The Target store was to be constructed on property that was contaminated by a previous gas station’s leaking underground storage tanks.  Plaintiff, a citizens group, filed a petition for writ of mandate in the trial court against the City.  The trial court denied the petition.  On appeal, plaintiff argued that the record contained substantial evidence of a fair argument that the project may have a significant environmental impact due to contaminated soil, and that the evidence does not show that the potential impact will be mitigated to a level of insignificance.  A CAP had been prepared regarding the contamination and planned remediation.  The City relied on the CAP to find that the contamination condition was properly mitigated and to determine that a mitigated negative declaration was appropriate.  However, the City failed to attach the CAP to the negative declaration and thus it was not part of the record in the trial court case.  The Appellate Court agreed with plaintiff’s argument that there was substantial evidence of a possible significant environmental impact.  The Court cited the CEQA Guidelines; “[T]he Guidelines define substantial evidence as enough relevant information and reasonable inferences from this information that a fair argument can be made to support a conclusion, even though other conclusions might also be reached. (Guidelines, § 15384, subd. (a).)”   The Appellate Court remanded the case to the trial court to determine whether completion of the CAP would remediate soil contamination to a point of insignificance.  The Appellate Court further advised that if the trial court held that the CAP would not remediate soil contamination to a point of insignificance that the trial court must order the City to prepare a full environmental impact report (“EIR”).  The Appellate Court cited No Oil in support of its conclusion: “an EIR must be prepared ‘whenever it can be fairly argued on the basis of substantial evidence that the project may have significant environmental impact.’” No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68, 75.

The plaintiff-appellant Team Enterprises, LLC (“Team”) operated a dry cleaning store and used PCE as part of the dry cleaning process, which generated wastewater containing PCE.  Team used the Puritan Rescue 800 filter-and-still combination equipment (“Rescue 800”), designed and manufactured by defendant-appellee R.R. Street & Co. (“Street”), to separate the PCE from the wastewater, and then filter and reuse it.  The Rescue 800 returned the distilled PCE to Team’s machines and deposited the wastewater into a bucket.  In the bucket, the wastewater would sit and more PCE would separate from the water, allowing Team to reuse that separated PCE as well.  However, the remaining wastewater in the bucket still contained some dissolved PCE, and Team disposed of this wastewater by pouring it down the sewer drain, allowing the PCE to leak out of the drain pipes and into the soil.  The California Regional Water Quality Control Board found that the soil needed cleanup, which Team performed at its expense.

To recover costs of this cleanup, Team sued Street and several other defendants for contribution under CERCLA.  In addition, Team alleged State law nuisance and trespass claims.  Street moved for summary judgment on all three claims, which was granted by the District Court, and Team appealed.

With regard to its CERCLA claim, Team argued that Street is liable under CERCLA as a party that “arranged for disposal” of hazardous substances, one of the strict liability categories under CERCLA.  42 U.S.C. § 9607(a).  CERCLA’s section regarding arranger liability provides:

(3) any person who by contract, agreement or otherwise arranged for disposal . . . of hazardous substances owned or possessed by such person, by any other party or entity, at any facility . . . owned or operated by another party or entity and containing such hazardous substances . . .

42 USC § 9607(a)(3).  As noted by the court, arranger liability ensures that owners of hazardous substances may not free themselves from liability by selling or transferring a hazardous substance to another party for disposal, which is a fact-intensive inquiry.  Team Enterprises, at *5, citing Burlington N. & Santa Fe Ry. Co. v. United States, 129 S. Ct. 1870, 1879, 173 L. Ed. 2d 812 (2009); Cal. Dep’t of Toxic Substances v. Alco Pac., Inc., 508 F.3d 930, 938 (9th Cir. 2007).  The court also cited Burlington Northern in stating that “an entity may qualify as an arranger . . . when it takes intentional steps to dispose of a hazardous substance.”  Team Enterprises, at *6, citing Burlington Northern, at 1879.  Arranger liability therefore contains an intent requirement, but the Ninth Circuit distinguished intent to dispose from mere knowledge of future disposal.  Team Enterprises, at *6-7.

