Chemical Coalition Withdraws TSCA Section 21 Petition Seeking Revisions to TSCA 8(a)(7) PFAS Reporting Rule
As reported in our May 4, 2025, blog item, on May 2, 2025, a coalition of chemical companies petitioned the U.S. Environmental Protection Agency (EPA) for an amendment of the Toxic Substances Control Act (TSCA) Section 8(a)(7) rule requiring reporting for per- and polyfluoroalkyl substances (PFAS). The petitioners ask that EPA revise the reporting rule to exclude imported articles, research and development (R&D) materials, impurities, byproducts, non-isolated intermediates, and PFAS manufactured in quantities of less than 2,500 pounds (lb.). Petitioners also request that EPA remove the requirement to submit “‘all existing information concerning the environmental and health effects’ of the chemical substance covered by” the reporting rule and instead allow “robust summaries, similar to the approach adopted by the European Chemicals Agency” (ECHA). According to a May 22, 2025, letter from EPA, on May 16, 2025, the coalition withdrew its petition via email to EPA Administrator Lee Zeldin and “EPA now considers this petition closed.” After the coalition submitted its petition, EPA published an interim final rule to postpone the data submission period to April 13, 2026, through October 13, 2026. 90 Fed. Reg. 20236. Small manufacturers reporting exclusively as article importers would have until April 13, 2027, to report. According to the interim final rule, EPA is separately considering reopening certain aspects of the rule to public comment. Comments on the interim final rule are due June 12, 2025. More information on the interim final rule is available in our May 12, 2025, memorandum.
Trump Administration Files Statement of Interest Supporting State AG Action Against Asset Managers Accused of ESG-related Antitrust Violations
Last week, the Trump Administration’s FTC and DOJ (Antitrust Division) filed a statement of interest in support of a lawsuit filed last November by eleven Republican state attorneys-general against three major asset managers for alleged antitrust violations. This lawsuit is founded upon a novel application of antitrust law; in essence, the state attorneys-general have alleged that, under the guise of responding to environmental concerns, the three asset managers engaged in a scheme to reduce coal output (enabled by their market power–i.e., extensive holdings of stock in coal companies), and so increased the price of electricity (and profits for the coal companies). It is especially unusual as it relies upon collusive efforts by minority shareholders to reduce output across an entire industry in the pursuit of additional profits, rather than an explicit agreement among competitors to reduce competition or increase prices. Nonetheless, the use of antitrust law to pressure ESG-focused investing has been a legal tactic embraced over the past few years by elements of the GOP.
The fact that the FTC and the Antitrust Division have decided to weigh in on a prominent lawsuit is not especially surprising; noteworthy cases attract substantial attention from amici curiae, including the federal government, due to the potential significant of such cases for future litigation or the development of the law. Other prominent organizations, such as SIFMA, have also made filings in the case.
What is perhaps more interesting is how the positions adopted in the legal filing by the federal government are directly tied to the policy priorities of the Trump Administration. Indeed, the press release issued by the DOJ in conjunction with this filing makes that point clear, as it specifically invokes recent executive orders by President Trump concerning energy policy–including Exec. Order 14261, which expressly encouraged increasing domestic coal production–and how this statement of interest was intended to combat efforts “to harm competition under the guise of ESG.” While the fact that the policy priorities of the Trump Administration are guiding legal strategy is not especially surprising, this case provides a noteworthy and concrete example of this broader agenda.
Justice Department and Federal Trade Commission File Statement of Interest on Anticompetitive Uses of Common Shareholdings to Discourage Coal Production Thursday, May 22, 2025 Today, the Justice Department, joined by the Federal Trade Commission (the “Agencies”) filed a statement of interest in the Eastern District of Texas in the case of Texas et al. v. BlackRock, Inc. The States’ lawsuit—led by the Texas Attorney General—alleges that BlackRock, State Street, and Vanguard used their management of stock in competing coal companies to induce reductions in output, resulting in higher energy prices for American consumers. This is the first formal statement by the Agencies in federal court on the antitrust implications of common shareholdings.
www.justice.gov/…
Proposed Renewable Regulations in Texas Might Trigger Force Majeure and Change in Law Clauses
The renewable energy industry in the United States is facing new headwinds in the form of state legislation that could delay, disincentivize, or even potentially prevent the completion of planned solar and wind projects. For example, the Texas State Senate recently voted to enact new burdensome regulations on solar and wind generation of a certain scale. Critics of the bill claim that these measures are designed to slow renewable energy expansion in the state of Texas.
