Published by the Environmental Law Section of the Virginia State Bar for its members

Environmental Law News Volume XVI, No. 3 Winter 2005

The Wilderness Act of 1964: Where Do We Go From Here? Luder Milton

The fortieth anniversary of the Wil-derness Act was recognized on Sep-tember 4, 2004. This milestone offers an opportunity to reflect on the service of this statute to the na-tion and the environment. This arti-cle will provide a context within which the statute can be understood and its impact evaluated. While the commemorations will recognize the accomplishments of the Act, we should be mindful of the costs as well. This topic should hit especially close to home for Virginians after the recent submission of a bill that would designate more than 40,000 acres of federal land in Southwest Virginia as Wilderness Area.1

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Background of the Wilderness Movement The Wilderness Act of 1964 was an outgrowth of the push for the con-servation of natural resources in the United States that began in the nine-teenth century.2 Conservationist in-fluences had begun to make inroads in society’s perception of nature, encouraging the valuation of its beauty and inherent worth. Organi-zations like the Sierra Club began to

spring up in various parts of the country.3 America’s romance with her natural treasures, which started during the Westward expansion in the eighteenth century, had begun anew.4

A sense of urgency galvanized the Wilderness preservation movement when the revitalized World War II economy led to increases in the de-mand for timber.5 This higher de-mand led to heightened pressure on the Forest Service to open additional lands to lumbering and develop-ment.6 The Wilderness Society’s executive director, Howard Zahniser, describing the status of wilderness protection in 1951, stated:

Let’s try to be done with a wilderness preservation pro-gram made up of a sequence of overlapping emergencies, threats, and defense cam-paigns. Let’s make a con-certed effort for a positive program that will establish an enduring system of areas where we can be at peace and not forever feel that the wilderness is a battle-ground.7

This vision took shape in 1955, when the first version of the Wilder-ness Act was drafted by a consor-tium of groups headed by Howard Zahniser.8

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Chair’s Corner

Have you represented a client in an interesting environmental law matter in the past year? Have there been changes in the law or decisions issued that may affect your approach or advice to clients with environmental law con-cerns? If so, consider authoring or collaborating on an article for the October, 2005 edition of the Virginia Lawyer that will be devoted to environmental law. We need at least four 2500 word articles, two of which should be scholarly articles, one should be a general audience article and one should provide practical tips. If you have ideas but need help with the execution, let us know. We may be able to put you in touch with another lawyer willing to work with you on an article. This is a great opportunity to share your expertise with colleagues who do not regularly practice envi-ronmental law as well as with those who do. If you have questions, please call Brooks Smith at (804)-788-8200 or write him at bsmith@hunton.com. We must submit article proposals to the Virginia State Bar by mid-April so please contact Brooks Smith by March 31st if you are interested in author-ing an article.

Luder Milton is a J.D. Candidate, May 2005, at Washington and Lee University School of Law. An expanded version of this article with a more exten-sive analysis of the Roadless Rule may be obtained from the Environmental Law Digest web site at http://eld.wlu.edu.

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Environmental Law News Volume XVI, No. 3, Winter 2005

Prepared by the staff of Environmental Law Digest

Washington and Lee University School of Law

Lexington, Virginia 24450 Editor-in-Chief Terrence Egland

Executive Editor Erin Sullivan

Senior Articles Editor Gabrielle Butcher

Senior Case Review Editor Stephen Brownback

Senior Legislative Editor Nathaniel Parker

Managing Editor April Ballou

Articles Editor Tiffany Davidson

Case Review Editor Stephen Mealor

Staff Michael Bauer

Shannon Borromeo Michael Bourdaa James Braswell Clint Carpenter

Grace Doe Ryan Dunlavey

Laura Fleischmann Roswell Henry Taylor Menlove Abigail Parolise

Zahid Raja Jennifer Rawls

Jason Reid Michael Spencer Edward Standley

Brien Van Wagner Michelle Williams Faculty Advisors

Professor Sean H. Donahue Professor Mark A. Drumbl

All statements, expressions, opinions or comments appearing herein are those of the by-lined authors or the editors and are not necessarily those of the State Bar or the Environmental Law Section.

From the Editor As the Environmental Law News hits its stride in the middle of the aca-demic year, we bring you our third issue within six months. It has been a busy but rewarding experience for the Law News staff as we attempt to improve upon the efforts of our predecessors. I hope that our efforts have been a help to you, our faithful reader.

In furtherance of our goal to aid practicing attorneys, in this issue we have the pleasure of publishing two excellent articles written by third year students here at Washington & Lee. While the topics implicate na-tional concerns, the authors have ably tied the federal laws in question to their consequences in Virginia. Both Luder Milton and Stephen Brown-back have withstood numerous rewrites and constructive criticisms in producing what I think are two fine examples of what the ELN can bring to the environmental law community in Virginia.

Nonetheless, the articles have been considerably edited down to fit the ELN format. Thus, I encourage you to visit our web site, http://eld.wlu.edu, to read the articles in their complete form. I think you will find they are worthy of your time. You will also find short biogra-phies and photos of the ELD editors and staff, past issues of the Law News, and links to other environmental sites of interest. As always, please contact me or any of the staff with concerns and sug-gestions.

Terrence T. Egland Editor-in-Chief

eglandt@wlu.edu

Table of Contents Chair’s Corner .............................................................................................1 The Wilderness Act of 1964: Where Do We Go From Here?.....................................................................1 From the Editor ............................................................................................2 Request for Articles...................................................................................10 The EPA’s Utility Mercury Reduction Rule: Its History, Implementation, and Potential For Litigation ..........................................10 Case Digest ................................................................................................18 Federal Regulation.....................................................................................22

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Chair’s Corner continued from page 1

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Senator Hubert Humphrey and eight co-sponsors introduced the Wilder-ness Bill to Congress the following year.9 After much deliberation and compromise, nine years and sixty-five versions, the bill became law on September 4, 1964.10 Although con-cessions were made by both sides to get the necessary votes, Zahniser’s objectives were passed largely in-tact.11 The new Wilderness Act de fined land designated as wilderness:

A wilderness, in contrast with those areas where man and his own works dominate the landscape, is hereby rec-ognized as an area where the earth and its community of life are untrammeled by man, where man himself is a visitor who does not remain. An area of wilderness is fur-ther defined to mean an area of undeveloped Federal land retaining its primeval char-acter and influence, without permanent improvements or human habitation, which is protected and managed so as to preserve its natural condi-tions and which (1) gener-ally appears to have been affected primarily by the forces of nature, with the imprint of man's work sub-stantially unnoticeable; (2) has outstanding opportuni-ties for solitude or a primi-tive and unconfined type of recreation; (3) has at least five thousand acres of land or is of sufficient size as to make practicable its preser-vation and use in an unim-paired condition; and (4) may also contain ecological, geological, or other features of scientific, educational, scenic, or historical value. 12

Congress initially directed the United States Departments of Agri-culture and the Interior to evaluate all lands under their supervision for inclusion in the National Wilderness Preservation System (“NWPS”).13 The Departments’ recommendations were to be passed on to the Presi-dent, who would communicate them to Congress.14 The Act specifies that only federal land may be designated wilderness and then only by an act of Congress.15

Unlike other federal land manage-ment legislation, the Wilderness Act did not give the managing agencies much discretion in the maintenance of the land. The Act contains an al-most global prohibition on commer-cial development, roads, permanent structures, and motorized vehicles within designated Wilderness Ar-eas.16 The only exceptions are for medical emergencies, administrative necessities required to manage the

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As promised, we have arranged for Section members to register for a list serv on the VSB's Environmental Law Section website. Go to http://www.vsb.org/sections/en/index.htm. You will see a message that in-vites you to subscribe to the Environmental Law Section List Serv. Follow the directions. You will not receive any announcement unless you register. We anticipate that messages will be infrequent and that they will contain news about CLEs and significant case decisions that will be of interest. To make this an effective communication tool, you need to register.

Make plans to attend the Environmental and Real Estate Law sections' CLE on June 17 at 11:00 a.m. in Virginia Beach. It will address environmental due diligence, site assessments and strategies to manage environmental risk. We are pleased that Ray Forrester, President and Managing Partner of the Forrester Group and Keith Cannon of March Environmental Practice will be two of the four panel members.

Get a head start on your annual mandatory CLE credits. On April 28th in Richmond, VCU will sponsor a CLE entitled “Environmental Science for Judges and Lawyers: Non-tidal Wetland Science and Regulation Continu-ing Legal Education Workshop.” To inquire about this day-long conference contact Cliff Fox at “jcfox@vcu.edu.”

The Board has begun planning for next year. If you have ideas, suggestions, complaints or compliments, please let us know. The names and addresses of Section Board members can be found on the back of this issue. It has been a privilege to work with the members of this year's Environmental Law Sec-tion Board. Thanks to Marina Phillips, Chip Gasch, Karla Haynes, Rick Linker, Heather Stevenson, Barbara Rose, J.T. Morgan, Kelley Kline, Kathy Frahm, David Graham, and Brooks Smith for their contributions to the Section and to the Bar this year. I hope to see you at the Virginia State Bar summer meeting in June.

Karen T. Lebo,

Chair

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land, and any carve-outs that Con-gress may have made which are unique to the individual designa-tion.17 The scope and stringency of the Wilderness Act’s proscription of all man-made implements makes this legislation the most protective federal land conservation classifica-tion available.18

Management of Wilderness Areas The Wilderness Act does not assign responsibility for the management of Wilderness Areas to a single agency; instead, the Act directs that the agency that managed the land prior to its wilderness designation con-tinue managing it. If Congress chooses to create a wilderness area, the land designated remains under the administration of the same agency, just with different guide-lines for its use. This policy gives rise to its own set of difficulties.

The primary challenge of Wilder-ness management arises out of the tension between the conflicting re-sponsibilities of the agencies manag-ing Wilderness Areas. Lands administered by four agencies have become Wilderness Areas through the Wilderness Act and subsequent legislation.19 These agencies are each charged with a niche assign-ment. The Bureau of Land Manage-ment and the Forest Service, for example, were largely created to manage the natural resources on federal lands.20 The Fish and Wild-life Service focuses on the preserva-tion of wildlife and its habitat.21 While the Park Service’s purpose may seem to be fully compatible with the Wilderness Act, it employs very different priorities in its man-agement of the land.22 Each agency has a distinct culture and priorities, so the way they manage specific areas and situations also differ.23

The process by which they recom-mend areas for inclusion in the NWPS is just one example.24

By requiring them to administer the Wilderness Act on the portions of the lands entrusted to them, Con-gress may be asking the agencies to act in a manner inconsistent with the policy priorities dictated in their or-ganic mandates. The court in Hon-chok v. Hardin took this view when it said:

While wilderness and rec-reational values may result from the creation of national forests … the purposes for which national forests may be created … contrast with the express references to recreational and wilderness values found in the statutes creating the National Park Service to administer na-tional parks, 39 Stat. 535 (1916), 16 U.S.C. § 1, and the Wilderness Preservation System, 78 Stat. 890 (1964), 16 U.S.C. § 1131.25

The court here concluded that the Forest Service had been given two contradictory assignments.26 If the agency follows the instructions in its organic act, it could not fully adhere to the Wilderness Act.27 The Forest Service had chosen an intermediate path regarding mining activities in the National Forests, which the court found reasonable.28 Where there is a conflict, the statute directs the agency to follow its organic act while infringing as little as possible on the values set forth in the Wil-derness Act.29

Dr. James Gilligan, a former mem-ber of the Forestry Department at Oklahoma A&M, expressed similar concerns prior to enactment of the Wilderness Act:

The Forest Service, in its at-tempts to placate everyone

interested in national forest lands . . . finds itself in the awkward and contradictory position of setting aside wil-derness units and at the same time advocating mul-tiple use as a basic policy.30

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The creation of Wilderness Areas may also impair proper management of the land.31 Different agencies were assigned various tracts of land because each area has unique values to which the agency is specifically adapted. For instance, the Forest Service was created primarily to manage the harvesting of timber on federal lands. Its duties under the Wilderness Act are diametrically opposed to that task. As the com-mentators here observed:

Conflicts between legisla-tive objectives exist despite the declaration in Section 4(a) of the Wilderness Act that wilderness designation is “within and supplemental to” the purposes for which national forests, national parks, wildlife refuges, and game ranges were estab-lished. Where a legitimate conflict exists between the goals of wilderness and those of the basic enabling legislation, the organic leg-islation is generally pre-dominant.32

This type of “conflict between legis-lative objectives” explains, for ex-ample, the events unfolding in the Cabeza Prieta Wilderness Area in Arizona. The Cabeza Prieta dilemma can serve as a perplexing illustration of challenges facing the agencies managing Wilderness Areas today.

