Climate Change

Alaska Supreme Court Opens the Door for Alternative Theory in Public Trust Litigation

September 26, 2014 23:40
by J. Wylie Donald  & Jeffrey Janicke

As this blog has discussed on several prior occasions, Our Children’s Trust, an Oregon public interest group, has coordinated lawsuits in numerous states seeking to apply the public trust doctrine to the atmosphere (e.g., here  and here).  While some jurisdictions now recognize the doctrine, OCT has yet to succeed in forcing a state to take any action on the climate.  This month, however, the Alaska Supreme Court provided plaintiffs another possible route.

In Kanuk v. Alaska Department of Natural Resources,  several Alaska minors alleged that the State had violated its duties under the Alaska constitution and the public trust doctrine by failing to take steps to protect the atmosphere from climate change.  Among other things, the plaintiffs had asked the trial court for a declaratory judgment holding that the atmosphere is a public trust resource that the State has a fiduciary obligation to protect and preserve, and that it has failed to uphold this obligation.  They also asked for affirmative relief, including an order requiring the State to “reduce the carbon dioxide emissions from Alaska by at least 6% per year from 2013 through at least 2050.” 

While the Alaska high court affirmed the dismissal of the plaintiffs’ various claims – the affirmative relief on political question grounds and the declaratory relief on prudential grounds – two aspects of the ruling will likely boost OCT’s confidence.

First, the State had challenged the plaintiffs’ standing to bring the suit, but the court held that the complaint showed “direct injury to a range of recognizable interests” and that the plaintiffs therefore had standing.  The court cited, among other things, plaintiff Nelson Kanuk’s allegation that he had been personally affected by climate change due to erosion from ice melt and flooding from increased temperatures, which “threaten the foundation of Nelson's home, village, native traditions, food sources, culture, and annual subsistence hunts.”  The court rejected the State’s argument that standing is lost by the fact that climate change affects all Alaskans and not just the plaintiffs.  In this regard, it distinguished the case from Center for Biological Diversity v. U.S. Department of the Interior on the basis that no individual harm had been alleged in that case:  “Here, the plaintiffs allege individual harm; all Alaskans cannot claim the same degree of injury as Kanuk, for example, whose family is alleged to have had to evacuate its home because of climate change.”

Second, and more importantly, in ruling that the claims for declaratory relief should have been dismissed on prudential grounds (and not political question grounds), the court made the following statement:

We also observe that if the plaintiffs are able to allege claims for affirmative relief in the future that are justiciable under the political question doctrine, they appear to have a basis on which to proceed even absent a declaration that the atmosphere is subject to the public trust doctrine.  In their complaint they allege that the atmosphere is inextricably linked to the entire ecosystem, and that climate change is having a detrimental impact on already-recognized public trust resources such as water, shorelines, wildlife, and fish.  Allegations that the State has breached its duties with regard to the management of these resources do not depend on a declaratory judgment about the atmosphere.  In short, we are not convinced that declaratory relief on the scope of the public trust doctrine, as requested in this case, will advance the plaintiffs’ interests any more than it will shape the future conduct of the State.

(Emphasis supplied.)

Hence, the court essentially held that, to succeed, the plaintiffs need not obtain a ruling that the public trust doctrine applies directly to the atmosphere.  As long as the plaintiffs can allege justiciable claims for relief, they can rely on the indirect effect of climate change on the State’s other natural resources.

It will be interesting to see whether OCT advances this rationale in future litigation.  While the plaintiffs will still have to overcome the political question hurdle to force a state to take action, sidestepping the public trust requirement would certainly make their overall climb easier.  

After a slow start, OCT can now claim some success in at least four states (Texas, New Mexico, Arizona and Alaska).  One of the central themes of governmental response to climate change is the idea of the 50 states as 50 separate laboratories investigating and testing various responses.  OCT’s approach of lawsuits in multiple jurisdictions seems to be proving up the laboratory approach. 

Climate Change | Climate Change Litigation

A Slow-Burning Fuse: Climate Change from the Risk Management Trenches

April 29, 2014 23:02
by J. Wylie Donald

This morning was the only professional session on climate change at the 2014 annual conference of RIMS, the Risk and Insurance Management Society, the preeminent risk management trade group in the country. Over 9,000 individuals from insurers, policyholders, brokers and vendors are in attendance.  In a different conference room, my partner made a presentation on "additional insured" coverage with 400+ in attendance.  About 30 showed up for climate change.

The disinterest was not due to the quality of the presenters.  Climate Change: How to Stress Test Your Organization was presented by  Jeffrey Bray, Senior Vice President, Global Risk Management of Prologis, Inc. and John Marren, Director, Global Risk and Insurance Management of CSL Behring and also Business Insurance's Risk Manager of the Year.  Both are engaged in climate change risk management; they were here to give a view from the trenches on practical ways to address climate change issues.

Both companies were new to me. CSL Behring is the American subsidiary of CSL Australia, whose core business is the manufacture of vaccines and plasma protein biotherapies with $5 billion in revenue.  Prologis is a global operator of industrial real estate with 3000 facilities and 569 million sq. ft. under management. 

CSL Australia, in addressing a need for transparency in line with its corporate social responsibility goals, concluded that it needed to include climate change in its risk assessments.  Assessing climate change risk was also required in order to accurately respond to inquiries by the Carbon Disclosure Project, which sought information on the effect of climate change on business.

CSL already had a risk framework in place.  They wanted to treat climate change just like every other risk.  If it was material it needed to be addressed.  If not, it still needed to be on the radar so they could do more than just react if and when it surfaced.  Fortunately, senior management was intimately involved with corporate social responsibility and including climate change in that area was not difficult. 

The methodology of bringing climate change into the risk management framework was relatively simple.  First, the context needed to be established.  Environmental, social and economic impacts would be considered on a 25-year time horizon.  Second, information needed to be gathered as to where CSL's concerns would arise.  Workshops were held with every business unit.  Research was conducted.  Third, the data needed to be analyzed.  Last the findings needed to be reported. 

