Great Lakes Law

Water access and shut-offs in Detroit: a legal analysis – guest post by Matthew Clark

Water affordability and access is a complex and contentious issue, even in regions that enjoy a relative abundance of freshwater. Widespread poverty, state tax policy, and years of infrastructure underinvestment have made water shut-offs a pressing challenge in Detroit. This guest post by Matthew Clark summarizes the legal issues and offers some suggestions for policy reform. Matt will be graduating from Wayne Law this spring, and his experience includes clerking with a local law firm, practicing as a student attorney with the Michigan Unemployment Insurance Project, and interning with the Sugar Law Center for Economic & Social Justice in Detroit. Prior to law school, Matthew worked for U.S. Senator Carl Levin. Matthew has assisted the Great Lakes Environmental Law Center through Wayne Law’s Transnational Environmental Law Clinic on many issues, including water affordability in Detroit, and has authored a research paper examining the legal issues and opportunities for policy reform.

Detroit, the largest city in a state surrounded by the world’s largest body of fresh water, faces a dire crisis of water access. Every year, tens of thousands of Detroit residents face water shut-offs in their homes because they cannot pay their bills. My research paper details the legal aspects of this crisis, as well as prospective solutions. Ultimately, a solution must come from the political process, not the courts. However, any solution must successfully navigate the law, which presents substantial challenges.

From the international to the local, the law provides no enforceable right to water access for those who cannot afford it. International law recognizes a human right to water but provides no binding enforcement mechanism. Federal law does not provide a right to access, or protection against shut-offs. Furthermore, Michigan law explicitly authorizes local units of government to shut off water services to residents delinquent in paying their bills, regardless of poverty or other hardships. This authorization was upheld by the Michigan Supreme Court in Ripperger v. City of Grand Rapids, 338 Mich. 682 (1954).

A solution must therefore come from the political process, and the state and local arenas present the most potential in this regard. Michigan could emulate Massachusetts, for instance, which provides substantial protection against shut-offs for households facing hardships. Detroit can also implement its own local solution. In fact, the city already approved the comprehensive Detroit Water Affordability Plan seven years ago. If implemented, this plan would subsidize low-income household water bills down to an “affordable burden,” so that they constitute no more than 2-3 percent of household income. To pay for these subsidies, the plan would impose an additional charge to each Detroit customer’s monthly water bill, ranging from $1 for residential customers to $275 for industrial customers.

The Detroit Water and Sewerage Department has refused to implement this plan. But even if implemented, the plan would face two principal legal challenges. The first is whether imposing extra costs on ratepayers to subsidize an economically poor class would violate DWSD’s duty, under Michigan law, to set water rates at a reasonable level that is not undue or excessive. This legal standard is largely undefined, and the issue is one of first impression in Michigan. However, other state judiciaries have dealt with the issue. States are split in how narrowly to construe what constitutes an unduly discriminatory utility rate. A narrow construction strikes down any plan that subsidizes one ratepayer class at the expense of another, absent explicit legislative authorization to do so. In contrast, a relaxed construction allows subsidized rates for disadvantaged classes, provided that the plan’s cost is not excessive, the subsidized class is sufficiently narrow, and similar factors are adequately balanced. It is unclear how Michigan courts would construe the “unreasonable, undue, and excessive” standard. However, the less the plan costs, and the narrower its subsidized class, the greater the chance it will pass judicial scrutiny.

The second legal challenge is whether the Plan would violate the Headlee Amendment to the Michigan Constitution, Art. IX, Sec. 31. The Headlee Amendment prohibits local government from raising taxes on its citizens above that already authorized by law, absent voter approval. The Headlee Amendment prohibits taxes, but not fees. Though the distinction between the two is not always clear-cut, taxes tend to serve a revenue-raising purpose, are out of proportion to the necessary cost of the service rendered, and are involuntary. Fees, in contrast, tend to serve a regulatory purpose, are proportionate to the service cost, and are more voluntary.

In this case, the Water Affordability Plan’s per-customer charges would likely be closer to a tax than a fee, and would thus not survive a Headlee Amendment challenge. The charges explicitly raise revenue solely for the subsidized class of customers, and not for a general regulatory purpose. For this same reason, the charges would not be proportionate to the general service rendered to ratepayers. Finally, paying the charge would not be voluntary; customers cannot realistically forego water services from DWSD. All of this points to the charge being a tax. A more unorthodox analysis, in contrast, would view the charge in context of the entire water bill, rather than in its separateness. Under this analysis, the plan’s relatively slight water bill increase would be a valid regulatory action under Detroit’s general police powers to promote the health, safety, and general welfare of its residents. The more typical Headlee Amendment analysis, however, views charges in their separateness. In any case, this challenge could be sidestepped by funding the plan through general volumetric water rate increases, rather than separate per-customer charges. 

Ohio Supreme Court draws a dividing line on the scope of the public trust doctrine - Guest post by Professor Ken Kilbert

The Ohio Supreme Court this week issued its decision in State ex rel. Merrill v. Ohio Department of Natural Resources, holding that the public has no right to use the shore of Lake Erie above the “natural shoreline.” Professor Ken Kilbert, Director of the Legal Institute of the Great Lakes at the University of Toledo College of Law, has followed the case closely and published a comprehensive article on this issue, “The Public Trust Doctrine and the Great Lakes Shores,” 58 Clev. St. L. Rev. 1 (2010) (available free online through SSRN). His previous Great Lakes Law guest posts analyzed the lower court’s decision and previewed the Supreme Court case based on oral arguments. Ken once again offers his insights and analysis of the Ohio Supreme Court’s decision.

The Ohio Supreme Court this week ruled that the public has no right to use the shore of Lake Erie above the “natural shoreline,” which it defined as the line at which water usually stands when free from disturbing causes. The Court in State ex rel. Merrill v. Ohio Department of Natural Resources also decided that same line represents the boundary between privately owned uplands and the state-owned lakebed.

The unanimous 7-0 decision is a blow to lakefront property owners because it reversed aspects of earlier decisions in this case by lower Ohio courts which had drawn the boundary line for purposes of the public trust and state ownership at the water’s edge as it exists moment to moment. However, the Court also rejected the argument advocated by other parties in the case, the State and two environmental groups, that the boundary should be the ordinary high water mark (OHWM). In the aftermath of the Court’s opinion, both sides in the case seem to be declaring victory.

While the Court explained that neither the water’s edge nor the OHWM is the boundary, the opinion did not explain where “the line at which water usually stands when free from disturbing causes” exists on the shore. Fleshing out the meaning of that phrase, and the location of the boundary line, apparently will be left to future court opinions and/or future Ohio Department of Natural Resources (ODNR) regulations.

The Merrill case was begun in 2004 by a group of lakefront property owners in response to ODNR’s position that the state owned the shore up to the OHWM and the owners must obtain leases from the state for certain uses of the shore below the OHWM. (ODNR subsequently abandoned that position, leading the court of appeals to rule that the Ohio Attorney General lacked standing to pursue the appeal on behalf of the State, a ruling that the Supreme Court reversed.) Although the case began as a dispute over title, also at issue was the public’s right to use the Lake Erie shore. Pursuant to the public trust doctrine, the public has a right to use land and water within the public trust for certain important purposes, including boating and fishing. It is undisputed that Lake Erie and the lakebed are owned by the state and are subject to the public trust. The Merrill case involved questions of how far state ownership and the public trust extend up the Lake Erie shore and, secondarily, whether walking the shore is a protected use.

The Lake County Court of Common Pleas and the Ohio Court of Appeals for the 11th District had ruled that the public has no right to use the Lake Erie shore above the water’s edge; the public has a right to walk along the shore, but only to the extent they keep their feet wet by staying on state-owned lakebed (see this previous guest for more on the court of appeals decision). The Ohio Supreme Court did not expressly discuss the public’s right to walk along the shore, but it did hold that the territory held in trust by the state does not extend landward beyond the “natural shoreline” as it defined the term, meaning that the public has no right to use the privately owned shore above that natural shoreline. The Court held that the lakefront property owners have no title lakeward of that same natural shoreline.

Although the Court of Appeals had called the case one of “first impression,” the Supreme Court emphasized that its decision regarding the boundary of the public trust along the shore of Lake Erie was merely a reiteration of law settled in an 1878 Ohio Supreme Court case, which was clarified in a 1916 Court case and codified by a state statute in 1917.

The Merrill decision sharply contrasts with the 2005 decision by the Michigan Supreme Court in Glass v. Goeckel, which held that the public trust extends to the OHWM along the Michigan shores of the Great Lakes. The Glass Court ruled that the public has a right to walk along even privately owned shores up to the OHWM in Michigan.

I respectfully disagree with the Merrill opinion, at least regarding the public trust. The boundary of the public trust was not at issue in the 1878 case or any subsequent Ohio Supreme Court case, and Ohio Rev. Code §§ 1506.10 & .11 were not intended to modify the geographic scope of the public trust. Further, the Court erred in assuming that the boundary for title must be the same as the boundary for the public trust. Rather, in my view, the shores of Lake Erie passed to the State of Ohio up to the OHWM at the time Ohio became a state, and the State has never clearly relinquished the public trust in the shores of Lake Erie below the OHWM, so the public should have a right to walk along the Ohio shore of Lake Erie up to the OHWM. See Kenneth Kilbert, The Public Trust Doctrine and the Great Lakes Shores, 58 Clev. St. L. Rev. 1 (2010) (available free online through SSRN).

The Merrill case and its implications will be the topic of a panel discussion, featuring attorneys from both sides of the case, at the annual Great Lakes Water Conference on November 4 at the University of Toledo College of Law.

The U.S. Fuel Economy Standard “Deal” – Guest Post by Professor Brandon Hofmeister, Part 2

Energy law expert Professor Brandon Hofmeister of Wayne Law continues his guest post on the Obama Administration’s announced agreement on consensus fuel economy standards for U.S. cars and light trucks. For background on Professor Hofmeister and the first part of his analysis, see the prior post.

Auto Politics

Some have suggested that the reason the auto industry agreed to a fairly high standard for fuel economy was that they didn’t want to aggressively pick a fight with the administration so soon after the taxpayer funded bailouts.  I wasn’t privy to any of the negotiations, so all of this is pure speculation, but I’m not so sure that was the case.  The auto industry clearly was willing to run attack ads and rile up the Michigan congressional delegation against a 56.2 mpg standard by 2025.  But less than a week later, they agreed to a standard of 54.5 mpg by 2025. 

What explains the politics of the deal?  My guess it’s less the auto industry’s reluctance to lobby or fight the administration so soon after bailouts, and more the lack of leverage they had in the “negotiation.” The Obama administration and the State of California held most of the cards in this rulemaking process, and the auto industry really, really wants a uniform U.S. standard. The fact that California agreed to issue identical standards was crucial to the automakers. The inefficiency for their global production and delivery system of potentially having a patchwork of states around the country with different fuel economy standards is a bigger problem for their business than having slightly stricter standards. And the autos could likely use the Obama administration to talk the California regulators down a bit from even bigger fuel economy aspirations. The autos also got a potential offramp to the regulations if in another decade they truly prove to be “not feasible” – which was probably the concession that closed the deal.