Land is often entrusted to the Fish and Wildlife Service for manage-ment because the land serves as habitat for endangered species. Wildlife preservation may be called that agency’s “niche”.33 The habitat

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of an endangered species is often in need of protection because of the danger posed by commercial devel-opment.34 The 860,010 acre Cabeza Prieta National Wildlife Refuge was established in 1939 to protect the endangered Sonoran pronghorn (An-tilocapra americana sonoriensis).35 The best estimates put the world-wide population of Sonoran prong-horns at 500.36 The Fish and Wildlife Service was allocated land to provide for the needs of the wild-life there. In 1990, 93% of the Ref-uge land was designated wilderness.37 Along with the desig-nation came the general prohibition of motorized machinery on the land. Without certain heavy equipment proscribed by the Wilderness Act, the Fish and Wildlife Service’s abil-ity to provide for this population of endangered species is impaired.38

The pronghorn habitat is under as-sault on two fronts: foreign plants have overtaken its grazing lands and there is a severe shortage of water.39 The preferred solution to these prob-lems would be to drill wells to per-mit the pronghorns to access water, and to destroy the invading plants with a controlled burn or heavy equipment.40 Removing the offend-ing plant life and drilling water wells would permit the domestic plants that constitute the native pronghorn food supply to return, and provide an adequate water supply.41 The animals would then have access to the necessities of life without leav-ing the safety of the refuge. 42 The pronghorns would be almost com-pletely independent, with little need for human intervention.

Unfortunately, these permanent so-lutions are precluded by the Wilder-ness Act’s ban on alterations to the wild character of the land.43 Since the agency is unable to use heavy tractors or drilling equipment, the most effective option is unavail-

able.44 Instead, the agency is truck-ing fresh food and water to the pronghorns.45 The survival of the Sonoran pronghorn depends upon these daily deliveries.46 Under such circumstances the endangered spe-cies may survive, but its chances of thriving seem limited. Further, the agency is engaged in a wasteful and unnatural cycle that also compro-mises the wild character of Cabeza Prieta, with their constant incur-sions.47

Such situations may seem anoma-lous, but are likely to become more common as development continues to encroach on formerly undevel-oped private land. The Wilderness Act’s prohibition of some rigorous management techniques limits the options available to managing agen-cies. Although managers are in-structed that “the [agency’s] organic legislation is generally predominant” in these cases, it is unclear where the gray area becomes black.48 Regard-less of whether they infringe on the express provisions of the Wilderness Act, agency efforts are hampered by these additional restrictions. Of course, the agency will sometimes find an innovative solution that does not violate the Wilderness Act—as it did to preserve the St. Mary’s Wil-derness Area in Virginia.49 Never-theless, things will not always work out so well.

Scope of the NWPS The scope of the system created by the Wilderness Act has been con-tinuously debated since its passage in 1964. In his influential 1966 arti-cle, Sierra Club Chairman Michael McCloskey examined the Wilder-ness Act’s strengths and weak-nesses.50 The article provides the reader insights into the anticipated scope of the NWPS at its incep-tion.51

The Wilderness Act initially as-signed 9.1 million acres of federal land to the NWPS.52 In his article, McCloskey recognized the potential for expansion of the system.53 He rightly concluded that Congress could and would add Wilderness Areas to the initial list through amending legislation.54 “Ultimately, the system might protect more than forty-eight million acres, about 2 percent of the nation’s land sur-face.”55 Today, the size of the Wil-derness Preservation System has expanded to include over 105 mil-lion acres, or approximately five percent of the total acreage of the United States.56 The growth in only forty years has far outstripped even McCloskey’s ambitious prediction. There are several reasons for the discrepancy.

First, Congress lowered the bar for land to qualify as Wilderness.57 This came over a decade after passage of the Wilderness Act.58 Initially, the Forest Service only considered areas for inclusion that had been left virtu-ally untouched by man.59 Lands with “cabins and jeep trails, or the ‘sights and sounds of civilization’ in an otherwise pristine area, were un-suitable.”60 Under this interpreta-tion, the only areas that contained any lands that qualified were the most far-flung areas of the Western United States.61 This ‘purist’ reading of the statute was rejected by Con-gress in 1975 when it passed the Eastern Wilderness Act.62 It did so over the Forest Service’s objec-tions.63 This accounts for some of the discrepancy between McCloskey’s prediction and the scope of the system today. Once the eligibility standard was lowered, more land could be included.

A second explanation for the differ-ence is that McCloskey did not grasp the enormity of the potential Wil-dernesses in Alaska. Alaska had

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only been added to the Union in 1959, so McCloskey may not have foreseen the eventual designation of more than fifty-seven million acres in the state.64

The third primary reason for the large increase in the number of acres protected by the Wilderness Act in-volves the alterations in the political landscape since 1964.65 There is a much larger political base in favor of such designations today.66 This is may be the single largest factor ac-counting for the difference between the prediction and reality. McCloskey could not have known that such an enormous political paradigm shift was in the offing.

The Wilderness Act in Virginia As mentioned above, the original statute did not designate any Wil-derness Areas in Virginia or any of the Eastern states. It was not until 1975 that the first Wilderness Area was established in the Common-wealth.67 In that year the James River Face Wilderness Area was designated.68 It included approxi-mately 8,000 acres of the Jefferson National Forest.69 Later statutes added to the designations in Vir-ginia.70 Today Virginia boasts eight-een Wilderness Areas totaling 177,212 acres.71 Currently, Virginia has more acreage of Wilderness than any state East of the Mississippi River except Michigan.72 Congress most recently added Wilderness Ar-eas here in 2000, when it created the Priest and Three Ridges Wilderness Areas, covering a total of 11,300-acres in central Virginia.73 The Na-tional Park Service manages the Shenandoah Wilderness Area which is the largest in the Common-wealth.74 All the others are located in the Washington or Jefferson Na-tional Forests and are managed by the Forest Service.75

Continued Wilderness Expansion in Virginia There has been no slackening of the pace in the Wilderness expansion in Virginia.76 Efforts by wilderness conservation groups like Virginia Forest Watch, The Clinch Coalition, and The Virginia Wilderness Com-mittee have met with success.77 However, members of these organi-zations are not the only people with an opinion on the issue. The impact of Wilderness expansion is also im-portant to citizens in the communi-ties where Wilderness Areas are proposed.78 These two groups often have differing views on the creation of a proposed Wilderness Area.79 Ideally, the processes by which a land is designated will give both sides equal voice. A good example of the process in Virginia is the For-est Service’s revision of the man-agement plan for the Jefferson National Forest.80

In its most recent revision of the Jef-ferson National Forest Land and Re-source Management Plan, three new Wilderness Areas and twelve addi-tions to existing Areas were recom-mended to Congress for designation.81 Chief Forester Jacobs made the recommendation after tak-ing into account several factors, in-cluding the views of local community leaders.82 He recognized that the recommendation of an area will invariably affect neighboring communities.83 His report expressed concerns that a Wilderness designa-tion may hurt local economic inter-ests such as private land values.84 He chose not to include one area because he believed it could be put to better use as a bike trail.85 Less than four months after the recom-mendation was made, Senator John Warner and Congressman Rick Boucher introduced bills to make these areas part of the NWPS.86

Why Wilderness In Virginia? The benefits of Wilderness designa-tion are difficult to quantify. As suggested by the wording of the statute itself, Wilderness Areas pro-vide largely intangible advantages to society including opportunities for relaxation, wildlife preservation, watershed protection, communion with nature, and various forms of recreation.87 Another intangible that seems to be directly referenced in the Wilderness Act is the idea of existence value.88 This is the con-cept that “[t]he worth of natural re-sources [goes] beyond their use value.”89 There are several varia-tions on this concept, but the basic idea is that, even though an individ-ual may never visit a Wilderness Area, he or she values the preserva-tion of the land in its natural state.90 The individual gains from just knowing it is there.

A more quantitative measure of the value of Wilderness designations may be reflected in the local tourist economy.91 Some estimate the value of Virginia’s Wilderness Areas to the state economy in the millions of dollars.92 Clearly, this measure of the societal benefits from Wilder-ness is unsatisfactory as it only re-flects the incidental financial advantages to the community, while ignoring the less readily measured benefits.

Analysis Wilderness areas have wonderful qualities that are unquestionably worthy of protection. In almost every state they enhance and com-plement the established multi-use conservation areas as intended.93 The current and future scientific and aesthetic benefits of such reserves are incalculable. Today, few dispute the inherent value of land undis-turbed by man. Wilderness Areas are here to stay and the nation is better

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off because of it. However, this is not the end of the analysis.

While the creation of Wilderness Areas has fulfilled the dreams of many, it has engendered other prob-lems in the federal system of land conservation. The explosive growth of the NWPS is cause for concern. While Congress makes designations, more people should ask whether Wilderness is the best use for the land in question. Several interest groups encourage the indiscriminate growth of Wilderness.94 A close re-view of the current processes of ex-pansion is needed because there are important possible uses being pre-cluded as Wilderness designations continue. The primary concern raised by a rapidly expanding NWPS is that it is not the best use of the land. The lands designated for inclusion in the NWPS are often taken from other uses, such as non-primitive recreation, grazing or log-ging. These areas were dedicated to those uses because of their unique characteristics.95 Land may be espe-cially conducive to the provision of wildlife habitat, as in the Cabeza Prieta example above.96 Or, perhaps it is especially well situated for tim-ber production, water resources, mineral extraction, or some other special use. When Congress desig-nates land as a Wilderness Area and thereby prohibits activities which were previously deemed to be the best use of the land, we should ask why.97

Further, the Act does not tell us how much land ought to be Wilderness. Neither does it establish a method to evaluate the qualifications of the land. Instead it speaks in terms of basic human desires and needs that are impossible to quantify. Thus, Americans find themselves with a rapidly expanding National Wilder-ness Protection System with no plan

to limit the number of acres or per-centage of land surface.98

Although Congress may seem to be in the captain’s chair because it con-trols Wilderness designations, this perception is somewhat illusory. There is no one individual or entity that is responsible for the entire sys-tem. Members of Congress are not accountable except insofar as they have voted for or against a particular designating bill. No one is. Of course, each agency charged with land management has its own wil-derness division, but this seems to just add to the confusion.99

The designation of a single agency to manage the land and provide rec-ommendations standing alone would be a significant improvement. With one agency managing all Wilderness Areas, the recommendations to Congress could be evaluated on a national basis, with proper perspec-tive. This idea is not a new one. Dr. Gilligan suggested that the Forest Service manage the Wilderness Ar-eas that he envisioned in 1954.100 This would reduce the number of conflicting agency assignments, or at least limit the conflict inherent in land-management to a single entity. Without a single decision-making body, the recommendation process is more open to pressure from groups with a local or regional fo-cus.

Reconsidering all undeveloped fed-eral land for designation is another way the process favors Wilderness over other land uses. If the agency fails to recommend the land for des-ignation the first time, it will get another chance because the agency is required to reevaluate the land’s suitability as Wilderness periodi-cally.101 If the agency must consider the issue of Wilderness designation every time it revises its plans, the land management planning process itself creates a strong preference for

designation of additional Wilderness Areas.102 An “if not now, then later” mentality may set in as federal lands adjacent to Wilderness Areas are piece-by-piece included in the des-ignation. The rolling reassessment of federal lands encourages inappropri-ate designations.

Proponents of continuous expansion believe that the ideal Wilderness System would include as much land as possible. The Wilderness Society, for example, seeks Wilderness des-ignation for “another 100 million acres” of federal lands.103 It seems unlikely, however, that such groups will be satisfied once such additional designations are made. The contin-ued efforts of similar groups will exert pressure on the administrative and political actors in the recom-mendation process to add lands to the NWPS.

