In the environmental space, 2024 has been a memorable year with regulatory efforts and court decisions touching on every aspect of environmental and energy regulation, capped out by a closely divided election.

As the year fades into rearview, it is our sense that 2024 will be remembered less for what happened and more for foreshadowing what will come. Looking back to our list of issues to watch as the year unfolded where we flagged environmental, social, and governance (ESG), coal combustion residuals (CCR), per- and polyfluoroalkyl substances (PFAS), an increased focus on plastics, and environmental justice (EJ) as hot button topics for 2024, we note only that the debates have not fundamentally changed in 12 months. However, with a new presidential Administration around the corner, there will be new voices with the opportunity to weigh in and shape these.

Below, we ask and answer four questions supporting our belief that 2024 will be remembered as “transitional” not “transformative.” In general, the results of big court battles and government policy changes in 2024 appears likely to be table setting for major changes affecting the substance of environmental and energy law in the coming years.

How Did Last Term’s High-Profile US Supreme Court Decisions Like Loper Bright and Corner Post Change the Regulatory Landscape?

The 2024 Supreme Court term was filled with several high-profile cases, including the Loper Bright v. Raimondo and Corner Post v. Board of Governors, affecting administrative and environmental law. These decisions built on recent precedent including Biden v. Nebraska, West Virginia v. EPA, and American Hospital Association v. Becerra, stressing judicial primacy in matters of statutory interpretation and highlighting judicial skepticism of agency efforts to broadly construe statutory language to address new concerns.

As for the latter of the above — Court decisions highlighting judicial skepticism — the Loper Bright decision is the forerunner, overruling agency deference established by Chevron USA v. NRDC and holding that courts must “exercise their independent judgment” when interpreting federal statutes and may not defer to agency interpretations simply because they determine that a statute is ambiguous. (See our discussion here.)

In our view, Loper Bright was far from revolutionary. It does not affect agencies’ ability to interpret their own regulations and purports to not be retroactive. Importantly, it leaves open a review process in which agencies retain the ability to marshal expertise and evidence supporting their legal interpretations, which are still to be given “respect” if no longer “deference.” While the three dissenting justices portrayed Justice John Roberts’ majority as essentially reimagining federal administrative law, the long-term impacts of Loper Bright will take longer to assess as various Chevron-related issues will soon be revisited by courts — something that is only just beginning now.

Shortly after Loper Bright came the Court’s decision in Corner Post v. Board of Governors, which relates to when some challenges to federal administrative actions must be filed. (For a detailed discussion, see here.) Corner Post involves a challenge to a Federal Reserve Board cap on debit charge interchange fees. In a six-justice majority, Justice Amy Coney Barrett, authoring the majority opinion, held that the default limitations period for the federal Administrative Procedure Act (APA) challenges runs from when a particular plaintiff is injured by the agency action, even if the injury was years or even decades after the action that is the subject of the challenge.

By anyone’s evaluation, Corner Post opens the door for at least certain administrative challenges to be lodged years after the six-year period that the APA provides as a default so long as a plaintiff is newly injured by the determination. A dissent authored by Justice Ketanji Brown Jackson notes that “there is effectively no longer any limitations period for lawsuits that challenge agency regulations on their face” and that “well-heeled litigants [will now] game the system by creating new entities or finding new plaintiffs whenever they blow past the statutory deadline.” The dissent predicts that the majority’s decision, coupled with the Loper Bright decision, will “wreak havoc on Government agencies, businesses, and society at large” and lead to a “tsunami of lawsuits” challenging agency regulations.

But at the time of our writing, it is too soon to establish what areas will be caught in the coming “tsunami.” We will have to wait and see.

What Happened to ESG and Climate?

At some point in 2023, ESG went from being a popular new kid on the regulatory block to oftentimes a social pariah. As 2024 evolved:

• Various cases challenging the extent to which ESG-related factors can guide investment decisions were filed.
• Challenges to Securities and Exchange Commission ESG rules proceeded.
• US Congress investigated whether ESG-related coalitions violated antitrust laws.
• The world in fact shifted back to discussing “sustainability” in place of ESG.

While the ESG debate played out, climate concerns remained a hot issue. Climate-related cases like Juliana v. United States remain pending in US courts while the build-out of ESG-related reporting mechanisms continued in jurisdictions, including the European Union and California, even if litigation challenging some ESG-related programming exists. Meanwhile, tort-focused litigation filed by state and local governments against fossil fuel producers continues in state courts with the Supreme Court yet to meaningfully weigh in.

All these issues pre-date 2024 and — while changes in the space appear on the horizon — nothing much has appreciably changed yet. Going into next year, while there are likely to be changes in the US stance on climate issues resulting from the election, it is our sense that very little has changed related to climate policy this year.

What Impact Has 2024 Had on the Coal-Fired Power Industry?

