EPA’s Regulatory Roll-Back

In March 2025, Administrator Zeldin announced that EPA will reconsider a number of regulations in order to advance various executive orders issued by President Trump and fulfill EPA’s own Powering the Great American Comeback Initiative. These efforts include the 2024 ambient air standard for particulate matter, the 2009 endangerment finding, and the scope of jurisdiction over ‘adjacent wetlands after the Supreme Court’s 2023 decision in Sackett.

In the Biden Administration, EPA lowered the National Ambient Air Quality Standard for particulate matter, the PM 2.5 NAAQS. The standard was reduced to levels that were close to background levels in some areas. EPA announced it is “revisiting” the lower standard because, among other things, the lower standard “raised serious concerns from states across the country and served as a major obstacle to permitting.”

So far, though, EPA has not issued a proposal to revisit the PM 2.5 NAAQS. It faces some hurdles in doing so. It must be done through the administrative rule-making process, which includes public notice and comment. Further, to survive judicial review, EPA must provide a reasoned explanation for the basis of the revision. EPA also stated it would “soon release guidance to increase flexibility on NAAQS implementation…and direction on permitting obligations.” However, these items have not yet been issued.

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The Fading Luster of Carbon Capture

Carbon dioxide (CO2) is used to carbonate beverages and enhance plant growth. It has also been used for decades in enhanced oil recovery, in which CO2 is injected into oil- or gas-bearing formations to help extract oil and gas. Of course, many say that CO2 causes or contributes to climate change / global warming. In 2009, EPA issued its ‘endangerment finding’ in which EPA determined that current and projected concentrations of CO2 and other greenhouse gases in the atmosphere threaten the public health and welfare of current and future generations.

The idea of capturing CO2 before it enters the atmosphere and using it or injecting it for perpetual storage, or sequestration, came about as a way to mitigate the anticipated impacts of climate change. To facilitate carbon capture, use, and storage (CCUS), Congress created the 45Q tax credit in the US Tax Code. Additionally, the Biden Administration touted CCUS as an important tool to address climate change. Even the prior Governor of Louisiana included it as a centerpiece of his climate strategy.

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What A Difference A Single Memo Makes!

The scope of jurisdiction over wetlands under the Clean Water Act has long been debated and litigated. The Supreme Court and other courts have issued various rulings explaining and limiting the scope of such jurisdiction. The Corps of Engineers (Corps) and the Environmental Protection Agency (EPA), though, have not always strictly adhered to those rulings and have sought to expand their jurisdictional reach. Now, the Trump Administration seems determined to force compliance with those rulings.

The Supreme Court’s ruling in Sackett v. EPA was a clear statement about the limits of jurisdiction over adjacent wetlands pursuant to the Clean Water Act. In adopting Justice Scalia’s opinion in its prior Rapanos decision, the Supreme Court severely limited the Corps’ jurisdiction, holding that the Clean Water Act extends to only those wetlands that are as a practical matter indistinguishable from waters of the United States. The Corps must establish first, that the adjacent body of water constitutes ‘waters of the United States’ (i.e., a relatively permanent body of water connected to traditional interstate navigable waters) and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the water ends and the wetland begins. Sackett v. EPA, 143 S.Ct. 1322, 1341 (2023).

Despite the clarity of this holding, the Corps seems to have resisted its application, seemingly seeking to assert and/or hold onto jurisdiction as much as possible. An example is found in the Fifth Circuit’s decision in Lewis v. EPA, 88 F.4^th 1073 (5^th Cir. 2023). In that case, it was clear that the two tracts at issue were miles away from a relatively permanent water body and connected by roadside ditches, a culvert, and a non-relatively permanent tributary. Still, the Corps clung to jurisdiction, forcing the Fifth Circuit to remark on the Corps’ “unwillingness to concede its lack of regulatory jurisdiction” and to emphatically state “enough is enough.” Lewis, 88 F.4^that p. 1076 and 1080. Ultimately, the Fifth Circuit ruled there were no jurisdictional wetlands on the two tracts.

Against this backdrop, the Trump Administration came into office in January 2025. Within 60 days, the EPA and the Corps issued a joint Memorandum to the Field on March 12, 2025 (the Memorandum). [1] The Memorandum states that it is being issued to provide “guidance on the meaning of the ‘continuous surface connection’ requirement” and noting that prior guidance on the subject was “inconsistent with … the Sackett decision.” Further, the Memorandum represented the “agencies’ views on the proper implementation of the definition of ‘waters of the United States’” and will be used “when determining if a wetland has a ‘continuous surface connection’ to a requisite jurisdictional water under the Clean Water Act.”

The Memorandum makes clear that “adjacent” means “physically abutting.” Thus, adjacent wetlands are “those that directly ‘abut’ covered waters.’” It goes on to state that “unless a wetland has a continuous surface connection – directly abutting a requisite jurisdictional water – it cannot be determined to be jurisdictional as an adjacent wetland.”

Importantly, the Memorandum firmly rejected language in prior guidance documents related to “a discrete feature like a non-jurisdictional ditch, swale, pipe, or culvert” because it is “in tension with the pre-2015 regime and Sackett and the purpose of this memo is to align the agencies’ interpretation of adjacency with Sackett.” The Memorandum further states:

Therefore, an interpretation of continuous surface connection which allows for wetlands far removed from and not directly abutting covered waters to be jurisdictional as adjacent wetlands has the potential to violate the direct abutment requirement for adjacent wetlands under the plurality’s standard and now Sackett’s endorsement of that standard. Therefore, any components of guidance or training materials that assumed a discrete feature established a continuous surface connection are rescinded.