The auto industry’s main leverage was political pressure and the threat of litigation. Ultimately, I think the auto industry, like many industries, ultimately preferred regulatory certainty to waging a political or legal fight – even if it meant agreeing to standards that were more aggressive than they’d otherwise prefer. The same is probably true of the electricity industry when it comes to greenhouse gas regulatory uncertainty.  Maybe this desire for certainty could open the door to another sector-specific climate policy after the 2012 elections.

Note that the German automakers – Volkswagen and Daimler – didn’t sign on to the agreement.  They are publicly claiming that the light truck standards disproportionately helped the U.S. automakers, but at least one industry watcher is suggesting that might not be their true motivation. I don’t buy the conspiracy theory that the Germans are carrying the water for foreign oil interests, but their opposition does raise a question.   Will they consider litigation to enjoin the standards?  Do they have a cause of action?  I doubt they will sue, but if they do, their best chance might be a procedural suit.  This could give a new administration the chance to rewrite the rules. Though it’s not clear those hypothetical standards would be any better for the Germans – they could be worse.

The Administrative Process

Darrell Issa, Chairman of the House Committee on Oversight and Reform, intends to hold hearings on the process leading to the deal. I doubt Issa is motivated by a desire to uphold the sanctity of the administrative process, but regardless, these hearings should be of interest to those who study administrative law.  According to news reports, he has informed the major automakers to hold on to all of their documents related to fuel efficiency deal.  Issa’s argument is that the deal is invalid because it was reached through a process that did not meet the requirements of the Administrative Procedure Act (not to mention NEPA – though Issa has not mentioned NEPA in the public statements I’ve seen).  No doubt the Obama administration’s answer will be that no “final” rule has been issued and it will still be going through the traditional rulemaking requirements of notice and comment, NEPA environmental review, etc.  That technical answer seems to be just that – a formalistic technicality.  The President’s remarks on the deal on July 29th don’t include any lawyerly caveats about the deal being subject to the notice and comment process.  His remarks imply heavily that the deal is done. 

This process for reaching a “deal” seems to make notice and comment and the requirements of the APA an empty formality.  Is this something we need to worry about?  If you support the substance of the deal, do the ends justify the means?

Proponents of strong executive action, like Justice Elena Kagan, may argue that strong Presidential direction of agency policymaking serves fundamental administrative law values like accountability, transparency, and effectiveness.  Others might believe that the procedural protections provided by the APA are both important in and of themselves and help make substantive procedures even stronger by ensuring they are subject to a thorough, transparent, public vetting before being enacted. 

The statutory standard for CAFE standards in the 1975 Energy Policy Conservation Act is the “maximum feasible level,” considering four factors: 

1. technological feasibility;
2. economic practicability;
3. effect of other standards on fuel economy; and
4. need of the nation to conserve energy.

While there is certainly some technocratic expertise that is relevant to such factors as “technological feasibility,” maybe it’s good that the White House is weighing in directly on such other factors as “economic practicability” and the “need of the nation to conserve energy.”  These seem to be broad level policy decisions that might be better determined by the more politically sensitive White House than agency staff. 

I’m not sure how I come down here.  I think this particular process probably led to decent public policy.  For major rulemakings, I do think it’s appropriate and realistic that the White House will play a key role in guiding public policy in the White House’s conception of the public interest.  But should they be cutting deals before the notice and comment even begins?  I’m not so sure.  It will be interesting to see what, if anything, OIRA administrator and regulatory scholar Cass Sunstein has to say about the process leading to the CAFE agreement.

Auto Jobs

Contrary to the overly simplistic notion that any regulatory interference with the free market is a “job killer,” the fuel economy standards are good news for the “knowledge economy” portion of the auto industry – designers and engineers. It was interesting to see the UAW refer to the new fuel economy standards as “job producers.” The union cosponsored a report with the NRDC which suggested that new standards could create almost 200,000 jobs by 2020.  As the report points out, these jobs don’t necessarily need to be in the U.S.  They could be in Europe or Asia or anywhere really. Given the EU’s slightly more aggressive fuel economy standards, it is possible that the fuel economy solutions may be engineered in Europe and exported to the U.S.

I don’t think that will ultimately be the case, however.  The fuel economy standards are likely to be good news for the battered economy of Michigan. Despite the loss of thousands of manufacturing jobs in the last decade, Michigan remains the intellectual home of the global auto industry – whether it’s the U.S. automakers, foreign automakers like Nissan, Hynundai, Mitsubishi, and Toyota that have North American research and design facilities in Michigan, or the hundreds of automotive suppliers who develop a lot of the fuel saving technologies in Michigan. The American automakers are all making moves to consolidate their global production platforms to become more efficient, which is likely to result in more consolidations of engineering jobs around Detroit.

Thanks to the leadership of Governor Jennifer Granholm, Michigan is also home to a burgeoning advanced battery industry, which is critical for hybridizing and electrifying more of the automotive fleet to meet the 2025 fuel economy standards.  Just this past week President Obama visited one of the over 30 companies that have recently made investments in the advanced battery value chain in Michigan to highlight this growing industry. Finally, Dow Chemical is becoming a leader in developing lower-cost carbon fiber composites, which may eventually play a role in light weight and fuel efficient vehicles. 

Predicting that job creation will occur in any place because of one single factor is a risky proposition. The global economy moves too fast and reacts to too many variables to be simplified in that manner. But on the whole, I agree with the UAW/NRDC report that the fuel economy standards will make it more likely that we’ll see more automotive engineering jobs, particularly in Michigan.

The U.S. Fuel Economy Standard “Deal” – Guest Post by Professor Brandon Hofmeister

Buried in the national news about the debt ceiling fiasco during the last week of July was an announcement that the Obama Administration had reached an agreement with the State of California and a number of automakers on consensus fuel economy standards for U.S. cars and light trucks. These new standards will cover cars and light trucks for Model Years 2017-2025, requiring performance equivalent to 54.5 mpg in 2025. As Professor Brandon Hofmeister writes in this two-part guest post series, the fuel economy deal is a major policy development with implications for reducing greenhouse gas emissions, the future of the automotive industry, and executive agency practice for implementing federal statutes. Today’s post will provide some background on the issue, explain why the future of climate policy is in sector specific regulation, and address some of the questions surrounding the effectiveness of automobile fuel economy standards. The next post will cover the auto politics behind the deal, the administrative process issues that are being raised in Congress, and the implications for auto sector jobs.

Professor Brandon Hofmeister teaches Energy Law, Civil Procedure and The Regulatory State at Wayne State University Law School. He most recently served as special counsel for energy and climate policy in the office of Michigan Governor Jennifer Granholm. In that capacity, he was the governor’s primary adviser on energy and climate issues, and a member of her nine-person executive team. He was a key member of the team that formulated and executed Gov. Granholm's successful strategy to attract the electric vehicle and advanced battery industry to Michigan. He also served as a Chevening fellow (University of Edinburgh), working alongside energy policy decision-makers from countries around the world. Earlier, he was deputy legal counsel to Governor Granholm, and a law clerk to U.S. District Judge John Corbett O’Meara. He earned a J.D. from Harvard Law School and an A.B. from Harvard College. Professor Hofmeister’s most recent publication was "Bridging the Gap: Using Social Psychology to Design Market Interventions to Overcome the Energy Efficiency Gap in Residential Energy Markets," 19 Southeastern Environmental Law Journal 1 (2010) (available online through SSRN).

The Future of Climate Policy – Sector Specific Regulation

When the Clinton White House couldn’t get a universal coverage health care bill passed early in their first term, they decided to instead chip away at covering the uninsured in an incremental fashion.  So, for example, they targeted poor children - a relatively easy first step - and passed a major federal block grant program to provide health care for poor children. 

Given the current political atmosphere, there seems to be almost no hope for a comprehensive economy-wide climate regulatory policy in the short-term, and little hope even in the medium- or long-term.  Accordingly, the way to move the ball down the field on climate policy is likely going to be an incremental approach that targets specific sectors. While a national greenhouse gas regulatory scheme would potentially be more efficient and more effective overall, we don’t necessarily need a national cap-and-trade program to make progress on mitigating climate risk.  We’re living in a world of second (or third or fourth) best solutions to the climate change problem. 

The fuel economy standards are a case in point.  They didn’t require legislation – so they are relatively low-hanging fruit for the administration’s climate goals.  These standards will likely have a bigger impact on greenhouse gas emissions from automobiles in the next decade than any slight increase in fuel prices resulting from a gradual cap-and-trade program might have.  According to the White House talking points, “[t]he standards will reduce carbon dioxide pollution by over 6 billion metric tons – equivalent to the emissions from the United States last year, or what the Amazon rainforest absorbs in three years.” This is a big step forward in climate mitigation.

The Effectiveness of Automobile Fuel Economy Standards

The new U.S. standards are not quite as aggressive as the 2009 standards adopted by the European Union. Regulation 443/2009/EC established fleet-wide carbon dioxide emission limits of 130 g/km (or 209 g/mile) by 2015 and 95 g/km (153 g/mile) by 2020.   These are more aggressive than the U.S. targets of 250 g/mile by Model Year 2016 (summer of 2015) and 167 g/mile by 2025, but I still think they will make for a massive transformation in the U.S. passenger vehicle fleet and a significant reduction in greenhouse gas emissions.

That is, of course, if the proponents of the so-called “rebound effect” are wrong about its application to automobiles.  What’s the rebound effect, you say?  Well, I’m not exactly sure how the Obama Administration calculated its greenhouse gas savings estimates, but I imagine they include an assumption that vehicle miles travelled will not increase significantly over the next 15 years.   Proponents of the rebound effect suggest that this assumption is faulty – that if we make it cheaper to drive our cars, we will simply drive more and thereby offset any savings in emissions reduced. The hypothesis has some intuitive appeal, but it has been incredibly difficult to test its validity.  My own take is that there’s probably some degree of rebound effect that results from efficiency standards, but the key is what the degree of the effect is.  I don’t think there’s a linear relationship such that every ounce of fuel saved will simply be replaced by increased consumption.  My guess is that the more important limitation on vehicle miles travelled is the speed limit – people simply don’t want to be stuck in a car for hours on end even if they can drive twice as far on the same amount of fuel.  Maybe the increase in fuel economy standards over the next decade will give some smart economics graduate students a data set to test the applicability of the effect.  There are a lot of variables involved, but some good research here would be quite useful to all of us who believe energy efficiency is a critical component to sound energy and climate policy.