The result was the identification of six key vulnerabilities:
1.  Would there be enough potable water and where would it come from?
2.  Would their sole source suppliers comply with environmental requirements?
3.  Could time-sensitive biological raw materials be delivered timely?
4.  Would energy supply reliability decrease?
5.  Would resulting new diseases impair the availability of plasma donors?
6.  Would resulting new diseases provide an opportunity for new vaccines?

CSL utilized their corporate risk framework to guide the assessment of risks for the risk management process.  Climate change risks were integrated with all of the corporation's other risks for a relative comparison.  None of the six risks were considered material; nevertheless, they are being evaluated every two years on a Zero Basis risk review for their business unit.

Prologis concedes it is not as far along in the evaluation process as CSL.  It noted that there are significant impediments to making that evaluation.  The accuracy of the data is varied and data is not available for many circumstances.  The modelers provide estimates with significant long-term variation.  Accounting for various exposures (inland flooding, storm surge, temperature change, storm severity) is variable.  For example, flood protection in Amsterdam is much better that it is in New York. 

Despite these data and analyses challenges, Prologis recognized that climate change will affect it.  Ten of its markets (ports) ranked in the OECD top 15 for climate change  vulnerability.  Those potential impacts included  increased physical damage and business interruption, which would lead to more restrictive and costly insurance coverage.  Recognition that property concentrations in vulnerable areas would exacerbate event impacts, has led to risk mitigation in the form of more stringent construction requirements, new site selection criteria, and enhanced disaster management.

A key question was raised during the presentation by the moderator, Andrew Thompson, the Global Lead, Risk and Insurance Practice, for the engineering firm, Arup.  How does one integrate a slow-burning risk like climate change into risk planning, which typically has much shorter time horizons.  Mr. Marren of CSL acknowledged that CSL's typical risk horizon is 12-24 months.

The answer, at least for these two billion dollar companies, was in a nutshell:  strategic long-range thinking.  They concluded the presentation with four key points:
1.  Companies should focus on increasing resilience;
2.  Climate change risk is manageable;
3.  While ongoing analysis is recommended, there need be no direct change in current business activity; and
4.  It is important to be proactive to reduce costly future solutions.

This is not profound.  What is profound, is that at least two substantial business entities are stepping around the rhetoric and addressing climate change as simply another business risk (like interest rates, or workforce training, or raw material sourcing) that must be addressed in the short-term and in the long-term.  That short-term results have not yet been identified, does not say anything about the need for long-term consideration, integration and planning.  Others seeking long-term business success should follow.

Climate Change | Climate Change Effects

The Top 6 at 12: Highlights of the Top Climate Change Legal Stories in the Second Half of 2013

January 1, 2014 00:01
by J. Wylie Donald

2013 has drawn to a close; here is our take on the top six climate change legal stories in the last six months.
 
1.  Climate Change Assessments - Blockbuster legislation may have been evaded once more but that has not stopped those in the trenches. Assessments of climate change risk are becoming more routine. For example, the September 2013 Record of Decision for the Gowanus Canal Superfund Site required assessment of “periods of high rainfall, including future rainfall increases that may result from climate change” in implementing certain aspects of the cleanup remedy.  Another example was provided by the Department of Housing and Urban Development, which in November required in its second round of community block grants for disaster relief that prospective grantees consider in their Comprehensive Risk Analysis “a broad range of information and best available data, including forward-looking analyses of risks to infrastructure sectors from climate change and other hazards, such as the Northeast United States Regional Climate Trends and Scenarios from the U.S. National Climate Assessment, the Sea Level Rise Tool for Sandy Recovery, or comparable peer-reviewed information."  Even the Nuclear Regulatory Commission looked at climate change with regard to its September draft generic environmental impact statement for the long-term continued storage of spent nuclear fuel. 

2.  Low Carbon Fuel Standards - In Rocky Mountain Farmers Union v. Corey the Ninth Circuit reversed several district court rulings limiting under the “dormant Commerce clause” the California Air Resources Board’s Low Carbon Fuel Standard.  Although the Commerce clause of the Constitution, U.S. Const., art. I, § 8, cl. 3. “does not explicitly control the several states,” it "has long been understood to have a ‘negative’ aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce.’” Rocky Mountain at 31 (citation omitted). California’s Low Carbon Fuel Standard supported carbon dioxide emission reduction “by reducing the carbon intensity [i.e., the amount of carbon dioxide emitted per unit of energy produced] of transportation fuels that are burned in California.”  It thus potentially burdened producers of ethanol in the Midwest and petroleum producers outside California, but that did not matter.  Specifically, the court held that the LCFS was not facially impermissibly discriminatory in favor of ethanol, was not improperly extraterritorial and did not discriminate against petroleum fuels.  Accordingly, California is still on its path to a reduction in the carbon intensity of its fuels by 10% by 2020, as mandated by the 2006 Global Warming Solutions Act.

3.  The Cost of the Grid - On November 14, the Arizona Corporation Commission ruled that Arizona's net metering program should spread the cost of maintaining a reliable grid among all of Arizona Public Service's customers, including its rooftop solar customers. Up to that point rooftop solar customers were paid for the electricity they provided to the grid at retail rates, without any adjustment for the cost of the grid. The Commission concluded that this resulted in a "cost shift" from customers that were paying for the grid, to rooftop solar customers, who weren't.  APS put on a good case demonstrating that rooftop solar customers were substantially benefitting from the grid by drawing power at night, during cloudy weather and during the periods of daylight when solar power production did not exceed the customer's needs. Many have criticized solar power as unfairly subsidized. In Arizona at least, one of those subsidies is being addressed.

