Environmental Regulation

The coronavirus (COVID-19) is placing businesses in situations where facilities have to be shut down, staff are sent home, laboratories that test monthly samples are temporarily closed, and contractors who normally conduct sampling or testing are not available. These circumstances create challenges for environmental regulatory/permit compliance. An update highlighting various ways that COVID-19 can adversely

The Supreme Court of California has granted review of two cases to resolve a split among courts of appeal over whether the issuance of well permits pursuant to state standards is subject to CEQA. California Water Impact Network v. County of San Luis Obispo and Protecting Our Water & Environmental Resources v. Stanislaus County.

At the forefront of these cases is whether the standards issued by the Department of Water Resources for well construction give local agencies any discretion when issuing well permits. Water is a critical resource in the state and with enactment of the Sustainable Groundwater Management Act in 2014, groundwater, particularly its sustainable withdrawal and quality, are issues receiving more attention. Consequently, the practice of ministerial approval of well construction permits by local agencies without discretionary environmental review have come under increasing scrutiny.

In both California Water Impact Network and Protecting Our Water & Environmental Resources, plaintiffs alleged that the counties’ practice of treating approval of well construction permits as a ministerial action results in hundreds of permits being issued each year without CEQA review. The plaintiffs assert that this practice, and the counties’ respective ordinances, violate CEQA because the state standards are not entirely objective, rather, they give the counties discretion to consider local environmental factors when issuing a permit. It is against this backdrop that the Court will consider both cases. The Court’s decision will likely affect how well construction permits are reviewed and issued by local agencies throughout the state.

Water Code Section 13801 requires local agencies to adopt the minimum standards established by DWR for well construction. These standards, in DWR Bulletins No. 74-81 and 74-90, provide guidance on well construction, location, surface features, seals, casing materials and so forth with the goal of preventing groundwater contamination and pollution. Stanislaus County’s well ordinance incorporates both DWR Bulletins, while San Luis Obispo County’s ordinance only incorporates DWR Bulletin 74-81, though in practice, the county also applies the standards in DWR Bulletin 74-90.
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The Council on Environmental Quality (CEQ) has issued a notice of proposed rulemaking regarding potential changes to the CEQ regulations under the National Environmental Policy Act. The proposed revisions to the CEQ regulations could potentially have far-reaching effects because NEPA requirements are largely defined in the regulations themselves, which have remained essentially unchanged for nearly

As reported in our prior Update, in a decision issued on January 22, the U.S. Supreme Court ruled in National Association of Manufacturers v. Department of Defense, 138 S. Ct. 617, that challenges to the Obama administration’s 2015 Clean Water Rule must be brought in federal district courts, rather than directly in the federal courts of appeals. The Court’s decision will likely prolong the ongoing litigation over the validity of the Rule.

Shortly after the Court’s decision, the Trump administration delayed the Rule’s applicability date for two years while it works on rulemakings to rescind and replace the Rule.
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The Clean Water Act requires a permit to discharge pollutants through pipes, ditches, and channels from an oyster hatchery, even though the facility would not be subject to the Act’s permitting requirements as a “concentrated aquatic animal production facility,” the U.S. Court of Appeals for the Ninth Circuit held in Olympic Forest Coalition v. Coast Seafoods Co., 884 F.3d 901 (9th Cir. 2018).
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A certified regulatory program, which is exempt from some of CEQA’s requirements, must still comply with CEQA’s core policies and standards, which include considering feasible alternatives and cumulative impacts and recirculating environmental review documents in certain circumstances, the court of appeal held in Pesticide Action Network North America v. California Department of Pesticide Regulation,

The Ninth Circuit Court of Appeals recently ruled that the anti-duplication provisions of the Resource Conservation and Recovery Act (RCRA) do not apply in the absence of a stormwater discharge permit issued under the Clean Water Act. Therefore, unregulated stormwater discharges are potentially subject to RCRA citizen suits and specifically imminent and substantial endangerment suits

Federal courts of appeal do not have original jurisdiction under the Clean Water Act to hear a challenge to EPA’s objection to a state’s draft water pollution discharge permit, the Ninth Circuit held in Southern California Alliance of Publicly Owned Treatment Works v. EPA, 853 F.3d 1076 (9th Cir. 2017).

The Clean Water Act

In a 2-1 decision, the Court of Appeal upheld the California Air Resources Board’s cap-and-trade program for greenhouse gas allowances. California Chamber of Commerce v. State Air Resources Board,  No. C075954 (3rd Dist., April 6, 2017). In upholding the validity of the auction used by the California Air Resources Board to distribute a portion of the greenhouse gas allowances auction, the opinion created an important new test for assessing whether the auction should be considered a tax. The majority found that the allowance auction was not compulsory and provided a valuable commodity to the purchaser, and thus was not a tax requiring supermajority approval under Proposition 13.

Background on CARB’s GHG Cap-and-Trade Program

In 2006, California enacted AB 32 with the goal of reducing greenhouse gas (GHG) emissions to 1990 levels by the year 2020. The California Air Resources Board (CARB) is the designated state agency charged with regulating sources of GHG emissions under AB 32. AB 32 directed CARB to adopt rules and regulations to achieve the maximum technologically feasible and cost-effective reductions in GHG emissions.

Smoking power plantPursuant to AB 32’s directives, CARB promulgated regulations that created a cap-and-trade-program. The program sets an aggregate emissions “cap” on covered entities and enforces the cap by issuing a limited number of allowances, the total value of which is equal to the cap. Covered entities must demonstrate compliance with the program by surrendering allowances that correspond to that entity’s emissions requirements.

Emissions allowances can be obtained in three ways: 1) Some allowances are distributed by CARB for free; 2) allowances are distributed by CARB through an auction; and 3) allowances can be obtained by trading on the secondary market.

CARB’s allowance auction takes place through a single round of sealed bidding, and winners pay the market clearing price. In 2012, the state legislature passed four bills specifying how the auction proceeds would be used to support the regulatory purposes of AB 32.

Several corporations and industry groups challenged the auction mechanism as exceeding CARB’s statutory authority under AB 32 and as an unconstitutional tax that violated the supermajority requirements of Proposition 13.
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