With regard to Street’s intent and CERCLA liability, the Ninth Circuit found that there was no showing that Street intended for its sale of the Rescue 800 to result in disposal of PCE, and therefore found Street lacked the requisite intent for arranger liability.  Id., at *9.  Rather, Street met the requirements of the so-called “useful product defense,” which prevents a seller of a useful product from being subject to arranger liability.  Id.  This defense is available even where the product itself qualifies as a hazardous substance that requires future disposal; the court provided the example of an auto parts store selling motor oil to car owners without incurring such liability because it would be odd to describe that sale of motor oil as being for the purpose of disposing of hazardous waste.  Id., at *7-8.  The fact that Street may be indifferent to the possibility that residual PCE would be poured down the drain was insufficient to meet the intent requirement.  Id., at 10.

Team also argued that the district court erred in dismissing Team’s nuisance claim.  The Ninth Circuit stated that such a claim depends on whether Street created or assisted in creating and maintaining the nuisance.  Id., at *18, quoting Selma Pressure Treating Co. v. Osmose Wood Preserving, 221 Cal. App. 3d 1601, 1620 (Cal. App. 5th Dist. 1990) (overruled on other grounds).  “A defendant may be liable for assisting in the creation of a nuisance if he either (1) affirmatively instructs the polluting entity to dispose of hazardous substances in an improper or unlawful manner, . . . or (2) manufactures or installs the disposal system.”  Team Enterprises, at 18.  Mere “but-for” causation, however, does not give rise to nuisance liability.  Id., at *18.  The Ninth Circuit found no evidence in the record that Street instructed Team or other dry cleaners to set up their equipment to discharge solvent-containing wastewater into drains or sewers, and also found that Street’s Rescue 800 is not a disposal system.  Id., at 19.  Accordingly, the Ninth Circuit affirmed the district court’s grant of summary judgment on Team’s nuisance claim.

Similarly, the Ninth Circuit affirmed the district court’s grant of summary judgment to Street on Team’s trespass claim.  Under California state law, “a trespass is an ‘invasion of the interest in the exclusive possession of land.’”  Id., at *20, quoting Capogeannis v. Superior Court, 12 Cal. App. 4th 668, 674 (Cal. App. 6th Dist. 1993).  Team did not present any evidence that either Street’s Rescue 800 or the PCE entered Team’s property without Team’s consent.  The court noted that Team’s employees contaminated the soil by pouring wastewater down the drain, and such contamination was not a trespass against itself because one cannot commit an actionable interference with one’s own possessory right.  Team Enterprises, at *21.  Therefore the Ninth Circuit found that Team failed to present evidence creating a genuine dispute as to any material fact with respect to its trespass claim.

Public Resources Code section 21152(c) requires a County clerk to post the NOD “for a period of 30 days.”  The Court looked to Code of Civil Procedure section 12 for clarification on the timing requirement and determined that the “30-day” period excludes the first day of posting and includes the last day.  The Court clarified that “the NOD must be posted for the entire last (30th) day to satisfy the 30-day posting requirement.”  196 Cal. App. 4^th at 1157-1158.  Since the City only posted the NOD for part of the 30^th day, and not until the County Clerk’s office closed, the 30-day notice requirement was not met.  The City argued that because it filed the NOD with the County Clerk that action alone satisfied the 30-day posting and filing requirement of Public Resources Code section 21152, relying on CEQA Guidelines section 15094(g).  However, the Court of Appeals determined that CEQA Guidelines section 15094(g), like Public Resources Code section 21152, provides that a NOD must be both filed and posted, and thus rejected the City’s argument.

The underlying lawsuits considered by the AEP Court began well before EPA initiated efforts to regulate greenhouse gases under the Act.  In July 2004, two groups of plaintiffs filed separate complaints in the Southern District of New York against the same five defendants, each of which was a major electric power generator using fossil-fuels.  The first group of plaintiffs included eight States and New York City, the second joined three nonprofit land trusts.  The defendants/petitioners are four private power generating companies and the Tennessee Valley Authority, a federally owned corporation that operates fossil-fuel fired power plants in several states.  According to the complaints, the defendants “are the five largest emitters of carbon dioxide in the United States.”   The plaintiffs asserted that by contributing to global warming, the defendants’ carbon-dioxide emissions created a “substantial and unreasonable interference with public rights,” in violation of the federal common law of interstate nuisance, or, in the alternative, of state tort law.  Plaintiffs sought injunctive relief requiring each defendant “to cap its carbon dioxide emissions and then reduce them by a specified percentage each year for at least a decade.”  The District Court dismissed both suits as presenting non-justiciable political questions, but the Second Circuit reversed.  On the threshold questions, the Court of Appeals held that the suits were not barred by the political question doctrine, and that the plaintiffs had adequately alleged Article III standing.  Turning to the merits, the Second Circuit (1) held that all plaintiffs had stated a claim under the “federal common law of nuisance” by relying on a series of United States Supreme Court decisions holding that states may maintain suits to abate air and water pollution produced by other states or by out-of-state industry, and (2) determined that the Act did not “displace” federal common law.  At the time of the Second Circuit’s decision, EPA had not yet promulgated any rule regulating greenhouse gases, a fact the court thought dispositive.