4.  New Carbon Dioxide Emission Standards - Following over 2.5 million comments, EPA rescinded its proposed rule governing carbon dioxide emissions from new coal-fired power plants.  In its place it proposed on September 20 a rule setting CO2 emission standards for new large natural gas power plants (1,000 lbs/MW-hr), new small natural gas power plants (1,100 lbs/MW-hr), and new coal-fired power plants (1,100 lbs/MW-hr).  From our perspective, the most significant facet of this new rule is that it actually will apply to plants that are being built.  The withdrawn proposed rule only applied to new coal plants, which EPA concluded would not be built anyway before 2030.  Equally significant, as pointed out in EPA’s news release  on the proposal, is that “EPA has initiated outreach to a wide variety of stakeholders that will help inform the development of emission guidelines for existing power plants.”

5.  The Fifth Assessment Report of the Intergovernmental Panel on Climate Change – The IPCC’s Working Group I issued The Physical Science Basis, its part of the Fifth Assessment Report.  Working Groups II and III will publish in 2014.  Among other things WG I concluded:  "Unequivocal evidence from in situ observations and ice core records shows that the atmospheric concentrations of important greenhouse gases such as carbon dioxide, methane, and nitrous oxides have increased over the last few centuries."  "The temperature measurements in the oceans show a continuing increase in the heat content of the oceans.  Analyses based on measurements of the Earth's radiative budget suggest a small positive energy imbalance that serves to increase the global heat content of the Earth system.  Observations from satellites and in situ measurements show a trend of significant reductions in the mass balance of most land ice masses and in Arctic sea ice. The ocean's uptake of carbon dioxide is having a significant effect on the chemistry of sea water."  But if one remains skeptical, this consensus view of the world’s leading climate scientists should not cause one alarm, the climate change skeptics have not thrown in the towel.  For example, according to one website, “climate science as proclaimed by the IPCC is a morass where what is scientific knowledge cannot be easily separated from speculation and what is wrong.”  One won't find seafarers plying the Northern Sea Route in the skeptic camp, however.  Russia logged a record year of transits in 2013 (over 200), up from just 4 in 2010. 

6.  Climate Change Liability Lawsuits - For the first time since 2005, when Comer v. Nationwide Mutual Insurance was filed, there is no climate change liability lawsuit on the docket anywhere. All have been defeated. Comer was the last to succumb, with its opportunity to file a petition for certiorari expiring on or about August 14.  The IPCC Fifth Assessment establishes climate change is not going away, but we will have to wait to see if anyone is going to attempt to make someone pay for it.

Carbon Dioxide | Climate Change | Regulation | Solar Energy | Utilities | Year in Review

How is the Government Shutdown the Same as Climate Change? How is it Different?

October 6, 2013 21:52
by J. Wylie Donald

If you read this blog for tips on how to advance your practice, or protect your employer from surprises, or keep your job (which may be the same thing), stop reading. Today is for introspection and evaluation.

We went off this weekend to western Maryland to go camping. Two things struck us. The 15 Mile Creek Campground on the C&O Canal run by the National Park Service was closed. The sign said "Due to Emergency Conditions."  We suppose it is an emergency when the richest nation in the world puts itself in a position where people have to consider whether it will default. A colleague described the Congress as a rudderless ship manned by fourth graders. We could find no points of disagreement. Our own view is:  you pay the mortgage. Period.

The other point burned into our consciousness was the temperature:  88 degrees in October.  We slept on top of the sleeping bag. We know that a hot night or two is indicative of nothing. Indeed, this was not even a record. But we are troubled by these anecdotal events, that in their totality match up with what the scientists are saying.

And as those two thoughts came together, we wondered about how they would play on SNL or with Jay Leno or Conan. "How are the government shutdown and climate change the same?"  "They both will end." "How are they different?"  "Only one will end in our lifetime." 

We leave it to you to sort out which is which.  If it helps, the last time the government shut down was in 1995-96; the last time carbon dioxide was at 400 ppm was 3 million years ago.

 

Carbon Dioxide | Climate Change

In Issuing Executive Order No. 41, Governor Markell Rejects Any Need to Choose Between Mitigating Climate Change and Supporting Economic Growth

September 13, 2013 21:39
by Mike Kelly  & Jameson Tweedie

Yesterday, Governor Jack Markell issued Executive Order No. 41, “Preparing Delaware for Emerging Climate Impacts and Seizing Economic Opportunities from Reducing Emissions.”  In many climate change discussions there exists an implied or overt assumption that society must choose between the economy and the climate.  Consistent with a theme that has resurfaced throughout his tenure as Governor, in Executive Order No. 41 Governor Markell explicitly rejects that choice:  “initiatives to responsibly reduce greenhouse gas emissions and prepare Delaware for climate impacts present significant economic development and employment opportunities in infrastructure construction, energy efficiency, clean energy, and advanced transportation.”

Executive Order No. 41 consists of three main components.  First, it establishes a Governor’s Committee on Climate and Resiliency (the “Committee”).  The composition of the Committee itself is noteworthy as it is clear this effort is not “mere puffery,” rather the Committee will include many of the key cabinet heads, including the Secretaries of the Departments of Natural Resources and Environmental Control (“DNREC”), Agriculture, Transportation, Health and Human Services, Safety and Homeland Security, and State, as well as the Directors of the Delaware Economic Development Office, the Office of Management and Budget, the Delaware State Housing Authority, and the Office of State Planning Coordination.

Second, the Committee, chaired by the Secretary of DNREC, shall develop a “an implementation plan to maintain and build upon Delaware’s leadership in responsibly reducing greenhouse gas emissions,” as well as recommendations for actions by agencies and local governments.  The plan and recommendations must be delivered to the Governor by the end of 2014, with the implementation plan updated annually thereafter.  Noteworthy are the requirements which Governor Markell mandates for the plan, overtly rejecting the notion that advancing the economy and planning for, and reducing, climate change must be at odds.  The plan “shall ensure that efforts have a positive effect on the State’s economy, including advancing the strategy of securing cleaner, cheaper, and more reliable energy, improving public health outcomes, increasing employment in Delaware, strengthening Delaware’s manufacturing capabilities, and enhancing Delaware’s overall competitiveness” (emphasis added).  This mandate that the climate change plan achieve positive economic results is framed by the plain acknowledgment of the significant risks facing Delaware from climate change and sea level rise.  These risks include that:

  • Delaware has the “lowest average land elevation in the United States and significant population living along 381 miles of shoreline,” putting Delaware at risk for coastal erosion, storm surge, flooding, saltwater intrusion, and tidal wetland losses.
  • Delaware’s critical infrastructure is at risk from climate change.
  • Delaware’s groundwater aquifers are at risk from saltwater intrusion.
  • Delaware’s $8 billion agriculture industry “could be significantly impacted by increasingly variable temperatures, precipitation, extreme weather events, and droughts.”
  • Delaware’s $6 billion tourism industry is vulnerable to climate change and sea level rise.