Some have also criticized the new standards because “extra credits” for hybrids and electric vehicles will likely chip away at the overall mpg figures – possibly getting down to as low as 40 mpg on average. I’m less concerned with this because I’m a strong supporter of giving auto companies incentives to build electric vehicles. If we are going to meet the massive reductions in greenhouse gasses that many scientists are recommending (80% reduction by 2050), I don’t see any way to get there without almost completely de-carbonizing passenger transportation. There are likely to be continued emissions from land use changes, agriculture, heavy industry, etc. So we need to simultaneously reduce emissions in both the transportation and electricity-generating sectors. I think the most feasible way (note – I’m not saying it’s easy or inexpensive) to decarbonize transportation is to electrify the passenger vehicle and gradually decarbonize the electricity sector. So to help reach this long-run objective, I’m OK with giving auto companies incentives to electrify more of their vehicles, even if it comes at the cost of shorter term fuel economy. Hopefully increasing EV scale can drive down the price of batteries that are the biggest long-term barrier to vehicle electrification.

In the next post, Professor Hofmeister continues his analysis of the fuel economy deal, looking at auto politics, administrative process, and auto jobs implications.

Alternative Strategies for managing pharmaceutical and personal care products in water resources – Guest Post by Gabriel Eckstein

The following guest post is by Gabriel Eckstein, a professor of law at Texas Wesleyan University. Prof. Eckstein is also the Director of the International Water Law Project and a Senior Fellow with the Texas Tech Center for Water Law & Policy. He and George William Sherk recently published an EPA-funded study entitled “Alternative Strategies for Managing Pharmaceutical and Personal Care Products in Water Resources.” The study is available on the Micropollutants Clearinghouse website, a great resource for data, articles, and reports about PPCPs in drinking water systems across the country.

What’s in your water? Researchers have known for more than 40 years that pharmaceuticals and personal care products (PPCPs) – such as antibiotics, prescription and over the counter drugs, steroids, reproductive hormones, fragrances, soaps, and thousands of other products – can end up in our drinking waters (see the Micropollutants Clearinghouse to view thousands of studies, articles, and reports about PPCPs in drinking water). Studies done over the past several decades have indicated that these contaminants can be found in both surface and ground waters throughout the United States (as well as most other countries). This has raised serious concerns stemming from the possibility that the presence of these PPCPs may pose a threat both to human and environmental health, either through direct exposure (e.g., contact with endocrine disrupting compounds) or indirect consequences (e.g., emergence of antibiotic resistant bacteria). The water treatment and wastewater treatment communities have been especially concerned over PPCPs because of their ubiquitous nature and ability to persist or only partially degrade in water or during the wastewater treatment process.

Sources of PPCPs include human & animal feces and urine, hospital/medical wastes, wastes from industrial and agricultural processes, pharmaceuticals and personal care products that are disposed of inappropriately, urban runoff, and leachate from landfills. These contaminants are rarely treated or removed in the wastewater treatment process and typically remain in waters discharged from wastewater treatment plants into receiving streams and lakes, as well as in solid and liquid wastes applied to lands designated as application sites.

What have we done about PPCPs in our water? Not much, though not because of a lack of effort. The legal system (at least in the United States) was never meant to deal with micropollutants on this scale. For example, while common law remedies like trespass, nuisance, negligence, and strict liability may be applicable to concerns over PPCPs in water supplies, they rely on litigation, an all-to-often expensive, time consuming, and very case-specific process. Moreover, success in litigation requires plaintiffs to prove causation – which manufacturer produced the PPCP involved in the suit, and which PPCPs resulted in the harm alleged in the suit – hurdles that may be difficult to overcome.

An alternative to common law remedies might be found under federal statutory regimes including the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, Toxic Substance Control Act, and Endangered Species Act. While these strategies may be relevant and important, their implementation also can be expensive and politically complicated. Moreover, none of these schemes specifically address PPCPs and none are singularly applicable to (let alone capable of managing) the thousands of different pharmaceuticals and personal care products introduced into our water systems every year.

A more effective route for responding to PPCPs in drinking water supplies may be to focus on alternative strategies that focus on removing (or limiting the presence of) PPCPs at the source. In the case of pharmaceuticals, alternative strategies might include:

• Designing drugs and personal care products that minimize the human and animal excretion of wastes, which would then minimize the volume of PPCPs that enter the water system;
• Changing the delivery mechanisms by better informing doctors and patients about the effects of PPCPs on the environment, and educating doctors and other professionals on how to individualize or tailor doses to the individual user rather than prescribing the manufacturers’ recommended dose;
• Informing users on how to dispose of unused drugs and personal care products and producing a variety of package sizes to reduce the amount of unused drugs;
• Developing more disciplined dispensing and inventory control protocols to reduce disposal of unused drugs, such as through limits on Internet sales and tying drug dispensing of the necessary quantity to the drug’s expiration date (i.e., minimize drug expiration before the course of treatment is completed);
• Encouraging states or manufacturers of PPCPs to develop take-back arrangements and appropriate disposal/recycling programs; and
• Developing nutrition and health maintenance programs that reduce illness and the need for PPCPs, as well as the use of alternative products that do not contain PPCPs, such as probiotics.

The issue of PPCPs in water supplies is a complex problem that will require more than one simple solution. Yes, it will require monitoring and regulating the PPCPs that do enter the water supply, new monitoring, detection, and analysis methods, and new drinking water treatment processes. Yet, to successfully limit the presence of these contaminants in our drinking water, it will also require a reduction in the sources of PPCPs. This reduction will be achieved only through a combination of technological and industry fixes as well as regulatory and statutory mechanisms.

(Note: Another complimentary strategy to address this problem is being pursued by the Great Lakes Environmental Law Center. Working with NRDC, GLELC filed a petition last year with the Food and Drug Administration to close a regulatory loophole that allows pharmaceutical drugs to be approved without considering their impacts on drinking water. For more info, see this previous post.) 

Landmark public trust decision from the Wisconsin Supreme Court – Guest Post by Melissa Scanlan

The following guest post is by Melissa Scanlan, a legal expert who has spent over a decade working to protect the waters of her home state of Wisconsin. Much of her scholarship and advocacy has focused on the public trust doctrine and its role in state water management. For more info about Melissa, see her previous Great Lakes Law guest post.  

When Nestle-Perrier tried to set up a spring water pumping and bottling plant in Wisconsin in 2000, I was part of the legal team that argued the DNR had a duty under the public trust doctrine and Wis. Stat. § 281 to consider the impact pumping groundwater has on navigable waters. The DNR countered that it was limited by the high capacity well statute to only consider the impacts outlined in that statute, which did not include impacts to the nearby surface waters. Because my clients won the case on other grounds, the Wisconsin courts never resolved this legal question in a published decision.

That is, until July 6, 2011, when the Wisconsin Supreme Court decided in favor of upholding constitutionally-based public trust protections for navigable waters. 

The issue came before the court with different facts and different litigants than the Perrier case, arising out of a contested high-capacity well permit sought by the Village of East Troy near Lake Beulah. In Lake Beulah Management Dist., et. al. v. Wisconsin DNR, et. al., 2011 WI 54 (Wis. 2011), the DNR argued that it did have a duty to consider impacts to surface waters when issuing a high capacity groundwater well permit, based on the public trust doctrine and its general duty to protect all waters of the state in Wis. Stat. § 281.11 and § 281.12.

In its published opinion, the Supreme Court begins its legal analysis by underscoring that the public trust doctrine is a “fundamental tenet” of Wisconsin’s Constitution that should be broadly construed to protect public rights in navigable waters. “This court has long confirmed the ongoing strength and vitality of the State’s duty under the public trust doctrine to protect our valuable water resources.” The Court emphasized the legislature’s express delegation of authority to the DNR to carry out the “state’s affirmative obligations as trustee of the navigable waters….” (Lake Beulah Management Dist. ¶30-33.)

The Court concluded that the legislature accomplished this delegation through Wis. Stat. § 281.11 and § 281.12. In pertinent part, those statutes require that the DNR “shall serve as the central unit of state government to protect, maintain and improve the quality and management of the waters of the state, ground and surface, public and private.” The legislature empowered the DNR to enact a “comprehensive action program directed at all present and potential sources of water pollution . . . to protect human life and health, fish and aquatic life, scenic and ecological values and domestic, municipal, recreational, industrial, agricultural and other uses of water.” And, finally, the legislature expressly conferred on the DNR “necessary powers” to organize a “comprehensive program under a single state agency for the enhancement of the quality management and protection of all waters of the state, ground and surface, public and private.”

Rather than read the high capacity well statute in isolation and in a manner that put on blinders to the potential impact on the state’s public trust waters, the court held that the DNR has “the authority and a general duty to consider potential environmental harm to waters of the state when reviewing a high capacity well permit application.” (Lake Beulah Management Dist. ¶44.)

However, the duty is not one that requires the DNR to initiate a scientific investigation of environmental impacts on every high capacity well permit. Rather, the DNR “must consider the environmental impact of a proposed high capacity well when presented with sufficient concrete, scientific evidence of potential harm to waters of the state.” (Lake Beulah Management Dist. ¶4, 46.)  In this case, the Court held, due to an apparent misfiling of a scientific affidavit, which resulted in it not being part of the administrative record, that the duty had not been triggered. (See id. ¶6.) 

Yet, the Wisconsin Supreme Court delivered a resounding message in support of sound management of Wisconsin water resources that integrates surface and groundwater. This is good news for Wisconsin families, businesses, homeowners, and sportspeople who rely on water for their livelihood and quality of life.

The Good, the Bad, and the Ugly: Implementation of the Great Lakes Compact – Guest Post by Sara Gosman

The following guest post is by Sara Gosman, a water resource attorney with the National Wildlife Federation’s Great Lakes Regional Center, and the leading regional expert on state implementation of the Great Lakes Compact. Sara is also a lecturer at the University of Michigan Law School, teaching a variety of environmental law courses (see her faculty bio for more details).

Two weeks ago, Ohio became the last state to take action to implement the Great Lakes-St. Lawrence River Basin Water Resources Compact. The bill passed by the General Assembly has the dubious distinction of not only creating the weakest permitting program for water withdrawals in the region, but also violating several of the minimum standards in the Great Lakes Compact. Ohio's move has been widely condemned (see, for example, this Detroit Free Press editorial), and was opposed by former Republican Governors George Voinovich and Bob Taft.  Governor Kasich has until July 18th to veto the bill or it becomes law. ***Update: Gov. Kasich has now vetoed the bill*** A month ago, New York's Legislature passed a bill that is the polar opposite of Ohio's: it creates a statewide water management program notable for its protective standard, low permitting threshold of 100,000 gallons per day, and regulation of both existing and proposed water withdrawals. The bill is expected to be signed by Governor Cuomo.

Judging from these events, it is a good time to take stock of the Great Lakes Compact. The Compact, a binding agreement among the Great Lakes states to protect the water resources of the Great Lakes Basin from diversions and excessive withdrawals, became law two and a half years ago.  Together with a similar agreement between the states and the Great Lakes Canadian provinces, the Compact set minimum requirements for water use across the Basin. Each state agreed to implement the Compact by meeting a series of deadlines over five years, subject to regional oversight. Implementation of the Compact is now at the halfway point. Two deadlines have already passed, and the final deadline is December 8, 2013.