Relying on the decision in Massachusetts v. EPA, 549 U. S. 497 (2007)(Massachusetts), which held that the Act authorizes federal regulation of emissions of carbon dioxide and other greenhouse gases, the AEP Court rejected plaintiffs’ federal common law nuisance claims “…hold[ing] that the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.”   Per the Court, Massachusetts made plain that (1) emissions of carbon dioxide qualify as air pollution subject to regulation under the Act and, (2) the Act “speaks directly” to emissions of carbon dioxide from the defendants’ plants.  In Massachusetts, the Court held that the Environmental Protection Agency (EPA) had misread the Act when it denied a rulemaking petition seeking controls on greenhouse gas emissions from new motor vehicles, since the Court had determined that greenhouse gases qualify as “air pollutants” within the meaning of the governing Act provision.  In response to the Massachusetts decision, EPA undertook greenhouse gas regulation and concluded that “compelling” evidence supported the “attribution of observed climate change to anthropogenic” emissions of greenhouse gases, and determined that consequent dangers of greenhouse gas emissions included increases in heat-related deaths; coastal inundation and erosion caused by melting icecaps and rising sea levels; more frequent and intense hurricanes, floods, and other “extreme weather events” that cause death and destroy infra-structure; drought due to reductions in mountain snow-pack and shifting precipitation patterns; destruction of ecosystems supporting animals and plants; and potentially “significant disruptions” of food production.  In a footnote, the Supreme Court cautioned in AEP that it endorses no particular view of the complicated factual issues related to carbon-dioxide emissions and climate change.

As a result of the Massachusetts decision, EPA also began phasing in requirements that new or modified “[m]ajor [greenhouse gas] emitting facilities” use the “best available control technology.” §7475(a)(4) and commenced a rulemaking under §111 of the Act, 42 U. S. C. §7411, to set limits on greenhouse gas emissions from new, modified, and existing fossil-fuel fired power plants.  The AEP Court noted that under the Act, if EPA does not set emissions limits for a particular pollutant or source of pollution, states and private parties may petition for a rulemaking on the matter, and EPA’s response will be reviewable in federal court.  Indeed, to settle litigation brought under §7607(b) by a group that included the majority of the plaintiffs in this very case, the agency agreed to complete that rulemaking by May 2012.  Because the Act itself provides a means to seek limits on emissions of carbon dioxide from domestic power plants—the same relief the plaintiffs sought by invoking federal common law, the Court saw no room for a parallel track.

In the Court’s view, the critical point is that Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation is what displaces federal common law.  Indeed, were EPA to decline to regulate carbon-dioxide emissions altogether at the conclusion of its ongoing §7411 rulemaking, the federal courts would have no warrant to employ the federal common law of nuisance to upset the agency’s expert determination.   The Court added that EPA’s judgment would not escape judicial review, since Federal courts can review agency action (or a final rule declining to take action) to ensure compliance with the statute Congress enacted.   The Court also acknowledged that EPA may not decline to regulate carbon-dioxide emissions from power plants if refusal to act would be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” and stated that if the plaintiffs in this case are dissatisfied with the outcome of EPA’s forthcoming rulemaking, their recourse under federal law is to seek Court of Appeals review, and, ultimately, to petition the Supreme Court for certiorari.

The Court deferred to Congress’ designation of an expert agency, the EPA, as best suited to serve as primary regulator of greenhouse gas emissions, since it better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions.  Per the Court, “Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order.”  Finally, the Court noted that the judgments the plaintiffs would commit to federal judges, in suits that could be filed in any federal district, cannot be reconciled with the decision making scheme Congress enacted under the Act.  Accordingly, the Court held that the Second Circuit erred in ruling that federal judges may set limits on greenhouse gas emissions in the face of the Act, which empowers EPA to set the same limits, subject to judicial review only to ensure against action (or inaction) that is “arbitrary, capricious, . . . or otherwise not in accordance with law.” §7607(d)(9).