In short, “the agencies are interpreting waters of the United States to include only those adjacent wetlands that have a continuous surface connection because they directly abut the requisite jurisdictional water (e.g., they are not separated by uplands, a berm, dike, or similar feature).” Further, “pursuant to the Rapanos plurality, wetlands with only an intermittent, physically remote hydrologic connection to waters of the United States do not implicate the boundary-drawing problem of Riverside Bayview and thus do not have the necessary connection to covered waters that triggers CWA jurisdiction.” Finally, the wetland “must have a continuous surface connection to a requisite covered water making it difficult to determine where the water ends and wetland begins.” Emphasis supplied; punctuation omitted.

What a difference the Memorandum has made! One specific example highlights at least one positive outcome of its application.

An approved jurisdictional determination (AJD) was issued in December 2024 for a 120-acre site. The northern part had been placed into agricultural use years ago, but the southern portion was wooded. Various drains and ditches crossed the property, carrying water to ditches adjoining the property and eventually to roadside ditches. The roadside ditches ultimately drained to a relatively permanent waterway about a mile away. Prior to the issuance of the AJD, evidence was presented to the Corps in the form of reports and photographs establishing that the various drains and ditches, both on the property and off the property (the roadside ditches) had, at best, only intermittent or ephemeral flow.

Nevertheless, the Corps, in the AJD, described the various drains and ditches as tributaries and asserted that these drains and ditches created a continuous surface connection to the relatively permanent waterway. In fact, the Corps deemed the drains and ditches themselves as relatively permanent waterways, some with seasonal flow. The Corps then asserted jurisdiction over all the wetlands on the tract.

After an administrative appeal was requested and a suit for judicial review was filed, the Corps decided to reconsider the AJD. Applying the concepts included in the Memorandum, the Corps issued a new AJD. This time, the AJD found that the ‘tributaries’ (i.e., the drains and ditches) were not relatively permanent waterways, had only ephemeral to intermittent flow, and so lacked the required continuous surface connection. As a result, the wetlands on the tract were all deemed non-jurisdictional. Based on the application of the Memorandum, the property went from one with jurisdictional wetlands (which require a permit and mitigation to develop) to one without any jurisdictional wetlands or waters at all.

Of course, the key is that evidence was intentionally submitted to the Corps for inclusion in the administrative record showing that the drains and ditches provided only ephemeral and intermittent hydrologic connections. The submittal of that type of evidence is necessary to show the Corps that the required continuous surface connection does not exist and to ensure that the administrative record includes that evidence for any appeal.

The Memorandum is a good, practical first step to ensure adherence to the Supreme Court decisions. It is already making a difference for property owners. Hopefully, EPA and the Corps will take steps to codify these concepts into the applicable regulations.

[1] The Memorandum is available here: https://www.epa.gov/system/files/documents/2025-03/2025cscguidance.pdf.

The Push To Unleash American Energy

On January 20, 2025, the day of the inauguration, President Trump signed Executive Order 14154, Unleashing American Energy. Through the EO, President Trump seeks to “encourage energy exploration and production on Federal lands and waters … in order to meet the needs of our citizens and solidify the United States as a global energy leader long into the future.” He ordered an immediate review of “all existing regulations … and any other agency actions … to identify those agency actions that impose an undue burden on the identification, development, or use of domestic energy resources.” He further ordered that agencies must “expedite permitting approvals” to achieve this overall goal.

The relevant federal agencies have heard the call. Doug Burgum, the Secretary of the Interior, issued Order No. 3418 to implement the EO. In it, Secretary Burgum ordered steps be taken to reduce “barriers to the use of Federal lands for energy development” and that leases cancelled during the Biden Administration be reinstated. Chris Wright, the Secretary of the Department of Energy, criticized net-zero policies, stating that they threaten the reliability of our energy system and achieve “precious little in reducing global greenhouse gas emissions.” He resumed consideration of pending applications to export American liquefied natural gas (LNG). Towards that end, he announced a new export authorization for the Commonwealth LNG project proposed for Cameron Parish, Louisiana and provided an export permit extension for Golden Pass LNG Terminal, currently under construction in Sabine Pass, Texas

EPA is also involved. Administrator Zeldin announced an initiative, titled Powering the Great American Comeback, which included his ‘five pillars’ approach. The ‘pillars’ include Restoring American Energy Dominance and Permitting Reform, Cooperative Federalism, and Cross-Agency Partnership. Energy produced in America “is far cleaner than energy produced overseas” and is better for the environment because “we do it better here.” However, the cost and length of time to obtain necessary permits is a potential impediment to achieving these goals. EPA will “bring down that timeline [to] make sure it doesn’t take as long to get a permit.”

Administrator Zeldin also announced that EPA will reconsider over thirty regulations. These include the standards of performance for oil and gas facilities (Subparts OOOOb/c) and the effluent limitations guidelines and standards (ELGs) for wastewater discharges for oil and gas extraction facilities. EPA will also reconsider regulations on power plants (the Clean Power Plan 2.0).