Could laws like Texas Senate Bill (SB) 819 trigger change in law or force majeure clauses if they delay or prevent the construction/operation of renewable energy projects in Texas? Some parties may have specifically allocated permitting risk in their existing contracts. Others may not have foreseen this issue because of Texas’ reputation as a relatively de-regulated energy market. Whether a change in law or force majeure clause captures this situation will depend on the language of each individual contract.
In this alert, we explore the role that change in law clauses, force majeure provisions, and specific permitting language may play for solar- and wind-generation projects in Texas as parties seek to manage the risk of potential permitting delays attributable to the requirements provided by SB 819.
SB 819 Background
Texas SB 819 passed with a Senate vote of 22-9; it must still pass the House. The bill adds new permitting requirements from the Public Utility Commission of Texas for solar and wind projects with a capacity of 10 megawatts (MW) or more before construction or operation can commence. Existing facilities interconnected prior to 1 September 2025 are excepted. SB 819 adds minimum setback requirements from property lines and habitable structures, unless written waivers are obtained from neighbors. The proposed legislation requires an Environmental Impact Statement with review by the Texas Parks and Wildlife Department and imposes a new annual environmental impact fee. Applicants will also be required to satisfy public notice requirements. Finally, the bill would prohibit local taxing authorities from agreeing to property tax abatements for renewable energy projects with a capacity of 10 MW or more.
In January 2025, K&L Gates wrote about the potential impact of SB 819 on renewable energy investments. That article can be found here. In sum, if passed, SB 819 will impose regulatory burdens on the Texas renewable energy industry and is likely to have a chilling effect on investors’ appetites to finance new projects or expand existing facilities, which could negatively impact the development of renewable projects in the state. If a solar or wind project is materially delayed or unable to be constructed due to the failure to obtain approvals or permits required by SB 819, parties may have arguments that a change in law clause applies or that they have suffered an event of force majeure, provided the applicable contractual language captures the subject event.
Change in Law
A change in law clause is designed to allocate the burdens of any unexpected change in the legal or regulatory landscape that has a substantial impact on the obligations of a party. Such clauses are designed to offset the losses or damage due to changes in the law applicable at the time of contract execution.
Where the change is captured by the change in law clause and hinders a party’s performance, that party can claim relief in accordance with the terms of the clause. Foreseeable costs and laws enacted before the effective date of the contract are ordinarily not included in such provisions. In the energy industry, we have seen change in law clauses related to duties and tariffs on key equipment. Changes or adjustments to production and investment tax credits under the Inflation Reduction Act are also areas where parties have liberally utilized change in law provisions to account for this risk. Whether changes in permitting, environmental, and tax requirements are captured by a change in law clause is a contract-specific question that rests on the wording of the individual clauses.
Force Majeure
The Firm recently explored the contours of force majeure in the context of tariffs. That article can be found here. Generally, “force majeure” provisions are designed to excuse nonperformance or delayed performance of contractual obligations for extraordinary, uncontrollable events that negatively impact a party’s ability to fulfill those obligations. In other words, force majeure provisions allocate the risk of events outside of the control of the parties that impact performance under a contract. There is no implied force majeure under US law, meaning that a party can only invoke force majeure if the contract includes a force majeure provision. The applicability of force majeure depends on the specific language in the contract. Force majeure clauses are “narrowly construed” and will excuse a party’s nonperformance only if the event alleged to have prevented performance is “specifically identified” in the parties’ contract. This narrow construction also applies to a “catchall” in a force majeure clause, cabining the meaning to “things of the same kind or nature as the particular matters mentioned.”1
Despite relatively strict rules of construction, several courts have found that delays attributable to permitting can constitute force majeure where the contractual language contemplates such an event. For example, in Pennington v. Continental Resources, Inc., the Supreme Court of North Dakota held that a force majeure clause operated to prevent termination of an oil and gas lease and extended the term of the lease when the project faced delays attributable to permitting delays. As the court stated, “Continental was prevented from commencing operations within the primary term of the Leases by a contingency beyond its control, namely the decisions of the U.S. Fish and Wildlife Service and the [Bureau of Land Management] … to withhold approval of Continental’s May 15, 2012 APD [application for a permit to drill] ….”2
Likewise, in Burns Concrete, Inc. v. Teton County, the Idaho Supreme Court held that a developer’s failure to obtain zoning approval for a 75-foot-high facility was not reasonably foreseeable and constituted an event beyond the developer’s control. The court found that the force majeure clause, which included “any other act of force majeure or action beyond Developer’s control,” applied to the county’s denial of a permit, excusing the developer from completing construction within the specified timeframe.3
The Ohio Court of Appeals upheld the application of a force majeure clause when a petroleum company was denied access to property by adjoining property owners and faced unreasonable demands for compensation, preventing drilling operations. The court found that the inability to obtain necessary access and easements was beyond the lessee’s control and tolled the lease’s primary term, allowing the lessee additional time to commence operations.4 SB 819 provides neighboring property owners with considerable rights that could delay or alter ongoing projects. This is another factor that should be analyzed against the force majeure clause in a contract.