The Governor makes clear his belief that mitigating climate change and pursuing economic growth are not mutually exclusive.  Indeed, he plainly considers the joint goals of positive economic and climate outcomes as a logical next step from the successes already achieved in Delaware, including Delaware’s role within the Regional Greenhouse Gas Initiative, Delaware’s reduction of greenhouse gas emissions “by more than any state in the nation (29.7% from 2000 to 2010),” and Executive Order No. 18, which sought to reduce the climate change impacts of State Government, and which the Governor asserts not only significantly reduced the climate-related impacts of State Government, but at the same time “result[ed] in millions of dollars of savings.”

Third, and likely with the most immediate on-the-ground consequences (rather than future planning), Executive Order No. 41 requires that “all state agencies shall adhere” (emphasis added) to certain flood hazard mitigation and sea level rise adaptation requirements.  These include:

  • Requiring all state agencies to “incorporate measures for adapting to increased flood heights and sea level rise in the siting and design of projects for construction of new structures and reconstruction of substantially damaged structures and infrastructure” to avoid and minimize flood risks, and, wherever “practical and effective” shall use natural systems or green infrastructure to “improve resiliency to flood heights, erosion, and sea level rise.”
  • Requiring structures within Federal Emergency Management Agency (“FEMA”) special flood hazard areas to be “designed and constructed with habitable space at least 18 inches above current base flood elevation” and, in addition, requiring structures within areas designated by DNREC to be vulnerable to sea level rise inundation to be “designed and constructed to account for sea level changes anticipated during the lifespan of the structure” (emphasis added).
  • Requiring all state agencies to “consider and incorporate the sea level rise scenarios set forth by the DNREC Sea Level Rise Technical Committee into appropriate long-range plans.”

Only time will tell whether Governor Markell can achieve his dual goals of climate change action and economic growth, but Executive Order No. 41 demonstrates that he is well aware of the challenges and confident in his administration’s ability to achieve both goals.  His experience in the private sector and his economic track record since taking office in 2009, in the midst of the Great Recession, indicate that his climate change policies, and his optimism that they can be positive forces for economic growth, are based on pragmatism, science and economics, not ideology.

Climate Change | Regulation | Rising Sea Levels

Extreme Weather Patterns in Fiction: A Riverine Book Review

September 3, 2013 08:22
by J. Wylie Donald

One of the guidelines for this blog is to stay away from extreme views. The effects of climate change do not need to be amplified to merit reasoned discussion and thoughtful application of what we as lawyers do. So what were we to do with a request from Simon & Schuster that we provide a pre-release review of Rivers by Michael Faris Smith, an "incidence of fiction presenting an all-too-real possibility." "All-too-real" meaning "a series of devastating storms has pummeled the American Southeast in the years since Hurricane Katrina. The federal government has drawn a boundary known as the Line, and everything below it has been declared uninhabitable." Ahhh! Climate change equals the apocalypse, nuclear armageddon without the nuclear.

Of course, we have a number of issues with that. First, climate science does not anticipate that the severity of tropical hurricanes is going to increase. Second, El Niño and La Niña control the Atlantic hurricane season and Mr. Smith omits any mention of their importance. Last, there are a heck of a lot of inhospitable places on the earth, but, to our knowledge, governments don't abandon those areas, whether the inhospitableness is due to man (think the Niger Delta) or nature (think the North Slope). Instead, they are exploited for their resources and taxed.

So we were prepared to be skeptical. But just as one willingly suspended disbelief as one enjoyed On the Beach and Planet of the Apes, so too here. Mr. Smith crafts a fine novel with apt foreshadowing, three-dimensional characters, and a well-spun yarn that kept us turning the pages. You know you are in the hands of a master when the title shows up multiple times in various manifestations. I counted at least five. Here's one: it had rained every day for 631 days and when you were caught in it it felt like this: "The water ran down his head and face and arms and legs. Under his skin. In his bones." "In his bones."  Anyone caught outside in a hurricane, flipped out of a kayak for more than a moment, or working for a living in heavy sea states can grasp this sense of continuous immersion.

One of the more significant things about all this rain is that it washes away everything. Even names. Not one of the characters has a last name. Some don't have proper first names either. You can read about one particularly odious preacher-polygamist-type fellow, Aggie, on the book jacket.

We'll stick with the main character, Cohen. He has remained south of the Line for several years, nurturing the memories of his wife and baby girl, when a misjudgment sets in motion the theft of everything and he ends up at the camp of the afore-mentioned Aggie. Suffice to say, things don't go well there and he is off with a small family (new-born, six- and 16-year old boys, 19-year old girl, and two breedable (see Aggie) women, one pregnant and one not) in a small caravan. Not the type of road trip one would willingly take to the beach, much less to a war zone, but they had hope.

Or did they? They cower against the omnipresent storm in an abandoned store, which still has its roof. As the storm howls,

"They were small things against this big thing. Against this enormous thing. Against this relentless thing. Small, exhausted things whose lives had become something so strange and extraordinary that it didn't seem possible that they could be anywhere but sitting in this abandoned building in this abandomed land in this storm-filled night in this storm-filled world. They sat still and exuded exhaustion. Maybe even hopelessness. Maybe even helplessness. The day had begun with the idea of a finish line, but that idea was being washed away in the torrent of despair."