Overall, though, perhaps the most important one is the reconsideration of the 2009 Endangerment Finding and all of the regulations and actions that rely on it. In the Endangerment Finding, EPA concluded that carbon dioxide (CO2), methane (CH4), and other greenhouse gases threaten public health and welfare. While the Finding itself did not impose any requirements, it was a “prerequisite for implementing greenhouse gas emissions standards for vehicles and other sectors.” Secretary Wright stated that the Finding “has had an enormously negative impact on the lives of the American people. For more than 15 years, the U.S. government used the finding to pursue an onslaught of costly regulations – raising prices and reducing reliability and choice on everything from vehicles to electricity and more.”

In addition to its regulatory impact, EPA provided other reasons for the reconsideration. First, when EPA announced the Finding, it indicated that, by itself, it did not impose any costs and that EPA could not consider future costs when making the Finding. However, EPA has subsequently relied on the Finding as part of its justification for certain regulations with an aggregate cost of more than one trillion dollars. Second, the Finding itself acknowledged significant uncertainties in the science and assumptions used to justify the decision but EPA has never sought comment on major developments in innovative technologies, science, economics, and mitigation that may impact the Finding. Finally, major Supreme Court decisions, including Loper Bright Enterprises v. Raimondo, have provided new guidance on how EPA should interpret statutes to discern Congressional intent and ensure that its regulations follow the law.

EPA, and the other federal agencies reviewing their existing regulations and prior actions to implement the EO, must exercise some caution in changing policies. In very general terms, an agency must indicate an awareness that it is changing position, show that the new policy is permissible under the statute, indicate that the new policy is better, and provide reasons for adoption of the new policy. In light of Loper Bright, an agency would likely have to show that the new policy is not just permissible but in line with the ‘best reading’ of the statute. Overall, the agency must provide a reasoned explanation for the change. They must also follow the Administrative Procedure Act. To amend or revoke a rule, notice and comment are required and decisions are subject to judicial review. The reconsideration process will take some time and the outcome is not at all certain due to the ongoing threat of litigation.

An increased emphasis on the domestic production of oil and gas and a decline in regulatory burdens are certainly welcome to the oil and gas industry and those related industries that depend on fossil fuels. Oil and gas production, which is higher now than at the start of the pandemic (see figures below), can only reach new heights.

A Good Place To Start

The Trump Administration has signaled that it plans to expand energy production, expedite energy permitting, and ‘roll-back’ regulations and practices that impede growth. As part of this effort, Mr. Trump has named Lee Zeldin, a former GOP member of Congress, to lead the EPA.
Mr. Trump has stated that Mr. Zeldin wishes to “ensure fair and swift deregulatory decisions” while maintaining “the highest environmental standards, including the cleanest air and water on the planet.’’ Further, Elon Musk and Vivek Ramaswamy, heads of the so-called Department of Government Efficiency, or DOGE, have vowed to work with the Trump Administration to use executive action “to pursue three major kinds of reform: regulatory rescissions, administrative reductions and cost savings.”

While there are many statutorily mandated regulatory programs and practices that are not easily ignored or revised, there are several regulations and practices that impede growth in violation of the governing statute and/or case law interpreting that statute. One area that Mr. Zeldin and DOGE can focus on is the EPA/Corps of Engineers’ regulatory definition and interpretation of ‘navigable waters’ and ‘waters of the United States’ in the Clean Water Act.

Under the CWA, “navigable waters” means the “waters of the United States,” or WOTUS. EPA/Corps promulgated a simple regulatory definition of WOTUS in the early 1970s. Since then, though, EPA/Corps have expanded the regulatory definition, and their interpretations of the CWA and that definition, to include, as stated in Sackett v, EPA, “almost all waters and wetlands across the country [such that they] theoretically could be subject to a case specific jurisdictional determination.” Obviously, an expansive definition impairs growth and prevents development.

Over the years, the US Supreme Court has issued several decisions seeking to clarify the meaning of WOTUS and curtail the EPA/Corps’ ever-expanding view of their jurisdiction. Most recently, the Supreme Court issued its decision in Sackett, which was a full-throated endorsement of Justice Scalia’s plurality opinion in Rapanos v. US. The Sackett Court completely rejected the ‘significant nexus’ test espoused by Justice Kennedy in his concurrence in Rapanos.

In Sackett, the Supreme Court stated that, to be jurisdictional, the adjacent wetlands “must be indistinguishably part of a body of water that itself constitutes ‘waters’ under the CWA.’” According to the Supreme Court, this requires the party asserting jurisdiction over adjacent wetlands, that is, the EPA/Corps, to establish: 1) that the adjacent body of water constitutes WOTUS (i.e., a relatively permanent body of water connected to traditional interstate navigable waters) and 2) that the wetland has a continuous surface connection with that water, making it difficult to determine where the water ends and the wetland begins.

The EPA/Corps, though, do not seem willing to adopt and apply this simple formulation of WOTUS and the resulting jurisdictional scope over adjacent wetlands. Instead, they seem to retain their previous expansive interpretations to maintain or assert jurisdiction over wetlands that should not, post-Sackett, be included within the scope of the CWA.

