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Critics Fear EPA Appeals Shakeup Sidelines Environmental Justice

July 24, 2020, 10:00 AM

When the EPA issued critical permits for offshore oil exploration in the Arctic more than a decade ago, two Indigenous groups fought back—not in the courtroom, but in an obscure office planted deep within the bureaucracy of the Environmental Protection Agency.

The Alaska Eskimo Whaling Commission and the Inupiat Community of the Arctic Slope took their complaints to the Environmental Appeals Board, where they argued that agency officials ignored environmental justice concerns when they approved air permits for Royal Dutch Shell Plc subsidiaries to hunt for oil in the Beaufort and Chukchi seas.

A trio of agency judges agreed in 2010 and ordered EPA officials to redo their analysis, stalling Shell’s exploration plans. It was a key early victory for environmentalists and Alaska Natives engaged in years of opposition to Arctic development.

“That was really where we stopped Shell from going out,” said environmental lawyer Tanya Sanerib, who represented the Indigenous groups in the administrative appeal.

But that kind of victory could be impossible for future challengers after the Trump administration rolled out sweeping changes for the Environmental Appeals Board. A final rule released this week speeds up the review process, narrows the panel’s jurisdiction, and makes it easier for political officials to control the outcome of cases.

The rule, which could spark litigation, affects future disputes over pollution from EPA-permitted coal-fired power plants, wastewater treatment plants, and other projects.

‘Better Certainty’

The update “will lead to better certainty and a fairer process” for permit applicants and the public, EPA Administrator Andrew Wheeler said in an announcement.

And it will ensure EAB judges focus on legal and technical issues, rather than “second-guessing” policy decisions from the agency’s leaders, General Counsel Matthew Z. Leopold told Bloomberg Law.

Critics say the changes short-circuit the consideration of environmental justice concerns and insert too much political influence in the review process.

“This is another example of making it more difficult for environmental justice communities to defend themselves,” said Mustafa Santiago Ali, vice president of environmental justice, climate, and community revitalization at the National Wildlife Federation.

He said the rule is especially harmful now because communities disproportionately affected by pollution are also more vulnerable to Covid-19.

How the EAB Works

The EPA created the Environmental Appeals Board in 1992 as an out-of-court option for resolving disputes over certain permits and agency orders under the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and other statutes.

Challengers file a petition with the EAB, and a three-member panel reviews briefs, holds a hearing, and issues a decision. Sometimes the process takes the place of more expensive and time-consuming federal court proceedings. Other times, the board is just the starting point for conflicts that end up in court.

Many environmental groups, tribes, project neighbors, and other permit challengers prefer the EAB process to litigation because they can use it to negotiate more protective permit terms and block permits from becoming final until the board resolves their complaint. Plus, challengers get to present their concerns to expert agency judges.

“All of the judges are people who are incredibly well-versed in that area of the law,” said Sanerib, now at the Center for Biological Diversity. “You can assume not just a baseline knowledge, but a really intimate knowledge of the statutory framework and of administrative law. That’s a really unique luxury.”

Permit holders on the other side of the table aren’t as enthusiastic about the EAB, saying the process takes too long, creating uncertainty about when and whether development can move forward.

Sidley Austin LLP attorney David Buente told Bloomberg Law earlier this year that he’s seen clients’ business deals disrupted because of lengthy EAB proceedings. The Air Permitting Forum, an industry group, filed comments accusing challengers of attempting to “extract additional concessions on the draft permit” through meritless appeals.

‘No Longer Being Valued’

The EPA’s new rule addresses many of the industry complaints. It sets swift deadlines for decisions, blocks the board from considering certain issues, imposes 12-year term limits for agency judges, and allows the EPA administrator to reach down to resolve any legal questions before the board.

Critics say the changes will deny some challengers access to justice. In the Arctic drilling case, for example, the Indigenous challengers won their case in part because the board determined the EPA hadn’t studied impacts on Alaska Natives, despite a Clinton-era executive order directing agencies to consider how their decisions affect environmental justice communities.

EAB judges are now barred from reviewing whether the EPA has complied with executive orders or “internal discretionary policies.” If the Arctic drilling case happened now, the judges couldn’t fault the agency for ignoring the 1994 environmental justice order, which is still on the books.