Under CERCLA, when the EPA determines that an environmental cleanup is necessary at a contaminated site, the agency may: (1) negotiate a settlement with PRPs, 42 USC § 9622; (2) conduct the cleanup with “Superfund” money and then seek reimbursement from PRPs by filing suit, 42 USC §§ 9604(a), 9607(a)(4)(A); (3) file an abatement action in federal court to compel PRPs to conduct the cleanup, 42 USC § 9606; or (4) issue a UAO instructing PRPs to clean up the site, 42 USC § 9606.  GE’s suit challenged the constitutionality of option (4)—UAO issuance.

Once EPA issues a UAO, the recipient PRP has two choices.  First, a PRP may comply with the UAO and seek reimbursement from EPA after completing the cleanup, 42 USC §9606(b)(2)(A).  If the EPA refuses reimbursement, the PRP may sue the agency in federal court to recover its costs on the grounds that (1) the PRP was not liable, § 9606(b)(2)(B)–(C); or (2) it was liable, but EPA’s selected response action was “arbitrary and capricious or . . . otherwise not in accordance with law, § 9606(b)(2)(D). Second, a PRP may refuse to comply with the UAO and wait for EPA to bring an enforcement or cost recovery action in federal court.  42 USC §§9606(b)(1); 9607(c)(3).  However, if the court concludes that that the PRP willfully failed to comply with an order without sufficient cause, the court may impose fines (currently $37,500/day) which accumulate until EPA brings an action against the PRP (a period up to six years).  See 73 Fed. Reg. 75,340, 75,340-46 (Dec. 11, 2008); 28 USC §2462; 42 USC §9613(g)(2). In addition, if EPA undertakes the cleanup, the district court may impose punitive damages of up to three times the amount of EPA’s costs.  42 USC §§9606(c)(3).  These two options are exclusive, as CERCLA Section 113(h) bars PRPs from obtaining immediate judicial review of a UAO.  42 USC § 9613(h).  The inability to obtain judicial review of an UAO prior to compliance, other than in the context of non-compliance with the UAO and the attendant risk of penalties, gave rise to GE’s claim of violation of its constitutional due process rights.

In the lower courts, and in its petition to the Supreme Court, GE argued that EPA’s option to issue UAOs to PRPs violates due process requirements because it requires PRPs to clean up a site without first providing an opportunity for a hearing except in the context of an enforcement proceeding for failure to comply with the UAO.  On June 29, 2010, the U.S. Court of Appeals – D.C. Circuit decided in favor of EPA, finding the CERCLA statutory scheme to be constitutional.  General Electric Co. v. Jackson, 610 F.3d 110 (D.C. Cir. 2010) (pdf link available here), affirming 595 F. Supp. 2d 8 (D.D.C. 2009).  The D.C. Circuit ruled that the EPA’s authority to issue UAOs under CERCLA satisfies constitutional due process requirements because recipients of a UAO may obtain a pre-deprivation hearing by refusing to comply and forcing EPA to sue in federal court. 

GE argued that the penalties for disobeying a UAO and requiring EPA to file an enforcement action were so enormous as to intimidate and effectively preclude PRPs from ever resorting to the courts to test the validity of the UAOs, relying on Ex Parte Young, 209 U.S. 123 (1908) and its progeny.  As noted by the D.C. Circuit, “[a]ccording to GE, -[t]he unilateral orders regime . . . imposes a classic and unconstitutional Hobson’s choice: because refusing to comply -risk[s] severe punishment [i.e., fines and treble damages] UAO recipients’ only real option is to -comply . . . before having any opportunity to be heard on the legality and rationality of the underlying order.”  Thus, GE argued that CERCLA fails to provide any realistic avenue for pre-deprivation review, and is therefore unconstitutional.  However, the D.C. Circuit reasoned that such fines satisfy due process if they are subject to “good faith” or “reasonable grounds” defenses, or if the imposition of penalties is subject to judicial discretion, citing to Reisman v. Caplin, 375 U.S. 440, 446–50 (1964); Okla. Operating Co. v. Love, 252 U.S. 331, 338 (1920); Wagner Seed Co. v. Daggett, 800 F.2d 310, 316 (2d Cir. 1986); cf. Brown & Williamson Tobacco Corp. v. Engman, 527 F.2d 1115, 1121 n.8 (2d Cir. 1975).   The D.C. Circuit found that CERCLA adequately guarantees these safeguards, as CERCLA provides that a PRP faces daily fines and treble damages only if a federal court finds: (1) that the UAO was proper; (2) that the PRP willfully failed to comply without sufficient cause; and (3) that, in the court’s discretion, fines and treble damages are appropriate. 42 U.S.C. §§ 9606(b)(1), 9607(c)(3).  Accordingly, the D.C. Circuit concluded that CERCLA did not preclude a resort to the courts for the purpose of testing a UAO’s validity, and held that the CERCLA statutory scheme is not unconstitutional.