But they persevere and make it to the Line. Which we imagined as some sort of customs checkpoint, with Civilization on one side and Barbarity on the other. But that was based on the explanations provided by the poor souls who had been stuck south of the Line for years. In the interim, Barbarity had moved north, and the hoped-for refuge was more illusion than reality. Still, one could actually get a hot meal, and clean sheets, ... And a bullet, or several, for your troubles.

Sarah Connor survives another end-of-the-world saga in the Terminator series and carries on. Cohen does similarly, but with twists and turns and shades of meaning that are unanticipated.

Rivers may not be good climate science, but it still is a very good read.

 

Climate Change

New Mexico Court Refuses to Take Steps to Apply Public Trust Doctrine to the Atmosphere

August 22, 2013 09:13
by J. Wylie Donald

By J. Wylie Donald and Patrick Reilly

Two years ago, we observed a potentially startling development in climate change litigation: “On Monday, May 4, [2011] in state courts across the nation lawyers representing children and young adults filed (and apparently will continue to file) suits seeking to compel State governments to recognize the application of the public trust doctrine to greenhouse gas emissions and to take action to abate those emissions.” These lawsuits were coordinated by two groups, Our Children’s Trust and Kids vs. Global Warming, and sought to apply the Public Trust Doctrine to the atmosphere. At the time, we pointed out that there were a host of issues to be resolved before these lawsuits could be successful. And so far, although the Public Trust Doctrine is now recognized in some jurisdictions as applying to the atmosphere, not one suit has been successfully concluded.  Recently, the New Mexico suit, although it survived a motion to dismiss, joined its unsuccessful brethren when the District Court granted a motion for summary judgment against the plaintiffs. 

In the case, Sanders-Reed v. Martinez, seventeen-year-old Aklilah Sanders-Reed sued New Mexico and Susana Martinez in her official capacity as governor for breaching their duty to uphold the public trust with respect to greenhouse gas emissions into the atmosphere. Asserting that “courts have emphasized the flexibility of the [public trust] doctrine to meet changing societal concerns,” Sanders-Reed and her lawyers argued in their complaint that “Governor Martinez has failed to use her authority for the protection of the atmosphere, a valuable public trust resource that belongs to present and future generations of New Mexico citizens.” Plaintiffs effectively hoped that, by applying the Public Trust Doctrine to the atmosphere, the state judiciary could order stricter greenhouse gas regulations.

In her June 26th, 2013 Order on Summary Judgment (attached), the Honorable Sarah M. Singleton noted the gravity of such a decision: “I think that in applying this Doctrine … the Supreme Court would allow the judicial branch to bypass the political process if there was an indication that the political process had gone astray.”  Citing an earlier case in Hawaii, Judge Singleton went on to conclude that, “the State may compromise public rights in the resource only when the decision is made with a level of openness, diligence, and foresight that is commensurate with the high priorities that the rights command under the laws of the state.”

With these conclusions in mind, the Court opined that even if the Public Trust Doctrine does apply to the atmosphere, invoking it to protect the atmosphere would stand at odds with New Mexico’s record of doing so legislatively.

The question is whether or not the State is ignoring its role in protecting the environment or the atmosphere. The State’s not ignoring it, it just disagrees with what the Plaintiff thinks is needed. So the State, in my opinion, has acted on this.

Now, is there the possibility under the Public Trust Doctrine that the State’s action could be so wrongheaded as to invoke the Public Trust Doctrine? I  suppose that in rare circumstances, it could. But I believe that before a court should jump in to apply a doctrine like the Public Trust Doctrine, there should be some showing that the process was tainted or that the public was foreclosed from pursuing the issue. That is not the case here.

Judge Singleton went on to explain that, by virtue of the state Environmental Impact Board’s public decision-making process, plaintiffs had not been denied their chance to participate in its findings on greenhouse gas emissions. She then asserted that regulation of greenhouse gas emissions is, “a political decision, not a Court decision,” before granting summary judgment.  With that decision, Sanders-Reed’s attempt to curtail New Mexico’s greenhouse gas emissions fell short at the trial court. But an appeal was filed on July 24th so it may not be over yet. (We note that Our Children’s Trust plaintiffs have a busy appellate docket.  Following losses at  the trial or intermediate appellate court, appeals are pending in Alaska, Oregon, and Washington also have pending appeals of litigation.  Losses on appeals in Arizona and Minnesota have not been further appealed.  They have appeals of regulatory petitions pending in TexasIowa, and Pennsylvania.)

As stated in Arizona Center for Law in the Public Interest v. Hassell, and repeated earlier this spring in the Arizona OCT appeal, Butler v. Brewer, "as an attribute of federalism, each state must develop its own jurisprudence for the administration of the lands it holds in public trust."  Our Children’s Trust may have extended that rule to the “administration of the [atmospheric resources held] in public trust”, but so far that has had no effect. 

20130704 Order on Summary Judgment (Sanders-Reed v. Martinez).pdf (410.72 kb)

Carbon Dioxide | Climate Change | Climate Change Litigation | Greenhouse Gases

Harvey Cedars v. Karan: Condemnation at the Shore and the Evolution of the Common Law

July 29, 2013 23:46
by J. Wylie Donald

If you were a municipality that had to take action and condemn private property for the public good to avert disaster, before you got to court you would be particularly pleased to be able to say, "See, I told you so," pointing to an avoided calamity.  When one New Jersey beachfront community, the Borough of Harvey Cedars, took such action, the longed-for serendipity avoided both the trial and intermediate appellate courts. But then fortune smiled and the Borough enjoyed a favorable result before the New Jersey Supreme Court in Borough of Harvey Cedars v. Karan, decided just this month and setting the stage for condemnation actions up and down the New Jersey coast (and potentially elsewhere).

In 1973 the Karans acquired a beachfront home on a small lot (11,868 sq. ft.)  in Harvey Cedars.  It’s a lovely three-story home, the kind of place where one can sit on the porch on the second story and watch the children playing on the beach. Except that is, if there is a 22-foot dune between the home and the water. In that case, to see the little ones one would need to climb up to the third floor. One might, then, be a little incensed if the Borough came and offered $300 for a quarter of the property to put up such a dune.  And the fact that the dune would protect the home from the ravages of a rising and violent ocean, such as that delivered by Superstorm Sandy, might not ameliorate the unjustness of it all. 

