On May 19th 2015, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) issued an order directing the issuance of financial assurance regulations under the Federal Superfund program. As discussed in our previous Client Alert (see OMM April 20, 2015, Client Alert, EPA Issues Financial Assurance Guidance for Superfund Settlement Agreements and Unilateral Administrative Orders), on August 8, 2014, several environmental groups filed a writ of mandamus asking that the D.C. Circuit require the Environmental Protection Agency (“EPA”) to issue financial assurance rules pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) for certain industries, including the chemical manufacturing, hardrock mining, petroleum and coal tar manufacturing, and electricity generation/transmission sectors. In re: Idaho Conservation League, et al, Case No. 14-1149 (D.C. Cir.). The subject financial assurance rules will obligate companies performing CERCLA remedies to provide a standby financing mechanism (guarantee, bond, insurance or letter of credit) against the EPA-project remedy cost.

During oral arguments held on May 12, 2015, the petitioners acknowledged that, due to the passage of time, the January 2016 deadline requested in their petition for action on the financial assurance regulations was no longer feasible. The EPA reported that it had provided the April 2015 guidance covered in the above-noted Alert (directing regional offices to include financial assurance obligations in settlement agreements and consent judgments), and that it had recently completed the “framework” for a proposed rule for hardrock mining.

In light of these developments, the D.C. Circuit order directs the petitioners to update the time frame they seek for the EPA to issue financial assurance regulations, and asks EPA to update its rulemaking schedule to expedite “to the greatest possible extent” the issuance of financial assurance rules in accordance with the proposed schedule. The D.C. Circuit specifically ordered the parties to identify the dates by which the EPA will issue proposed and final financial assurance rules for the hardrock mining industry. In addition, the Court ordered the parties to specify the deadlines for the EPA to determine whether to issue a notice of proposed rulemaking for the chemical manufacturing, petroleum and coal products manufacturing, and electricity generation/transmission industries, and, if the EPA decides to proceed, the timeline for issuing proposed and final financial assurance rules for those industries.

The D.C. Circuit also authorized the petitioners to supplement their declarations to support their claim for Article III standing, an issue on which the Court has not yet ruled.

The parties’ submissions are due on June 9, 2015, with any responses due June 15, 2015.