Zahniser’s suggestion of a National Wilderness Preservation Council may be the best idea to slow down this runaway train.104 The proposal would have included an eleven-member committee composed of five agency representatives and six private individuals.105 Originally intended to check the influence of agencies hostile to the idea of wil-derness preservation, today it may also work to temper agency enthusi-asm for indiscriminant designa-tions.106 A board with an eye for balancing the designation of Wilder-ness against economic, social and recreational interests might be the best solution.107 We do not need a moratorium on Wilderness designa-tions, but we must ensure that Con-gress has the best information possible when it makes these deci-sions.

Those who argue for continuous and indiscriminate expansion fail to rec-ognize the costs of such a policy. Just because a parcel of land can qualify as Wilderness does not mean

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that Wilderness is its best use. These lands retain many protections even if never made a Wilderness Area. By creating a wilderness area on federal land, the land is effectively taken out from under the umbrella of a multi-use management philosophy. These lands are put out of reach of a major-ity of Americans.108

Critics will argue that these concerns are addressed by the agency officials tasked with making the recommen-dations who balance economic, so-cial, and environmental concerns. After all, Congress has the final word on all designations. Although this is true to a degree, the individual recommenders are not always oper-ating with the big picture in mind. With pro-wilderness groups making the most noise and a section of the agency promoting Wilderness growth, the agency decision-maker is bound to feel pressure to recom-mend Wilderness Areas. This hap-pens even though she is supposed to be making an objective evaluation based on public and governmental input.109 Members of Congress feel similar pressure. A national advisory council composed of government officials and private individuals could provide a more balanced global view and a better recommen-dation to Congress.

All this might not seem like a major concern. After all, Congress could always remove a Wilderness desig-nation. But political pressures mili-tate against that ever happening.110 In fact, this has never happened in the forty years since 1964.

Conclusion Without a limit or goal at which to aim, the NWPS will continue to ex-pand. While it provides politicians with the ‘I care about the environ-ment’ vote they need for reelection, it severely restricts the uses to which the land can be put. Worse, it fosters waste by taking land away from

managers who could preserve it while harnessing its full capacity. Instead, the yield from the land is lost. While Wilderness Areas are appropriate in some places, the scope and speed of the expansion has overcome the need. Despite the best of intentions, without an effec-tive orchestration of the NWPS as a whole, the Wilderness Act may de-prive the American people of many other considerations in order to de-liver access to the wonders of “un-trammeled” land.111

1 See Mike Gangloff, Bills Mark Wilder-ness Areas, Roanoke Times & World News, Apr. 23, 2004, at B1 (detailing the proposal submitted on Earth Day 2004 by Congressman Rick Boucher and Senator John Warner to create a new, 40,000 acre wilderness area in South-west Virginia). 2 See Michael McCloskey, The Wilder-ness Act of 1964: Its Background and Meaning, 45 Or. L. Rev. 288, 289- 292 (1966) (referring to centuries old roots of the Wilderness Movement in America). 3 See Sierra Club, Highlights of the Si-erra Club’s History, available at http://www.sierraclub.org/history/timeline.asp (last visited Aug. 3, 2004)(noting the organization of the Sierra Club and similarly-minded groups). 4 See McCloskey, supra note 2, at 290 (explaining, in depth, the genesis of and motivation for the wilderness move-ment). 5 See Dennis Roth, The National Forests and the Campaign for Wilderness Legis-lation, 28 J. of Forest Hist. 112, 117 (1984) (describing the myriad of reasons for the anxiety of wilderness proponents during this time, headlined by the price of timber). 6 Id. 7 John C. Hendee & Chad P. Dawson, Wilderness Management: Stewardship and Protection of Resources and Values 103-4 (Fulcrum Publishing, 3d ed. 2002) (quoting an unpublished address at the Sierra Club’s 1951 Biennial Wilderness Conference). 8 Id. at 105. 9 McCloskey, supra note 2, at 298. Id. 10 Id. at 298, 301. 11 See 16 U.S.C. § 1131(c) (2004) (de-claring Objectives 1, 2 and 4 law and providing for severe curtailment of the concerns mentioned in Objective 3).

12 16 U.S.C. § 1131(c) (2004). 13 16 U.S.C. § 1132(b), (c)(2004). 14 Id. 15 16 U.S.C. § 1131(a)(2004). 16 See 16 U.S.C. § 1133(c) (2004). 17 For example, some Wilderness Areas include special exceptions to permit ae-rial over-flights, etcetera. See id. § 1133(c) and (d). 18 See Hendee, supra note 7, at 4 (iden-tifying Wilderness Areas as the “least modified extreme on the spectrum of land uses”). 19 The following table indicates the four agencies responsible for the Wilderness Act and the percentage of the NWPS managed by each. Bureau of Land Management – 5.9% U.S. Fish & Wildlife Service – 19.6% National Park Service – 41.6% U.S. Forest Service – 32.9% Hendee, supra note 7, at 609. 20 See Bureau of Land Management, BLM Facts, available at http://www.blm.gov/nhp/facts/index.htm (last updated Feb. 19, 2003) (stating BLM’s mission as being, in part, to “sus-tain the . . . productivity of public lands”). 21 See United States Fish and Wildlife Service, Frequently Asked Questions, Can you tell me about the U.S. Fish and Wildlife Service?, available at http://faq.fws.gov/fwsfaq.html (last vis-ited Aug. 3, 2004) (identifying the USFWS’ mission as to “preserve, protect and enhance fish, wildlife and plants and their habitats”). 22 See 16 U.S.C. § 1 (2004)(directing the Park Service to protect land so it can be enjoyed by future generations). 23 See Roth, supra note 5, at 115 (noting the historical difference and rivalry be-tween the Park Service and the Forest Service). 24 See Hendee, supra note 7, at 143-51 (detailing the distinct methods by which the four agencies recommend areas for wilderness designation). 25 Honchok v. Hardin, 326 F. Supp. 988, 993 (D. Md. 1971) (dismissing action challenging the constitutionality of the General Mining Law of 1872). 26 Id. 27 Id. 28 Honchok, 326 F. Supp. at 993. 29 16 U.S.C. § 1133(a) (2004). 30 James P. Gilligan, The Contradiction of Wilderness Preservation in a Democ-racy, Proceedings, Society of American Foresters Meeting Oct. 1954, 119, at 120 (1954). 31 See Hendee, supra note 23, at 144 (noting that wilderness designation may

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sometimes conflict with the agency’s organic legislation). 32 Id. 33 United States Fish and Wildlife Ser-vice, Frequently Asked Questions, Can you tell me about the U.S. Fish and Wildlife Service?, available at http://faq.fws.gov/fwsfaq.html (last vis-ited Aug. 3, 2004). 34 United States Fish and Wildlife Ser-vice, Pronghorn, Threats, available at http://southwest.fws.gov/refuges/arizona/pronghrn.html (last updated Apr. 15, 2002). 35 Id.; United States Fish and Wildlife Service, Threatened and Endangered Species System, available at http://ecos.fws.gov/tess_public/TESSSpeciesReport (last visited Aug. 3, 2004). 36 United States Fish and Wildlife Ser-vice, Pronghorn, Range, available at http://southwest.fws.gov/refuges/arizona/pronghrn.html (last updated Apr. 15, 2002). 37 United States Fish and Wildlife Ser-vice, Welcome to Cabeza Prieta NWR, available at http://southwest.fws.gov/ refuges/arizona/cabeza.html (last up-dated May 20, 2002). See also Arizona Desert Wilderness Act of 1990, Pub. L. No. 101-628, § 101(k)(1), 104 Stat. 4469, 4474 (codified at 16 U.S.C. § 1132 (2004)). 38Telephone Interview with J. Frederick Milton, Wildlife Biologist, Division of Conservation Planning and Policy, Na-tional Wildlife Refuge System, U.S. Fish & Wildlife Service (Apr. 9, 2004). 39 Id. 40 Id. 41 Id. 42 Id. 43 See 16 U.S.C. § 1133(c) (2004) (pro-hibiting any change in the land’s wilder-ness character). 44 Id. 45 Interview with J. Frederick Milton, su-pra note 39. 46 Id. 47 See 16 U.S.C. § 1131(c) (2004) (pro-hibiting roads within designated Wilder-ness Areas). 48Hendee, supra note 7, at 144. 49Problems occasioned by acid rain had caused streams within the St. Mary’s Wilderness to become inhospitable to wildlife. The Forest Service was able to find an innovative solution to minimize the violations, as required by the Wilder-ness Act. Using a grant funded by an outside group, lime was dropped into the affected streams from a helicopter. St.

Mary’s Wilderness Liming Project, Miti-gating Acidity in the Streams of the St. Mary’s Wilderness in Augusta County, Virginia, available at http://csm.jmu.edu/ st.marys/. This avoided the need to bring a truck through the wooded land to de-liver the lime. While this is not a solution that perfectly tracks the Wilderness Act, it was the best solution with a minimal impact on the wilderness character of the land. 16 U.S.C. § 1133(c) (2004) (citing prohibitions on land use under the Wilderness Preservation System). 50 McCloskey, supra note 2, at 288. 51 Id. 52 Id. at 288. 53 Id. at 314. 54 Id. 55 Id. at 289. 56 Wilderness.net, Fast Facts, available at http://www.wilderness.net/index.cfm? fuse=NWPS&sec=fastFacts. 57 Charles F. Wilkinson & H. Michael Anderson, Land and Resource Planning in the National Forests, 64 OR. L. REV. 1, 348 (1985) (attributing the policy change to direction from Congress and the Department of Agriculture). 58 Id. 59 Id. at 347. 60 Id. 61 Id. 62 Eastern Wilderness Act, Pub. L. No. 93-622, 88 Stat. 2096 (codified at 16 U.S.C. §§ 1131-1132 (2004)). 63 Wilkinson, supra note 58, at 348 (not-ing that the Forest Service believed des-ignation under the Wilderness Act was inappropriate and suggested alternative protections). 64 Wilderness.net, Alaska State Fast Facts, available at http://www.wilder-ness.net/index.cfm?fuse=NWPS&sec=stateView&state=ak_c. 65 Roth, supra note 5, at 125. 66 Id. 67 Eastern Wilderness Act, Pub. L. No. 93-622, 88 Stat. 2096 (codified at 16 U.S.C. § 1131-1132 (2004)). 68 Id. 69 Wilderness.net, National Wilderness Preservation System James River Face Wilderness, available at http://www. wilderness.net/index.cfm?fuse=NWPS& sec=wildView&wname=James%20River%20Face. 70 To Designate Certain Lands as Wil-derness, Pub. L. No. 94-567, 90 Stat. 2692 (codified at 16 U.S.C. § 1132 (2004)). Act of June 7, 1988, Pub. L. No. 100-326, 102 Stat. 584 (codified at 16 U.S.C. § 1132 (2004)). Act of Nov. 9,

2000, Pub. L. No. 106-471, 114 Stat. 2057 (codified at 16 U.S.C. § 1132 (2004)). Virginia Wilderness Act, Pub. L. No. 98-586, 98 Stat. 3105 (codified at 16 U.S.C. § 1132 (2004)). 71 Hendee, supra note 7, at 605. 72 Id at 559-606. 73 Act of Nov. 9, 2000, Pub. L. No. 106-471, 114 Stat. 2057 (codified at 16 U.S.C. § 1132 (2004)). 74 Hendee, supra note 7, at 605. 75 Id. Statutorily designated Wilderness Areas should be distinguished from ad-ministrative programs that prohibit de-velopment, but which are outside the Wilderness Act framework. The most prominent of these later programs is the Forest Service’s Roadless Rule. Erin Sullivan, The Forest Service’s Roadless Rule: Not Out of the Woods Yet, 16 Envtl. L. News No. 2, 1 (Fall 2004). The primary distinction between areas desig-nated under the Wilderness Act and lands affected by the Forest Service Roadless Rule is the duration. While the measures provide similar protections, a Roadless area is created or eliminated by executive decision. Wilderness Areas on the other hand are statutory and can only be affected by an act of Congress. The aforementioned U regulations cre-ated and used by the Forest Service prior to the Wilderness Act were similar to the Roadless Areas today. Supra at n.28. 76 Id. 77 Wilderness.net, Splendid Wilderness and a Wilderness Challenge, available at http://www.wilderness.org/WhereWeWork/Virginia/index.cfm. 78 Forest Serv. S. Region, U.S. Dep’t of Agric., Record of Decision, Environ-mental Impact Statement, Revised Land and Resource Management Plan, 9 (Jan. 2004). 79 Supra at n.138. 80 Forest Service Southern Region, su-pra note 79, at 38. 81 Id. at 10. 82 Id. at 9. 83 Id. at 10. 84 Forest Service Southern Region, su-pra note 79, at 10. 85 Id. at 24. 86 Mike Gangloff, Wilderness Areas Pro-posed, Roanoke Times & World News, Apr. 23, 2004, at B1. 87 16 U.S.C. § 1131(a)(2004). 88 Id. 89 Frank Cross, Natural Resource Dam-age Valuation, 42 Vand. L. Rev. 269, 285 (1989). 90 Id.

