Recent Cases - Environmental

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California Chamber of Commerce, et al. v. California Air Resources Board, et al., Case No. C075930 (Cal. Ct. App. 3d. Dist., 2017).

On April 6, the California Court of Appeal for the Third District issued its long-awaited decision in the consolidated lawsuits challenging the greenhouse gas (“GHG”) emission allowance auctions, which are a key component of the California Air Resources Board’s (“CARB”) Cap-and-Trade Program.  The court held that CARB has the authority to establish the auctions and that they do not constitute an illegal tax.  The second holding is key and breaks new legal ground; it also was made over a strong dissent.  As the court put it, “the hallmarks of a tax are: 1) that it is compulsory; and 2) that the payor receives nothing of particular value for payment of the tax.”  (Op. at 5.)  The auction system is not a tax because 1) “the purchase of allowances is a voluntary decision driven by business judgments as to whether it is more beneficial to the company to make the purchase than to reduce emissions,” and 2) “the allowances are valuable, tradable commodities, conferring on the holder the privilege to pollute.”  (Id.)  This is a major victory for the Program and the State’s efforts to address climate change by reducing GHG emissions. However, there is a question whether the decision will stand.  There was a strong dissent, and the decision is sure to be appealed to the California Supreme Court.  Meanwhile, the Legislature is currently at work on crafting legislation aimed at determining how the existing ambitious emission reduction mandates will be met.  The court’s decision will factor into those critical legislative deliberations, which will resume later this month after the spring recess.
Continue Reading GHG Allowance Auctions are Not a Tax; Key Element of State’s Cap-and-Trade Program Upheld

In a recent trial in Los Angeles Superior Court in the matter AFS Enterprises, LLC, v. Reckitt Benckiser, PLC, Los Angeles Superior Court Case No. BC539678, the plaintiff brought a single claim under Proposition 65 (Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code sections 25249.1 et seq.) against the makers of Brasso, a brass polish, arguing that the manufacturer was obligated to provide a Proposition 65 warning for the product.  Proposition 65 requires manufacturers and retailers to provide warnings for products sold to California consumers if the products expose consumers to certain chemicals including lead.  Here, the plaintiff’s argument was unique.  Although Brasso itself does not contain lead, the plaintiff argued that a warning was nevertheless required because the polish, when used on certain brass surfaces, releases lead. The manufacturer argued that it should be exempt from the warning requirement because the amount of lead customers are exposed to when using the polish does not exceed the “Maximum Allowable Dose Level.”  The court, after weighing testimony of the various experts at trial, issued a Statement of Decision on May 12, 2016 wherein the court ultimately agreed that the manufacturer is not required to provide a Proposition 65 warning.
Continue Reading Los Angeles Superior Court Issues Important Defense Verdict In Unique Proposition 65 Trial Against Brass-Polish Manufacturer

Utility Air Regulatory Group v. EPA et al. 573 U.S. ____ (2014)

On June 23, 2014, the United States Supreme Court held that the Environmental Protection Agency (EPA) overstepped its authority under the Clean Air Act when it attempted to regulate greenhouse gas emissions from stationary sources not already subject to a permit controlling emissions of more conventional pollutants.  The Court reasoned the Act’s language did not compel the EPA to regulate greenhouse gas emissions from such sources and, further, that the EPA’s efforts to do so were incompatible with Congress’s intent.  The Court further held, however, that stationary sources that did need a permit for their emissions of conventional pollutants could be subject to further regulation for emitting greenhouse gases.  This holding likely means the greenhouse gas emissions of many hotels, offices, residential buildings, retail establishments, and similar facilities will remain immune to the Clean Air Act’s permit requirements because such sources do not typically emit conventional pollutants at sufficient levels to require a permit.  Conversely, stationary sources that are required to get a permit for emitting conventional pollutants likely will also be subject to EPA regulation regarding their greenhouse gas emissions.Continue Reading Only When a Permit is Required: The Supreme Court Caps the EPA’s Authority to Regulate Greenhouse Gas Emissions from Stationary Sources