By way of example, in one pre-Sackett jurisdictional determination, the EPA/Corps relied on the ’significant nexus’ test to assert jurisdiction over isolated wetlands. After a request to review that prior determination in the wake of Sackett, the EPA/Corps determined that the very same isolated wetlands remained jurisdictional. EPA/Corps merely changed the designation of the ditches draining the wetland area to now claim that those ditches provide a ‘continuous surface connection,’ even though in the prior determination they claimed those same ditches were ephemeral at best.

These approved jurisdictional determinations are subject to judicial review under the Administrative Procedure Act. In other words, the recipient may file a petition or complaint for federal judicial review of that AJD. Additionally, since the Supreme Court’s decision in Corner Post, such a review may be filed within six years of the harm or injury from the AJD and not the date of issuance of that AJD. Still, the EPA/Corps should faithfully apply Sackett in the first instance instead of issuing expansive AJDs and requiring recipients to seek judicial review.

There are presumably many fertile grounds for DOGE to attack throughout the federal government. However, the EPA/Corps’ current interpretation of WOTUS stifles, delays, and impairs growth and development, contrary to the Supreme Court’s express ruling in Sackett. Mr. Zeldin and DOGE would help growth tremendously if they addressed this issue as one of their first priorities.

Trump, Part Two

The second Trump Administration will likely usher in a pitched battle between its attempt to ‘roll-back the Biden Administration’s environmental rules and policies and environmentalists’ defense of those same rules and policies. The outcome is anything but clear.

The Biden Administration still has some time and power to cement its legacy. In this interim transition period, it can, among other things, deny requests for reconsideration of promulgated rules, grant petitions of objection to Title V permits, and seek expedited rulings in multiple court cases across the country. It can also finalize proposed rules and policies. However, those actions can be undone, delayed, or stymied once the Trump Administration assumes control of the EPA and the Department of Justice.

Once the Trump Administration is in place, there are any number of possibilities. Most importantly, President Trump has the power to issue executive orders. He can revoke, rescind, or amend any existing executive order issued by President Biden. He can also issue his own orders with new policies, guidance, and requirements. It is likely that prior executive orders regarding climate change and environmental justice will be targeted for revocation or revision.

Mr. Trump has picked Lee Zeldin, a former Congressman from New York, as the Administrator of EPA. In announcing the pick, Mr. Trump stated that Mr. Zeldin will “ensure fair and swift deregulatory decisions that will be enacted in a way to unleash the power of American businesses, while at the same time maintaining the highest environmental standards, including the cleanest air and water on the planet.” Mr. Zeldin stated that he would prioritize efforts to “roll back regulations” that have caused American businesses to struggle and would “restore US energy dominance … while protecting access to clean air and water.”

One possible regulatory ‘roll-back’ is the joint EPA and Corps of Engineers rule on “Waters of the United States,” which published in the wake of Sackett v EPA. That rule has been criticized for imposing jurisdiction on waters well beyond that allowed by the Supreme Court’s ruling. The EPA/Corps have also issued guidance which provides expansive interpretations of jurisdiction which the Corps is currently following. It is likely the scope of jurisdiction under Sackett will be codified in a rule and the EPA/Corps guidance, which retains an expansive view of jurisdiction, will be reissued to more properly align with Sackett.

Oil and gas industry interests have advocated for repeal of certain Inflation Reduction Act energy policies and the issuance of numerous executive orders relating to, among other things, prioritizing natural gas and liquefied natural gas exports, prioritizing American energy production, and requiring agency actions to align with statutory intent. Additionally, they have suggested modification of EPA’s methane emissions rules and greenhouse gas reporting requirements, modifying or repealing the methane fee implementation rule, revoking and replacing CEQ’s NEPA Phase 1 and Phase 2 rules, and revoking the SEC’s climate disclosure rule.

Further, other than those rules specifically required by statute, it is likely that EPA will not promulgate additional rules as expansive or far-reaching as have been proposed during the Biden Administration. The Trump Administration will also likely utilize the Supreme Court’s ruling in Loper Bright, which overruled Chevron and generally curtailed the application of deference to EPA’s interpretation of a statute, to provide a ‘best reading’ of an environmental statute that does not allow for expansive interpretations of the applicable statute.

However, these anticipated actions will not be met with silence or inaction. Environmentalists will use public pressure, the comment process, litigation, and any other methods or means at their disposal, to oppose, delay, or stop any possible ‘roll-backs’ by the Trump Administration. They did so with some success in the first Trump Administration and so have experience with opposing a Trump-controlled EPA. It has been reported that they anticipate a second Trump Administration to overreach in its actions and they will be ready to exploit any such errors.

The extent to which the second Trump Administration will be successful in moving away from the Biden Administration and imposing its own agenda is hard to predict. Regardless, as with the first Trump Administration, it promises to be a litigious and contentious time.

The Right Result for The Sunshine Project

By John B. King (John B. King was a member of Formosa’s legal team, submitting portions of the briefs at the district court and First Circuit.)

The Louisiana First Circuit has issued a sweeping decision affirming and upholding the issuance of air emission permits by the Louisiana Department of Environmental Quality (LDEQ) for the Sunshine Project, Formosa’s $9.4 billion petrochemical facility located in St. James Parish (the Facility). RISE St. James, et al v. LDEQ, 23-0578 (La. App. 1 Cir. 1/19/24), — So.3d —, 2024 WL 207859 (the Decision). In doing so, the First Circuit reversed the legally deficient decision of the district court, which had adopted “almost verbatim” the suggested written reasons submitted by the Opponents to the Project.