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91 James E. Johnson, Say Yes, Virginia, To Funding for Natural Resources, Richmond Times-Dispatch, Jan. 16, 2004, at A17. 92 Id. 93 See Wilkinson, supra note 58, at 336 (citing Leopold’s rationale for including Wilderness in land management plans). 94 Infra at n.39 (acknowledging that the Wilderness Society seeks to double the size of the NWPS). 95Interview with J. Frederick Milton, su-pra note 70 (noting unique ability of some lands to support specific wildlife, grow certain plants, or geography that is especially appropriate for activities such as military training because it is far re-moved from large populations).

96 Interview with J. Frederick Milton, su-pra note 39. 97 Id. 98 Hendee, supra note 7, at 511. 99 Hendee, supra note 7, at xii. 100 Gilligan, supra note 31, at 121. 101 Forest Service Southern Region, supra note 79, at 11. 102 See Virginia Wilderness Act, Pub. L. No. 98-586, § 5(b)(2), 98 Stat. 3105, 3107 (codified at 16 U.S.C. § 1600 (2004)) (including soft-release language that encourages reconsideration of the land in the future). 103 The Wilderness Society, About the Wilderness Society, available at http://www.wilderness.org/AboutUs/index.cfm?TopLevel=About.

104 Hendee, supra note 7, at 107. 105 Id. 106 Id. 107 An excellent example where this type of approach is succeeding can be found in Idaho, where a consortium of envi-ronmental groups and ranchers are sup-porting a plan to create a Wilderness Area there. This is evidence that the same can succeed at a national level. Juliet Eilperin, Groups Unite Behind Plan to Protect Idaho Wilderness, Wash. Post, April 14, 2004, at A02. 108 Hendee, supra note 7, at 511. 109 Id. 110 Roth, supra note 5, at 125. 111 16 U.S.C. § 1131(c)(2004).

Request for Articles

The articles in this newsletter are intended to provide analysis and discussion of topics that may interest attorneys who practice in the areas of environmental law. The Environmental Law Digest welcomes submissions of appropriate articles. Suggestions of topics for articles and other comments are also welcomed. Please send any submissions or comments to the Environmental Law Digest at:

Environmental Law Digest Washington and Lee University

School of Law Lexington, Virginia 24450

or by e-mail at: eglandt@wlu.edu

The EPA’s Utility Mercury Reduction Rule: Its History, Implementation, and Potential For Litigation Stephen Brownback

INTRODhe battle regarding the means by which the environment will be protected in the future

is heating up. After a very successful

cap-and-trade program to reduce acid rain, the United States Envi-ronmental Protection Agency (EPA) is trying to expand the use of cap-and-trade as an environmental regu-latory scheme by proposing the Util-ity Mercury Reduction Rule (UMMR) to reduce mercury emis-sions from new and existing coal-fired electric utility steam generating units (Utility Units), as defined in CAA section 112(a)(8).

UCTION

1 This article will briefly outline the somewhat tumultuous history of the proposed Utility Mercury Reduction Rule, analyze its major provisions, and discuss potential areas of litigation surrounding this controversial area of environmental regulation.

The proposed rule is unique in two respects. First, EPA has never used a cap-and-trade program to regulate a chemical that has been deemed a “Hazardous Air Pollutant” (HAP) under section 112 of the Clean Air Act (CAA).2 If EPA successfully creates a cap-and-trade rule, which regulates the emissions of a HAP, it is likely that the political pressure to use a cap-and-trade scheme in other areas of environmental protection will escalate significantly.

Second, EPA's proposal presents difficulties in that it is arguably pre-cluded from using a cap-and-trade regulatory scheme for mercury emissions. In December 2000, EPA issued a regulatory finding that

T Stephen Brownback is a J.D. Candidate, May 2005, Washington and Lee University School of Law. An expanded version of this article with a more extensive analysis of the Mercury Rule and its implications may be obtained from the Environmental Law Digest web site at http://eld.wlu.edu.

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seems to require it to regulate mer-cury emissions from coal-fired Util-ity Units under the very stringent regulatory scheme found in section 112 of the CAA.3 However, the President and industries are pushing the agency to find a way to regulate mercury emissions using a more flexible, industry friendly, cap-and-trade approach to regulation despite this finding. Confronted with a flood of public responses to the proposed rule, EPA has already extended the comment period by two months and has pushed back final action on the rule from December 2004 to March 2005.4 Environmentalists have charged that the proposed rule would take too long to reduce mer-cury emissions, and industry repre-sentatives claim that more stringent deadlines for reducing mercury would force adoption of unproven technologies and drive up energy costs.5 However, there has been some dispute as to whether any mer-cury reduction rule will effectively combat the mercury problem in America, in part because only one-third of domestic man-made mer-cury emissions are attributable to U.S. electric utilities and a signifi-cant amount of mercury emission in the United States can be traced to foreign sources.6 It is almost certain that the final rule will be a major source of litigation, regardless of its ultimate content. In fact, even before the notice and comment period ended, several environmental groups filed suit against EPA claiming that the proposed rule is not strict enough.7

The Hazards Posed by Mercury Mercury arises from both natural and man-made sources and presents significant environmental and health hazards.8 It circulates much like wa-ter, evaporating from soil and water to the atmosphere and re-depositing

on land and surface water. Once mercury enters water, it can be transformed into methylmercury, which is extremely toxic, dissolves easily in water, and bioaccumulates in the food chain.9 The main source of human and wildlife exposure to methylmercury, the most toxic form of mercury, is consumption of mer-cury-laden fish.10 A less common exposure to mercury is breathing mercury vapor when elemental mer-cury or products that contain ele-mental mercury break and release mercury to the air, particularly in warm or poorly-ventilated indoor spaces.11 However, mercury is harmful to humans in any form. It can damage the nervous, digestive, respiratory systems, as well as the kidneys. Developing fetuses and young children are most sensitive to mercury exposure, even at low lev-els.12 Maternal exposure to mercury may lead to brain damage, mental retardation, poor coordination, speech difficulties, and other serious effects on the fetus and newborn.13 A recent government study indicated that 630,000 U.S. newborns had un-safe levels of mercury in their blood in 1999-2000, nearly double prior estimates.14

Statutory Background Although the CAA Amendments of 1990 authorized the EPA to regulate mercury emissions from electric utilities, the EPA did not really be-gin to address the problem of mer-cury emissions for several years. As a result of litigation regarding the EPA's failure to issue mercury emis-sions reduction standards in accor-dance with the 1990 Amendments to the CAA, EPA agreed to issue pro-posed regulations limiting the mer-cury emissions of power plants on a national basis by December 15, 2003 and to issue final regulations by De-cember 15, 200415. In December 2000, EPA made several official

findings regarding mercury emission from United State utilities. First, EPA found that among the HAPs emitted by Utility Units, mercury was of greatest concern from a pub-lic health perspective because it is highly toxic, persistent, and bioac-cumulative in food chains. EPA also concluded that Utility Units are the largest anthropogenic source of mer-cury emissions in the Unites States. Finally, EPA found that it was nec-essary to regulate mercury emissions from coal-fired Utility Units “be-cause the implementation of other requirements under the CAA will not adequately address the serious public health and environmental hazards arising from such emis-sions.”16 Based on these findings, EPA determined, pursuant to CAA section 112(n)(1)(A), that it was both appropriate and necessary to regulate coal-fired Utility Units un-der section 112 of the CAA.17

As a result of the December 2000 findings, coal-fired Utility Units were added to the list of source categories under section 112(c) of the CAA. Once a source is placed on the section 112(c) list, EPA is re-quired to promulgate, for both new and existing sources, emissions standards that require the maximum degree of reduction in emissions of hazardous air pollutants. EPA must propose a standard for mercury that will require maximum achievable control technology (MACT),18 which must be at least as stringent as the average removal efficiency of the top 12% of the best performing units in the nation.19 These strict standards, justified by reference to the heightened risk associated with hazardous air pollutants, seem to limit EPA’s ability to develop a flexible and cost-effective program to reduce mercury emissions.20

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Proposed Rule Although bound by the December 2000 findings imposing MACT upon coal-fired Utility Units, EPA is forging ahead with a rule that at-tempts to institute a cap-and-trade regulation for mercury. The pro-posed Mercury Reduction Rule ac-tually contains four alternative rules, three of which involve cap-and-trade style regulation, while only one is a command-and-control MACT stan-dard. The first and most straightfor-ward of the four alternatives is to utilize the section 112(d) process and propose a MACT standard. The second alternative involves revising the December 2000 regulatory find-ing and removing coal-fired Utility Units from the section 112(c) list, instead regulating mercury emis-sions from coal-fired Utility Units pursuant to existing authority in sec-tion 111 of the CAA. The third op-tion would leave the December 2000 “appropriate and necessary” finding in place, and regulate under section 112(n) of the CAA via a to-be-promulgated cap-and-trade program. Finally, the fourth proposal would remove coal-fired Utility Units from section 112(c) by revising the De-cember 2000 regulatory finding, and promulgate a cap-and-trade program for mercury from coal-fired Utility Units pursuant to section 112(n)(1)(A) of the CAA. 21

Proposal One - Maximum Available Control Technology (MACT) Standards In determining the maximum achievable mercury reduction, CAA 112(d)(2) specifies that EPA is to take into consideration the cost of achieving the emissions reductions, any non-air-quality health and envi-ronmental impacts, and energy re-quirements. The MACT standards for new sources cannot be less strin-gent than the emission control achieved in practice by the best-

controlled similar source.22 For ex-isting sources, MACT standards can be less stringent than standards for new sources, but they cannot be less stringent than the average emission limitation achieved by the best-performing 12 percent of existing sources.23 According to EPA, if a MACT standard for mercury were implemented, it would allow mer-cury emissions of 34 tons per year,24 a reduction of nationwide emissions of mercury by 14 tons (29 percent) by the end of 2007.25

Revising the December 2000 Finding According to the current EPA, the Clinton administration erred when it found that the regulation of coal-fired Utility Units under section 112 is “necessary” within the meaning of section 112(n)(1)(A).26 Accordingly, EPA proposes to fix the previous administration's “mistake” by re-moving the coal-fired Utility Units from the CAA section 112(c) list, and then regulate mercury emissions either under CAA section 112(n) or section 111.27

In order to conclude that the regula-tion of coal-fired utilities is not “necessary” under section 112 EPA must take three distinct steps. First, it has to clarify that the December 2000 finding does not require the EPA to promulgate rules for all of the 188 HAPs listed in section 112(c) because the corresponding harm to public health from the emis-sions of these plants can be ade-quately addressed under another section of the CAA. 28 Secondly, EPA must determine that the De-cember 2000 finding was based on the threat posed by Utility Units to public health, but not “environ-mental hazards.”29 The only infor-mation in the record during the December 2000 decision-making process about the effect of HAPs on the environment concerned mercury, and that information was obtained

after completion of the study.30 Fi-nally, if the December 2000 finding is sufficiently narrowed to require regulation of only mercury emis-sions from coal-fired utilities insofar as these emissions are harmful to public health, EPA must then find that it is not necessary to regulate coal-fired utilities under section 112 because there would be alternative sections of the CAA that would ad-dress these concerns adequately.31

EPA argues that section 112(n) is a “last resort” provision, which is to be used only if the other authorities of the CAA, once implemented, would not adequately address those HAP emissions from Utility Units that warrant regulation.32 EPA relies on the final sentence of section 112(n)(1)(A) which calls for regula-tion of Utility Units under section 112 only if, based on the results of the study, EPA determines that such regulation is both “appropriate and necessary” to regulate such units.33 EPA's interpretation of this language seems to be consistent with the statement by Congressman Oxley, a member of the conference commit-tee.

