Corporate Environmental Lawyer

WHO Announces Second Meeting On Global Collaboration In Chemical Risk Assessment

By E. Lynn Grayson

The World Health Organization (WHO) has announced its second meeting focused on strengthening global collaboration in chemical risk assessment to be held 29-30 March 2012 in Bonn, Germany. The first meeting was held in March 2010.

The two day meeting will follow up on key issues and priority actions to address the needs identified in March 2010 including: capacity building/training; chemical risk assessment/sharing knowledge; risk assessment methodology; and, research. The objective of the first day of the meeting is to provide an update on tools developed to increase capacity globally in chemical risk assessment and propose strategies to enhance update of risk assessment methodologies. The objectives of Day 2 of the meeting are to further explore interest in participating in a WHO Risk Assessment Network, to discuss the Network design in terms of vision, goals and objectives, structure and function, as well as to propose options for its implementation.

The WHO previously identified ten chemicals of major public health concern that are an important focus in the continuing risk assessment work:

1. Air pollution
2. Arsenic
3. Asbestos
4. Benzene
5. Cadmium
6. Dioxin and dioxin-like substances
7. Inadequate or excess fluoride
8. Lead
9. Mercury
10. Highly hazardous pesticides

More information about this upcoming meeting and WHO's outreach on chemicals and related risk assessment is available at http://www.who.int/ipcs/en/.

D.C. Court of Appeals Grants Stay of Cross-State Air Pollution Rule

By Allison A. Torrence

On December 30, 2011, the United States Court of Appeals for the District of Columbia Circuit granted several parties’ motions to stay in the federal case challenging the United States Environmental Protection Agency’s Cross-State Air Pollution Rule (“Transport Rule”).  The court’s order stops implementation of the Transport Rule two days before it was set to take effect on January 1, 2012.  The Transport Rule has been challenged by several states and private companies in over three dozen cases, which have been consolidated under the first-filed case, EME Homer City Generation, L.P. v. Envtl. Prot. Agency, No. 11-1302 (D.C. Cir. filed Aug. 23, 2011).

The court’s ruling is not a decision on the merits of the case.  Instead, in a two-page opinion, the court held that the “petitioners have satisfied the standards required for a stay pending court review.”  Thus, the Transport Rule is stayed pending the court’s resolution of the various petitions to review the EPA rule.  The court will likely decide on the merits of the challenges to the Transport Rule in the spring of 2012.

CCX Sued For Fraud

By Steven M. Siros

On December 14, 2011, a group of investors that purchased trading privileges on the Chicago Climate Exchange ("CCX") sued the CCX and its founders, alleging fraud and violations of Illinois' Consumer Fraud and Deceptive Business Practices Act. The lawsuit, which was filed in Illinois state court, contends that defendants falsely represented that only a limited number of trading privileges would be sold and once these privileges were sold, the privileges would be freely transferable. The CCX was acquired by Intercontinental Exchange ("ICE") in April 2010. In August 2011, ICE announced that due to low trading volume on the CCX (attributable to the failure to pass federal cap and trade legislation), the exchange would operate through first quarter 2012 and then shut down. In their lawsuit, plaintiffs allege that they would not have purchased trading privileges on the CCX had they been aware that the privileges would ultimately not be marketable. To see a copy of the complaint, please click here.

DOE Reports That EPA’s New Air Pollution Rules Will Not Hinder Electricity Reliability

By Allison A. Torrence

The United States Department of Energy ("DOE") has issued a report titled "Resource Adequacy Implications of Forthcoming EPA Air Quality Regulations." The DOE report evaluates two United States Environmental Protection Agency ("EPA") regulations: (1) the Cross-State Air Pollution Rule ("CSAPR") and (2) the Mercury and Air Toxics Standards ("MATS").

The DOE report summarized the two rules as follows:

CSAPR creates multiple trading systems to control the emissions of NO_x and SO₂ from electric generators, and MATS imposes emissions rate standards on coal and oil-fired electric generators for mercury, acid gases and particulate matter. The trading systems for CSAPR begin in 2012, with the limits tightening for sources in some states in 2014. The first year of compliance for MATS is 2015, subject to potential extensions discussed in this report.

DOE concludes that looking at a stringent test case, which was more conservative than actual anticipated conditions, the overall supply-demand balance for electric power would be adequate following the implementation of CSAPR and the proposed MATS rules.

Criminal Charges Filed For Sale of Fake Renewal Energy Credits; NOVs Issued to Companies that Purchased Fake Credits

By Steven M. Siros

On October 3, 2011, Rodney Hailey, the Chief Executive Officer of Clean Green Fuels, LLC was charged with wire fraud, money laundering, and Clean Air Act violations for allegedly selling $9 million in fake renewable energy credits. According to the complaint, Hailey is alleged to have sold 32 million renewable energy identification numbers representing approximately 22 million gallons of biodiesel fuel. The credits were purchased by oil companies to demonstrate compliance with a provision in the Energy Independence and Security Act that requires these companies to either produce a specific quantity of renewable fuel or purchase renewable energy credits.