The D.C. Circuit denied GE’s request for rehearing on September 30, 2010, and GE filed a petition for certiorari to the Supreme Court on December 29, 2010.  The D.C. Circuit opinion now stands, following the Supreme Court’s rejection of GE’s petition.

The draft Industrial General Permit applies to most industrial facilities, including manufacturing, oil and gas, mining, hazardous waste treatment/storage/disposal, landfills, recycling, steam electric power, transportation, and sewage/wastewater treatment.  The Board asked a blue ribbon panel of experts to address whether it is technically feasible to establish numeric effluent limitations or some other quantifiable limit for inclusion in general storm water permits.  The draft Industrial General Permit reflects the findings of the panel, and incorporates elements of the U.S. EPA’s Multi-Sector General Permit (MSGP).

The Board has released a document detailing major changes and new requirements contained in the draft Industrial General Permit.  Some of the new significant changes proposed are:

• Numeric Action Limits (NALs) and Numeric Effluent Limits (NELs).  The draft Industrial General Permit incorporates U.S. EPA MSGP values as NALs which require corrective action when exceeded.  If a discharger repeatedly exceeds NALs, they will be subject to NELs.  The NELs are the same values as the NALs unless the Regional Boards impose more stringent values.  Exceeding NELs trigger harsher corrective action by the Board, including mandatory minimum penalties, penalties as high as $25,000 to $37,500 per day, as well as any other appropriate sanction provided by CWA § 309.
• Minimum Best Management Practices (BMPs).  The draft Industrial General Permit requires that dischargers to incorporate specific minimum BMPs into their storm water pollution prevention plans (SWPPPs), unless clearly inapplicable.  The Minimum BMPs incorporate some of the BMPs contained in the U.S. EPA MSGP, which the Board has found applicable to California discharges.  These include BMPs for spill response procedures, material handling/waste management, employee training, record keeping, and erosion/sediment control.  In addition, the Minimum BMPs include periodic visual inspections, such as the weekly inspection of outdoor areas, discharge locations, drainage areas, and perimeter areas impacted by off-facility materials or storm water run-on.  The EPA has developed some online resources for erosion and sediment controls that can be found at the MSGP website: http://cfpub.epa.gov/npdes/stormwater/msgp.  Another resource to research possible BMPs is the California Storm Water Quality Associations Industrial and Commercial BMP Handbook: http://www.cabmphandbooks.com/Industrial.asp.
• Electronic Filing Requirements.  Permit Registration Documents are required to be filed electronically.
• QSD/QSP.  The draft Industrial General Permit requires dischargers to meet minimum training qualifications and certification.

The Board has issued a Notice of Public Hearing.  There will be a public hearing to accept comments on the draft Industrial General Permit, on March 29, 2011 at 9:00 a.m.  The location will be:

Joe Serna Jr./Cal-EPA Headquarters Building
Coastal Hearing Room
1001 I Street, 2nd Floor
Sacramento, CA 95814

In addition, the Board made a request for written comments, documents, and other information, which must be submitted by Monday, April 18, 2011 at 12:00 p.m.   Written comments may be submitted to the Board via email at commentletters@waterboards.ca.gov, but must be less than 15 MB in file size.  In addition, comments may be faxed to (916) 341-5620.  If sent by mail, written comments should be addressed to:

Jeanine Townsend
Clerk to the Board
State Water Resources Control Board
1001 I Street, 24th Floor
Sacramento, CA 95814