A. Facts

FG LA LLC (known as Formosa) sought to construct a petrochemical complex that would take ethane and propane, convert them into ethylene and propylene, and ultimately create high density polyethylene, linear low-density polyethylene, ethylene glycol, and polypropylene. Formosa choose a site in St. James Parish that was designated for industrial use, which was surrounded by industrial and agricultural uses, and which was about one mile from the nearest community on the west bank of the Mississippi River.

As a major source of air emissions, Formosa submitted applications to LDEQ to construct and operate the Facility. LDEQ reviewed the applications, which included the required air quality modeling. A public hearing was held and thousands of public comments were received.

In January 2020, after a review of the applications and all the public comments, LDEQ issued fifteen air emissions permits to construct the Facility. LDEQ issued a Prevention of Significant Deterioration (PSD) Permit and fourteen Title V Permits (the Permits), which together authorized the construction and operation of the Facility. LDEQ also issued a 182-page Basis for Decision and Public Comments Response Summary (Response to Comments), which provided, in detail, LDEQ’s reasons and rationale for granting the Permits. The PSD Permit also provided a detailed discussion of the Best Available Control Technology and the air quality modeling performed by Formosa. [1]

Several environmental organizations, such as RISE St. James, the Louisiana Bucket Brigade, and the Sierra Club (the Opponents), sought judicial review of LDEQ’s decision to issue the Permits. In very general terms, the Opponents argued that:

LDEQ violated the Clean Air Act due to its use of significant impact levels (SILs) to determine that the Facility’s emissions did not cause or contribute to a violation of the National Ambient Air Quality Standards (NAAQS);
LDEQ violated its constitutionally mandated duties as the public trustee of the environment; and
LDEQ failed to properly consider environmental justice issues, such as the alleged disparate impact on Black and minority members of nearby communities.

The appeal was assigned to District Judge Trudy White, now retired. After the matter was briefed and argued before her, she requested that all parties submit draft Written Reasons, in Word format, for her review. In September 2022, she issued her own Written Reasons for Judgment in which she vacated the Permits and remanded the entire matter back to LDEQ. Judge White’s Written Reasons for Judgment were an “almost verbatim” adoption of the draft Written Reason submitted by the Opponents.

LDEQ and FG appealed Judge White’s decision to the First Circuit. After an oral argument to a three-judge panel and another oral argument in front of a five-judge panel (which included the original three), the First Circuit issued its Opinion (the Decision). The First Circuit reversed Judge White’s decision and fully reinstated the Permits.

B. The Decision

The Decision is a detailed and lengthy explanation of the facts, the arguments by the parties, the applicable law, and LDEQ’s reasoning and rationale. For almost every issue before it, the First Circuit noted the LDEQ’s stated basis for its decision on that issue, the support in the record for that decision, and the vast discretion afforded LDEQ in permitting matters. In doing so, the First Circuit highlighted the need for a complete administrative record and a robust discussion of the issues by LDEQ in its Basis for Decision and Response to Comments.

There are several important aspects to the Decision. This article will include a discussion of the main ones: the standard of review, the Clean Air Act issues, and certain issues associated with the scope and application of the public trust doctrine.

1. The Standard of Review

The standard of review refers to the guiding principles to be applied by a court in reviewing a decision made by an administrative agency or a lower court. A lax or broad standard of review tends to provide a reviewing court with more latitude to overturn a lower court’s decision. By way of contrast, a more restrictive or narrow standard of review cabins or constrains a reviewing court as it reviews the lower court decision.

The Opponents argued that the First Circuit must give deference to the district court’s decision and factual findings. The First Circuit rejected this notion and applied the standard of review set out in Save Ourselves and Save Our Hills.

First, the First Circuit “reviews the findings and decision of the DEQ and not the decision of the district court” and “no deference is owed to the factual findings or legal conclusions of the district court.” Second, the First Circuit “should not reverse a substantive decision of DEQ on its merits unless it can be shown that the decision was arbitrary or that DEQ clearly gave insufficient weight to environmental protection in balancing the costs and benefits of the proposed action.” The test for determining whether an action was arbitrary or capricious is whether the action was taken “without reason,” a test that “imposes a significant limitation on judicial review.” Third, “considerable weight” must be given to LDEQ’s construction and interpretation of the statutory scheme it is entrusted to administer as well as its construction and interpretation of the rules and regulations under its authority.

When taken together, these principles provide a more restrictive or narrow standard of review. They impose a “significant limitation” on a reviewing court, which is prevented from reversing a substantive decision by LDEQ unless it was arbitrary (i.e., without reason) or there was insufficient weight provided to environmental protection. Throughout the Decision, the First Circuit applied this standard of review and found that the administrative record provided more than sufficient reasons for LDEQ’s decisions.

2. The Clean Air Act Issues

The Clean Air Act issues relate to the modeling effort conducted by Formosa and the use of SILs (or significant impact levels) to determine that the Facility does not cause or contribute to a violation of the National Ambient Air Quality Standards (NAAQS).

Formosa conducted what the First Circuit described as “extensive air modeling.” Formosa conducted a preliminary impact analysis, a full impact analysis, and detailed refined modeling. The modeling was done in accordance with federal and state guidelines.

