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Pipeline Ruling Spotlights ‘Game-Changer’ in Environmental Cases

April 2, 2020, 8:56 AM

A recent court ruling on federal environmental reviews could help breathe new life into an under-the-radar legal argument against major projects across the country.

A district court on March 25 ordered the Trump administration to conduct a more in-depth study of the embattled Dakota Access oil pipeline’s impacts.

The judge reasoned that the impacts were “highly controversial” under the National Environmental Policy Act and required closer analysis.

The standard, enshrined in NEPA regulations for decades, focuses not on public controversy over a project but on scientific or technical disputes about its impacts.

Experts raised legitimate concerns about the pipeline’s oil spill risks, the court ruled, so the government must do a detailed environmental impact statement rather than the streamlined environmental assessment it conducted.

The ruling built upon a precedent established just last year. Legal experts expect the two decisions to fuel an uptick in environmental cases that take the same approach.

“It’s not just disagreeing with the agency’s conclusions or the agency’s analysis, but you have to have expert information and technical information to show that there are real problems with it,” University of Minnesota law professor Alexandra Klass said.

“If you can show that, it can really make a difference.”

‘Dividends for Years and Years’

Though NEPA and its regulations are decades old, federal courts in Washington, D.C.—where much NEPA litigation is filed—hadn’t directly grappled with the “highly controversial” test until recently.

The efforts to push the question to the U.S. Court of Appeals for the District of Columbia Circuit had been years in the making.

In 2015, Colorado-based environmental lawyer William S. Eubanks II saw an opportunity when the Army Corps of Engineers granted permits for an electric transmission line across the James River despite criticism from other agencies taking issue with how the corps analyzed the route’s impacts.

Eubanks and his colleagues from the small but high-powered firm Meyer Glitzenstein & Eubanks LLP, which is now Eubanks & Associates LLC, stressed that point when they filed suit on behalf of the National Parks Conservation Association.

The case eventually reached the D.C. Circuit, which in 2019 ruled that the Army Corps should have done an environmental impact statement in light of the expert criticism.

The U.S. District Court for the District of Columbia applied that precedent when it issued the Dakota Access pipeline decision last week, saying the James River decision “lights the way.”

“It really is a game-changer,” Eubanks said. “It’s still going to pay dividends for years and years, and decades to come.”

Questions Remain

The James River decision set the standard for cases that feature disagreement among government agencies, Eubanks said, and the Dakota Access ruling showed that the same standard applies when the criticism comes from outside the federal government—in that case, from American Indian tribes.

The question now, he said, is what happens when “you have some nonprofit groups who are scrappy and they hire some of the world’s best experts” and raise legitimate concerns.

“Is that enough?” he said. “Courts are going to have to grapple with that.”

Another unknown, he said, is how the Trump administration’s efforts to update NEPA regulations will affect the legal landscape.

“A lot of things are up in the air right now with this administration,” Eubanks said. “For now, this is the law in the D.C. Circuit, which is where a lot of these types of cases are brought. And until and unless something major changes, this is still going to be binding law.”

Testing the Limits

Litigants can put the precedent to the test in a variety of contexts, said Jayni Foley Hein, natural resources director for New York University’s Institute for Policy Integrity.

She noted that most oil and gas auctions and coal leases on public lands are approved through environmental assessments, the streamlined style of review at issue in the Dakota Access and James River cases.

Opponents could take aim at federal studies by identifying, for example, disputed methodology for weighing fossil fuel development’s climate impacts, Hein said.

“The plaintiffs could advocate for an EIS to be prepared to fill those gaps, and the ruling shows that judges may very well agree with them,” she said.

Western Environmental Law Center attorney Kyle Tisdel, based in New Mexico, said the recent clarification of the highly controversial standard provides a “road map” for judges reviewing future challenges, including his group’s steady stream of litigation over fossil fuel extraction in the West.

Klass, the law professor, added that it highlights how important it is for litigants to hire experts early on to provide technical support for their claims.

“Typically all that expertise is within the agencies and with the project proposers, so it tends to even the playing field a bit,” she said.

Developers’ Role

Klass argued, however, that the new legal landscape won’t necessarily lead to more environmental impact statements. Instead, she said, agencies can guard against court rebukes by responding more robustly to technical critiques of their analyses.

“If that means additional data analysis, if that means digging into a model again, they need to do that,” she said.

Bracewell LLP attorney Kevin Ewing, who advises energy and infrastructure companies, said project backers can help by providing “all the technical support, information, and clarity to the federal permitting agency to help them have the soundest basis for their own technical assessments.”

Doing so might be costly for developers, ClearView Energy Partners analyst Christine Tezak said in a recent research note, but “may be the most efficient and cost-effective way over the life of the project to lower the risk of permit suspension during litigation.”

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

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

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