The new Green Building Standards Code, known as CALGreen, is the first in the nation statewide mandatory green building code for newly constructed buildings.  Finalized earlier this year by the California Department of Housing and Community Development and the Building Standards Commission, CALGreen is a comprehensive code that will apply to newly constructed residential, commercial, school and hospital buildings.  Residential-type buildings, such as single family dwellings, and motels, hotels, and apartments of three stories or less, are subject to the CALGreen Code when constructed new, under a permit issued on or after January 1, 2011.  Newly-constructed nonresidential buildings subject to CALGreen include, among others, state-owned buildings, state universities, and privately-owned buildings used for retail, office and medical services.  While CALGreen applies to all newly constructed buildings unless otherwise exempted by law (i.e. federal buildings and buildings constructed on Indian land or reservations) it does not apply to remodels and additions.

CALGreen contains both mandatory and voluntary standards for the design and construction of buildings and construction site management.  The Code will require, among other standards, that new buildings constructed in California reduce water consumption by 20 percent (based on the maximum allowable water use per plumbing fixture and fittings as required by the California Building Standards Code), divert 50 percent of construction waste from landfills and install low pollutant-emitting materials, among other conservation measures.  The California Air Resources Board estimates that the mandatory provisions will reduce greenhouse gas emissions (CO2 equivalent) by 3 million metric tons equivalent in 2020.

While CALGreen is the first mandatory statewide green building program, many cities in California have already enacted their own green building codes.  Los Angeles began imposing its green building code rules in April 2008.  San Francisco followed shortly thereafter by enacting its green building ordinance in August 2008.  

In response to this new wave of local green building regulations, and in anticipation of the State’s program, many smaller California communities also have recently begun to adopt new green building measures.   For example, the City of Burlingame adopted a green building ordinance on October 18, 2010 that will impose certain green construction requirements in residential and commercial projects. 

Anticipating that many municipalities would want some measure of autonomy in creating their own green building rules, CALGreen allows local jurisdictions to retain their already existing, stricter green building standards, or adopt stricter versions of the state’s code.  Thus, those communities with pre-existing green building ordinances that are stricter than the state’s program may not need to implement CALGreen, the new statewide green building code.  CALGreen will provide a set of uniform green building code provisions that smaller communities, lacking sufficient resources to develop their own green construction codes, can incorporate into their local building codes.

With less than one month until the implementation of CALGreen, municipalities and industry professionals should begin to familiarize themselves with the new rules.  California’s Green Buildings Standards Code can be downloaded at the Buildings Standards Commission website.

The lawsuit underlying the appeal concerned five waste byproducts (“the five Complaint wastes”) generated by U.S. Magnesium through its magnesium production process.  The United States argued that U.S. Magnesium’s handling of these wastes did not comply with Subtitle C of the Resource Conservation and Recovery Act of 1976 (“RCRA”).  U.S. Magnesium responded that the EPA previously exempted the five wastes from Subtitle C’s requirements in a prior interpretation of its own regulation, and that the EPA was precluded from changing that interpretation without first complying with the notice and comment procedures of the Administrative Procedure Act (“APA”).  The district court agreed with U.S. Magnesium and granted partial summary judgment in its favor.  

However, after determining that the EPA never previously adopted a “definitive” interpretation of Subtitle C, the 10^th Circuit vacated the district court’s order.  The 10^th Circuit held that EPA remained free to change its prior tentative regulatory interpretation and issue a new interpretation without assuming APA notice and comment obligations. 

Background

The final Subtitle C regulations issued by EPA in 1980 treated large volume, low risk mineral processing wastes as hazardous wastes subject to the same stringent Subtitle C requirements as other such wastes.  Shortly thereafter, Congress passed the Bevill Amendment, which required EPA to determine whether it should regulate such wastes under Subtitle C or under a less stringent regime, such as Subtitle D.  In response, in 1990, EPA submitted a required Report to Congress on Special Wastes from Mineral Processing, which recommended the exemption of “[p]rocess wastewater from primary magnesium processing by the anhydrous process,” though the EPA noted that its “findings” were “tentative.”  Thereafter, EPA’s “[f]inal regulatory determination and final rule” in June 1991 EPA confirmed that “[p]rocess wastewater from primary magnesium processing by the anhydrous process” definitively qualified for exemption from Subtitle C and should be subject to less onerous regulatory terms, mostly under Subtitle D. EPA did not purport, however, to interpret the phrase “[p]rocess wastewater from primary magnesium processing by the anhydrous process.” 