On its face, 2024 could be considered a transformative year for coal-fired power regulation. However, when studied a bit deeper, transitional is likely a more appropriate term. As we discussed here, 2024 came with a suite of coal-powered regulations, regulating the air, water, and by-products created as a result of the coal combustion process.

Perhaps most notably, the US Environmental Protection Agency (EPA) issued its Legacy Rule, which amended the existing rules governing the disposal of CCRs in landfills and surface impoundments, 40 C.F.R. Part 257, Subpart D, by regulating two new types of “units”: Legacy CCR Surface Impoundments and CCR management units (CCRMU). Under the new rule, EPA regulates inactive surface impoundments at inactive facilities — Legacy CCR Surface Impoundments — and coal ash disposed in areas outside of regulated units, including certain previously closed surface impoundments and landfills — CCRMUs. This Rule became effective on November 8 and includes a host of regulations with compliance deadlines quickly approaching. The dates range from 15 months to establish a website and complete Part 1 of the facility evaluation report, 27 months to complete Part 2 of the facility evaluation report, and 42 months to install a groundwater monitoring system for CCRMUs and three months to complete an initial inspection; 14 months to complete an initial annual fugitive dust report; 15 months to compile a history of construction; and 18 months to complete initial assessments, prepare an emergency action plan, and complete an initial inflow design flood control system plan for Legacy CCR Surface Impoundments. The Legacy Rule is comprehensive and governs ash deposits that were not and generally are not governed at the federal or state level, subjecting coal-fired power plant owners and operators to at least another decade of compliance at facilities already regulated by EPA’s 2015 rules.

While this may seem transformative, the Legacy Rule is self-implementing at this time, relying on power producers to comply and publish proof of compliance with all the Rule’s requirements and, if violated, on EPA’s enforcement of the Rule. In addition to its self-implementing nature, the Rule, in several instances, relies on finalizing a federal CCR permit program, originally expected to become final in the last quarter of the year after being proposed in February 2020. (85 Fed. Reg. 9940.) But with 2024 coming to a close, the federal program seems unlikely. The federal CCR permitting program (or, in the alternative, EPA-approved state programs that are as protective as the federal rules) would be EPA’s enforcement tools to ensure that power producers were complying with the comprehensive CCR rules in short order, in addition to other Resource Conservation and Recovery Act enforcement tools. Instead, the Legacy Rule has laid the groundwork for strict regulation of coal-powered facilities but relies on a heavy administrative hand. The new Administration has the power to walk back, reduce, or choose not to enforce the Legacy Rule, leaving us to wonder what is in store for CCR regulations in 2025.

Have Court’s Adjudication of Standing Requirements Impacted the Environmental Space?

Standing to sue is a major issue in nearly all environmental citizen suits. Because standing is a necessary predicate to filing litigation, the height of the hurdle imposed by standing has a direct effect on many claims. For some time, the most closely watched standing-related case was Environment Texas Citizen Lobby v. ExxonMobil Corporation, which dates back to 2010 when two non-governmental organizations sued Exxon Mobil for operations at a complex in Baytown, Texas, alleging harms on behalf of themselves and their members.

The Exxon operations at issue in the case include an oil refinery, a chemical plant, and an olefins plant, all of which are regulated by federal air permits and operate in close proximity to one another. Under permits issued to the various plants, Exxon had a duty to report, in some instances, its noncompliance with the permit conditions. These self-reported permit violations formed part of the basis for the plaintiffs’ claims, which were filed using the Clean Air Act’s citizen suit provisions alleging noncompliance with relevant operating permits. 

While the history of this case is long and winding since its filing, the Fifth Circuit’s most recent decision stems from Exxon’s challenge to a district court’s decision that the plaintiffs had proved standing for thousands of violations and assessing over $14 million in penalties. In 2022, a split three-judge panel of the Fifth Circuit upheld the district court’s findings. The Fifth Circuit rejected Exxon’s argument that Supreme Court decisions in 2016 (Spokeo v. Robins) and 2021 (TransUnion v. Ramirez)requiring plaintiffs to show some “concrete injury” and not merely “bare procedural violations” required the district court to make a separate finding of concrete injury for each individual violation. Exxon petitioned for en banc review of this decision in 2022, and another split decision resulting in the district court’s verdict again being largely upheld was reached this month. Much of the en banc decision focused on the mechanics of Fifth Circuit decision making in place of further guidance on standing.

The decisions in this case, at the district court level and from the Fifth Circuit, exemplify an additional area where precedent may set the stage for sweeping changes to the way environmental citizen suits proceed. As we discussed here, standing is usually one of the primary defenses to claims in the environmental space. While the Fifth Circuit’s decisions seem to, on their face, conflict with the Supreme Court’s decisions in Spokeo and TransUnion, it is not unreasonable to consider whether other courts will follow their lead. As the theme continues, we will have to wait and see.