However, the model did predict exceedances of 24-hour PM2.5 and 1-hour NO2 NAAQS. Based on those exceedances, the Opponents claimed “that the mere existence of a modeled exceedance violates the Clean Air Act.” The First Circuit simply stated, “we disagree,” finding that the “existence of a predicted modeled exceedance is merely one step in the modeling process.” Because of the modeled exceedances, Formosa followed the approvable air quality modeling procedures and conducted the required detailed refined modeling which showed that the modeled exceedances “are caused by off-site sources.”

The First Circuit also approved the use of SILs as part of the modeling effort to determine whether emissions “cause or contribute”: to a violation of the NAAQS. The NAAQS are health-based standards set by EPA at levels requisite to protect public health with an adequate margin of safety.

Under the Clean Air Act, emissions are not allowed to “cause or contribute’ to a violation of the NAAQS.

The Opponents mounted a vigorous challenge to the use of SILs to make this determination. They essentially claimed that any contribution to a violation, regardless of its size, violated the Clean Air Act. The First Circuit found that LDEQ’s “use of SILs in the PSD program is supported by its interpretation of the Clean Air Act itself, case law interpreting the Clean Air Act, and the regulations and guidance promulgated or issued by the EPA pursuant to the Clean Air Act. Thus, DEQ had a reasonable basis for incorporating the use of SILs in its PSD program, and its use of SILs is neither erroneous nor arbitrary and capricious.”

The First Circuit noted that entire purpose of the PSD program was to prevent “significant” deterioration of air quality and that EPA had incorporated SILs into their own regulations. Importantly, the First Circuit recognized that the use of SILs is based on EPA’s “longstanding policy” and even cited to EPA’s guidance documents. It also noted that LDEQ had incorporated the guidance memoranda “into the administrative/permit record as justification for the use of EPA’s recommended SILS in its PSD program” and “considerable weight” must be given to an agency’s

construction and interpretation of the statutory scheme that it administers and to its own rules.

To reach these conclusions, the First Circuit relied extensively on the documents in the administrative record and LDEQ’s articulation of its reasoning as set out in the Basis for Decision and Response to Comments. Because the record supports LDEQ’s reasoning, the First Circuit could not say that LDEQ’s decisions, such as the use of SILs, were ‘without reason’ and thus arbitrary.

3. The Public Trust Issues

At the district court and in the First Circuit, the Opponents grouped or styled the rest of their arguments as violations of the public trust doctrine. Essentially, they argued that LDEQ did not fulfill its duty as the public trustee because LDEQ failed to consider a variety of issues raised by the Opponents that they claimed should have been considered as part of the public trust analysis.

The public trust doctrine emanates from the Louisiana Constitution and generally requires that LDEQ, as the primary agency tasked with protecting the environment, articulate in written findings its consideration of three basic issues: whether the potential and real adverse environmental effects of the proposed project have been avoided to the maximum extent possible; a balancing (a cost-benefit analysis) of the environmental impact costs against the social and economic benefits of the project demonstrating that the latter outweighs the former; and whether alternative projects, alternative sites, or mitigating measures offer more protection to the environment without unduly curtailing non-environmental benefits. The consideration of these issues does not mandate a specific result; instead, LDEQ is afforded a great deal of discretion and latitude in individual matters.

Several of the main issues associated with the public trust doctrine are discussed below.

a. Environmental Justice

LDEQ and Formosa argued that the inclusion of environmental justice concepts in permitting decisions is not mandated by any constitutional provision, statute, regulation, or policy. In this regard, the First Circuit disagreed with LDEQ and Formosa, finding that “the directives from the Louisiana Supreme Court in Save Ourselves, which require consideration of economic, social, and other factors, broad enough to include an analysis of environmental justice, as defined by the EPA.” (Citation and punctuation omitted.)

Based on this decision, then, the consideration of environmental justice concerns is a part of the public trust review. However, as such, LDEQ’s consideration of these issues and its conclusions should be entitled to the “rule of reasonableness” and the same “room for a reasonable exercise of discretion” afforded other components of the public trust review, as set forth in Save Ourselves. In other words, if LDEQ articulates its reasons and there is support in the administrative record for those reasons, LDEQ should not be deemed to have acted arbitrarily (i.e., without reason).

Even so, LDEQ did conduct an extensive environmental justice analysis which was articulated in the Basis for Decision and Response to Comments. The First Circuit summarized LDEQ’s environmental justice analysis, ultimately finding that “we cannot say that [LDEQ’s] decision was in violation of its public trust duty or that its environmental justice analysis was arbitrary and capricious or otherwise without reason.” Indeed, there was “ample documentation in the administrative record” to support LDEQ’s conclusions.

Several key points were made by LDEQ which were highlighted by the First Circuit. First, LDEQ found that emissions from Formosa would not cause or contribute to a NAAQS violation and so the permits “do not allow for air quality impacts that could adversely affect human health or the environment.” EPA had previously regarded compliance with the NAAQS as presumptively protective “and that emissions of a pollutant meeting the NAAQS should not be viewed as ‘adverse’ under Title VI of the Civil Rights Act.” Although EPA did away with that rebuttable presumption, “the determination of whether there were ‘adverse’ impacts was ‘still intrinsically linked to whether a given area is compliant with the NAAQS.’”

