killed 173 people and injured 797. More recently, an explosion at a chemical factory in the city of Yibin, Sichuan province in July killed 19 people. These incidents highlight that hazardous material storage remains a challenge in China.

Zhang Xingkai, the president of the China Academy of Safety Science and Technology noted that in the four years between 2011 and 2015, approximately US$89.4 billion was lost due to workplace accidents. The MEM was established in March 2018 in order to respond more effectively to crises like the Tianjin and Yibin explosions. With overall responsibility for safe chemical production and work environments, the MEM will provide a unified system focused on disaster prevention. Continue Reading

Courts Block Coal Ash Suits, Setting Up US Supreme Court Showdown

Posted in Environmental Regulation, Water Quality and Supply

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. Continue Reading