[I]f the Administrator regu-lates any of these units, he may regulate only those units that he determines—after taking into account compliance with all provi-sions of the Act and any other Federal, State or local regulation and voluntary emission reductions—have been demonstrated to cause a significant threat of ad-verse effects on the public health.34

Under a revised December 2000 finding, addressing mercury emis-sion from Utility Units, EPA would employ CAA section 111 to address the hazards to public health resulting from mercury emissions from Utility

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Units. If section 111 could indeed be used to address these health hazards it would not be “necessary” to regu-late under section 112. Section 111 authorizes EPA to develop standards of performance for new and existing sources of air pollutants that cause, or contribute significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.35 EPA argues that the agency “based its ‘necessary’ find-ing in December 2000 solely on its belief, at the time, that there were no other authorities under the CAA that would adequately address mercury emissions from coal-fired Utility Units.”36 But now EPA believes that regulation of coal-fired Utility Units under section 112 is not “necessary” because the proposed CAA section 111 rules, once implemented, would adequately address the public health hazards posed by Utility Unit emis-sions of mercury.37

Proposal Two and Three: Cap-and-Trade Program Under Section 112 According to EPA, section 112(n) does not require a MACT standard, but would allow other more flexible options like cap-and-trade.38 Cap-and-trade program under section 112(n) would be similar to the cap-and-trade rule that is proposed under section 111, but with a few impor-tant differences. One significant dif-ference is that under section 112 the cap-and-trade program would re-main more firmly in the federal gov-ernment’s control because it would allow EPA to implement a national standard directly.39 Under a section 111 rule, EPA would rely on the states to implement the program through a State Implementation Plan.40 If a state fails to submit or implement a SIP, or if it submits a SIP that is unacceptable to EPA, EPA has the power to impose sanc-tions or other penalties on that state

such as cutting off federal highway funds and setting more stringent pol-lution offsets for certain emitters.41 However, increased control of an EPA-implemented cap-and-trade program would reduce administra-tive burdens on both EPA and the States and assure national consis-tency.42

In order to implement a cap-and-trade program under section 112 of the CAA, EPA would have to make a few simple moves. First the Agency would remove the coal-fired utilities from section 112(c) by find-ing that it was not necessary for the Clinton administration EPA to place coal fired Utility Units on the sec-tion 112(c) list of source categories. Then it would regulate these utilities under section 112(n) of the CAA instead of section 112(d). EPA ar-gues that, unlike the strict standard required by section 112(c), Congress intended section 112(n) of the CAA to allow the implementation of a flexible, market-based approach like a cap-and-trade regulation.

Section 112(n)(1) of the CAA is specifically aimed at the control of pollution from “Electric Utility Steam Generating Units.”43 EPA now argues that even though the 2000 finding determined that it was appropriate and necessary to regu-late these utilities, it was inappropri-ate for the Clinton administration to decide to regulate these utilities by MACT pursuant to section 112(c). EPA contends that Congress in-tended that an “appropriate and nec-essary” finding should have resulted in the promulgation of regulations under 112(n).44

EPA cites several reasons why, in its view, Utility Units should be regu-lated under section 112(n). First, there is no statutory support for plac-ing these Utility Units on the section 112(c) list.45 Nothing in section 112(n) requires that these Utility

Units be placed on a 112(c) list or mandates a MACT standard regula-tion. Had Congress not authorized section 112(n) to regulate electric utility steam generating units, it may have been appropriate for EPA to regulate these utilities under section 112(c). But since Congress has ex-pressly authorized EPA to regulate these units under section 112(n), it would be inappropriate to regulate under section 112(c) instead.46 Sec-ondly, the Bush EPA asserts that Congress created section 112(n) ex-pressly to spare Utility Units from the MACT standard. Congress en-acted section 112(n), which specifi-cally regulates through “alternative strategies,” so that utilities could achieve emission reductions while avoiding the high costs usually asso-ciated with MACT regulations.47 Finally, EPA bolsters its argument that section 112(n) was intended to be the regulating statute by pointing out that there are significant differ-ences between regulations required by section 112(d) and 112(n). Sec-tion 112(d) requires the technology-based MACT standard, but 112(n) allows “any control strategy that is ‘appropriate and necessary’ in light of ‘hazards to public health reasona-bly anticipated to occur.’”48 Accord-ing to EPA’s understanding, this allows EPA to pursue flexible and creative regulation as long as it ef-fectively addressed the public health concerns. Further, section 112(n) requires EPA to develop alternative control strategies for the regulation of utility emissions that may warrant regulation under section 112. Sec-tion 112(d), however, has no such provision for alternative strategies.49 The current EPA therefore con-cludes that because Congress did not require an “appropriate and neces-sary” finding to result in a 112(c) listing, and because there are signifi-cant differences between the re-quirements of 112(d) and 112(n), it

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would be inappropriate to regulate these utilities under section 112(d).

In section 112(n), Congress requires that EPA consider a wider range of control alternatives than the source-by-source approach under section 112(d) MACT approach.50 In EPA's view, this provision confers on the Agency the authority to develop a cap-and-trade program for HAP emissions from Utility Units.51 Even if EPA does not revise the December 2000 finding, it intends to remove coal-fired utilities from section 112(c). EPA no longer believes that an “appropriate and necessary” find-ing should result in a 112(c) listing, but that a section 112(n) finding of “appropriate and necessary” should result in regulation under section 112(n) itself. Section 112(n) allows for a flexible cap-and-trade approach to the regulation of utilities.

Proposal Four: Cap-and-Trade Regulation Under Section 111 In order for EPA to promulgate a cap-and-trade rule under CAA sec-tion 111, it would also have to rec-oncile conflicting congressional amendments to section 111(d) in such a way that would allow the agency to promulgate an existing sources regulation for HAPs emitted from coal-fired utilities. However, if EPA concludes that it is not neces-sary to regulate coal-fired utilities under section 112, and is successful in removing these utilities from the CAA section 112(c) list, EPA may promulgate a cap-and-trade regula-tion under CAA section 111. EPA would utilize both section 111(b), which applies to new sources, and section 111(d), which applies to ex-isting sources. Under these provi-sions, EPA believes it has the authority to establish standards of performance for both mercury emis-sions from new and existing coal-fired Utility Units. EPA believes that the cap-and-trade program under

these provisions of section 111 would adequately address the health hazards resulting from mercury emissions from coal-fired utilities.52 Of these two sections, regulating under section 111(b) for new sources seems less problematic.

EPA has not historically regulated HAPs under CAA section 111, but EPA has found nothing in CAA sec-tion 111 or section 112 or their leg-islative history indicating that Congress sought to exclude this pos-sibility and require HAPs to be ex-clusively regulated under section 112. EPA thus concludes that CAA section 111(b), as amended in 1990, constitutes a viable and appropriate statutory authority by which to regu-late mercury emissions from new coal-fired Utility Units.53

HAP regulation of existing sources under section 111(d) is more prob-lematic. Current law as it is printed in the United States Code would seem to prohibit EPA from taking this course of action. However, the 1990 amendments to the CAA con-tain two different and conflicting amendments to section 111(d), both of which address the scope of EPA’s authority to regulate HAPs under section 111(d). Before the 1990 amendment, section 111(d) provided that standards of performance should not be established under section 111(d) with respect to any pollutants that are listed as hazardous air pol-lutants under section 112(b)(1)(A) or the 1977 CAA.54

EPA sought to resolve this conflict by “harmoniz[ing] such conflicting provisions, where possible, and to adopt a reading that gives some ef-fect to both provisions.”55 Not sur-prisingly, EPA’s harmonized section 111(d) would allow the Agency to regulate by enacting a cap-and-trade program for mercury. EPA now reads the statute to mean that: “Where a source category is being regulated under section 112, a sec-

tion 111(d) standard of performance cannot be established to address any HAP listed under 112(b) that may be emitted from that particular source category.”56 However, even under this interpretation of section 111(d), EPA still would not be allowed to enact the cap-and-trade program under section 111(d) for Utility Units because these units are now listed in section 112(c) and mercury is listed as a HAP under section 112. EPA has proposed to avoid this problem by inquiring whether it would have been permissible in 1998, before the December 2000 finding began the regulatory process for these units under section 112(c).57

Despite the statutory complications, the cap-and-trade program itself is rather simple to understand. Under a section 111 cap-and-trade scheme, EPA projects that it would reduce power plant emissions of mercury by 70 percent from today’s levels by 2018. Under section 111(b)(1)(B), EPA would promulgate technology-based limitations for mercury emis-sions from new coal-fired Utility Units. For existing Utility Units, EPA would institute a mercury cap-and-trade program under section 111(d).58

EPA would limit mercury emissions on a nationwide basis at a specified level, and then allocate to each State a specified amount of mercury al-lowances. Each allowance is the au-thorization to emit a unit of mercury. The States would have the discretion to choose how to allocate their re-spective budget allocations as part of the SIP process. Facilities would hold one allowance for each ounce of mercury emitted in any given year, and would be forbidden to emit more mercury than their allowances covered. Utility Units would be al-lowed to purchase or sell allowances on a nationwide basis and adjust their emissions accordingly.59 The

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authorization to trade allows each Utility Unit to use the most cost-effective means to regulate its emis-sions. In this way, the cap would provides health protection by limit-ing overall emissions, but also be more efficient than a MACT ap-proach.

The cap-and-trade program would have two phases. The first phase cap would become effective in 2010 and would be set at a level that reflects the maximum reduction in mercury emissions that could be achieved through the installation of the con-trol units that will be necessary to meet the 2010 caps for SO2 and NOX in the proposed Interstate Air Quality Rule.60 Although the emis-sion reduction units for SO2 and NOX would decrease mercury emis-sions as well, the agency admits that it is uncertain about the extent of the mercury reductions that these con-trols would actually achieve by 2010.

Because of this uncertainty, EPA has not proposed a specific amount for the 2010 cap, but is still attempting to determine the appropriate level. EPA estimates that these controls for NOX and SO2 should reduce mer-cury emissions from the power sec-tor to approximately 34 tons per year.61 This is the same amount that EPA estimates will be achieved by a MACT standard by 2007.62 The EPA asserts that it makes much more sense to lead with SO2 and NOX controls, which are well estab-lished, than to lead with mercury controls, which are only at the be-ginning stages of commercialization. Another advantage of concurrently regulating mercury and SO2 is de-rived from the fact that companies will have the opportunity under the SO2 cap to generate extra allow-ances by achieving early reductions. As explained above, companies would probably meet the mercury

cap by way of the controls they in-stall for SO2 and NOX. Conse-quently, the incentive to achieve early reductions for SO2 effectively assures early reductions for mer-cury.63

From a capital planning perspective, a trading approach permits utilities to make a much more rational in-vestment in emissions control than a traditional MACT approach. Utility investments in reducing criteria air pollutants (particulate matter, sulfur dioxide and oxides of nitrogen) pro-vide a co-benefit for mercury control because some forms of mercury, especially those that are deposited nearest the source, are controlled by the same technologies used to con-trol criteria pollutants. Given the likelihood of co-benefits, it makes good economic sense for utilities to coordinate control of criteria air pol-lutants, especially those needed to achieve the new air quality standards for fine particulate matter and ozone, with their capital investments aimed at reducing mercury emissions. The statutory deadlines for a mercury MACT rule do not permit this se-quence of investments.64

In the second phase, EPA would set a 15-ton cap on these emissions in 2018. Here EPA would walk a fine line; a cap that is too strict could create an incentive for coal-fired utilities to switch to natural gas or increase the price of electricity to the public. EPA believes that a 15-ton cap would create an incentive for certain plants to continue to install newer technologies as they became available, while a more stringent cap could significantly impact the types of fuels used or power availability, reliability, or pricing. Though it is cleaner, the standard might encour-age too many utilities to shift to natural gas, which poses two sepa-rate problems. First, a large increase in natural gas use will likely strain

the U.S. natural gas production and delivery system.65 Secondly, over-reliance on natural gas could have serious economic consequences—including higher prices and greater price volatility.66

States can participate in the 111 trading programs by adopting the model rules developed by EPA. When a State adopts the model rule as part of its section 111 SIP-like rule, it will be authorizing EPA to assist the State in implementing the trading program with respect to the sources in that State.67 The State budgets and unit emission alloca-tions become the required maximum emission limit for states that opt not to participate in the trading pro-gram.68

Probable Sources of Litigation Mercury emission reduction from coal-fired plants has been a source of litigation long before this rule was proposed, and it is almost certain that this proposed rule will face liti-gation no matter what route EPA finally decides. If EPA decides to implement a MACT standard, EPA will probably be sued both by envi-ronmental groups and by the indus-try. The environmental groups will probably claim that the proposed mercury emission reduction required by the MACT standard is not as low as it should be. According to the proposed rule, the MACT standard would allow mercury emissions of 34 tons per year,69 a reduction of nationwide emissions of mercury by 14 tons (29 percent) by the end of 2007.70 However, the newly re-leased EPA Office of Research and Development analysis found that existing pollution control technolo-gies under a MACT approach could achieve between 70 percent and 90 percent cuts in mercury by 2010, and 90 percent to 95 percent by

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2015. The higher reduction poten-tially achievable under the MACT standard could be the basis for a ju-dicial challenge to a trading ap-proach.