Second, LDEQ addressed the alleged cancer risks from emissions of toxic air pollutants, primarily ethylene oxide, as to potentially affected Black and minority populations in the surrounding community. While LDEQ noted that there had been declines in the emission of toxic air pollutants and that there would be no ‘fenceline community,” the First Circuit specifically noted LDEQ’s use and reliance on data from the Louisiana Tumor Registry. That data, which include actual cancer incidences and deaths, indicted that cancer did not affect Black men or women in a significantly different manner. For example, rates “rates for all cancers combined for [W]hite men, [B]lack men, and [B]lack women do not differ significantly from Louisiana rates.”

Third, the First Circuit addressed claims that a disparate impact was created by emissions from the Facility, finding that LDEQ “specifically considered the impact of emissions on the nearby Black and minority communities.” LDEQ had found that there was no adverse impact, that overall emissions had significantly declined, that cancer rates were not significantly different based on data from the Louisiana Tumor Registry, that Formosa sought a site as far away from all people, regardless of race, and that the Facility was at least a mile from residential communities. It concluded that the fact that the Facility “is situated near a minority community alone is insufficient to establish a disproportionate effect on a minority community,” citing a prior case. As a result, and based on these findings, the First Circuit found that “even if there was evidence of an ‘adverse impact,’ there was no evidence of a ‘disparate impact.’”

Finally, the First Circuit highlighted LDEQ’s conclusion regarding the substantial limitations of the use of the EJScreen, as set forth by EPA itself. For example, EJScreen should not be used “to quantify specific risk values for a selected area” and that the screening-level results supplied by the EJScreen “do not, by themselves, determine the existence or absence of environmental justice concerns in a given location.” The Opponents had touted the EJScreen data to establish that “there is a ‘disparate impact’ or a disproportionate effect on a minority community.” The First Circuit supported LDEQ’s determination “based on specific directives from the EPA” that the EJScreen “information remains unsuitable for the use to which the [Opponents] are trying to use it: to quantify specific risk values for a selected area and as a basis for agency decision-making regarding the existence or absence of environmental justice concerns.”

b. Cumulative Impact Analysis

The Opponents argued that LDEQ failed to require Formosa to model the cumulative or combined

impact of all of its toxic air pollutants. The First Circuit rejected this argument.

The issue had come up in a prior matter (In re: Petroplex, 2010-1194 (La. App. 1st Cir. 3/25/11), 2011 WL 1225871). In that case, a similar argument was made but the First Circuit did not require such modeling because modeling was done in accordance with approval protocols and the facility emissions were lower than the ambient air standards. As a result, additional cumulative modeling was not required.

Similarly, Formosa conducted extensive air modeling in accordance with EPA’s and LDEQ’s approved modeling guidance and protocols. That modeling effort showed, like the modeling effort in Petroplex, that no ambient air standard for any toxic air pollutant would be exceeded. As a result, the First Circuit could not say that LDEQ’s “decision not to require Formosa to model the cumulative or combined impact of all of its toxic air pollutants was arbitrary and capricious or in violation of its duty under the public trust doctrine.”

c. Alternative Sites

Formosa conducted a robust alternative sites analysis in which sites were eliminated because they were located in what, at the time of site selection, was to be a non-attainment area. A facility to be constructed in such an area must purchase offsets in the form of expensive emission reduction credits. In this case, the amount of offsets that would be required to be purchased by Formosa “effectively precluded construction of the complex” because the requisite number of credits were not available.

The Opponents argued that the elimination of the non-attainment sites was arbitrary. The First disagreed, stating that LDEQ “had a reason, supported by the administrative record, to find that the five sites in Ascension Parish were not feasible alternative sites for the proposed Formosa complex.” As a result, LDEQ’s analysis of alternative sites was not arbitrary.

C. Conclusion

The First Circuit’s decision upholding LDEQ’s issuance of the Permits provides a powerful precedent and multiple arguments for LDEQ and permittees who seek to fend off judicial challenges to LDEQ’s decision to issue a permit. However, there are two main “takeaways” from this decision:

LDEQ should provide robust and detailed reasons for its decision to grant the permit in a Basis for Decision, Response to Comment, and/or other permit documents; and
The administrative record should be replete with sufficient evidence to support any and all such reasons.

Here, the administrative record included a vast amount of information to support LDEQ’s decision, much of which was supplied by Formosa as part of the permit process. In turn, LDEQ provided detailed reasons for its conclusions and the decision to issue the Permits. As a result, and faced with such a record and reasoning, the First Circuit could clearly find, and did find, that the decision was not arbitrary (i.e., without reason).

A copy of the decision can be found here.

[1] LDEQ later issued a Supplemental Basis for Decision in response to an order by the district court.

Enough is Enough

The Corps of Engineers refuses to accept the Supreme Court’s decision in Sackett v. EPA, which substantially reduces the scope of Corps’ jurisdiction over ‘adjacent wetlands.’ The Corps’ “unwillingness to concede its lack of regulatory jurisdiction” prompted the Fifth Circuit to emphatically state “enough is enough” in a recent decision related to adjacent wetlands.

The Clean Water Act regulates the discharge of dredged or fill material into navigable waters. 42 USC §1344(a) (Section 404). Navigable waters are defined as “the waters of the United States, including the territorial seas.” 42 USCA §1362(7).