In the analogous context of frustration of purpose, a California appellate court found in Johnson v. Atkins that the seller’s inability to obtain the necessary permit for the entry of goods into the country excused further performance due to impracticability. Obtaining the necessary entry permissions for the goods was found by the court to be fundamental to the contract. The failure, without fault, to obtain permission excused further performance.5
However, these outcomes regarding the applicability of force majeure clauses to excuse lack of performance attributable to permitting delays are not uniform. There are numerous decisions where courts have held that the contract in question did not provide force majeure for failure to obtain specific permits.6 The foreseeability of required permissions, the diligence undertaken in pursuing such permits, and whether the denial or delay in issuing permits was the fault of the party claiming force majeure are all critical factors that need to be examined closely, along with the specific contract language, to determine whether force majeure may offer relief in a specific instance of permitting-related delay.
Specific Permitting Clauses
While force majeure and change of law clause are often the key provisions that parties use to allocate risk, agreements sometimes contain a bespoke “permitting delay” clause that provides specific schedule relief for a delay in the issuance of a required permit. The agreement may also include a condition precedent that enables either party to terminate the agreement without liability in the event required permits have not been secured in a final, nonappealable form by a particular date. Force majeure and change of law clauses should be considered in the context of these other provisions if they have been included in the contract.
Key Takeaways
If enacted, Texas SB 819 will impose additional permitting and regulatory requirements on most solar and wind projects to be interconnected in Texas. If these new regulatory requirements delay or prevent the construction of these projects, parties may try to argue that a change in law clause applies or that their performance is excused by force majeure. The success of such claims will depend heavily on the text of the clauses in each contract, along with the facts surrounding the inability to obtain the required SB 819 permitting approvals.
Footnotes
1 JN Contemp. Art LLC v. Phillips Auctioneers LLC, 29 F.4th 118, 124 (2d Cir. 2022) (quoting Kel Kim Corp. v. Cent. Mkts., Inc., 70 N.Y.2d 900, 903, 519 N.E.2d 295 (1987)).
2 Pennington v. Cont’l Res., Inc., 2019 ND 228, ¶ 20, (N.D. 2019).
3 Burns Concrete, Inc. v. Teton Cnty., 161 Idaho 117, 120–22 (Idaho 2016).
4 Haverhill Glen, LLC v. Eric Petroleum Corp., 67 N.E.3d 845, ¶¶ 35–37, (Ohio Ct. App. 2016).
5 See Johnson v. Atkins, 53 Cal. App. 2d 430, 433–35 (1942).
6 See, e.g., Aukema v. Chesapeake Appalachia, LLC, 904 F. Supp. 2d 199, 209-211 (N.D. N.Y. 2012) (refusing to apply a force majeure clause where a particular type of drilling permit was denied).
Documents Show EPA Wants to Erase Greenhouse Gas Limits on Power Plants
The Environmental Protection Agency (EPA) has reportedly drafted a plan to eliminate all limits on greenhouse gases from coal and gas-fired power plants in the US. In its proposed regulation, the agency argued that greenhouse gases from power plants “do not contribute significantly to dangerous pollution” because they are a small and declining share of global emissions.
“The argument is a solid argument,” Bracewell’s Jeff Holmstead, who served in the EPA during both Bush administrations, told The New York Times.
But he wondered if it would hold up under a legal challenge. “I just don’t know if you’re contributing 3 percent of greenhouse gas emissions the court will say ‘that’s not significant’ when there’s hardly anybody that contributes more than that.”
Democratic Senators Launch Investigation of Major Financial Institutions Based Upon Their Retreat From Climate Policies
Earlier this year, each of the major US banks announced their withdrawal from the Net Zero Banking Alliance. This move, which was likely undertaken in response to the policy priorities of the Trump Administration, was criticized by a number of climate activists.