That story is pretty much what happened to the Karans.  With funding from the New Jersey Department of Environmental Protection and the U.S. Army Corps of Engineers, the Borough planned to construct a $25 million, 22-foot-high sand dune along its shoreline; it would be placed on private property where necessary by way of an easement. Such a barrier, it was hoped, would protect local homes and businesses from future storm surges. Many beachfront homeowners saw the benefit of a protective dune and voluntarily accepted the easement. Others, including the Karans, did not. The asserted benefits did not sit well with Harvey Karan, who argued that, in nearly four decades of owning the home, he had not seen “a lick of water” reach its living quarters.  We note that this was not a particularly surprising result as the living quarters were on the second and third floor.  In any event, in November 2008, the Borough moved to acquire a portion of the Karans’ property by eminent domain. Unsurprisingly, the Karans rejected the Borough’s offer of $300 “just compensation” and took legal action.

In an evidentiary proceeding, the Karans moved to prevent the Borough’s appraiser, Donald M. Mollier, Ph.D.,  from testifying that the dune’s storm protection increased the value of their home—thus decreasing the amount of compensation to which they were entitled. Instead, they maintained that the project provided “general benefits” to all Harvey Cedar residents, ones that could not be taken into account when determining compensation. Relying on prior New Jersey precedent, Sullivan v North Hudson County Railroad Co., 51 N.J.L. 518 (E. & A. 1889), the court supported this view, instructing the jury:  “the Borough is not entitled to any credit nor should the amount of just compensation to the Karans be reduced by virtue of any general benefit which they may receive along with other property owners in the Borough as a result of the dune and beach replenishment project.”

The jury returned an award to the Karans of $375,000, for the taking of a quarter of their lot and the loss of their view. In early 2012 the Appellate Division affirmed, reasoning "that the advantage accruing to the Karans from the newly constructed dune was not a special benefit but rather 'a classic example of a general benefit,' which cannot be used to offset the loss from a partial taking."

The Borough persisted nonetheless and filed an appeal to the New Jersey Supreme Court. And then came Sandy with its unprecedented devastation up and down the Shore. Over 100 killed, sixty-two billion dollars in damage (much of it uninsured) in the New York-New Jersey metropolitan area. Places like Mantoloking, without a protective dune, were shredded. Places like Harvey Cedars came through relatively unscathed. Hmmmm.  Maybe there's something to the protective dune idea.

The Jersey Shore Partnership thought so and filed a motion seeking leave to be allowed to submit out of time a brief amicus curiae, which the Court granted. Rather than get caught up in an analysis of general and specific benefits, the Partnership took a different tack. Lead counsel, Dave Apy, crafted an argument based on the modern method of any condemnation award:  fair market value.  (Full disclosure:  Mr. Apy mentored me as a younger associate; he has a knack for cutting through legal clutter.)  Rather than staying "mired in technical, nonsensical arguments" over general and special benefits, the courts should look to a simple test:  "whether the benefits, however characterized, are ascertainable and directly enhance the remaining property."  The other amicus, the New Jersey Department of Environmental Protection, likewise advocated for a fair market value approach.   

 The New Jersey Supreme Court bought the Partnership's and the NJDEP's argument. In its ruling, it cited a wide body of case law, dating back to the Magna Carta, and supporting the notion that when private property is taken, the State must pay just compensation. In a complete taking, just compensation is measured by fair market value. The Court saw no reason not to apply the same concept to a partial taking. After laying out the history that led to Sullivan (the basis for the trial court's decision), the Court turned to Mangles v. Hudson County Board of Chosen Freeholders, 55 N.J.L. 88 (Sup. Ct. 1892), decided only a few years after Sullivan and by the same judge. "'Just compensation' could not 'be ascertained without considering all the proximate effects of the taking."  Id. at 92.  "'Any benefit arising from the taking and public use of the property 'which admits of reasonable computation may enter into the award.'" Id.

The remainder of the Court's opinion in Karan bolsters the position of fair market value. It concludes that the general/special benefit distinction "is at odds with contemporary principles of just-compensation jurisprudence."

Thus, there would be a new trial, where “the Borough will have the opportunity to present evidence of any non-speculative, reasonably calculable benefits that inured to the advantage of the Karans’ property at the time of the taking.” "In short, the quantifiable decrease in the value of their property -- loss of view -- should have been set off by any quantifiable increase in its value."

Justice Holmes said in The Common Law, "The life of the law has not been logic; it has been experience."  In Karan, logic required that Sullivan’s hoary general and special benefit distinction would carry the day, as it did before the trial court and the Appellate Division.  Experience (bearing the nom de guerre Sandy), however, led to a different result.

Climate Change | Climate Change Effects | Rising Sea Levels | Weather

Walking on Eggshell Skulls: Louisiana's Levees Take on the Oil and Gas Industry Over Coastal Land Degradation

July 24, 2013 23:20
by J. Wylie Donald

Ground zero for climate change and rising sea levels in the United States is not a status to which any state aspires.  Florida distastefully remembers 2005 when 4 hurricanes – Charley, Frances, Ivan, and Jeanne - roared ashore, all within six weeks.   Delaware worries that 8-11% of the state will be submerged by 2100.  Today we learned that Louisiana’s concerns over rising sea levels and hurricanes have resulted in an enormous lawsuit, Board of Commissioners v. Tennessee Gas Pipeline Co LLC, against 100 oil and gas companies based on their activities in Louisiana’s coastal lands over the last century, and the lands' ongoing demise.  “Unless immediate action is taken to reverse these losses and restore the region’s natural defense, many of Louisiana’s coastal communities will vanish into the sea.“  Complaint at 2.