In Sackett, the Supreme Court held that Corps’ jurisdiction under the Clean Water Act “extends to only those wetlands with a continuous surface connection to bodies that are waters of the United States in their own right, so that they are indistinguishable from those waters.” Sackett, 143 S. Ct. at 1344. The Court also explained that the Corps must establish “first, that the adjacent [body of water constitutes] … ‘water[s] of the United States,’(i.e., a relatively permanent body of water connected to traditional interstate navigable waters); and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” Sackett, 143 S. Ct. at 1341.

The Corps has refused to accept this holding and the limitations on its jurisdiction as established by the Supreme Court. The Corps’ current position is that a ‘continuous surface connection’ exists when wetlands are connected to a jurisdictional water by a discrete feature like a non-jurisdictional ditch, swale, pipe, or culvert. Further, a continuous surface connection does not require a constant hydrologic connection. The EPA and Corps echoed this view in guidance released in November 2023 in the form of a PowerPoint presentation.

However, there are two problems with the Corps’ current position. First, the case relied on by the Corps in the November 2023 Guidance does not support its claim. Second, the Fifth Circuit just held that the Corps’ November 2023 Guidance on this point is wrong.

In the November 2023 Guidance, at p. 48, the EPA and the Corps rely on “prior EPA practice” and a Sixth Circuit case, US v. Cundiff, 555 F3d 200 (6 Cir. 2009), for this position. However, that case does not specifically make that statement. The Court actually stated: “Although the term ‘continuous surface connection’ clearly requires surface flow, it does not mean that only perpetually flowing creeks satisfy the plurality’s test.” Cundiff, 555 F3d at p. 212. The Court went on to discuss seasonal flow “and like water bodies.” Waterways with seasonal flow can be relatively permanent waterways. Further, one waterway, the South Channel, provided a continuous surface connection between the wetlands at issue and a traditional waterway (the South Channel had flow for all but a few weeks a year). So, the EPA’s and Corps’ statements regarding non-jurisdictional waters based on Cundiff, if any, are likely dicta.

On Dec. 18, 2023, the Fifth Circuit decided the case of Lewis v. US (2023 WL 8711318), which negates the EPA’s and Corps’ position in the Fifth Circuit. Wetlands on two tracts in Livingston Parish were at issue. The tracts are described as grass-covered, majority dry fields with gravel, logging, and timber roads on the sides of each tract. The owners harvested and managed timber on the tracts. As to the first tract (the east tract), waters flowed through roadside ditches to an unnamed tributary (which flowed intermittently), to Colyell Creek (a relatively permanent waterway), and then to Colyell Bay, a traditional navigble waterway about ten to fifteen miles away. As to the second tract (the west tract), water flowed through roadside ditches to Switch Cane Bayou, to Colyell Creek, and then Colyell Bay.

At the district court level (2020 WL 4798496), the court was reviewing an approved jurisdictional determination (AJD) initially issued in 2017 after an administrative appeal. The 2017 AJD found jurisdictional wetlands, noting the above connections to the traditional navigable waterway. The Plaintiffs argued that there was no jurisdiction under Rapanos (including the Scalia test as to adjacency). At some point in the district court proceedings, the Corps “acknowledged that the land in question does not meet the adjacency requirement set forth under the Scalia test. Accordingly, it provides no basis for CWA jurisdiction.” The district court also found that there was no jurisdiction under the significant nexus test. The matter was remanded back to the Corps.

After remand, the Corps applied the 2020 Navigable Waters Protection Rule to the wetlands on both tracts. The Corps indicated in a 2020 AJD that there were no jurisdictional wetlands on the west tract but found wetlands on the east tract by “connecting (a) roadside ditches and (b) a culvert to (c) an unnamed non-‘relatively permanent water’ tributary, then to (d) Colyell Creek (a ‘relatively permanent water’) several miles away, and ultimately to (e) the traditionally navigable waterway of Colyell Bay ten to fifteen miles from the Lewis property.”

Upon review by the Fifth Circuit and based on these facts, the Court found: “There is no ‘continuous surface connection’ between any plausible wetlands on the Lewis tracts and a ‘relatively permanent body of water connected to traditional interstate navigable waters.’ Recall that the nearest relatively permanent body of water is removed miles away from the Lewis property by roadside ditches, a culvert, and a non-relatively permanent tributary. In sum, it is not difficult to determine where the ‘water’ ends and any ‘wetlands’ on Lewis’s property begin—there is simply no connection whatsoever. There is no factual basis as a matter of law for federal Clean Water Act regulation of these tracts.” Thus, the Fifth Circuit found no continuous surface connection, even though there was a ditch, a culvert, and a non-relatively permanent tributary.

The Lewis decision highlights several important points. First, the Corps admitted under these facts that there was no jurisdiction under the Scalia test in Rapanos (the very same test adopted in Sackett). Second, there was no continuous surface connection even when water may flow through ditches, a culvert, and a non-relatively permanent tributary. Finally, the Sackett holding relating to a determination of where waters ends and wetlands begins was specifically incorporated into the Lewis decision.

As a result of the Lewis decision, non-jurisdictional features (ditches, culverts) and non-relatively permanent waterways are not continuous surface connections and cannot serve to link wetlands on a property to a relatively permanent waterway. On this point, the November 2023 Guidance is not consistent with the Fifth Circuit’s strict and straightforward application of Sackett in the Lewis decision.