Today the National Wildlife Federation is releasing a report I authored that examines how the states and region are implementing the Great Lakes Compact. In the report, The Good, the Bad, and the Ugly: Implementation of the Great Lakes Compact, I focus on three critical areas of the Compact: diversions out of the Great Lakes Basin; conservation and efficiency; and water withdrawal permitting. For each area, I give examples of the good, the bad, and the downright ugly. You might not be surprised to learn that Ohio is the "ugly" example of a water withdrawal permitting program. But other states have also failed to live up to the Compact's promise.  As I explain in the report:

Where are the Great Lakes states? That isn’t a rhetorical question. While some states have taken their obligations under the Compact seriously, and indeed chosen innovative approaches, many have opted for the lowest common denominator. All have failed to meet one or more of the deadlines. The Great Lakes-St. Lawrence River Basin Water Resources Council (“Council”)—the regional oversight body created by the Compact—has not stepped up and held the states to account.  The Council is operating on a shoestring budget from a foundation grant and cannot even muster the resources to bring the state representatives together for a formal meeting more than once a year.

The report closes by recommending that the states and region take specific actions to shore up the good, address the bad, and stop the ugly. The bottom line? There is much to cheer, but also much yet to do: 

Halfway to the five-year mark, it is time for the states to renew their commitments under the Compact to each other, to the public, and to the long-term health of the Great Lakes Basin. And it is time for the Council to demand the resources necessary to oversee the states and to publicly set the states right when they falter. There is no doubt that these actions require more effort than accepting the lowest common denominator. But without these steps, the Compact will be yet another promising framework that is never truly implemented.

Capping the Bottle on Uncertainty: Closing the Information Loophole in the Great Lakes-St. Lawrence River Basin Water Resources Compact – Guest Post by Jeff Dornbos

This is the second of two guest posts by Jeffrey Dornbos, an attorney with Warner Norcross & Judd in Holland, Michigan. In addition to his legal background, Jeff also taught environmental science, holds a captain’s license from the U.S. Coast Guard, and is a SCUBA diver. Jeff’s guest posts introduce his two excellent law review articles focusing on management of transboundary water resources – “Capping the Bottle on Uncertainty: Closing the Information Loophole in the Great Lakes-St. Lawrence River Basin Water Resources Compact,” 60 Case W. Res. L. Rev. 1211 (2010) and “All (Water) Politics Is Local: A Proposal for Resolving Transboundary Water Disputes,” 22 Fordham Envtl. L. Rev. 1 (2011).

“Whiskey is for drinking and water is for fighting over.” In my mind, this quote (mythically attributed to Mark Twain) conjures up images of tumbleweed blowing down the dusty streets of a town in then Old West, not the vast expanse of the Great Lakes basin. The ongoing debate over the so-called “bottled-water loophole” in the Great Lakes compact, however, demonstrates that the wisdom also applies east of the Mississippi. 

The “bottled-water loophole” results from the Great Lakes Compact’s ban on diverting water out of the Great Lakes basin in containers that are greater than 5.7 gallons (such as a tanker) but leaving it to individual states to decide whether to ban diverting water out of the basin in smaller containers (such as bottles). Debate over the loophole has centered on whether the disparate treatment is required under international agreements, such as GATT and NAFTA, and whether giving states discretion over smaller containers could possibly result in depleting the lakes, one bottle at a time. (These debates have been discussed in previous Great Lakes Law posts.) 

The debate, however, cannot be resolved without addressing another loophole in the compact, a loophole I call the “information loophole.” As described in my article, Capping the Bottle on Uncertainty: Closing the Information Loophole in the Great Lakes—St. Lawrence River Basin Water Resources Compact, 60 Case W. Res. L. Rev. 1211 (2010), this loophole results in part from the decision to treat larger containers (more than 5.7 gallons) differently than smaller containers (5.7 gallons or less). Specifically, users must report to their respective state any time they remove water from the basin in the larger containers, but individual states can decide whether to require reporting when water is taken out in smaller containers (if the user withdraws less than 100,000 gallons/day).

The problem is exacerbated by the fact that users are required to report estimates to their various states, and the estimates are often based on inaccurate coefficients that vary across jurisdictions, especially when trying to determine the amount of water that is used consumptively. Even the water use that is reported is only required to be publicly reported in the aggregate. These compact requirements are inadequate to address the concerns expressed by the Great Lakes Commission that accurate withdrawal data is “lacking for all water use categories for all jurisdictions” because “reporting consistency varies widely and withdrawal data is mostly estimated.”

Better information would help determine whether exporting water in smaller containers actually presents a threat to the Great Lakes basin. In addition, improved information would be useful for determining whether the disparate treatment complies with NAFTA and GATT, or if an exception applies. Currently, the lack of accurate information about water use within the basin weakens arguments on both sides and prevents resolution of the debate. Returning to the analogy of the Old West, it’s a little like showing up to a shootout at high noon with no bullets – both sides keep pointing at each other and pulling the trigger, but nothing much gets resolved.

All (Water) Politics Is Local: A Proposal for Resolving Transboundary Water Disputes – Guest Post by Jeff Dornbos

This is the first of two guest posts by Jeffrey Dornbos, an attorney with Warner Norcross & Judd in Holland, Michigan. In addition to his legal background, Jeff also taught environmental science, holds a captain’s license from the U.S. Coast Guard, and is a SCUBA diver. Jeff’s guest posts introduce his two excellent law review articles focusing on management of transboundary water resources - "Capping the Bottle on Uncertainty: Closing the Information Loophole in the Great Lakes-St. Lawrence River Basin Water Resources Compact," 60 Case W. Res. L. Rev. 1211 (2010) and "All (Water) Politics Is Local: A Proposal for Resolving Transboundary Water Disputes," 22 Fordham Envtl. L. Rev. 1 (2011).

Is it better to flood thousands of acres of rich Missouri farmland or a historic Illinois town? The recent decision to blow a hole into a levee and sacrifice Missouri farmland in order to save an Illinois town is a vivid reminder that water resource boundaries don’t always fit neatly within political jurisdictions. Political decisions regarding water resources become even more complicated when watersheds cross international boundaries.

Nearly 30 years ago, the United States and Canada disagreed about a similar difficult choice – whether to efficiently generate power for the city of Seattle or save thousands of acres of pristine Canadian wilderness. The dispute came to be known as the High Ross Controversy. Predictably, the choice looked different from each side of the border. Surprisingly, however, the resolution of the controversy was hailed as a success by both the U.S. and Canada. That resolution was a treaty, signed on April 2, 1984 by representatives of both countries, in which the U.S. agreed not to raise the height of the dam in exchange for a long term supply of power from Canada. 

The most interesting aspect of the settlement was not the result, however, but the process. In this case, much of the negotiating occurred between representatives of Seattle and British Columbia, rather than higher level officials from Ottawa and Washington D.C. A negotiator involved in the process recalled that the Canadian and U.S. governments told the local officials to figure it out and then come back and tell them the solution. They did just that, and in the letter of transmittal, President Reagan described the treaty as “constructively and ingeniously settled.”

The High Ross Controversy illustrates the potential advantages of using the boundaries of the watershed at issue to help dictate the appropriate stakeholders who should be involved in resolving disputes. This principle is often referred to as the “watershed approach.” The EPA outlines three guiding principles to this approach: getting those most directly affected by decisions involved in the decision making, focusing on the geographic boundaries of the water body, and basing decisions on strong science and data. 

As I outline in my article All (Water) Politics Is Local: A Proposal for Resolving Transboundary Water Disputes, 22 Fordham Envtl. L. Rev. 1 (2010), I think that transboundary water agreements, following this approach, should include a rebuttable presumption that negotiations over transboundary water disputes begin with regional committees organized at the “lowest” appropriate hydrological level. Doing so would strengthen the existing focus on long-term cooperation, accurate data gathering, and public participation that exists in agreements such as the Berlin Rules, the Rio Declaration, and the Watercourses Convention. It would also be consistent with the International Joint Commission’s recommendation to establish “ecosystem-based international watershed boards from coast to coast to prevent and resolve transboundary environmental disputes.” While not a perfect solution, the presumption might also help better align the jurisdiction of political institutions with the boundaries of water resources to help anticipate and manage the need to make difficult choices such as choosing between rich farmland and historic towns.

Ohio Supreme Court hears oral arguments in Great Lakes shoreline ownership case - guest post by Prof. Ken Kilbert

The Ohio Supreme Court earlier this month heard oral arguments in State ex rel. Merrill v. Ohio Department of Natural Resources, in which two lower courts have ruled that the public has no right to use the shore of Lake Erie above the water’s edge. Professor Ken Kilbert, Director of the Legal Institute of the Great Lakes at the University of Toledo College of Law, has followed this case closely and wrote about the lower court decision in a previous guest post. Professor Kilbert has published a comprehensive article on this issue, “The Public Trust Doctrine and the Great Lakes Shores,” 58 Clev. St. L. Rev. 1 (2010) (available free online through SSRN) and previews the case looking at the recent oral arguments. 

It is undisputed that the State of Ohio owns the bed of Lake Erie in trust for the public to use. Hotly disputed in State ex rel. Merrill v. Ohio Department of Natural Resources, however, is both the public’s right to use the shore of Lake Erie and the proper boundary between the state-owned bed and the privately owned uplands. In 2009, the Ohio Court of Appeals for the 11th District affirmed a Lake County Common Pleas Court decision holding that the water’s edge – as it exists moment to moment – serves as the boundary between privately owned lakefront property and the state-owned lakebed, and that lakefront owners can exclude the public from the privately owned shore above the water’s edge. These Ohio lower court opinions contrast sharply with the Michigan Supreme Court’s 2005 decision in Glass v. Goeckel, which held that the public trust doctrine affords the public a right to walk along even privately owned shores of the Great Lakes up to the ordinary high water mark (OHWM). The dispute was precipitated by the Ohio Department of Natural Resources (ODNR) claiming state ownership of the shore below the OHWM, and the courts held that lakefront owners can use the property down to the water’s edge without the need to obtain leases from ODNR.

Three attorneys argued before the Ohio Supreme Court in Merrill on Feb. 1. Stephen Carney, on behalf of the Attorney General of Ohio, argued in favor of a boundary at the OHWM: above the OHWM is privately owned, below the OHWM is owned by the state, and the public has the right to boat, fish and walk up to the OHWM pursuant to the public trust doctrine. Many of the justices’ questions to Mr. Carney focused on another issue – the Attorney General’s standing to pursue the case after ODNR abandoned its original position requiring lakefront owners to obtain leases for uses below the OHWM. Irrespective of how the standing issue is resolved, the Court should reach the merits of the case because intervenors Ohio Environmental Council and National Wildlife Federation (which ceded their oral argument time to the State) also appealed.

Attorney Homer Taft, himself a lakefront owner, urged that the boundary between state-owned lakebed and privately owned upland is the ordinary low water mark. The public trust doctrine, according to Mr. Taft, gives the public the right to use the waters of Lake Erie but not the beds above the low water mark. Attorney James Lang, counsel for the lakefront owners group, essentially asked the Court to affirm the lower court decisions setting the boundary for ownership and the public trust doctrine as the water’s edge. In addition to the parties’ briefs and oral arguments, the Court received at least a dozen amicus briefs on behalf of more than 30 interested persons and entities.