If the MACT standard is used, it also is possible that coal-fired utilities and coal companies will also sue EPA. Because a MACT standard is comprised of technical requirements that the regulated industry must meet, a MACT standard usually seems to encourage the regulated industry to challenge the technical standard. The industry might seek to benefit from litigation delays result-ing from challenges to a MACT standard.

On the other hand, there is usually little litigation from the regulated industry when EPA institutes a cap-and-trade regulation. One reason for this is that a cap-and-trade style rule is much more industry-friendly be-cause it is flexible, allowing the in-dustry to choose what it deems the best means to accomplish the na-tional emission goal set by EPA.71 Another reason for a lack of litiga-tion from the industry is that a cap-and-trade style regulation does not employ the technical detail involved in a MACT standard. This simplified regulatory approach inherently cre-ates fewer loopholes than a more detailed technical rule.

However, if EPA does institute a cap-and-trade rule, it is likely that there will be prolonged litigation from environmental groups. One of the arguments that will probably be employed is that EPA significantly shifted its position by proposing that mercury emissions need not be con-trolled in the same manner as other toxic pollutants.72 Under general principles of administrative law, where a statute is unclear on a cer-tain subject, courts will normally defer to an administrative agency’s reasonable interpretation of that statute.73 In light of section 112(n)

command for EPA to develop “al-ternative control strategies”74 when regulating coal-fired Utility Units, it does not seem clear that Congress intended that a MACT standard must be used. It is probable that the courts will defer to EPA’s interpre-tation of the rule; however, this will be a hotly contested point.

Hot Spots The most controversial aspect of the cap-and-trade mercury reduction rule is whether such a rule would produce “hot spots.” Environmental-ists and health advocates which sup-ported the cap-and-trade program for certain types of pollution, such as smog-causing ozone or sulfur-producing acid rain, argue that it is not beneficial in the case of mer-cury. In the case of those pollutants, the cap-and-trade program was de-signed to provide an incentive to cut emissions nationwide, without limit-ing them at each individual facil-ity.75 Mercury, which is heavier than acid-rain-producing sulfur dioxide and nitrogen oxide, may remain close to the point of emission, creat-ing “hot spots” of unacceptably high levels of mercury contamination near power plants.76

The rule has not only generated con-cern about local hot spots, but also concern regarding unacceptable lev-els of mercury in entire regions of the country.77 According to a report release Environmental Defense in December 2003, ten states have pockets of airborne mercury pollu-tion that potentially pose a serious health risk.78 The report shows that in nine of the 10 states with the highest mercury concentrations, power plants in those states created 50 to 80 percent of the mercury. Complicating this problem, the eco-systems in some regions seem to be especially sensitive to mercury deposition.79

In January of 2004, ten House Re-publicans wrote a letter to the Presi-dent stating that EPA's proposed regulation to control mercury emis-sions from power plants through a cap-and-trade system could be im-proved with additional safeguards for local hot spots.80 They agree with the Bush administration that mercury trading is an efficient method for pollution cuts and is simpler to administer and enforce, but voiced concern that the national emission trading program could cause elevated mercury deposition levels in different areas of the coun-try.81 They suggested adding re-gional emission trading areas for states with high levels of mercury, or setting a level of mercury emis-sions above which no plant could emit.82 It is probable that environ-mental groups will litigate in an at-tempt to force EPA to include some sort of protection against hot spots in the rule, and states might litigate in order to gain some authority to pro-tect against hot spots within their borders.

Conclusion The UMRR has a very uncertain future. Already, many are calling for the proposed rule to be scrapped. EPA has delayed the issuing the fi-nal rule and this may bring trouble because this seems to violate the settlement agreements that they have made regarding the mercury reduc-tion.83 Further, if the Bush Admini-stration can push the Clean Skies bill pushed through Congress, that bill would make this rule moot. For now, however, this proposed rule is still alive, and EPA is battling on. The real battle, though, is not over mer-cury emission reduction. The real battle that is being waged is over the means that will be used to protect the environment in the future. In that respect, what is important here is not what is being done, but how it is be-ing done. How will the courts, in-

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dustry, and environmentalist react to the regulatory moves that EPA is attempting to make? Once precedent is made in the courts and in the in-dustry, (i.e. regulating a HAP through cap-and-trade, creating an-other cap-and-trade program) it will be much easier to attempt the same regulatory scheme again, but in an-other regulatory area. If EPA wins this battle, the next battle might not be over “if cap-and-trade” but over “what type of cap-and-trade.”

1 Proposed Nat'l Emission Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Per-formance for New and Existing Station-ary Sources: Electric Utility Steam Generating Units, 69 Fed. Reg. 4652 (proposed January 30, 2004) (to be codi-fied at 40 C.F.R. pt. 60, 63). 2 42 U.S.C. § 7412 (2004). 3 Notice of Regulatory Finding, 65 Fed. Reg. 79825 (Dec. 20, 2000). 4 Juliet Eilperin, EPA Delays Mercury Regulations; Final Action on Plant Emis-sions Rules Slated for March '05, WASH. POST, April 30, 2004, at A02. 5 Id. 6 Northeast States Say Strict MACT Standard Easily Achievable, AIR Daily, November 5, 2003, at 1, available at http://www.kfx.com/policy/AD110503.pdf (last visited May 5, 2004). See also Envi-ronmental Protection Agency, Mercury White Papers, available at http://www.epa.gov/ttn/oarpg/t3/memoranda/whtpaper.pdf (last visited May 5, 2004). 7 Meredith Goad, Suit Contends EPA Mercury Rules Will Not Protect Health, PORTLAND PRESS HERALD, April 29, 2004, at 1B, available at http://www. maineenvironment.org/press/merc_suit_ PPH0404.htm (last visited May 7, 2004). 8 Edison Electric Institute, Straight Talk About Electric Utilities and Mercury, (April 2001), available at http://www. seminole-eletric.com/sections/generation /public/straight_talk_mercury.pdf (last visited May 4, 2004). 9 Purdue University Agricultural and Bio-logical Engineering Department, Bioac-cumulation of Mercury, available at http://pasture.ecn.purdue.edu/~mercury/src/bioac.htm (last visited May 4, 2004). 10 Shilpi Banerjee & Vicki Stamper, Mer-cury Air Pollution: The Case for Rigorous

MACT Standards For Subbituminous Coal, (May 2003), available at http://www.westar.org/Docs/umact/mercury_final_may25finalcirc.doc (last visited May 4, 2004).

11 Environmental Protection Agency, Mercury Basic Information, available at http://www.epa.gov/mercury/about.html (last visited February 16, 2005). 12 Howard Koh, Health Benchmark Spe-cial Report on Mercury, Massachusetts Health Benchmark, available at http://www.healthbenchmarks.org/Mercury/SectionFourPregnantwomen.cfm (last visited May 4, 2004). 13 Physicians for Social Responsibility, Mercury Quick Facts, available at http://www.envirohealthaction.org/upload_files/PSR_Hg1_quickC.pdf (last visited May 4, 2004). 14 Guy Gugliotta, Mercury Threat To Fetus Raised; EPA Revises Risk Esti-mates, WASH. POST, Feb. 6, 2004, at A03. 15 Natural Resources Defense Council v. EPA, D.C. Cir., No. 92-1415, (1998). 16 Regulatory Finding on the Emissions of Hazardous Air Pollutants from Electric Utility Steam Generating Units, 65 Fed. Reg. 79825 at 79830 (December 20, 2000). 17 Id. at 79826. 18 42 U.S.C. § 7412(d)(3) (2004). 19 42 U.S.C. § 7412(d)(3)(A) (2004). 20 In many provisions of the CAA, Con-gress has denied consideration of com-pliance costs. See Whiteman v. ATA, 531 U.S. 457 (2001). Where the Su-preme Court found that § 109(b) of the CAA barred cost considerations from the NAAQS-setting process. 21 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4661. 22 42 U.S.C. § 7412 (d)(3). 23 42 U.S.C. § 7412 (d)(3)(A). 24 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4661. 25 Environmental Protection Agency, EPA Proposes Options for Significantly Reducing Mercury Emissions from Elec-tric Utilities, available at http://www.epa.gov/mercury/hg_factsheet1_29_04.pdf (last visited May 9, 2004). 26 Regulatory Finding on the Emissions of Hazardous Air Pollutants from Electric Utility Steam Generating Units, 65 Fed. Reg. at 79825. 27 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4683. 28Regulatory Finding on the Emissions of Hazardous Air Pollutants from Electric

Utility Steam Generating Units, 65 Fed. Reg. at 79830. 29 Id. 30 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4683. 31Regulatory Finding on the Emissions of Hazardous Air Pollutants from Electric Utility Steam Generating Units, 65 Fed. Reg. at 79825. 32 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4684. 33 42 U.S.C. § 7412 (n)(1)(A). 34 136 Cong. Rec. E3670, 3671 & H12911, 129.1 (daily ed. Nov. 2, 1990) (Statement of Congressman Oxley). 35 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4684. 36 Id. 37 Id. 38 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4661. 39 Id. at 4662. 40 A State Implementation Plan (SIP) is a plan developed at the state level that explains how the state will comply with federal air quality standards set by EPA under the Clean Air Act. See, Texas Natural Resources Conservation Com-mission, Introduction to SIPs, available at http://www.tnrcc.state.tx.us/oprd/sips/ sipintro.html (last visited May 4, 2004). 41 Id. 42 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4662. 43 42 U.S.C. § 7412(n)(1). 44 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4662. 45 Id. at 4661. 46 Id. 47 Id. 48 Id. 49 Id. In the proposed rule EPA is pro-posing three alternatives to the MACT standard required under section 112(d). These alternatives are being proposed under the authority of section 112(n), while the MACT standard is being pro-posed under section 112(d). Therefore, the revision, or lack thereof, of the 2000 finding will be the critical step in deter-mining even which alternatives are actu-ally viable options. 50 Id. 51 Id. at 4662. 52 Id. at 4684. 53 Id. at 4566. 54 Id. at 4685. 55 Id. 56 Id. 57 Id. 58 Id. at 4687. 59 Id. at 4686.

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60 Id. at 4566. 61 Id. at 4698, n.15. 62 Id. at 4661. 63 Id. at 4687. 64 Id. at 4688. 65 Electric Power Research Institute, Choosing the Right Fuel for a Depend-able Supply of Electricity, available at http://www.epri.com/corporate/discover_epri/news/HotTopics/env_FuelChoice.pdf (last visited May 5, 2004). 66 Id. (Experienced this fluctuation in the winter of 2000-01 when wholesale natu-ral gas prices quadrupled in a matter of months.) 67 Id. 68 Id. 69 Id. at 4661. 70 Environmental Protection Agency, EPA Proposes Options for Significantly Reducing Mercury Emissions from Elec-

tric Utilities, available at http://www.epa.gov/mercury/hg_factsheet1_29_04.pdf

71 Id. 72 Darren Samuelsohn, Enviros Mull Pre-emptive Legal Strike at Mercury Propos-als, Greenwire, (December 16, 2003) available at www.greenwire.com. 73 Chevron, U.S.A., Inc. v. Natural Re-sources Defense Council, Inc., 467 U.S. 837 (1984). 74 42 U.S.C. § 7412(n)(1)(A). 75 Tom Hamburger & Alan C. Miller, Mercury Emissions Rule Geared to Benefit Industry, LOS ANGELES TIMES, March 16, 2004, at A1. 76 Tom Hamburger & Alan C. Miller, Mercury Emissions Rule Geared to Benefit Industry, Staffers Say, Ohio En-vironmental Council, available at http://www.theoec.org/pdfs/hottopics_top

ish_rulegeared.pdf (last viewed May 5, 2004). 77 Mercury II, Ten States Have Danger-ous Hot Spots, (December 10, 2003), available at www.greenwire.com. 78 Id. 79 Utility Mercury Reduction Rule, 69 Fed. Reg. at 4701. 80 Darren Samuelsohn, GOP House Members Urge Bush to Consider Hot Spots in Mercury Rule, Environment and Energy Daily, January 29, 2004, avail-able at http://www.eenews.net/ sr_cleanair.htm (last visited May 9, 2004). 81 Id. 82 Id. 83 Natural Resources Defense Council v. EPA, D.C. Cir., No. 92-1415, (1998).

