On November 29, 2012, U.S. Magistrate Judge Deborah A. Robinson issued a memorandum order denying FERC’s request to compel production of certain portions of 25 email documents by J.P. Morgan Ventures Energy Corporation (“JP Morgan”). In its petition before the court, FERC argued that JP Morgan was “overbroad” in claiming attorney-client privilege for this information. Upon in camera review of the JP Morgan emails at issue, Magistrate Judge Robinson found that the redacted information was in fact “shielded” by attorney-client privilege.
Court Rulings
Ninth Circuit Upholds Contested Bonneville Power Administration Contract with Alcoa
On October 16, 2012, the United States Court of Appeals for the Ninth Circuit issued an opinion deciding several consolidated petitions for review relating to a power contract between Bonneville Power Administration (“Bonneville”) and its long-time customer, Alcoa, Inc. (“Alcoa”).
EPA Petitions for En Banc Review of CSAPR Decision
On October 5, 2012, the Environmental Protection Agency (“EPA”) filed a petition with the U.S. Court of Appeals for the District of Columbia requesting en banc rehearing of its ruling on the EPA’s Cross State Air Pollution Rule (“CSAPR”). The court, in a three judge panel, vacated CSAPR in a 2-1 decision on August 21, 2012 (“August 21 Order”).
Court Rules Clean Air Act Preempts State Common Law Nuisance Actions
On October 12, 2012, the U.S. District Court for the Western District of Pennsylvania found that the Clean Air Act displaced all state common law claims relating to dust emissions from a coal-fired power plant.
D.C. Court Vacates and Remands CFTC’s Position Limits Rule
On September 28, 2012, the U.S. District Court for the District of Columbia vacated and remanded the Commodity Futures Trading Commission’s (“CFTC”) Position Limits Rule. The Court held that the CFTC incorrectly interpreted the Commodity Exchange Act of 1936 (“CEA”), as amended by the Dodd-Frank Act. Specifically, the Court held that the CFTC failed to make a necessity finding before promulgating its Position Limits Rule.
Second Circuit Upholds FERC Licensing Order on Long Contested Hydropower Project in New York
On September 25, 2012, the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) issued a non-precedential summary order affirming FERC’s reissuance of a license to Erie Boulevard Hydropower, L.P. (“Erie”) for the School Street Hydroelectric Project (“School Street Project”). The School Street Project is located on the Mohawk River near the City of Cohoes, New York. Specifically, the Second Circuit determined that a proposed settlement agreement that modified certain aspects of the project’s hydroelectric license application was not a “material amendment” of the license application and thus, upheld FERC’s reissuance of the license.
Ninth Circuit Upholds Dismissal of Climate Change Nuisance Case
On September 21, 2012, the United States Court of Appeals for the Ninth Circuit upheld a 2009 California federal district court decision dismissing claims by an Alaska Native American village against a large number of coal, oil and electric utility companies that the greenhouse gas (“GHG”) emissions of these companies constituted a public nuisance by causing massive erosion around the coastal village. See Native Village of Kivalina v. Exxon-Mobil Corp., No. 09-17490 (Sept. 21, 2012). The case is the first major court decision in this area following the Supreme Court’s decision in American Electric Power Co., Inc. v. Connecticut, 131 S. Ct. 2527 (2011), which held that federal common law claims based on GHG emissions are displaced by federal regulation of GHGs under the Clean Air Act.
FERC’s Market-Based Rate Policy Survives Challenge at the Supreme Court
On June 25, 2012, the Supreme Court of the United States (“Supreme Court”) denied a petition for certiorari challenging a decision by the Court of Appeals for the Ninth Circuit (“9th Circuit”) that FERC’s Order No. 697, “Market-Based Rates For Wholesale Sales Of Electric Energy, Capacity And Ancillary Services By Public Utilities” does not violate the Federal Power Act (“FPA”). The Supreme Court did not discuss its reasons for denying the petition.
Secretary of Energy Ordered to Re-Evaluate Nuclear Waste Fees
On June 1, 2012, the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit”) held in National Association of Regulatory Utility Commissioners v. United States Department of Energy that the Secretary of Energy (“Secretary”) failed to perform a valid evaluation of annual fees collected from generators for disposal of nuclear waste under the 1982 Nuclear Waste Policy Act (the “Act”). The DC Circuit ordered the Secretary to conduct a re-evaluation of the annual fees within six months, but stopped short of ordering the fees suspended.
Second Circuit Validates FERC’s Environmental Review of a New Natural Gas Pipeline Construction Project to Carry Marcellus Shale Gas
In an unpublished memorandum order, the Second Circuit upheld FERC’s approval of a 39-mile natural gas pipeline in Pennsylvania without first preparing a full Environmental Impact Statement (“EIS”).