I learned long ago that it is foolhardy to predict how an appeal will be decided, especially based on the oral arguments. So I will close by offering my own view of what the law should be regarding the Ohio shore of Lake Erie. Pursuant to the equal footing and public trust doctrines, the State of Ohio acquired the land underlying Lake Erie up to the OHWM when it joined the United States and continues to hold that land in trust for the public to use for boating, fishing and other protected uses. Even if the State somehow relinquished title of the shore from the OHWM down to the water’s edge (I disagree), the state legislature has not relinquished the public trust in the shore below the OHWM. Therefore, the public should have the right to walk along the shore of Lake Erie in Ohio up to the OHWM, just as the public does along the shores of the Great Lakes in Michigan. For more analysis, see Kenneth Kilbert, The Public Trust Doctrine and the Great Lakes Shores, 58 Clev. St. L. Rev. 1 (2010), available online at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1604025.

Some good energy policy news from 2010 – Michigan enacts PACE legislation

One of the energy policy successes in Michigan in 2010 was the passage of the Property Assessed Clean Energy Act (Public Act No. 270, 2010). Eric Jamison worked with the Great Lakes Environmental Law Center as a Clean Energy Fellow to develop and enact PACE legislation in Michigan, and offers this guest post on the recent success.

On December 15, 2010, former Governor Granholm signed the Property Assessed Clean Energy Act (Public Act No. 270, 2010). The legislation is designed to allow property owners to pay for energy efficiency and renewable energy improvements over a number of years as a special assessment on their tax bill. One key feature is that in the event of a property transfer the payback obligation stays with the land, not the original property owner. For a more detailed description of PACE, see my previous post, Property Assessed Clean Energy - A Bright Spot in Michigan’s Economic and Environmental Future.

With the leadership of former State Representative (now State Senator) Rebekah Warren and former Washtenaw County Commissioner (now State Representative) Jeff Irwin, and support form Johnson Controls, the bill moved relatively quickly through the House and Senate. The GLELC was fortunate to have an opportunity to research and develop substantial portions of the legislation with input from various local and national lawyers, public interest groups and municipalities. 

Earlier in the year residential PACE programs were largely slowed by concerns from Fannie and Freddie Mac. (See the previous post, The PACE has stopped - federal agency makes short-sighted decision to halt common sense clean energy policy.) The Michigan PACE bill was changed in two significant ways to account for the concerns raised by Fannie and Freddie. First, the mortgage holder must consent to the assessment being placed on the property. Second, residential properties are not eligible for PACE programs; only commercial and industrial properties are eligible for PACE assessments in Michigan. Despite these limitations, the PACE Act will offer a tool for building owners and municipalities to lower the cost of ownership and reduce dependence on traditional energy sources. The Miller Canfield law firm has more information for interested business and local governments.

Michigan Supreme Court to decide case involving divestment of a public park on the shores of Lake Michigan

This is a guest post by Nick Schroeck, Executive Director of the Great Lakes Environmental Law Center. Nick is the lead attorney for the environmental groups in the Supreme Court case described below.

The Michigan Supreme Court will soon hear oral argument in Carol Drake and Clellen Bury v. City of Benton Harbor and Harbor Shores Community Redevelopment Corporation to address whether the City of Benton Harbor may lease a portion of Jean Klock Park to Harbor Shores Community Redevelopment Corporation to develop 3 holes of a proposed 18-hole championship Jack Nicklaus golf course. The court will consider whether the lease may violate: (1) the restriction set forth in the 1917 deed from John Klock to the City of Benton Harbor which created the Park; or (2) the January 27, 2004 consent judgment in an earlier lawsuit between the plaintiffs and the City relating to the City’s sale of a portion of Jean Klock Park to Grand Boulevard Renaissance, LLC, for the construction of a residential development.

The Friends of Jean Klock Park have created an excellent history of the Park, and their efforts to protect it, available online (see www.savejeanklockpark.org). In 1917, John Klock donated the property to the City of Benton Harbor in memory or his daughter Jean, with the intent that “the lakefront always be preserved in its natural state and be a playground for the children and a bathing beach for all the people.” To allow the City of Benton Harbor, after ninety-three years, to divest the public of its interest in the park would not only defeat the intent of Mr. Klock, but could also subject numerous other public properties in the state to the possibility of private sale and to the exclusion of the public.

The Great Lakes Environmental Law Center, joined by the Saugatuck Dunes Coastal Alliance, Defense of Place, Preserve the Dunes, and West Michigan Environmental Action Council, have filed an amicus curiae brief to address two significant legal issues presented in this case: (1) whether the language of the existing deed is sufficiently ambiguous to allow appellant to introduce extrinsic evidence as to the drafter's intent; (2) whether the development of a golf course violates the restrictive covenant requiring that Jean Klock Park be “open for the use and benefit of the public.” As Amici point out in their brief, in light of current economic pressures:

“Michigan’s publicly held lakeshore properties are threatened by sale, lease or development and none of more import than the ecologically unique freshwater dunes that line the western shore of the Lower Peninsula. Our tourism industry depends on public access to these unparalleled natural assets, not to mention the health and sustainability of the ecosystem itself. The threat is not just to the residents who will no longer be able to use the land for the purpose that it was intended, but also to the land itself.  No public land would be safe from the threat of private development.  No future generation would be assured public access to any undeveloped land that was gifted to the public.  Without protection those who would dedicate property for public use in perpetuity will not be guaranteed that their intent will be satisfied, and the public will suffer.”

Hopefully the Supreme Court will agree that that public lands deserve protection and that the intent of Mr. Klock’s gift, and others like it, should be respected so that the public will continue to have access to parklands and the Great Lakes.
 

Enforcing the federal Clean Water Act in state proceedings – guest post by Melissa Scanlan

The following guest post is by Melissa Scanlan, one of the leading public interest environmental attorneys in the Midwest. After graduating from the University of California-Berkeley in 1999, Melissa returned to her native Wisconsin and founded Midwest Environmental Advocates, which she led as Executive Director for almost a decade. In June of this year Melissa started a new environmental consulting firm where she is teaching, writing, and promoting social enterprises engaged in water policy, sustainability, and environmental justice. Melissa continues to serve of the board of Midwest Environmental Advocates, and she is also writing a blog, Dreamers and Doers. On a personal level, I have tremendous respect for Melissa and what she accomplished in launching and running Midwest Environmental Advocates, filling a much needed role in Wisconsin. Melissa has a long list of litigation, public advocacy, and legal scholarship accomplishments, and she is scheduled to teach a course about the Clean Water Act at Marquette University Law School in the spring 2011 semester.

Last week I attended oral arguments in the Curt Andersen, et al v. DNR case before the Wisconsin Supreme Court.  While an observer in this final round of the litigation, I had previously worked on the initial challenge to the water pollution permit that has, over the past five years, made its long journey towards a final disposition on a deceptively simple legal issue involving the system of cooperative federalism established by the Clean Water Act:  In a state administrative law forum, can one challenge terms of a Wisconsin Pollution Discharge Elimination System (WPDES) permit, in a state in which the EPA has delegated authority to the state DNR to carry out the Clean Water Act, on the basis that the terms fail to comply with the federal Clean Water Act?

While the Wisconsin Supreme Court has lots of experience with the statutory interpretation and agency deference issues this case raises, it was in unfamiliar territory addressing the federal Clean Water Act.  However, the questions the justices asked, struck at the heart of the Clean Water Act’s system of cooperative federalism and access to justice by challengers of water pollution permits. 

To get some background on the case, you can watch one of the conservationists who has litigated this case in an effort to reduce toxic mercury and excessive phosphorus pollution into the Fox River, Bay of Green Bay, and ultimately Lake Michigan. (Link to video on YouTube.)

Under Wisconsin statutes, section 283.31(3)(d), the DNR must issue WPDES permits with conditions needed to meet state and federal standards. Conservationists challenged Ft. James paper company’s WPDES permit terms in an effort to reduce mercury and phosphorus water pollution.  The conservationists did not challenge the state law on its face, but as applied to this particular permit in which the DNR did not undertake a reasonable potential or an antidegradation analysis, as required by the Clean Water Act.  The conservationists believe that had the DNR undertaken those analyses, it would have allowed less pollution to be sent into the Fox River.

The DNR argued that the only basis by which to judge the adequacy of a WPDES permit is state law, and that further, the DNR did not have the authority to determine the meaning of the Clean Water Act. Siding with the conservationists, the Wisconsin Court of Appeals held that "the DNR has authority to determine whether discharge permit provisions authorized by state regulations comply with federal law." Curt Andersen, et. al. v. DNR, 2010 WI APP at 20.

Citing potential chaos at the agency, the DNR appealed to the Wisconsin Supreme Court, claiming the outcome could impact over 1,000 companies and municipalities that send polluted wastewater into Wisconsin’s waterways. DNR Petition for Review Brief, at 3. 

In essence, the DNR argued before the Supreme Court that because state rules are required to comply with federal law and the EPA approved the state rules, any permit issued in accordance with the state rules automatically complies with federal law. DNR Petition for Review Brief, at 6. (I should note that approval of the rules by EPA is in dispute.) The DNR further argued that a challenge to a permit term is automatically a challenge to the state rule, and the proper forum for challenging a state rule is to either go through a new rulemaking or ask the EPA to declare the rule violates federal law. Several justices took issue with this logic and expressed discomfort with the automatic pass the DNR wanted to give to its application of rules as being consistent with federal law, which would deny any challenger the ability to have a judge review the veracity of the claim. Some justices also expressed concern that the DNR was equating rules with permit terms. 

The conservationists focused their oral arguments on clarifying that they have no problem with the state rules and are not challenging them on their face, but only as applied to the terms of Ft. James’ particular permit.  The conservationists also showed the fool’s errand the DNR was trying to send them on by directing them to the EPA to resolve the matter; the 7th Circuit in American Paper v. EPA foreclosed that option in 1989 when it determined that if the EPA fails to object to a state-issued permit, the conservationists would have no recourse to challenge the decision in federal court (see the Conservationists' Petition for Review Brief). 

The case raises interesting issues of the relationship between the federal and state governments in administering a delegated program like the Clean Water Act.  Although EPA retains an oversight role and may withdraw approval of Wisconsin's WPDES program, that oversight role does not absolve DNR of its state statutory obligation to ensure compliance with the federal law – or does it?   Is the EPA the exclusive arbiter of whether a state law or state issued permit complies with the federal Clean Water Act such that it deprives an administrative law judge or state court of authority to find that a permit fails to comply with applicable federal laws?

The DNR’s position, of course, would cut both ways:  impacting permit holders who claim the state is regulating beyond that required by the federal law as much as it would impact the immediate litigants who resort to federal law to claim lack of protection of the state’s waters.

You can watch the oral arguments on Wisconsin Eye. We expect a decision from the Court some time within the next six months.  I’m hopeful that the Court will not interpret the facts and law in a way that nullifies a fundamental Clean Water Act right: the right to challenge through state proceedings a state's issuance of a permit that fails to comply with applicable federal law and regulations.