“EJ is no longer being valued as one of the criteria in making a determination around if a permit moves forward or not,” said Ali, who worked on environmental justice at the EPA for more than two decades.

Democratic Sen. Tom Carper of Delaware sent a letter to Wheeler on Wednesday, saying the change ignores EAB precedent, which has consistently applied the terms of the environmental justice order. Just last year, for example, the board remanded an oil well injection permit for the EPA to better explain its review of the Michigan well’s impacts on low-income neighbors.

21-Day Deadline

The rule’s 21-day deadline for parties to file amicus briefs in a new case also disadvantages environmental justice groups, Ali said, because they often have limited resources and can’t take action within such tight timelines.

Groups can still raise environmental justice issues in federal court, Earthjustice attorney David Baron said, but litigation is more costly, and development or pollution can often proceed in the meantime.

Leopold, the agency’s general counsel, defended the move as an appropriate reset for a board whose authority, he said, had become too broad.

“This administrator and, I think every administrator, makes it clear that EJ concerns are to be considered in all aspects of our policymaking,” he said. But, he continued, policy decisions need to stay in the hands of appointed officials.

“To allow career officials standing in the shoes of the administrator to supplant the policy judgment of the president’s appointees is anti-democratic,” Leopold said.

Political Influence

Environmental advocates saw one thing they liked in this week’s final rule: The agency dropped a proposal that would have funneled cases into an alternative dispute resolution process unless both sides agreed to go before the EAB.

Groups worried that industry parties would force them into ADR, a forum seen as less favorable to challengers. “I can’t remember one instance where I’ve had it work out successfully,” said Chesapeake Bay Foundation vice president of litigation Jon A. Mueller, who has brought disputes before the EAB.

But, he added, dropping that proposal comes as little comfort as the final rule locks in other changes.

Beyond environmental justice concerns, the EAB’s narrower scope of review undermines part of the panel’s purpose, which is to ensure the EPA’s thousands of employees and field offices are acting consistently with agency directives, said Hogan Lovells attorney Tom Boer, a former EPA and Justice Department lawyer.

“If EPA staff are going to depart from EPA guidance or executive orders,” he said, “then they should have the burden of explaining” their decisions.

The new provision that allows the EPA administrator, through the agency’s general counsel, to jump in to resolve legal questions pending at the board is also concerning, Mueller said. He recalled a 2008 victory for his group when the board said the EPA needed to set deadlines for pollution reductions at Washington, D.C.'s, Blue Plains Advanced Wastewater Treatment Plant, the largest in the world.

Under the new rule, “EPA would have won that case, and we’d probably have a dirtier Anacostia and Potomac now,” Mueller said, referring to the area’s two rivers.

But the EPA administrator has always had authority to overturn EAB decisions, Leopold said. The new rule simply streamlines that process, he said, adding that he thinks administrators will step in sparingly.

Environmental Integrity Project executive director Eric Schaeffer said that while the administrator does have that power to overturn the EAB, the agency’s new process for involvement in the middle of administrative proceedings “invites defendants to work back channels to overturn enforcement decisions they don’t like.”

Going to Court

But policy decisions are inherently political, and challengers have legal options if they think the agency got something wrong, said George Washington University professor Brian F. Mannix, a George W. Bush-era EPA official.

“If somebody thinks that the EAB made a political decision, or the administrator sent a politically motivated memo, if they think it’s not the right interpretation of the law, they can go to court,” Mannix said. “That’s the way it’s supposed to work. I don’t see it as a biased process.”

Critics could end up in court sooner than that if they decide to target the rule itself. The EPA crafted the regulation under the Federal Housekeeping Statute, which generally gives agencies wide latitude to manage their internal workings. That means the rule isn’t subject to the rulemaking requirements of the Administrative Procedure Act, the agency said.

Environmentalists haven’t yet announced any plans to challenge that logic, but Mueller said groups could allege that the action is arbitrary and capricious under the act. Baron said Earthjustice is looking at its options.

“This dictates what the board can and can’t review,” he said. “Those are not just housekeeping matters. Those affect people’s lives.”

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloombergindustry.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Renee Schoof at rschoof@bloombergindustry.com

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