At this point, the actions of these major US banks have now triggered semi-official regulatory attention. Senior Democratic Senators–Warren (D-MA) and Whitehouse (D-RI)–have sent letters to these banks that reportedly “seek to examine the extent to which banks have allegedly caved in to pressure from Republicans and fossil-fuel interests to abandon their fiduciary duty to manage the financial risks that stem from climate change.” However, as members of the minority party in the Senate, the practical impact of these letters by the Democratic Senators will likely be limited–they do not have the power to convene hearings or issue subpoenas. Nonetheless, these actions are significant, as they signal potential regulatory actions and hint at a regulatory agenda should the Democratic Party regain power in the midterms–and also offer a road map for potential investigations or enforcement actions by sympathetic state attorneys-general.
In other words, the conflict over the degree to which business interests must take into account climate concerns has not concluded, despite the Trump Administration’s recent actions and policy pronouncements.
The biggest US banks are the targets of an investigation initiated by Democratic Senators Sheldon Whitehouse and Elizabeth Warren into Wall Street’s retreat from its climate pledges. The probe seeks to examine the extent to which banks have allegedly caved in to pressure from Republicans and fossil-fuel interests to abandon their fiduciary duty to manage the financial risks that stem from climate change, according to letters sent to the banks that were reviewed by Bloomberg. In the letters, . . . Whitehouse and Warren ask that the banks provide documents on the internal discussions that led the banks to leave climate alliances. They’re also seeking emails and memoranda outlining internal talks at the banks on the financial risks related to climate change, the draft letters show.
news.bloomberglaw.com/…
EC Announces Low- and High-Risk Countries under the EUDR
The European Commission (EC) released on May 22, 2025, the identity of the countries that present a low or high risk of deforestation in producing seven commodities (cattle, cocoa, coffee, palm oil, rubber, soy, and wood) that are “the most relevant in terms of driving global deforestation and forest degradation” under the European Union Deforestation Regulation (EUDR). The classification takes into account other criteria as listed in Article 29(4) of Regulation (EU) 2023/1115. The Regulation is scheduled to enter into force on the third day following its publication in the Official Journal of the European Union (May 26, 2025).
High-Risk Countries
Belarus, Democratic People’s Republic of Korea, Myanmar, and the Russian Federation.
Low-Risk Countries
Afghanistan, Albania, Algeria, Andorra, Antigua and Barbuda, Armenia, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belgium, Bhutan, Bosnia and Herzegovina, Brunei Darussalam, Bulgaria, Burundi, Cabo Verde, Canada, Central African Republic, Chile, China, Comoros, Congo, Costa Rica, Croatia, Cuba, Cyprus, Czechia, Denmark, Djibouti, Dominica, Dominican Republic, Egypt, Estonia, Eswatini, Fiji, Finland, France, Gabon, Georgia, Germany, Ghana, Greece, Grenada, Guyana, Hungary, Iceland, India, Iran (Islamic Republic of), Iraq, Ireland, Italy, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Kiribati, Kuwait, Kyrgyzstan, Lao People’s Democratic Republic, Latvia, Lebanon, Lesotho, Libya, Liechtenstein, Lithuania, Luxembourg, Madagascar, Maldives, Mali, Malta, Marshall Islands, Mauritius, Micronesia (Federated States of), Monaco, Mongolia, Montenegro, Morocco, Nauru, Nepal, Netherlands (Kingdom of the), New Zealand, North Macedonia, Norway, Oman, Palau, Palestine, Papua New Guinea, Philippines, Poland, Portugal, Qatar, Republic of Korea, Republic of Moldova, Romania, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Sao Tome and Principe, Saudi Arabia, Serbia, Seychelles, Singapore, Slovakia, Slovenia, Solomon Island, South Africa, South Sudan, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Syrian Arab Republic, Tajikistan, Thailand, Timor-Leste, Togo, Tonga, Trinidad and Tobago, Tunisia, Türkiye, Turkmenistan, Tuvalu, Ukraine, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, United States of America, Uruguay, Uzbekistan, Vanuatu, Vietnam, and Yemen.
Standard-Risk Countries
If a country is not listed in the high-risk category or the low-risk category, the EC has assigned it a standard level of risk.
The EUDR, enacted on June 29, 2023, is intended to ensure that manufacturers do not produce goods from recently deforested areas or produce their goods in ways that contribute to deforestation. The Regulation explicitly applies to the seven aforementioned commodities and, importantly, to certain byproducts that contain feedstocks from the named commodities, to be “deforestation-free” if they are made available on or exported from the European Union (EU) market.