Update: See Melissa's op-ed in the Milwaukee Journal Sentinel for more on the case.

Update March 23, 2011: The Wisconsin Supreme Court has released its opinion. Bottom line: The DNR won.

Wisconsin develops innovative rules to control phosphorous pollution

The state of Wisconsin, with significant contributions by stakeholders, has developed a package of innovate new rules to control phosphorous pollution from point and nonpoint (runoff) sources. Attorney Bill Davis of the Environmental Law and Policy Center played a key role in developing and advancing these rules through the administrative process. Bill is ELPC’s Clean Water Program Manager, working out of their Madison, Wisconsin office. I’ve known Bill for over ten years, as he previously served as the Executive Director of the State Environmental Leadership Program and the Executive Director of Wisconsin’s Environmental Decade (now Clean Wisconsin), and I asked him to write a guest post on this significant policy victory to address a widespread water quality problem.

Across the Great Lakes region – and the country – nutrient pollution in our water is a major problem. Nutrient pollution causes a range of impacts, including toxic algae blooms that have killed pets and the “Dead Zone” in the Gulf of Mexico from the polluted Mississippi River and tributaries. Unfortunately, current law offers few tools to address much of this pollution because the Clean Water Act does not reach nonpoint pollution. However, given the severity of the issue, the US EPA has encouraged states to adopt numeric water quality criteria for nutrients and has recently promulgated such standards for Florida. As a result, more states are beginning to address this problem.

Wisconsin has recently taken action to control phosphorous pollution by adopting two rules – one that sets water quality criteria for Wisconsin waters (NR 102) and an implementation rule (NR 217) that translates the criteria to permit limits. (The final rules have not yet been published – see this document from the Wisconsin Natural Resources Board with the draft rules, comments, and additional info.) The implementation rule has tremendous potential as a useful tool to address both point source pollution and nonpoint (runoff) pollution, which is not directly regulated under the Clean Water Act. Both rules have advanced through Wisconsin’s administrative process and await publication and approval by the US EPA, which we expect by the end of this year.

To give a sense of the novelty of the Wisconsin approach, the Wisconsin Farm Bureau, municipal wastewater treatment plants, and the major environmental organizations (including ELPC) all testified in favor of these rules. Why? I believe the primary reason is the Adaptive Management section of the implementation rules (NR 217). This provision allows point sources in watersheds impaired by nonpoint phosphorous pollution to meet their permit limits by contracting with nonpoint sources in the watershed to reduce their phosphorous loads. This option [essentially a market/trading program to allow more cost efficient ways to reduce pollution] is very attractive to regulated point sources. For point sources, contracting with nonpoint sources to reduce their pollution is significantly less expensive than adding end-of-pipe treatment technology like filtration. Further, regulated point sources are no longer being singled out to solve the nutrient pollution problem, and the agriculture community gets a potential new source of revenue for pollution reduction. For the public, environmental groups, and state DNR, the new rules create an enforceable mechanism to address nonpoint sources which are the dominate source of nutrient pollution in many of watersheds. Given the political realities across the region, solutions that engender this kind of broad support have the best chance of long-term success.

Wisconsin is now working on guidance for NR 217 and as always, the devil is in the details.  There are many issues that need to be resolved, such as the necessary proximity between the point sources and nonpoint sources, the specifics of the pollution reduction plans and contracts the points sources must prepare, and the monitoring requirements and margins of safety. We know other states are interested in this approach, and will continue our hard work to make sure the Wisconsin package is a good example and model for other states.

Federal district court considers Asian carp case and arguments for temporary closure of Chicago canal locks - guest post by Thom Cmar

As this is being posted, a federal district court in Chicago is hearing arguments by Michigan and four other Great Lakes states to compel the temporary closure of Chicago canal locks to stop the spread of invasive Asian carp. Michigan and the other states (Wisconsin, Minnesota, Ohio, and Pennsylvania) argue that the U.S. Army Corps of Engineers and Metropolitan Water Reclamation District of Greater Chicago have created a public nuisance by allowing Asian carp to threaten the waters and fisheries of the Great Lakes. The requested injunction would compel “the best available methods to block the passage of, capture or kill bighead and silver carp” – including the closure of connecting navigation locks (except in emergency situations). For a quick background on the case with more on the complaint, motion for preliminary injunction, and supporting brief, see this prior post. Thom Cmar, an attorney with the Natural Resources Defense Council’s Midwest office in Chicago, has been closely following the case and is at the hearing today. Thom is a familiar guest contributor to Great Lakes Law (see his prior post on a legal win to stop invasive species in New York), and offers the following superb analysis of the legal issues in the case.

Today I am attending the oral argument in State of Michigan, et al. v. U.S. Army Corps of Engineers, et al., Case No. 1:10-cv-04457 (N.D. Ill.), better known as the Asian carp litigation. The oral argument is likely the final court hearing in a series of hearings held by District Judge Robert M. Dow to allow a full airing of the legal and factual issues relevant to the motion filed by the Great Lakes States (Michigan, Wisconsin, Minnesota, Ohio, and Pennsylvania) for a preliminary injunction against the Army Corps and the Metropolitan Water Reclamation District of Greater Chicago (MWRD) seeking short-term measures, such as a temporary closure of the navigational locks connecting the Chicago Area Waterway System (CAWS) to Lake Michigan, to head off the imminent threat of an Asian carp invasion. As their ultimate remedy in the case, the States seek an order compelling expedited review of permanently separating the Great Lakes and Mississippi River, to prevent invasive species from using the CAWS as a highway to travel in both directions. Last month, the parties presented several days of live testimony from a number of witnesses, including Professor David Lodge of Notre Dame University testifying on the States’ behalf, and a number of federal officials testifying on behalf of the defendants. NRDC is not a party to the lawsuit, for a variety of reasons, but I am attending today’s oral argument as a highly interested observer.

For those of you who haven’t been following this case as closely as I have, the important thing to recognize is – much like the Great Lakes States’ similar filing which was rejected by the U.S. Supreme Court – there are a number of reasons why the district court could choose not to rule in the States’ favor that have nothing to do with whether the Asian carp invasion is an imminent threat that could cause significant ecological and economic harm to the Great Lakes region. If the States do not succeed in their motion for a preliminary injunction, it will likely be due to one or more of the following reasons:

1. Sovereign Immunity – The Army Corps claims that the States’ common law nuisance claims may not be brought against the Federal Government under the doctrine of sovereign immunity. According to the Corps, the States’ nuisance claims are tort claims that do not fit within the exceptions created by the Federal Tort Claims Act, 28 U.S.C. § 2671, and therefore the Federal Government has not consented to be sued on, and is immune to, such claims. The States argue that the Administrative Procedure Act (APA), 5 U.S.C. § 702, expressly waives sovereign immunity for all actions seeking equitable relief from government agencies, including common law nuisance actions. In their favor, the States’ cite a line of precedent holding that § 702 waives sovereign immunity for “non-statutory” cases challenging agency action as unconstitutional or ultra vires (i.e., going beyond the scope of the agency’s authority). The Corps’ response to this argument is that the States’ case does not allege unconstitutional or ultra vires agency action, and therefore that the § 702 waiver of sovereign immunity does not apply. This is a fascinating jurisdictional issue that may be a question of first impression.

2. Displacement of Federal Common Law – Even if the court agrees with the States that their nuisance claims are not barred by the doctrine of sovereign immunity, the States must further persuade the court that their nuisance claims are not displaced under federal law by congressional action. The Army Corps points to a series of congressional authorizations that require the Corps to promote navigation on the CAWS, to maintain water levels to certain specifications, and also to construct, maintain, and ensure the efficacy of the electric barrier system designed to prevent Asian carp from migrating through the CAWS into Lake Michigan. The States’ response is that in the absence of a specific federal statute covering a plaintiff’s claims and providing a remedy, the common law is not displaced – and that none of the statutory authorizations cited by the Corps authorizes the creation of a public nuisance.

3. Limited Scope of Judicial Review under APA – In addition to their common law nuisance claims, the States also allege claims under the APA. In response to these claims, the Corps makes a seemingly bizarre argument that there is “no law to apply” to allow for judicial review of the Corps’ actions, and thus that the States’ APA claims are legally invalid. The Corps’ argument, atmospherically at least, seems inconsistent with its argument against the States’ common law nuisance claims: namely, that there is so much law to apply (in the form of congressional authorizations and mandates) that the common law is displaced. The Corps appears to be trying to have it both ways here, arguing on the one hand that congressional authorizations displace common law, but on the other hand that its actions pursuant to those congressional authorizations are not judicially reviewable.

Nevertheless, the Corps does have strong defenses to the States’ APA claims. As every law student knows, courts review APA challenges to agency action under a deferential standard of review. Agency actions will only be overturned by courts if they are “arbitrary, capricious, or contrary to law” – in other words, if the agency is acting in a way that either makes no sense or is blatantly illegal. This standard of review presents a difficult barrier for the States to overcome, especially at the preliminary injunction stage.

4. Federal Courts’ Institutional Reluctance to Impose Mandatory Injunctions – Another critical issue in this case is that the States, in their motion for a preliminary injunction, have asked the district court to issue a detailed, proscriptive injunction that requires the Army Corps and other agencies to take additional actions to stop the Asian carp from invading Lake Michigan that they would not otherwise take on their own. Although many of the actions sought by the States would more vigorously protect the Lake from invasion than what the agencies are doing when left to their own devices, federal courts are typically reluctant to grant such broad injunctions that arguably require the court to second-guess agency decision making.

Each of the above legal considerations has little to do with whether there is an actual, live threat of imminent harm to the Great Lakes from an Asian carp invasion of Lake Michigan. Yet some combination of the above arguments could easily derail the States’ case against the Army Corps and MWRD. The important thing to remember is that, regardless of what ultimately comes out of Judge Dow’s courtroom, both the long-term integrity of both the Great Lakes and Mississippi River basins requires development of a permanent solution to invasive species transfers through the CAWS that deals with all of the complicated water and transportation issues implicated by making changes to this critical piece of infrastructure. As long as the two basins remain hydrologically connected, we will continue to see harmful invasive species moving in both directions, just like the zebra mussel, the round goby, and the Asian carp have done. The only reliable way to eliminate our exposure to this risk is to restore the natural watershed divide.

Update - post hearing briefs available:

• Plaintiff states Michigan, Wisconsin, Minnesota, Ohio, and Pennsylvania
• Defendant U.S. Army Corps of Engineers
• Defendant Metropolitan Water Reclamation District of Greater Chicago
• Intervenor City of Chicago
• Intervenor The Coalition to Save Our Waterways
• Intervenor Wendella Sightseeing Company, Inc.