The plaintiff, the Southeast Louisiana Flood Protection Authority – East, is a governmental entity whose ”mission is to ensure the physical and operational integrity of the regional flood risk management system.”  To accomplish that end, it concluded that in order for Louisiana's coastal communities to survive into the next century it needed to restore and rejuvenate Louisiana’s coastal lands.  Its complaint explains how the system is supposed to work:

5.2 Coastal lands, including wetlands and marshes, are an integral natural complement to the Authority’s man-made flood protection system. 
5.2.1.  Coastal lands are the first line of defense for south Louisiana’s communities against the destructive force of hurricanes. 
5.2.2. Those lands form a buffer that reduces the height and energy of hurricane storm surge and waves, thereby aiding the Authority in its mission to protect south Louisiana.
5.2.3. Hurricanes lose intensity as they travel over land.  Hence, the more land that a given hurricane must traverse before reaching Louisiana’s coastal cities, the weaker that hurricane’s impact on those communities, and concomitantly, the more effective the levee system.

Notwithstanding the coastal lands’ importance, they had been (allegedly) substantially degraded by the activities of oil and gas companies.  These companies had built a network of canals that was alleged to continue "to introduce increasingly larger volumes of damaging saltwater, at increasingly greater velocity, ever deeper into Louisiana’s coastal landscape and interior wetlands.  The increasing intrusion of saltwater stresses the vegetation that holds wetlands together, weakening – and ultimately killing – that vegetation.  Thus weakened, the remaining soil is washed away even by minor storms.”  Id. ¶¶ 6.7.1-7.2

With the loss of coastal lands, the levees stand to become “de facto sea walls,” a function the levee system is not designed for. Id. ¶ 5.11.

The Authority’s complaint sets forth the regulatory framework for commercial work in the coastal lands.  First, there is the Rivers and Harbors Act of 1899, which forbids “any person to … in any manner whatever impair the usefulness of any … work built by the Uniteds States for the preservation and improvement of any of its navigable waters or to prevent floods.”  As noted above, the loss of coastal lands would lead to impairment of the levees struggling to serve as seawalls.  Second, Clean Water Act permits impose obligations for the maintenance and abandonment of canals, and for the minimization of environmental harm.  The permits, it was alleged, had not been complied with.  Third, the Louisiana State Land Office granted rights-of-way, which carried with them maximum right-of-way widths and obligations to minimize environmental effects and to indemnify the State for third-party damages.  The defendants' rights-of-way had all allegedly eroded and now exceeded their permitted size.  Last, state and federal Coastal Zone Management Acts imposed additional obligations.  Id. ¶¶ 9.1-9.4. 

From that framework, the Authority argues a duty of care arises, breach of which by the energy companies supports a claim for negligence.  That claim is joined with claims for strict liability, public and private nuisance, third-party beneficiary rights, and a local favorite, natural servitude of drain.  Under the last claim it is asserted, damages and injunctive relief are owed because “Parties, such as Defendants, may not take actions that increase the flow of water across another party’s land, as the Defendants’ activities in Louisiana’s coastal lands certainly and demonstrably have done.”  Id. ¶ 23.

Commentary already circulating quotes the plaintiff's attorneys on the potential damages at  “many billions of dollars.”  Although the damages are very large, many will look at this as just another wetlands preservation lawsuit. 

We take a different perspective.  The destruction alleged took place over a very long time, by hundreds of entities, with the support of the commercial and political establishments of Louisiana.  The status quo in Louisiana was ongoing energy development in conjunction with degradation of coastal lands.  No one asserted that billions of dollars were owed.  What changed? 

A fundamental tenet of this blog is that climate change will create winners and losers.  The losers are not going to go quietly; instead, they will look around and see if they can be made whole by someone else.  The first wave of climate change liability cases sought to tag the emitters of greenhouse gases with liability; they were uniformly unsuccessful.  Is Board of Commissioners the vanguard of the next wave targeting for liability those entities whose activities make defending against climate change much harder?

There is a theory in tort about the eggshell skull.  As stated by the Seventh Circuit in Schmude v. Tricam Industries:  “If a tortfeasor inflicts a graver loss on his victim than one would have expected because the victim had some pre-existing vulnerability, that is the tortfeasor's bad luck; you take your victim as you find him.” 

Here the Authority might not have done anything, or done it much later, had climate change not exacerbated the dire conditions faced by Louisiana.  Will Louisiana’s eggshell skull be a model for others seeking to be made whole for their losses from climate change?  Only time will tell.  In the meantime, visiting practitioners may wish to practice saying coquille d'oeuf.     

Climate Change | Climate Change Effects | Climate Change Litigation | Rising Sea Levels

Top 6 at 6: Highlights of the Top Climate Change Stories in the First Half of 2013

July 1, 2013 00:01
by J. Wylie Donald

Another six months have passed and it is time for our semi-annual look at climate change and its intersection with the law.  Here are some highlights of the last six months:

1.  The Administration’s Focus.  After months of silence in the 2012 presidential campaign, President Obama rejuvenated his administration’s commitment to addressing climate change.  We heard in his inaugural address:   “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.”  He carried this forward in his State of the Union address less than a month later: “I urge this Congress to get together, pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago.  But if Congress won’t act soon to protect future generations, I will.  (Applause.)  I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”     And in a speech this past Tuesday the promises took another step toward reality when the President outlined his “climate action plan.” 

Recognizing the logjam in Congress, the Administration's plan is based on authority the executive branch already has. The salient points include:  1) further restrictions on powerplant greenhouse gas emissions (notably addressing coal); 2) promotion of resilience and adaptation with respect to weather-related calamities; 3) additional permitting of renewable energy facilities on public lands; and 4) engagement in the international arena on climate change such as working out a global free trade agreement on clean energy technologies.   The goal is a reduction of U.S. greenhouse gas emissions by 17%.  The Wall Street Journal called these “sweeping climate policies.”  We will see; with no new authority, Gina McCarthy’s nomination to head EPA held up, and the bounty of natural gas unleashed by fracking, greenhouse gas reduction may be achieved by the market, see Leveraging Natural Gas to Reduce Greenhouse Gas Emissions,  not governmental efforts.  