Just because a country has been designated as “standard risk,” or even “low risk,” under the EUDR does not mean that manufacturers looking to import products into the EU are exempt from having to complete due diligence statements. Manufacturers producing products in low-risk countries have reduced obligations as set forth in the simplified due diligence requirement, and are required to collect and report information on their supply chains, but do not have to assess and address deforestation risks under Articles 10 and 11 of the Regulation. Companies manufacturing products in low-risk countries face the same data collection obligations, although they must comply with fewer compliance checks.
Companies producing goods from high-risk and standard-risk countries will need to show when and where commodities were produced and provide “verifiable” information that they were not sourced from land deforested after 2020.
ECHA’s Redesigned C&L Inventory Is Available in ECHA CHEM
The European Chemicals Agency (ECHA) announced on May 20, 2025, that the redesigned Classification and Labeling (C&L) Inventory is now available in ECHA CHEM, ECHA’s public database containing information from all Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) registrations received by ECHA. According to ECHA, the C&L Inventory includes information on more than 4,400 European Union (EU)-level harmonized classifications and seven million classifications notified or included in REACH registrations. ECHA states that altogether, the C&L Inventory includes data on approximately 350,000 substances. ECHA notes that the new C&L Inventory “is designed to help users easily locate the classification with the highest agreement and to bring clarity on the source behind the classification information.” It incorporates recent regulatory developments, such as the new Classification, Labelling and Packaging (CLP) Regulation hazard classes and “is built with stability and growth in mind.” The classification information is accessible in a visual format per substance with ECHA exploring complementary approaches, such as application programming interfaces (API), in future releases.
NASEM Releases Quadrennial Review of NNI, Recommends Renewed and Expanded Infrastructure
On May 20, 2025, the National Academies of Sciences, Engineering, and Medicine (NASEM) announced the release of a report entitled Quadrennial Review of the National Nanotechnology Initiative (2025): Securing U.S. Global Leadership Through Renewed and Expanded Infrastructure. Requested by Congress as part of the 21st Century Nanotechnology Research and Development Act, the report focuses on the infrastructure of the National Nanotechnology Initiative (NNI). The Committee on the Quadrennial Review of the NNI “recommends a new focus on renewing and expanding the nanotechnology infrastructure, including instruments, facilities, and people, so that the intellectual capital of nanotechnology can be converted into economic, social, and national security gains for the United States.” According to the report, this conclusion “reflects a consideration of the suitability of the nation’s existing nanotechnology infrastructure for current and emerging needs in academia and industry” and rests on the Committee’s “analysis of the existing nanotechnology infrastructure users in academia and beyond[,] as well as the existing barriers that limit the impact and accessibility of the infrastructure.” The report’s highest priority recommendations include:
Recommendation 1.1: In the coming year, the National Nanotechnology Coordinating Office (NNCO) should conduct a census of accessible nanotechnology infrastructure sites (instruments, staff, facilities) and display findings on a public, web-accessible map that includes university, regional, and national resources. This information, which should be maintained annually by NNCO, will enhance the visibility, availability, and impact of these assets.
Recommendation 1.2: Within two years, Congress should reauthorize the NNI as the National Nanotechnology Infrastructure and orient, with the appropriate funding, the NNCO and agency activity toward the renewal and expansion of infrastructure to serve existing and emerging nanotechnology research and development.
Recommendation 2.4: Within the next two years, the NNCO should undertake a study to determine the level of resources needed to maintain state-of-the-art nanotechnology infrastructure. The study should include a timeframe, measures of success and efficiency, and accountability measures.
Recommendation 3.3: Federal agencies that support nanotechnology infrastructure should within the next year, and periodically thereafter, prioritize investment in new capabilities that advance fabrication, materials synthesis, characterization, and data analysis to support emerging technologies to help the United States maintain its commercial edge.
Recommendation 4.1: All agencies that fund nanotechnology infrastructure should include in their infrastructure evaluations measures of performance that capture the breadth and heterogeneity of the associated user bases.
Recommendation 4.5: All agencies that fund nanotechnology infrastructure should increase program funding or provide a competitive travel grant program to include dedicated travel support for users and, where feasible, summer access for academics, researchers, and students who are not from R1 institutions.
Recent D.C. Circuit Case Limits Opportunity to Assert Waiver of State Section 401 Water Quality Certification Authority
The requirement to obtain a State water quality certification pursuant to Section 401 water of the Clean Water Act (“CWA”) has become a significant source of delay and complication in the federal permitting of any project—including hydropower, natural gas pipelines, liquefied natural gas terminal projects—that involves a discharge to a navigable water.