Case Digest

United States

Supreme Court

CWA Applies NDPES Per-mitting Requirements to Point Sources that Convey Pollutants South Florida Water Manage-ment District v. Miccosukee Tribe of Indians, et al., 124 S.Ct. 1537 (2004) Shannon Borromeo, Class of 2006, Washing-ton & Lee University School of Law

The Misccosukee Tribe of Indians (Tribe), along with Friends of the Everglades, brought suit against the

South Florida Water Management District (District), alleging violations of the Clean Water Act (CWA). Tribe claimed that District was re-quired under the CWA to obtain a discharge permit under the National Pollutant Discharge Elimination System (NPDES). The District Court granted Tribe’s motion for summary judgment and the United States Court of Appeals for the Eleventh Circuit affirmed. Justice O’Connor, writing for the United States Supreme Court, vacated and remanded, holding: (1) “discharge of pollutant,” for which a NPDES per-mit is required, includes point sources that do not themselves gen-erate pollutants, and (2) triable is-sues existed regarding whether canal and wetland areas were meaning-fully distinct water bodies.

District manages the Central and South Florida Flood Control Project. Congress established the project to address drainage and flood control

issues in reclaimed portions of the Everglades. The five elements of the project at issue here include: 1) the C-11 canal, 2) the S-9 pump station, 3) the WCA-3 wetland area, 4) the L-33 levee, and 5) the L-37 levee. Tribe sought to stop the conveyance of water from C-11 into WCA-3 by enjoining the operation of S-9. They relied on 33 U.S.C. § 1311(a), which prohibits “the discharge of any pol-lutant by any person” unless done in compliance with a provision of the CWA. The NPDES, established by § 1342, requires dischargers of pollut-ants to obtain permits that place lim-its on the pollutants that can be released into the Nation’s waters.

The relevant question before the Court was whether the operation of the S-9 pump constitutes the “dis-charge of a pollutant” within the meaning of the CWA. Section 1362(a) defines “discharge of a pol-lutant” to mean “any addition of any pollutant to navigable waters from

Environmental Law News any point source.” Furthermore, § 1362(14) defines ‘point source’ as “any discernible, confined and dis-crete conveyance from which pollut-ants are or may be discharged.” The District made three arguments.

District’s first argument that the NPDES program does not apply where the pollutants originate else-where and merely pass through the point source was rejected by the Court. The Court reasoned that by defining ‘point source’ as a “dis-cernible, confined, and discrete con-veyance,” the CWA made clear that a point source needs only to convey the pollutant to navigable waters. The point source does not have to generate the pollutant.

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District also argued that all water bodies that are navigable waters un-der the CWA should be viewed uni-tarily for NPDES permitting purposes. They asserted that such permits are not required when water from one navigable body is dis-charged, unaltered, into another navigable body. Although the Court kept the unitary waters argument open on remand, it declined to re-solve the case on the basis of the argument because neither the Dis-trict nor the Government raised it before the Eleventh Circuit or in their briefs requesting certiorari. The Court noted that it was unaware of any case that examined the unitary waters argument in this form.

Lastly, District argued that the C-11 canal and WCA-3 area constitute indistinguishable parts of a single water body, so that pumping water from one into the other cannot amount to an addition of pollutants within the meaning of the CWA. The test applied by the lower courts to determine whether or not the parts were distinct was to look at whether the transfer of water or its contents from C-11 to WCA-3 would occur naturally. Finding that issues of ma-

terial fact remained as to the dis-tinctness of the water bodies, the Supreme Court held that summary judgment was improper and the ap-plication of the test was premature.

Federal Circuit Court

District Court Abused Its Discretion By Requiring A Heightened Proffer Of Evidence Necessary To Establish Financial Eligibility Under The Equal Access To Justice Act Broaddus v. U.S. Army Corps of Engineers, 380 F.3d 162 (4th Cir. 2004) Zahid Raja, Class of 2005, Washington & Lee University School of Law

The district court determined that Mr. Broaddus failed to establish fi-nancial eligibility under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412 (2004), and denied his petition for attorney's fees. Mr. Broaddus appealed, and in an opin-ion written by Judge Gregory, the United States Court of Appeals for the Fourth Circuit concluded that Mr. Broaddus was a party as defined by EAJA, and the district court abused its discretion in holding oth-erwise. Accordingly, the case was reversed and remanded to the district court for a determination of appro-priate attorney's fees.

The EAJA allows persons who have successfully sued the government to collect attorney's fees and requires: 1) that the claimant be a “prevailing party”; 2) that the government posi-

tion was not “substantially justi-fied”; 3) that no “special circumstances make an award un-just”; and 4) that the fee application be submitted to the court within 30 days of final judgment and be sup-ported by an itemized statement. Crawford v. Sullivan, 935 F.2d 655, 656 (4th Cir. 1991) (quoting 28 U.S.C. § 2412). The sole argument by the government in this case is that Mr. Broaddus is not a party as defined by the statute.

The EAJA defines a party as an in-dividual whose net worth did not exceed $2,000,000 at the time the civil action was filed. 28 U.S.C. § 2412(d)(2)(B). The text of EAJA does not define net worth or give instructions on how to calculate an applicant's net worth. According to the Fourth Circuit, while the district court recognized that it must use generally accepted accounting prin-ciples to determine Mr. Broaddus's net worth, it did not correctly apply those principles.

The Fourth Circuit found that the district court erred by requiring heightened evidentiary requirements to establish an applicant's net worth. The Court held that a determination of eligibility for EAJA fees should not result in a second trial, and that some informality of proof should be allowed. It further held that a dis-trict court is capable of determining an applicant's net worth based upon a sworn affidavit by the applicant's CPA, provided that the affidavit in-cludes documentation of the appli-cant's liabilities and assets. The Fourth Circuit concluded that if a CPA's affidavit allows the court to subtract liabilities from assets, thereby enabling the court to deter-mine an applicant's net worth, then no further documentation is re-quired. In this case, the Court found that Mr. Broaddus’s documentation

Environmental Law News was more than ample to demonstrate his eligibility for an EAJA award.

The Fourth Circuit also found that the district court erred by holding that for net worth purposes under EAJA, assets are calculated by using acquisition cost, not fair market value. The Court found that the dis-trict court’s conception of acquisi-tion cost under EAJA was flawed, and regardless of whether Broaddus had supplied an acquisition cost, the record shows that he was nonethe-less eligible for attorney's fees. Ac-cordingly, the case was reversed and remanded to the district court for a determination of appropriate attor-ney's fees.

Pollution Expulsion Clause Does Not Bar Insurance Company’s Duty to Defend Auto-Owners Ins. Co. v. Potter, 105 Fed. Appx. 484 (4th Cir. 2004) Laura Fleischmann, Class of 2006, Washington & Lee University School of Law

Debra Potter and other residents of a North Carolina subdivision brought suit against housing developer, Whitewood Properties, alleging bod-ily injury and property damage caused by contaminated water sup-plied by Whitewood. Auto-Owners Insurance Company, Whitewood’s insurer, filed for a declaratory judg-ment in federal court claiming that it had no obligation to defend White-wood in the suit due to the pollution expulsion clause of the commercial general liability (CGL) policy.

The District Court granted summary judgment and held that the Auto-Owner’s pollution exclusion clause barred the insurer’s duty to defend Whitewood. On appeal, the Fourth Circuit vacated the district court’s

decision and held that a pollution exclusion clause does not release the insurer from defending the claim, and remanded the case for further findings.

“The Auto-Owners CGL policy re-quires the insurer to pay those sums that Whitewood is legally obligated to pay as a result of bodily injury or property damage caused by an oc-currence within the scope of the pol-icy’s coverage.” Potter, 105 Fed.Appx. at 487. The pollution ex-clusion clause creates an exception to the policy excluding from cover-age “bodily injury” or “property damage” arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, re-lease or escape of pollutants.” Id. at 488.

The Fourth Circuit reviewed the District Court’s finding de novo. Under North Carolina law, “the terms of the policy are to be given their ordinary meaning, unless the context indicated a different mean-ing was intended.” Id. at 489. Any doubts or ambiguities in the policy must be resolved in favor of the in-sured. Since there was no control-ling precedent in this case, the District Court relied on four inde-pendent holdings of the North Caro-lina Court of Appeals in W. Am. Inx. Co. v. Tufco Flooring, E., Inc., 409 S.E.2d 692 (N.C. Ct. App. 1991).

In Tufco, the Court interpreted the terms of the exclusion clause (dis-charge, dispersal, seepage, migra-tion, release or escape of pollutants) as “environmental terms of art.” The Fourth Circuit held that this in-terpretation should serve as the ordi-nary meaning for the Court. While both courts found that the first three findings of Tufco were distinguish-able from this case, the Fourth Cir-

cuit found that District Court erred in rejecting the fourth Tufco finding which held that in order to trigger the pollution exclusion clause and deny coverage to the insured, any discharge, dispersal, release or es-cape of a pollutant must be into the environment. In Tufco the damage was confined to an area within a processing plant. The court held that the traditional environmental damage a pollution exclusion clause is designed to protect against was not at issue because the damage was not “into or upon the land, the at-mosphere or any water course or body of water.” Tufco at 699.

The Fourth Circuit found that “the occurrence and injury to the appel-lants is not the prototypical envi-ronmental harms that a pollution exclusion clause is intended to pro-tect against.” Potter, 105 Fed.Appx. at 496. The damage in this case was to the homeowners and their prop-erty, not the environment. The envi-ronmental terms dispersal, seepage, migration release or escape refer to the sort of commonly recognized environmental pollution at which the clause is targeted, and in order to trigger the clause, the pollution must be into the environment. The clause does not absolutely protect insurers from every type of pollution.

Accordingly, the Fourth Circuit va-cated the decision and determined that the District Court erred by fail-ing to interpret the environmental law terminology as terms of art and failed to apply the fourth holding of Tufco.

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Environmental Law News

Virginia Court of Appeals

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Commonwealth Sovereign Immunity Waived for Judicial Review of SWCB Decision; Court of Appeals Has No Authority Over Non-Administrative Claim for Treaty Violation Mattoponi Indian Tribe v. Commonwealth Dept. of Envtl. Quality, 43 Va. App. 690, 601 S.E.2d 667 (2004) Taylor Menlove, Class of 2006, Washington & Lee University School of Law

The State Water Control Board (SWCB) granted Newport News a permit to build the King William Reservoir to help alleviate water shortage. The Mattaponi Indian Tribe (Tribe) claimed that the permit violated a freestanding 1677 treaty and both Tribe and Alliance to Save the Mattaponi (Alliance) argued that the permit violated VAPA. DEQ moved to dismiss on sovereign im-munity grounds. Court of Appeals, D. Arthur Kelsey, J., denied sover-eign immunity, held that VAPA was not violated, and transferred the treaty claim to the Virginia Supreme Court.

The DEQ moved to dismiss on sov-ereign immunity grounds under Va. Code § 2.2-4002(B)(3) (2002), which provides that agency action relating to the “location, design, specifications or construction of public buildings or other facilities shall be precluded from judicial re-view.” The court held that, although the reservoir is a public facility, the permit decision does not qualify for sovereign immunity. The court noted that the exemption serves only to preserve unique judicial review procedures applicable to first-party

government bids and contract dis-putes, like a state agency contracting for the construction of a state office building, and not to third-party situa-tions, like a state agency issuing a permit authorizing others to build their own office building. Although the literal text of the statute can em-brace both interpretations, dismiss-ing immunity best advances the legislative intent. The court also noted that it makes no sense for the legislature to authorize judicial re-view of SWCB permit decisions un-der VAPA only to exempt judicial review under Va. Code § 2.2-4002(B)(3) (2002).