More updates - 

NRDC’s issue brief “Re-Envisioning the Chicago River: Adopting Comprehensive Regional Solutions to the Invasive Species Crisis” outlines a bold solution to the Asian carp problem and other water management challenges. From NRDC:

In response to a public health emergency more than 100 years ago, engineers reversed the Chicago River and built the Chicago Sanitary and Ship Canal to carry wastewater away from Lake Michigan, the city’s source of drinking water. The canal also provides a shipping link between the Mississippi River and the Great Lakes, opening navigation not only to recreational boats and commercial barges, but also to invasive species, and it diverts massive amounts of water from Lake Michigan. The unfolding Asian carp crisis reveals more than just the challenges faced by local, state, and federal agencies in stopping invasive species from entering the Great Lakes. It also exposes critical infrastructure deficiencies in the region’s wastewater, stormwater, and transportation systems.

For another perspective on the case, below is a guest commentary by David L. Rieser of McGuireWoods LLP in Chicago. Mr. Rieser represents The Coalition to Save Our Waterways, which as an intervenor in the litigation opposes the States’ request for a preliminary injunction (see The Coalition to Save Our Waterways post hearing brief). Mr. Rieser was kind enough to share a short commentary and response to Thom Cmar’s guest post:

Tom Cmar's post documents not only the weak points in the State's case but the inappropriateness of attempting to use the courts to address issues of this nature. The CAWS is not some 19th century industrial artifact to be removed to make way for open space. It was and remains an engineering triumph continuing to perform its task of conveying wastewater and providing for navigation. It was and remains a huge economic engine for the region responsible for billions of dollars and thousands of jobs. Recognizing its importance, the United States has taken a huge role in funding and maintaining its operations. Congress has spoken directly to the importance of navigation through the CAWS in the region's and the nation's economy. It is not a "nuisance" as the States claimed, but integral to the region's history and future.
 
Congress has also spoken directly to the issue of invasive species migrations by creating task forces and funding numerous efforts of the Army Corps of Engineers, the USEPA, the US Fish and Wildlife Service and all of the other government agencies to address these problems. The Asian Carp Regional Coordinating Committee, an ad hoc merger of two such task forces has spent the last year coordinating monitoring and sampling to evaluate the presence of Asian Carp in the CAWS, evaluating the efficacy of the existing electric barriers, constructing an additional barrier between the Des Plaines River and the Sanitary and Ship Canal and constructing a new barrier.
 
Any federal judge would hesitate to issue an injunction to close the locks under these circumstances. A decision to close the locks would have far reaching economic and social impacts, involving many stakeholders who are not even before the judge. As a result, we have argued that an injunction would be so momentous and have such a broad impact that such a decision should not be made by the courts but should rightfully be made by Congress. An injunction would also contravene the will of Congress which has not only stated repeatedly that the locks must be maintained to support navigation but has also identified specific means and decionmakers for addressing the Asian carp issue.

Addressing urban and agricultural runoff pollution in the Great Lakes Water Quality Agreement

Urban and agricultural runoff (known legally as non-point pollution) is the most significant source of pollution in the Great Lakes.  As the United States and Canada are considering revisions to the Great Lakes Water Quality Agreement, addressing runoff pollution should be a top priority.  Carrol Hand, a law student at Tulane, worked with the Great Lakes Environmental Law Center to develop a white paper on non-point pollution and the Great Lakes Water Quality Agreement.  Carrol brings significant experience and expertise to this project, having worked with NOAA’s Great Lakes Environmental Research Lab, the U.S. EPA, and the Great Lakes Institute for Environmental Research at the University of Windsor (where she also earned a graduate degree).  Carrol’s white paper is available online, and she provided the following guest post as an introduction to the topic:

Changes in the urban and agricultural landscape of the Great Lakes have resulted in an increased threat to the water quality of the lakes.  Pollution entering the Great Lakes comes from both ‘point sources’ and ‘non-point sources.’  Point sources are more easily identified and managed, since they are limited to a single location like an oil refinery, industrial factory, or municipal wastewater treatment plant.  In contrast, non-point source pollution (also known as runoff pollution) comes from a variety of diffuse sources which are difficult to identify.  Consequently, the overall success at controlling non-point source pollution has been low, so much so that the EPA considers it “the most important remaining source of water pollution” in the Great Lakes Basin.

In the Great Lakes region, non-point sources are responsible for 76% of the pollution in the water.  One of the primary effects of that pollution is eutrophication, due to excessive amounts of phosphorus and nitrogen.  Eutrophication results in the growth of nuisance algae (such as cyanobacteria), which can lead to fish kills, foul odors, and undrinkable water.

Traditionally agriculture has been recognized as a primary cause of non-point pollution, particularly since urban areas only account for around 5% of the land in the continental United States.  More recently it has been acknowledged that urban sources can play a much larger part.  In the lower Great Lakes (dominated by the Corn Belt) non-point source pollution does come primarily from agricultural sources, but in the upper Great Lakes non-point pollution comes primarily from forestry and urban sources.  Agricultural non-point pollution comes primarily from fertilizer and manure, while in contrast much of the urban non-point source pollution comes from nutrients, sediment and bacteria that find their way into the Great Lakes through stormwater runoff from streets, parking lots, lawns, driveways, and roofs. In addition to pollutants picked up from the land, pollutants (nutrients in particular) that are deposited from the atmosphere also find their way into the waters of the Great Lakes.  Atmospheric deposition is one of the largest non-point sources of nitrogen deposited in the lakes, specifically coming from gases released from agriculture and the burning of fossil fuels.

In response to concerns about Great Lakes water quality, the United States and Canada entered into the Great Lakes Water Quality Agreement in 1972 with a commitment “to restore and maintain the chemical, physical and biological integrity of the Great Lakes Basin ecosystem.”  However, the Great Lakes Water Quality Agreement has failed to significantly limit non-point pollution in the Great Lakes due to a lack of accountability and enforcement mechanisms.  To fulfill its promise, the Great Lakes Water Quality Agreement must be amended to substantively address non-point pollution and provide the legal and policy tools to make the controls effective.

The Great Lakes are coming close to a turning point.  Increased urbanization throughout the basin has resulted in a substantial growth of surface area that is impermeable to rainwater and runoff.  Consequently, nutrients, pathogens and sediment, all of which are being produced in increasingly large volumes, are transported into the lakes in greater amounts.  Agriculturally, global market forces are moving farming practices away from small family farms towards large, intensive operations such as confined animal feeding operations.  Better controls need to be put into place to handle non-point source pollution, or the condition of our Great Lakes may take a serious turn for the worse.

The PACE has stopped - federal agency makes short-sighted decision to halt common sense clean energy policy

Guest post by Eric Jamison, Clean Energy Fellow with the Great Lakes Environmental Law Center.

The Federal Housing Finance Agency (FHFA) just halted residential PACE programs around the country by issuing a letter stating that PACE programs present “significant safety and soundness concerns” to the lending community.  The residential programs that were emerging have all stopped operating their programs.

PACE programs provide a voluntary tool for municipalities to promote the adoption of renewable energy (RE) and energy efficiency (EE) upgrades.  The program addresses two major obstacles to wide-spread adoption of RE and EE: upfront capital and a relatively long payback period.  This is how the program works: revenue bonds are sold, the funds are made available to consenting homeowners to make RE and EE improvements to their home and the amount used is paid back on the property tax bill over a number of years.  The money that is paid back is used to satisfy the bond obligation.  The programs are designed to be cash positive so that the improvements save more money per year than they cost in increased property taxes.  If the property is sold before the assessment is paid in full, the pay-back obligation transfers to the new owner.  For more info, see the Great Lakes Environmental Law Center’s PACE webpage.

The FHFA letter basically ignores that fact that there are over 37,000 financing districts already in operation around the country.  The existing districts are used to pay for projects such as parks, sewer systems or sidewalks, and are a regular part of the underwriting process.  The major difference is that PACE programs are designed to be cash positive so that the improvements save more money per year than they cost in increased property taxes.  So in a time of declining home values and increasing foreclosures the FHFA decided to curb a program that is designed to improve the value of a home and make it more affordable.  The program also creates local jobs, reduces dependence on foreign sources of energy, and reduces pollution.  The Department of Energy released guidelines for best practices to protect homeowners, lenders and municipalities.  The best practice guidelines already address legitimate lending concerns, preventing property owners who are underwater on their mortgages from participating and discouraging unwise investments like putting $30,000 solar panels on a $60,000 home. 

The market for PACE programs was beginning to get traction as a number of municipalities have programs up and running and more than 20 states have passed legislation in the last two years to allow such programs.  The Obama administration has just committed $150 million to fund programs across the country. 

Despite the FHFA letter, commercial PACE programs may be a viable option.  Commercial properties may have alternative financing arrangements that are not available for small residential properties. 

There may be Congressional action to pass legislation authorizing PACE programs to move forward, though the timeframe is very uncertain.  While it will be unpopular with the banking lobby, it should get substantial support because of the local jobs it will create and the positive impact it will have on the affordability of homeownership.

The worst environmental disaster in US history is unfolding in the Gulf of Mexico and serves as a poignant reminder that the costs of using fossil fuels is much higher than $2.95 a gallon.  We need policies and programs in place that allow people to adopt RE and make EE upgrades to their properties.  If the right policies are in place to favor RE and EE then the private market will invest the capital resources to make the US a leader in the emerging clean technology market.  If we fail to act with pragmatic policies to promote clean technology then the technology will be developed overseas and we will be importers instead of exporters.  We need the federal government to be supporting solutions, not standing in the way of them.

Update: California Attorney General Edmund G. Brown Jr. has filed lawsuit on behalf of the state of California against FHFA in the U.S. District Court for the Northern District of California.  California’s complaint contends that FHFA is “misrepresenting” the nature of the PACE programs and municipal financing in violation of California law, and further that FHFA failed to consider the environmental impacts of its decision in violation of the National Environmental Policy Act.

Canadian Feds propose ban on bulk water removals from transboundary waters

Last week, the Canadian federal government proposed legislation to ban bulk water removals from “transboundary waters” – meaning waters that cross the U.S.-Canada boundary.  To explain the legislation and how it fits within Canada’s other water protection efforts and challenges, Professor Marcia Valiante of the University of Windsor Faculty of Law generously agreed to author the following the guest post.  Prof. Valiante is a leading expert on Canadian environmental law with a special focus on water protection and the Great Lakes.  She is a member of the International Joint Commission’s Great Lakes Science Advisory Board and active in environmental protection issues regarding the Detroit River.  I had the pleasure of co-teaching a course with Prof. Valiante on U.S.-Canadian transboundary environmental law a few years ago and continue to rely on her expertise on issues north of the border.  From Prof. Valiante:

On May 13, Lawrence Cannon, the federal Minister of Foreign Affairs, introduced a bill into the House of Commons, to be called the “Transboundary Waters Protection Act.”  This bill would amend the International Boundary Waters Treaty Act, the legislation that implements Canada’s obligations under the 1909 Boundary Waters Treaty with the United States.  The Bill, C-26, would also make a minor amendment to the International River Improvements Act.  Minister Cannon claims that this fulfills a promise made by the Harper government in its 2008 Throne Speech.