The U.S. Court of Appeals for the D.C. Circuit’s decision in Village of Morrisville v. FERC decided May 16, 2025, is the most recent decision in a line of cases decided over the last several years that address whether a state has waived its certification authority through delay. This decision further narrows the circumstances under which the court will determine that the state has waived its authority, and thus increases the burden on project proponents to demonstrate that a waiver has occurred.
Background
Under Section 401, applicants for federal licenses or permits whose activities may result in discharges into U.S. waters must obtain water quality certification from the state where the discharge will occur. This provision allows states to impose conditions to ensure compliance with state water quality standards or to deny certification if the discharge will not comply with these standards, which effectively vetoes the federal license or permit. However, the CWA specifies that if a state “fails or refuses to act” on a certification request within a reasonable period, not exceeding one year, the state waives its certification authority.
Courts have clarified that this waiver provision prevents states from indefinitely delaying federally licensed projects through untimely certification decisions. For Federal Energy Regulatory Commission- (FERC) regulated projects, courts have directed that FERC holds the authority to determine whether a state has waived its Section 401 certification authority or not.
Despite this time limitation, states have developed procedural mechanisms to extend review beyond the one-year period. For many years, states avoided this one-year limitation by requesting that project applicants withdraw their 401 certification requests before the expiration of the one-year deadline. The state would then encourage applicants to re-file identical requests to initiate a new one-year period for review. FERC had been prevented from issuing new licenses in these cases for years, and in some cases decades, while the state orchestrated the annual ritual of withdraw-and-re-file.
The D.C. Circuit offered hope for FERC’s ability to reassert control of its licensing timelines from Section 401 delays when it decided Hoopa Valley Tribe v. FERC in 2019. In that case, the court determined that a written agreement between an applicant for water quality certification and the States of California and Oregon, by which the applicant annually withdrew and re-filed the same request while the parties pursued a dam removal settlement, constituted a “waiver of authority” by the states.
Spurred by Hoopa Valley Tribe, FERC found waiver in a number of cases in California. These cases were based on California’s entrenched practice, not limited to Hoopa Valley Tribe, of encouraging hydroelectric applicants to withdraw their certification requests just prior to expiration of the one-year deadline.
In more recent decisions, however, the D.C. Circuit has limited the circumstances in which it will uphold FERC waiver determinations and/or has upheld FERC’s determinations that no waiver occurred. In Turlock Irrigation District v. FERC, the D.C. Circuit addressed a variation on the “withdraw and resubmittal” scheme where the state instead repeatedly “denied without prejudice.” When Turlock and Modesto Irrigation Districts challenged the state’s repeated denials as effectively waiving certification authority, FERC determined that denial “without prejudice” still constituted an “act” under Section 401. On appeal, the D.C. Circuit upheld FERC’s interpretation, dismissing concerns that states could extend review indefinitely through successive denials without prejudice.
Village of Morrisville v. FERC
The Village of Morrisville, Vermont (“Morrisville”) operates a hydroelectric project, for which it needed to renew its FERC license. Under Section 401, Morrisville needed a water quality certification from the Vermont Agency of Natural Resources (“VANR”) before FERC could issue a new license. Through this process, VANR raised concerns about certain environmental aspects of the project. Facing these concerns and the potential conditions VANR sought to impose, Morrisville twice withdrew and resubmitted its certification application. Eventually, VANR issued a conditional certification with requirements that Morrisville found onerous.
After exhausting its challenges in Vermont state courts, Morrisville changed tactics and argued that VANR had waived its Section 401 authority by allowing the withdrawals and resubmissions to extend beyond the statutory one-year timeframe. FERC disagreed, finding that VANR had not waived its Section 401 authority because Morrisville had withdrawn and resubmitted its application “unilaterally and in its own interest,” rather than “at the behest of the state.”
Morrisville then appealed FERC’s decision to the D.C. Circuit, which upheld FERC’s decision. The D.C. Circuit took a narrow view of its decision in Hoopa Valley Tribe, and explained that unlike Hoopa Valley Tribe, where the state and an applicant had a written agreement to circumvent the one-year time limit, the Court found no evidence of any mutual agreement between VANR and Morrisville to delay the certification process. VANR’s awareness of or accession to Morrisville’s withdrawal requests did not make the state a participant in any scheme to evade statutory deadlines.
The court observed that Morrisville, not VANR, sought and benefited from the additional time. Both withdrawals came at Morrisville’s request to afford more time for review and negotiation of more favorable conditions under the water quality certification.
Finally, the D.C. Circuit concluded that the record indicated that VANR permitted these withdrawals as an alternative to either denying the certification outright or granting it with conditions Morrisville hoped to avoid.