On October 15, 2013, the United States Supreme Court granted certiorari to review six of the nine submitted petitions stemming from an appellate court ruling upholding Environmental Protection Agency (“EPA”) greenhouse gas (“GHG”) controls at utilities, factories and other facilities around the country.  Specifically, the challenged appellate ruling from the Court of Appeals for the District of Columbia Circuit unanimously upheld EPA’s GHG emission endangerment findings, rebuffed challenges to the EPA’s tailpipe rule for automobile emissions and its applicability to stationary sources, and determined the EPA was “unambiguously correct” in using existing federal law to address global warming.  However, the Supreme Court’s review will be more limited than some petitioners sought and should not jeopardize the Obama administration’s larger climate-change agenda.
Continue Reading Supreme Court Grants Limited Review of GHG Emissions Regulations

Association of Irritated Residents v. California Air Resources Board et al., A132165 (1st  Dist. Div. 3, June 19, 2012)

By Randolph Visser and Whitney Hodges

On June 19, 2012, the California First District Court of Appeal upheld the California Air Resources Board’s (“ARB”) Climate Change Scoping Plan (“Scoping Plan”), which charts dozens of climate change control measures. This ruling clears the way for ARB to move forward with its designated plan to combat greenhouse gas (“GhG”) emissions with a market-based cap-and-trade program. The decision also found the Scoping Plan to be in compliance with the 2006 California Global Warming Solutions Act, also known as AB 32, which required ARB to prepare a scoping plan to reduce GhG emissions to 1990 levels by the end of 2020. A ruling against ARB could have forced ARB to revise the Scoping Plan and freeze implementation of its GhG regulations.Continue Reading California Appellate Court Greenlights Air Resources Board’s Cap-And-Trade Program [1]

By Heather Plocky and Olivier Theard

California’s effort to reduce the carbon footprint of producers and refiners of fuel has hit a snag. Shortly after the passage of the Global Warming Solutions Act (AB32), requiring reduction of greenhouse gases to 1990 levels by 2020, former California Governor Arnold Schwarzenegger signed an Executive Order setting a statewide goal of reducing "the carbon intensity of California’s transportation fuels by at least 10 percent by 2020." Pursuant to this Executive Order, the California Air Resource Board (ARB) adopted the Low Carbon Fuel Standard (LCFS) in June 2007 as an early action measure under AB32. In April 2010, the regulation was formally adopted. On December 29, 2011, District Judge Lawrence O’Neill in the Eastern District of California issued a preliminary injunction blocking ARB from implementing LCFS.Continue Reading Enforcement of California Low-Carbon Fuel Standard Blocked

American Electric Power Co., Inc. v. Connecticut (June 20, 2011, No. 10-174) __ U.S. __

By Robyn Christo & Micah Bobo

In the battle over climate change, the Supreme Court once again set an important precedent in American Electric Power Co., Inc. v. Connecticut (“American Electric Power”). In an 8-0 decision written by Justice Ginsburg (Justice Sotomayor recused herself, presumably because she heard the matter while sitting on the Second Circuit), the Court held that Congress’s delegation of the power to regulate greenhouse gasses to the Environmental Protection Agency (“EPA”), "displaces federal common law" relating to the abatement of carbon dioxide ("CO2") emissions.Continue Reading Carbon Dioxide Emissions Not Subject to Federal Common Law Nuisance Claims

By Randolph C. Visser and Whitney Hodges

Until recently, Association of Irritated Residents v. California Air Resources Board proceeded along the litigation path as smoothly as any environmental challenge might. However, things took an unexpected twist last week that has left unanswered questions and many spectators baffled.Continue Reading Superior Court’s Injunction Preventing California’s Cap and Trade Program Has Been Stayed…Right?

Natural Resources Defense Council v. Los Angeles County, United States Court of Appeals for the Ninth Circuit, Case No. 10-56017 (March 10, 2011)

By Elizabeth Anderson

The Ninth Circuit Court of Appeals held that environmental groups were entitled to summary judgment after presenting evidence that the Los Angeles County Flood Control District ("District") had illegally discharged polluted stormwater into the Los Angeles River and San Gabriel River in violation of the federal Clean Water Act. The District has argued that the evidence did not show it was the source of the pollutants, only that it conveyed polluted stormwater. The Ninth Circuit rejected this argument and decided summary judgment was appropriate because monitoring stations located in a section of the municipal separate storm sewer system ("MS4") owned and operated by the District detected pollutants in excess of the limits set forth in the District’s National Pollutant Discharge Elimination System permit ("Permit") and, after the polluted stormwater passes through these monitoring stations, it was discharged into the two rivers, causing or contributing to exceedances of water quality standards.Continue Reading Municipalities Are Responsible For Discharges Of Stormwater Regardless Of The Ultimate Source Of Pollution