The court next addressed Tribe’s 1677 treaty violation claim, which Tribe brought both as a VAPA claim under judicial review and as a free-standing claim under the circuit court’s general jurisdiction powers. The court dismissed the VAPA claim, holding that jurisdiction un-der VAPA does not extend to any matter subject by law to a trial de novo in any court and that, in order for the court to hear such a claim, it must have some jurisdictional sup-port other than VAPA. Va. Code § 2.2-4025(A) (2002). Because the treaty claim affected private rights of action between competing liti-gants, it deserved a trial de novo and SWCB had no authority to adjudi-cate.

Regarding Tribe’s freestanding claim, the circuit court exercised its general jurisdiction and rejected Tribe’s argument that federal law governed the matter. Although the court affirmed the dismissal of the VAPA claim, the court was unable to review the freestanding claim be-cause Va. Code § 17.1-405(1) & (4) (2002) allow review only of final circuit court decisions regarding administrative matters. Lacking ju-risdiction, the court transferred the claim to the Virginia Supreme Court

under Va. Code § 8.07-677.1 (2002) because the Supreme Court has ex-clusive jurisdiction over the trial court in its non-VAPA jurisdiction.

Finally, the court held that SWCB issued the permit in accordance with VAPA. SWCB properly understood its purpose of protecting instream beneficial uses and ensuring the supply of drinking water, the deci-sion was supported by sufficient evidence, and it sufficiently pro-vided for mitigation. Further, Tribe did not present evidence that the project detrimentally impacted cul-tural and religious practices, VAPA did not require SWCB to account for archeological sites because they are not considered “instream beneficial uses” under Va. Code § 62.1-11(C) (2002), the decision was not prema-ture because Alliance failed to show that the record did not provide sub-stantial evidence supporting SWCB’s decision to issue the permit when it did, and decision timing is under the sole SWCB discretion.

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Virginia Circuit Court

Court Overrules Demurrer Based Upon Department of Environmental Quality's Failure to Act County of Accomack v. Burnley, No. 04CH081, 2004 WL 2334757 (Va. Cir. Ct. October 5, 2004) Michael Bauer, Class of 2006, Washington & Lee University School of Law

Judge Tyler, writing for the Circuit Court of Virginia, Accomack County, overruled a demurrer sought by the Virginia Department of Envi-ronmental Quality (DEQ) finding that a letter from the DEQ to the County of Accomack, denying the County's petition requesting relief from a Consent Order, is an appeal-able case decision.

The Wattsville landfill in Accomack County (County) was approved for closure in 1988. In 1997, the DEQ notified the County that the closed landfill was in violation of regula-tions. The matter was resolved by a Consent Order (Order) in 1998. In February 2004, the County unsuc-cessfully petitioned the DEQ to ter-minate the Order. In a letter in March 2004, the DEQ denied the request for termination, citing a de-sire to do further groundwater moni-toring. The County then brought suit seeking termination of the Order.

The DEQ argued that the March 2004 letter is not an appealable ad-ministrative decision. The Court found that the question of whether the County had complied with the Order was a matter of facts already established, and therefore was not contingent upon further monitoring. The Court also found that under the current definition of "case decision" in the Virginia Code, the March 2004 letter issued by the DEQ was an appealable agency action. Finally,

the Court found that the DEQ could not avoid an appeal of an adminis-trative decision by refusing to articu-late the facts necessary for an appeal. The Court, therefore, over-ruled the demurrer.

Plaintiffs Lacked Standing to Challenge Drainage Permit Issued by Virginia Water Control Board Chesapeake Bay Foundation, et al. v. Commonwealth of Virginia, ex rel. Virginia Water Control Bd., et al., No. CH03-1987-R, 2004 WL 2004774 (Va. Cir. Ct. Sept. 8, 2004) Ross Henry, Class of 2005, Washington & Lee University School of Law

The Virginia Water Control Board issued a permit to Tri-City Proper-ties, L.L.C., which authorized the development company to drain 144.6 acres of wetlands. The Chesa-peake Bay Foundation, Inc., and Citizens for Stumpy Lake appealed this decision under Virginia’s Ad-ministrative Process Act. Tri-City and the Commonwealth of Virginia filed a demurrer challenging the plaintiffs’ standing to maintain such an appeal. Finding that the plaintiffs did not meet the statutory require-ments of standing, Judge Randall G. Johnson of the Circuit Court sus-tained the demurrer.

The Commonwealth and Tri-City argued that the Foundation and the Citizens lacked standing because they were not “aggrieved persons” within the meaning of the State Wa-ter Control Law. Va. Code Ann. § 62.1-44.15:5 (2004). The court cited Pearsall v. The Virginia Racing Comm’m 26 Va. App. 376 (1998), which stated that, to be an aggrieved person, the petitioner must have a direct interest in the litigation caused by the denial of a personal or prop-erty right or imposition of a burden different from that suffered by the

general public. Because neither the Foundation nor the Citizens own real or personal property that will be adversely affected by the Board’s decision, the court found that the petitioners failed to satisfy the “ag-grieved person” requirement.

Federal Regulation

Fees For Excess Volatile Organic Compound And Nitrogen Oxides Emissions In Northern Virginia Approval and Promulgation of Air Quality Implementation Plans; Virginia; Excess Volatile Organic Compound and Nitrogen Oxides Emissions Fee Rule, 69 Fed. Reg. 77,909 (De-cember 29, 2004)(to be codified at 40 CFR pt. 52) The U.S. Environmental Protection Agency (EPA) approved revisions to Virginia's State Implementation Plan (SIP) for ozone. The changes require major stationary sources of volatile organic compounds (VOC) and ni-trogen oxides (NOX) in the Virginia portion of the Metropolitan Wash-ington D.C. Severe Ozone Nonat-tainment Area to pay a fee to the state if the area fails to attain the one-hour national ambient air qual-ity standard for ozone by November 15, 2005. The fee must be paid an-nually beginning in 2006 until the area regains attainment status.

LANDFILL EMISSIONS Approval and Promulgation of Air Quality Implementation Plans; Virginia; Approval of the Control of VOC Emissions From Municipal Solid Waste Landfills in Northern Virginia, 69 Fed. Reg. 77,900 (December 29,

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2004) (to be codified at 40 CFR pt. 52)

WASTE COMBUSTOR EMISSIONS Approval and Promulgation of State Air Quality Plans for Designated Facilities and Pollutants, Commonwealth of Virginia; Control of Municipal Waste Combustor Emissions From Large Existing Municipal Solid Waste Combus-tor Units, 69 Fed. Reg. 63,075 (October 29, 2004)(to be codi-fied at 40 CFR pt. 62) The EPA approved the Virginia De-partment of Environmental Quality (DEQ) municipal waste combustor plan. The plan establishes emission limits, monitoring, operating, and recordkeeping requirements for large municipal solid waste combus-tors with a unit capacity of more than 250 tons per day of municipal solid waste (MSW). The plan ap-plies to combustors for which con-struction commenced on or before September 20, 1994.

IMPORTATION EXEMPTION FOR OZONE DEPLETER Protection of Stratospheric Ozone: Process for Exempting Critical Uses From the Phaseout of Methyl Bromide, 69 Fed. Reg. 76,982 (December 23, 2004) (to be codified at 40 CFR pt. 82)

LEAK REPAIR OF REFRIDGERANT APPLIANCES Protection of Stratospheric Ozone: Leak Repair Requirements for Appliances Using Substitute Refrigerants, 70 Fed. Reg. 1,972 (January 11,

2005) (to be codified at 40 CFR Pts. 82)

AIR TOXICS REQUIREMENTS National Emission Standards for Hazardous Air Pollutants for Coke Ovens: Pushing, Quenching, and Battery Stacks, 70 Fed. Reg. 1,670 (January 10, 2005) (to be codified at 40 CFR pt. 63)

EMISSION STANDARDS FOR FINE PARTICLES Air Quality Designations and Classifications for the Fine Particles (PM2.5) National Ambient Air Quality Standards, 70 Fed. Reg. 944 (January 5, 2005) (to be codi-fied at 40 CFR Pt. 81) The EPA promulgated initial air quality designations and classifica-tions for the fine particles (PM2.5) National Ambient Air Quality Stan-dards (NAAQS). Exposure to fine particles is associated with heart or lung disease. This rule establishes the boundaries for areas designated as nonattainment, unclassifiable, or attainment/unclassifiable. Planning and control requirements for nonat-tainment areas will be promulgated at a later date.

POLLUTANTS DELISTED A. List of Hazardous Air Pollut-ants, Petition Process, Lesser Quantity Designations, Source Category List; Petition To Delist Ethylene Glycol Monobutyl Ether, 69 Fed. Reg. 69,320 (No-vember 29, 2004) (to be codi-fied at 40 CFR Pt. 63)

B. Revision to Definition of Volatile Organic Compounds --

Exclusion of t-Butyl Acetate, 69 Fed. Reg. 69,298 (November 29, 2004) (to be codified at 40 CFR Pt. 51)

C. Air Quality: Revision to Definition of Volatile Organic Compounds -- Exclusion of Four Compounds, 69 Fed. Reg. 69,290 (November 29, 2004) (to be codified at 40 CFR Pt. 51)

D. Emergency Planning and Community Right-to-Know Act; Extremely Hazardous Substances List; Deletion of Phosmet, 69 Fed. Reg. 68,809 (November 26, 2004) (to be codified at 40 CFR Pt. 355)

Virginia State Bar Environmental Law Section 2004-05 Board of Governors

Karen L. Lebo Chair Hunton & Williams 951 East Byrd Street Richmond, VA 23219 (t) 804/787-8953 (f) 804/787-8922 klebo@hunton.com

Karla C. Haynes Vice Chair City Attorney’s Office Real Estate Annex, Bldg. 20 2412 North Landing Road Virginia Beach, VA 23456 (t) 757/427-4531 (f) 757/698-2241 khaynes@vbgov.com

Heather Nixon Stevenson Secretary McGuire Woods LLP 901 E. Cary Street Richmond, VA 23219-4030 (t) 804/775-1380 (f) (t) 804/775-1380 (f) 804/698-2241 hstevenson@mcguirewoods.com

Barbara M. Rose Editor County Attorney’s Office P.O. Box 470 Hanover, VA 23069-0470 (t) 804/537-6035 (f) 804/537-6302 brose@co.hanover.va.us

Marina L. Phillips Immediate Past Chair Kaufman & Canoles, Suite 2100 150 West Main St. Norfolk, VA 23510 (t) 757/624-3279 (f) 757/624-3169 mlphillips@kaufcan.com

Manning Gasch, Jr. (“Chip”) Hunton & Williams 951 E. Byrd St. Richmond, VA 23219-4074 (t) (804) 788-8342 (f) (804) 788-8218 mgasch@hunton.com Kathy R. Frahm Dept. of Environmental Quality P.O. Box 10009 Richmond, VA 23240-0009 (t) 804/698-4376 (f) 804/698-4346 krfrahm@deq.va.gov

James T. Morgan, Jr. (“JT”) Environmental Protection Agency 1200 Pennsylvania Ave. NW Mailcode 2232 A Washington, DC 20004 (t) 202/564-7684 (f) 202/501-0579 morgan.james@epa.gov

Kelley Anne Kline Smithfield Foods 200 Commerce Street Smithfield, VA 23430 (t) 757/ 365-3027 (f) 757/357-8165 kelleykline@smithfieldfoods.com

Rick R. Linker Dept. of Environmental Quality P.O. Box 10009 Richmond, VA 23240 (t) 804/ 698-4000 (f) 804/ rrlinker@deq.va.gov

David B. Graham Kaufman & Canoles Suite 300 4801 Courthouse Dr. Williamsburg, VA 23188 (t) 757/259-3855 (f) 757/259-3838 dbgraham@kaufcan.com

Brooks M. Smith Hunton & Williams Riverfront Plaza, East Tower 951 E. Byrd St. Richmond, VA 23219-4074 (t) 804/787-8086 (f) 804/788-8218 bsmith@hunton.com

Dolly C. Shaffner VSB Liaison Virginia State Bar 707 E. Main St., Suite 1500 Richmond, VA 23219-2800 (t) 804 775-0514 (f) 804 775-0501 shaffner@vsb.org