Bill C-26 would primarily do two things.  First, it would expand the existing prohibition on water removals from boundary waters to include “transboundary waters.”  Second, the Bill would add inspection powers and significantly increase the penalties for violations of the IBWTA. 

In 2002, the IBWTA was amended to prohibit bulk water removals from the basins of “boundary waters” – including in particular the Great Lakes.  This was one of three actions taken by the federal government commencing in 1999 to respond to the well-known Nova Group proposal to remove water from Lake Superior by tanker and ship it to Asia.  (The other actions were to refer the issue to the International Joint Commission and to pursue a federal-provincial accord.)  Bill C-26 expands application of the ban on removal beyond waters that form the Canada-U.S. boundary to include waters that cross the boundary.  The Bill defines “transboundary waters” to include waters set out in a schedule.  This schedule is attached to the Bill and is an extensive list – from large river systems such as the Yukon, Red and Columbia Rivers to smaller creeks and streams.   

The inspection and enforcement sections bring the IBWTA into line with the enforcement provisions of other federal environmental statutes, which were strengthened in the Environmental Enforcement Act in June of 2009.

Minister Cannon claims that passage of Bill C-26 is necessary to fill an important gap in the protection of Canadian waters being eyed for export.  What it accomplishes is actually fairly modest.  For constitutional reasons, the Bill does not purport to control all waters in Canada that may be vulnerable to export, but stays safely within the narrow scope of water bodies referred to in the Boundary Waters Treaty.   This narrow scope explains the sponsorship of the Bill by the Foreign Affairs Minister, rather than by the Minister of Environment. 

Protection for all other Canadian waters remains in the hands of provincial governments, most of which have put in place prohibitions on bulk removal either from major drainage basins or from the province itself.  Ontario and Quebec, of course, have legislation in place that implements the provisions of the 2005 Great Lakes St. Lawrence River Basin Sustainable Water Resources Agreement, entered into with the eight Great Lakes States. 

The 2008 Throne Speech promise referred to the need to prohibit the “export” of water.  For reasons relating to international trade obligations that were debated at length at the time of the 2002 IBWTA amendments, it is not surprising that there is no reference in the Bill itself to the “export” of water.   The focus instead is on “bulk removal.” 

Bulk removal means removal from the water body and the taking of that water outside its drainage basin “by any means of diversion, including by pipeline, canal, tunnel, aqueduct or channel; or by any other means by which more than 50,000 L of water are taken outside the water basin per day.”   It does not include the taking of a manufactured product containing water, including bottled water or other beverages, outside a water basin.  Also excluded is water used in vehicles or for a “non-commercial project” for firefighting or humanitarian purposes.   

Under the IBWTA, bulk removal is deemed, “given its cumulative effects on boundary waters and on transboundary waters that flow to the United States, to affect the natural level or flow of those waters on the other side of the international boundary.”  In other words, bulk removal is deemed to violate the Boundary Waters Treaty. 

It is not clear why this Bill is coming forward now.  The Minister admitted there was no urgency or imminent threats to divert or export Canadian waters.  There has been fairly consistent opposition party and NGO pressure on the federal government to do more to protect water, but there has also been competing advice from several conservative think tanks to allow water export as a potentially lucrative industry for Canada.  The government appears to have rejected that advice.  Minister Cannon, in introducing the Bill, said “This important legislation makes it clear that we are not in the business of exporting our water… Canadian water is not a commodity.  It is not for sale.”

Bill C-26 does fill a gap in the legislation, but is not ambitious either constitutionally or environmentally.  It is perhaps an easy way for the government to improve its rather dismal environmental image.  It will not antagonize any provinces by stepping on their jurisdiction and the criticisms of the amendments are manageable – in particular the continuation of an exemption for bottled water, which is in the existing IBWTA provision and in the Great Lakes Agreement.  However, as some critics have pointed out, bulk water removal is not the most pressing issue facing Canadian waters; there is a need for an overhaul of federal water law – and this isn’t it. 

Federal court rules against Bureau of Reclamation in water diversion case citing concerns over invasive species

This guest post is by Nick Schroeck, Executive Director of the Great Lakes Environmental Law Center.  While Nick was just recently named Executive Director of the Great Lakes Environmental Law Center, he has long been the lead attorney on this precedent-setting water diversion case.  See my prior post for more background on the dispute and legal issues.

The Great Lakes Environmental Law Center and the Wayne State Environmental Law Clinic won a legal victory that will help ensure that issues like invasive species are given careful consideration in proposed federal water projects. The federal District Court for the District of Columbia has ruled that the Bureau of Reclamation must properly consider the consequences of an environmentally unwise and economically unsound water transfer project.  The New York Times covered the decision, citing our brief. 

The case involves the Northwest Area Water Supply (NAWS) project, a proposed Bureau of Reclamation pipeline that would pump water from the Missouri River basin across the continental divide into Manitoba, Canada and the Hudson Bay basin for the purposes of supplying water to Minot, North Dakota.  Conservationists were concerned about the proposal, not merely because it is a federal boondoggle which has already wasted taxpayer money, but due to the precedent that a trans-basin diversion on this scale, without proper environmental impact analysis, could set for the Great Lakes.

In 2005, the same court found the Bureau of Reclamation’s initial environmental analysis faulty and ordered them to properly evaluate the potential consequences of the proposed water transfer and to revisit their environmental impacts analysis. The Great Lakes Environmental Law Center has been working on the NAWS project for years as part of our work on transbasin water diversions.  We submitted comments on the Bureau’s draft Environmental Impact Statement in January of 2008 citing some of our concerns regarding invasive species, population trends, lack of water conservation, and lack of international cooperation. In December of 2008, the Bureau issued a final Environmental Impact Statement on the project.  

The Great Lakes Environmental Law Center, along with the National Wildlife Federation, and their affiliates South Dakota Wildlife Federation and Minnesota Conservation Federation, filed a friend of the court (amicus) brief in the case last fall in support of Manitoba’s challenge of the final Environmental Impact Statement.  In strong language, the Court again ruled that the Bureau failed to comply with the National Environmental Policy Act by not adequately evaluating the potential ecological consequences of invasive species transfer from the Missouri River basin to the Hudson Bay basin.  The Court went on to conclude that potential impacts to Canada’s waters must also be studied and that the Bureau failed to analyze cumulative impacts to the Missouri River system from the proposed diversion.

Pursuant to the Court’s March 5, 2010 ruling, the Bureau will now have to correctly analyze the consequences of this potentially disastrous project. The decision is also helpful in ensuring that the environmental review process set forth in NEPA is followed and that federally funded water diversions are given a very hard look prior to approval. Overall it’s a great win for the GLELC, the Wayne State Environmental Law Clinic, and for freshwater resources. Former clinic student Catherine Deciechi deserves huge credit for doing the heavy lifting on writing the brief under my supervision.

SEC issues interpretive guidance regarding disclosure of climate change risk

This guest post on the SEC’s new interpretive guidance on disclosure of climate change risk is by Eric Jamison.  This topic has not been on the radar for many people involved in water policy, but it is an important new legal development for many water-related businesses, including those involved in water infrastructure and delivery, energy production, and wastewater treatment. 

Eric is a second year law student at Wayne State and has a background in business management.  He has worked extensively on all aspects of energy law and emerging climate change law, with a focus on opportunities for business and economic development at the state and local levels.  Eric played a key role in developing the proposed Property Assessed Clean Energy (PACE) Program for Michigan, which would give homeowners the funds to invest in renewable energy and energy efficiency projects.  Eric recently wrote a national article on the new SEC guidance on disclosure of climate change risk, and was kind enough to write a short summary here. 

On February 8, 2010 the U.S. Securities and Exchange Commission (“SEC”) published interpretative guidance in the Federal Registrar regarding the disclosure of corporate climate change risk.  As interpretative guidance on existing disclosure rules, the guidance becomes immediately effective upon publication in the Federal Register which may impose disclosure obligations for companies filing their 10-K forms for the year ending 2009.

The guidance is not intended to create new legal requirements, but to clarify the disclosure requirements under the existing reporting infrastructure.  There has been political backlash by some Republican Senators claiming that the SEC should focus on the core mission of protecting investors and maintaining fair markets instead of getting involved with climate change.  In addition, 21 Republican Senators are claiming that the guidance is essentially a new rule and thus should be subject to the formal rule making process under the Administrative Procedures Act. 

The interpretative guidance identified some areas that may trigger disclosure obligations:

• The impact of legislation and regulation - When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.
• Impact of international accords - A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.
• Indirect consequences of regulation or business trends - Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.
• Physical impacts of climate change - Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business.

The potential triggers outlined by the SEC include very broad and ambiguous requirements.  The amount of pending federal, regional, state and even international regulatory and legislative action is enormous.  The political debates continue over how to best address the challenges of climate change.  Adding to the complexity of the problem is the lack of clear federal action; many regional, state and even local programs have emerged to address emissions regulation, green building codes and disclosure of energy use in real estate transactional matters.  The impact of legislation on business is a complex issue encompassing many layers of analysis based on operations under different regulatory schemes, the reach of the supply chain and a myriad of pending legislation from Congress, agency actions and executive branch efforts. 

Businesses may be better equipped to handle the indirect consequences. Sustainability initiatives have been at the forefront for many businesses for a number or years and during tight economic times businesses naturally look for ways to trim costs and operate more efficiently.  Innovative businesses are accustomed to dealing with market uncertainty related to other market drivers, thus assimilating the risks from the climate should be within the ambit of corporations abilities.

The physical effects of climate change present special challenges to businesses.  The best scientists in the world have struggled with forecasting the effects of climate change.  It leaves corporations in a precarious position to try to evaluate and disclose potential impacts of climate change on their business.  For many it is clear that the climate is changing, but the impacts of the change are multifaceted and result in non-linear changes.

In addition to the above mentioned challenges, many corporations participate in voluntary carbon reporting programs, which may be broader or narrower than the scope of the SEC disclosure obligations.  Thus corporations must be cognizant of the voluntary climate related disclosures they make to ensure that they are uniform so as to not subject the company to potential liability for disclosure omissions or misstatements. 

Despite the challenges posed by the new guidance, it moves the market towards transparency.  One of the purposes of the disclosure rules is to facilitate investor understanding of the risks faced by corporations.  Securities regulations require the disclosure of material information or information that a reasonable investor would find important.  In light of the numerous initiatives related to climate change, it is implausible to think that investors of companies with significant impacts on the environment would find the disclosure of climate change related information immaterial.  Major energy companies are facing fierce opposition from public interest groups for coal plant permitting, plaintiffs groups have successfully brought litigation regarding climate change liability, and emissions regulation is emerging from numerous sources.  A reasonable investor may find much of this information to be material as they consider their investment strategy. 

Putting aside the controversies regarding climate change, there has been significant activity from the public and private sector suggesting that corporations need to examine their operations and business model to reduce their environmental risks and liabilities.  From a pragmatic standpoint emissions and resources cost corporations money, and by measuring and reporting such activities corporations will become acutely aware of their relative costs.  Knowledge of costs will spur market innovation to reduce the use of resources and find ways to cut emissions because of the cost and uncertainty related to them.