On November 7, 2011, U.S. EPA issued notices of violation to 24 companies that had purchased these invalid credits, noting that the use by these companies of invalid credits to demonstrate compliance was still a violation "regardless of that person's good faith that the [credits] were valid at the time they were acquired." U.S. EPA has ordered these 24 companies to submit revised corrected compliance reports within 14 days or face potential penalties of $37,500 per day. Please click here to go to U.S. EPA's website for more information on these notice of violations.

States and Private Industry Challenge EPA’s Cross-State Air Pollution Rule

By Allison A. Torrence

The states of Alabama, Florida, Kansas, Nebraska, Oklahoma, South Carolina, Texas and Virginia, along with several private companies, have sued the United States Environmental Protection Agency ("EPA") in federal court, seeking to halt implementation of EPA's Cross-State Air Pollution Rule ("Transport Rule"). The states and private companies have filed seven separate cases, which have been consolidated under the first-filed case, EME Homer City Generation, L.P. v. Envtl. Prot. Agency, No. 11-1302 (D.C. Cir. filed Aug. 23, 2011).

EPA Inspector General Releases Report on Greenhouse Gas Endangerment Finding

By Genevieve Essig

Yesterday, the U.S. EPA Office of Inspector General (OIG) released a report entitled "Procedural Review of EPA's Greenhouse Gases Endangerment Finding Data Quality Processes," which was conducted at the request of Sen. James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works. According to the report, the purpose of the review was "to determine whether EPA followed key federal Agency regulations and policies in obtaining, developing, and reviewing the technical data used to make and support its greenhouse gas endangerment finding," referring to EPA's "Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act," issued December 15, 2009. EPA had relied on assessments conducted by outside organizations, such as the U.S. Global Change Research Program (USGCRP) (f/k/a U.S. Climate Change Science Program (CCSP)), the Intergovernmental Panel on Climate Change (IPCC), and the National Research Council (NRC), as the primary scientific basis for its endangerment finding, summarizing the results and conclusions of those assessments in its technical support document (TSD) accompanying the finding.

Environmental Citizen Groups Have No Standing to Challenge Climate Change Impacts of Federal Actions

By Gabrielle Sigel

Two U.S. district courts recently issued separate decisions rejecting environmental groups' challenges to federal actions based on alleged climate change injuries. In both cases, using the same legal test, the courts found that the environmental groups did not have standing to pursue their claims against the federal agencies. This is an important development in climate change litigation, which in the past has addressed standing only in the tort context or regarding claims brought by States, not when private parties were challenging federal agency actions.

Climate Change Update for August 2011 Now Available

By Gabrielle Sigel

Jenner & Block's latest monthly Climate Change Update, for August 2011, is available on the Firm's website.

The Climate Change Update summarizes on a monthly basis important climate change legislative, litigation, regulatory and research developments. The August 2011 Climate Change Update includes a discussion of the Obama Administration's announcement of the first-ever GHG emission standards for medium/heavy-duty trucks and for other heavy-duty vehicles. The update also includes a discussion of important developments affecting the ability of environmental citizen groups to bring federal lawsuits challenging federal regulations based on alleged climate change injuries.

Insurer Not Responsible For Global Warming Claims

By Steven M. Siros

On September 16, 2011, the Virginia Supreme Court issued its long-awaited decision in The AES Corporation v. Steadfast Insurance Company.  In that decision, the Virginia Supreme Court agreed with the insurance company's argument that it had no obligation to provide coverage for claims relating to alleged damages caused by greenhouse gas emissions. 

In 2008, The AES Corporation ("AES") was sued by the Native Village of Kivalina and the City of Kivalina for damages related to global warming allegedly caused by AES' greenhouse gas emissions.  AES in turn requested that its insurance company, Steadfast Insurance Company ("Steadfast") defend and indemnify it with respect to these claims.  Steadfast filed a declaratory judgment action, contending that it owed no defense or indemnity on three grounds:  (1) the Kivalina complaint did not allege "property damage" caused by an "occurrence"; (2) any alleged injury arose prior to the inception of coverage; and (3) the claims alleged fell within the pollution exclusion in the Steadfast policies.

In granting Steadfast's request for declaratory relief, the Virginia Supreme Court relied on the policy's definition of "occurrence".  The court noted that the term "occurrence" was defined with reference to "an accident" which in turn has been held to refer to an incident that was unexpected from the viewpoint of the insured.  Because the Kivalina complaint alleges that AES intentionally released greenhouse gases, the Virginia Supreme Court concluded that the alleged release of greenhouse gases could not constitute an "occurrence" as that term was defined in the policies.  The court further noted that the Kivalina complaint alleged that AES "knew or should have known" that its activities in generating electricity would result in the environmental harms suffered by the plaintiffs.  Per the court, "if an insured knew or should have known that certain results would follow from his acts or omissions, there is no 'occurrence' within the meaning of a comprehensive general liability policy."  The court did not address the remaining two arguments raised by Steadfast. 

The Kivalina case itself remains pending in the Ninth Circuit and briefing on the impact of the Supreme Court's decision in AEP on that case is ongoing.