A 1991 dispute between EPA, U.S. Magnesium, and the State of Utah regarding whether the phrase “[p]rocess wastewater from primary magnesium processing by the anhydrous process” exempted from Subtitle C all of U.S. Magnesium’s pollution-control wastes led to the underlying lawsuit in 2001. 

Analysis

The 10^th Circuit addressed whether EPA is precluded from pursuing its current and concededly plausible interpretation of its ambiguous 1991 regulation, under which the five Complaint wastes do not qualify as “process wastewater from primary magnesium processing by the anhydrous process,” because the Agency previously offered a different and inconsistent interpretation of that language.  The EPA argued that the initial interpretation it offered in its 1990 Report to Congress was a tentative one, and that an agency need not undertake the rigors of APA notice and comment to change a merely tentative interpretation of its own rules.  The court agreed with EPA, noting that even under the case law relied on by U.S. Magnesium, before an agency adopts a definitive interpretation of its own rule it remains free to hear new arguments, make adjustments, and change directions, all without having to undergo APA notice and comment.  As a result, the 10^th Circuit held that that EPA had not previously adopted a definitive interpretation of its 1991 rule, was free to adopt a different interpretation, and therefore vacated the district court’s order granting partial summary judgment to U.S. Magnesium.

In addition to reducing transportation’s environmental impact, the new standards are expected to reduce the cost of transporting freight.  According to U.S. Transportation Secretary Ray LaHood, “this is a win-win-win for the environment, businesses and the American consumer.”

The new standards propose to regulate three categories of heavy trucks: (1) combination tractors; (2) heavy-duty pickups and vans; and (3) vocational vehicles.  For combination tractors, EPA and DOT are proposing engine and vehicle standards to begin in the 2014 model year and achieve up to a 20 percent reduction in carbon dioxide emissions and fuel consumption by 2018 model year.  For heavy-duty pickup trucks and vans, the proposed standards phase in gasoline vehicles starting in the 2014 model year and achieve up to a 10 percent reduction.  For diesel vehicles, the standard proposes a 15 percent reduction by 2018 model year.  For vocational vehicles, the agencies are proposing engine and vehicle standards starting in the 2014 model year which would achieve up to a 10 percent reduction in fuel consumption and carbon dioxide emissions by 2018 model year.

Heavy-duty trucks play an important role in the goods movement infrastructure in the U.S. and have experienced significant growth over the past decade.   But this growth is not without environmental cost.  Mobile sources, such as heavy-duty trucks, emitted 31 percent of all U.S. greenhouse gases in 2007 and have been the fastest-growing source of U.S. greenhouse gases since 1990.  By setting greenhouse gas emissions standards for this sector, EPA and DOT are moving forward with concrete steps to address climate change and improve U.S. energy security by reducing dependence on foreign oil.

In implementing a final rule, EPA and DOT will need to achieve a balance between the goals of achieving greenhouse gas reductions and fuel efficiency improvements while allowing industry to implement the changes in a cost-effective manner.   Commenting on the standards, Truck Manufacturers Association President Tim Blubaugh stated: “EPA and the National Highway Transportation Safety Administration (NHTSA) need to provide manufacturers adequate lead time, encourage the use of existing technologies, assure regulatory compatibility with the complex commercial engine and truck marketplace, and avoid potential unintended consequences.”

The new standards also raise the issue of potential conflict and overlap with state authorities as states have undertaken a number of different regulatory programs to reduce greenhouse gas emissions from vehicles.  With California leading the way, many states have undertaken to adopt low carbon fuel standards.  Any differences between state and federal regulatory schemes could create the risk of conflict and lead to confusion within the industry.  As new federal policies addressing vehicle emissions are adopted, this issue will become more relevant and will no doubt be the subject of future judicial review and analysis.

The DOT’s National Highway Traffic Safety Administration (NHTSA) has prepared a Draft Environmental Impact Statement (DEIS) for the proposed fuel efficiency standards.  Comments may be submitted on the DEIS through January 3, 2011.  Additionally, a 60-day comment period will commence once the proposal is published in the Federal Register.