2. 400 PPM.  On May 9, Mauna Loa Observatory of NOAA’s Earth System Research Laboratory reported that the average weekly value of atmospheric carbon dioxide at the observatory had reached 400 ppm, a level unsurpassed in 3 million years.  The world collectively ignored the number, treating it more like an insignificant decimal, 0.0004, which it was (a decimal, not insignificant).  We don’t think anyone will dispute that there are three ways to interpret this number:  it’s bad, it’s good, it’s neither.  Climate scientists are unanimous that it’s bad.  There is nothing saying it’s good.  Which means the justification for not taking action on climate change is that the ever increasing levels, and the ever increasing rate of accumulation, of carbon dioxide in the atmosphere (see the graphs by the observatory), are of no consequence.  US Airways will probably side with the climate scientists - it canceled 18 flights as a result of the record-breaking temperatures in the southwest this past weekend. 

As a footnote, we note that Mauna Loa’s number is an average, and is subject to refinement.  As it turned out, the 400 ppm number was refined a few weeks later to 399.89.  

3.  Free Trade.  In 2009 Ontario enacted its Green Energy Act to promote renewable energy in the province.  One approach is the adoption of a feed-in tariff (mandatory above-market rates for electricity derived from renewable resources).  This had successfully been pioneered in Germany.  Ontario legislators also saw the opportunity to spur job growth by giving subsidies to businesses that sourced their wind turbines and solar panels in Ontario (i.e., “domestic content”).

Japan jumped on this protectionism immediately and sought consultations with Canada under the General Agreement on Tariffs and Trade and the World Trade Organization. The consultations were ineffective and Japan requested a panel to hear the dispute concerning Ontario’s “domestic content requirements," with which renewable energy generators were required to comply "in the design and construction of electricity generation facilities in order to qualify for guaranteed prices” under the feed-in tariff program.

Last December the panel ruled in favor of Japan on the domestic content requirements. Canada appealed and this May the appellate panel affirmed. Ontario's energy minister has confirmed that Ontario will abide by the WTO decision and revise its Green Energy Act.   We conclude that free trade remains colorblind.

4. Climate Change Liability Lawsuits.  For seven years now, the first wave of climate change liability lawsuits have roiled the legal waters.  It bears remembering that in October 2009, the plaintiffs in these cases rode the crest of the wave.  The Second Circuit had reversed the trial court’s dismissal in Connecticut v. American Electric Power (AEP), and the Fifth Circuit likewise overturned the Southern District of Mississippi’s dismissal of Comer v. Murphy Oil USA.  Plaintiffs had standing; the political question doctrine did not apply.

Things have gone badly for the plaintiffs since.  All readers of this blog know of the Supreme Court’s decision in AEP, stifling the plaintiffs’ case under the doctrine of displacement.  This year two more decisions confirmed the Judicial Branch’s hostility to these claims.  Comer made it back to the Fifth Circuit, where dismissal was summarily affirmed on the doctrine of res judicata.  And the last of the original quadriga, Native Village of Kivalina v. ExxonMobil Corp., found its petition for certiorari denied in April,  thus leaving the Ninth Circuit’s affirmance of dismissal unchanged.

The only reed left for the plaintiffs is the granting of a petition for certiorari in Comer, a prospect we deem unlikely, if only because the appeal would be based on a purely procedural question of little likelihood of being repeated and of little relevance to the larger climate change issues.

5.  Ursus Maritimus.  On March 1 the D.C. Circuit in In re Polar Bear Endangered Species Act Litigation  affirmed the district court’s dismissal of challenges to the Fish and Wildlife Service’s designation of the polar bear as threatened under the Endangered Species Act because “due to the effects of global climate change, the polar bear is likely to become an endangered species and face the threat of extinction within the foreseeable future.” The polar bear’s friends (environmental groups) sought to have the bear listed as “endangered.”  Ursus maritimus’s less-than-friends (the State of Alaska and hunting groups), urged that no listing was appropriate.  The standard in such reviews is relatively simple:  “Our principal responsibility here is to determine, in light of the record considered by the agency, whether the Listing Rule is a product of reasoned decisionmaking.”  The Court found that it was, holding specifically the the Listing Rule rests on a three-part thesis: the polar bear is dependent upon sea ice for its survival; sea ice is declining; and climatic changes have and will continue to dramatically reduce the extent and quality of Arctic sea ice to a degree sufficiently grave to jeopardize polar bear populations. See Listing Rule, 73 Fed. Reg. at 28,212. No part of this thesis is disputed and we find that FWS’s conclusion – that the polar bear is threatened within the meaning of the ESA – is reasonable and adequately supported by the record.”

As arctic resource development progresses as the ice retreats, the polar bear's Endangered Species Act listing is sure to take on larger significance, both as a model for the preservation of other arctic species, and as a tool to block development.

6.  Compressed Natural Gas (CNG). On June 13 the Fifth Circuit affirmed the district court's decision in Association of Taxicab Operators USA v. City of Dallas. In the case the local taxicab organization challenged a city ordinance that allowed CNG-fueled taxicabs “head-of-the-line” privileges at Love Field in downtown Dallas. Plaintiff's theory was that section 209(a) of the Clean Air Act, which prohibits states and their political subdivisions from adopting emission standards for motor vehicles, preempted the ordinance either directly or by implication. The Fifth Circuit did not agree. Traditional police powers of the state were preserved to the state by section 209(d) of the Clean Air Act. More importantly, an ordinance granting head-of-the-line privileges, on its face did not set an emission standard, as required by the statute.  As to any implied preemption, the ordinance may have influenced taxicab operators to alter their behavior, but it did not compel them to do so. Less than 7% of Dallas's taxicabs served Love Field and the only place CNG cabs had head-of-the-line privileges was at Love Field; there were plenty of other places for gasoline powered cabs to pick up fares. Accordingly implied preemption did not apply either. 

One of our themes in a world beset by climate change is that there will be winners and there will be losers. Little did taxicab operators know they would be both.


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