Implications
After the D.C. Circuit’s decision in Turlock, going forward states are more likely to deny certification requests without prejudice rather than request applicants withdraw and resubmit applications to avoid a potential waiver. Thus, decisions, like Morrisville, that address withdrawal and resubmittal may only apply in limited circumstances. Nevertheless, the Morrisville decision remains important for applicants who have previously been subject to the withdrawal and resubmittal scheme and may be seeking a waiver determination based on past state practice. While the D.C. Circuit stopped short of finding that a waiver determination could only be found if there is a written agreement between the applicant and the state, it remains unclear what evidence of agreement between the parties will be sufficient to support a waiver of a state’s certification authority. However, it appears that an applicant seeking a waiver determination is going to have to provide affirmative evidence that the state coerced the applicant into withdrawing and refiling, and the state was acting in its own interest in requesting the withdrawal and resubmittal.
Pennsylvania State Court Dismisses Climate Tort Litigation Against Major Fossil Fuel Companies
A local state court in Pennsylvania recently dismissed an array of climate tort claims brought against major fossil fuel companies by a local government–in this case, Bucks County. Among the three dozen or so climate tort litigations filed in recent years, this ruling is one of several decisions by both state and federal courts that have dismissed climate tort litigation at an early stage of the proceedings. Nonetheless, it remains true that more climate tort litigations have proceeded than not, as a number of courts–particularly state courts–have enabled those claims to proceed, although there have not yet been any rulings on the merits of the underlying claims.
Here, the state court held that it lacked subject matter jurisdiction because of the doctrine of preemption–i.e., that federal law governed the claims at issue. Specifically, the court stated that because “the Clean Air Act and the EPA actions it authorizes preempt Pennsylvania State law in this case,” that these laws “displace” any Pennsylvania common law right to seek abatement of greenhouse gas emissions from fossil fuel production companies.” This is the same legal doctrine that federal courts in New York and California, and state courts in Delaware, New Jersey, and Maryland, have relied upon to likewise dismiss similar climate tort claims.
While this decision will certainly not be the final word on climate tort litigation–a number of cases are continuing to proceed through the courts, and more may yet be filed–it does add increasing weight to a legal analysis that rejects the premise of these lawsuits.
A state judge dismissed a county’s climate tort lawsuit against major oil and gas companies, joining other local benches who have rejected similar lawsuits across the US. Judge Stephen A. Corr of the Pennsylvania Court for Common Pleas ruled on May 16 that Bucks County, Pa., does have capacity to sue, but ultimately had to dismiss its climate tort lawsuit, ruling that the state court does not have power over interstate emissions.
news.bloomberglaw.com/…
Recent Rulings Against Trump Administration Funding Freezes
Shortly after taking office, President Trump froze funding already allocated to various parties, citing the Administration’s disapproval of issues including climate change and social equity. Additionally, executive agencies removed content discussing climate change from websites.
Unsurprisingly, these actions have been challenged in court. Parties whose funding was frozen sued on the grounds that the freezes violated statutes including the Administrative Procedure Act (APA) or their constitutional right to free speech. While cases remain pending in courts across the country, initial decisions show a pattern of courts rejecting the initial funding freezes and agencies agreeing to restore website content.
Below, we break down three recent decisions in The Sustainability Institute v. Trump, Woonasquatucket River Watershed Council v. US Department of Agriculture (USDA), and Northeast Organic Farming Association of New York v. USDA.
Background
Shortly after his inauguration, President Trump signed several orders that froze or terminated congressionally appropriated funds under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). The orders are Unleashing American Energy, Ending Radical and Wasteful Government DEI Programs and Preferencing, andImplementing the President’s “Department of Government Efficiency” Cost Efficiency Initiative(previously discussed here, here, and here). In addition, agencies ordered their staff to take down climate-related webpages from their sites.
Below, we discuss three cases where courts ruled against agencies who terminated funding or took down websites on the grounds that the actions violated the APA and First Amendment.
The Sustainability Institute v. Trump
The Sustainability Institute v. Trump involves a challenge in South Carolina federal court by nonprofit groups and local governments to a freeze to federal climate funding by agencies including the US Environmental Protection Agency (EPA), USDA, and the US Departments of Energy (DOE) and Transportation (DOT). The funding was appropriated by US Congress and contractually awarded to municipalities and nonprofits before the Trump Administration sought to freeze it.
The challengers alleged:
That the freeze orders violate the APA by terminating funding with no process or notice.
That denying funding violates the separation of powers principle of the US Constitution and the executive’s duty under Article II, Section 2 of the Constitution to “faithfully execute[]” the laws of the United States by failing to distribute funds appropriated by Congress.
That EPA violated their First Amendment right to free speech by engaging in viewpoint discrimination by ordering nonprofits to remove disfavored language from grants and threatening to revoke federal funding for groups that draw attention to climate change or equity issues.
In response, the government argued, without evidence, that termination decisions were supported by reasoning made on an individualized grant by grant basis, rather than because they were funded by the IRA and IIJA, and therefore were justified.
In April, the court ordered the five agencies to produce all documents from January 20 to present, relating to the freeze, pause, and/or termination of any of the grants identified by the plaintiffs in their motion for expedited discovery. EPA and other agencies responded by releasing over 130,000 pages of documents containing internal EPA emails, spreadsheets, and other materials pertaining to the freezes. Even with these productions, the plaintiffs argued there was no evidence that EPA and other agencies made grant-specific determinations to terminate funding.
Following these productions, the government conceded that, at least for this case, it would “not contest[] the merits of a majority of plaintiffs’ APA claims” that grant decisions were not made on an individualized basis as required, but they maintain the admission is “for purposes of this case only.” On May 20, the court entered judgment in favor of the plaintiffs on the APA claims, granted the plaintiffs’ request for a preliminary injunction, and denied staying injunctive relief requiring the funding to be reissued.
Woonasquatucket River Watershed Council v. USDA
In Woonasquatucket River Watershed Council v. USDA, a court reached a similar holding. This case involves a challenge by several nonprofit organizations to the freezing of funding appropriated under the IRA and IIJA. Last month, the court issued a nationwide preliminary injunction, ordering five federal agencies — DOE, US Department of Housing and Urban Development, USDA, US Department of the Interior, and EPA — to “take immediate steps to resume the processing, disbursement, and payment of already-awarded funding appropriated under” the IRA and IIJA, and prohibited those agencies from “freezing, halting, or pausing on a non-individualized basis the processing and payment” of such funding.
When EPA argued that it should be allowed to continue its freeze on nearly 800 IRA grants that had been terminated or had terminations pending, the court ordered that the grants be unfrozen before sending termination notices, and urged EPA to expedite the termination process for the grants it believes it can legally revoke. The case is now on appeal to the US Court of Appeals for the First Circuit.
Northeast Organic Farming Association of New York et al. v. USDA
Northeast Organic Farming Association of New Yorkalso reached a similar outcome. In that case, several nonprofits sued the USDA seeking to enjoin the government from erasing webpages focused on climate change. The plaintiffs’ complaint alleges that USDA violated the APA when it took down government websites containing climate content, including statutorily required climate-related policies, guides, datasets, and other resources, without advance notice or reasoned decision-making.
The USDA originally argued that the environmental groups had failed to show that relief was warranted and that the removals should stand because it was in the public’s interest to have government websites that reflect the current presidential Administration’s priorities. However, USDA recently reversed course and committed to restore climate change-focused webpages that were taken offline. Going forward, USDA stated that it would restore required websites and that it was committed “to complying with any applicable statutory requirements in connection with any future publication or posting decisions regarding the removed content, including, as applicable, the adequate-notice and equitable-access provisions of the Paperwork Reduction Act and the reading room provisions of [the Freedom of Information Act].” The parties are expected to submit a joint status report in early June.
Bipartisan Bill Would Expand Biofuels and Biobased Manufacturing Innovation
On May 7, 2025, Representatives Nikki Budzinski (D-IL) and Zach Nunn (R-IA) introduced the Agricultural Biorefinery Innovation and Opportunity Act (Ag BIO Act) (H.R. 3253), a bipartisan bill that would support the biofuel economy. According to Budzinski’s May 8, 2025, press release, the bill would update the U.S. Department of Agriculture’s (USDA) Section 9003 program to expand access to grants, streamline loan guarantees, and provide $100 million in mandatory funding over five years. The press release states that the bill would strengthen the USDA Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program by:
Providing $100 million in mandatory funding through fiscal year 2030;
Updating the loan guarantee program to include year-round applications and waive feasibility studies for proven technologies;
Establishing a new competitive grant program to help build and expand biorefineries focused on producing ultra-low-carbon and zero-carbon bioethanol, renewable chemicals, and other advanced bioproducts;
Creating a priority scoring system for grant applications that evaluates environmental impact, rural economic development, scalability, and contributions to domestic energy security; and
Ensuring a 60/40 federal cost-sharing model to encourage private investment in materials, research, and development of new bioproducts.