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On January 19, 2024, the Louisiana First Circuit Court of Appeal reinstated the Formosa Plastics (“FG LA”) facility air permits, which the lower court had previously vacated. Rise St. James v. Louisiana Department of Environmental Quality, 2023-CA-0578.  In September 2022, the district court vacated the facility’s air permits finding, among other reasons, that the Louisiana Department of Environmental Quality (“LDEQ”) had not done a proper analysis under the Louisiana Public Trust Doctrine. In doing so, the lower court opined that an environmental justice (“EJ”) analysis was mandatory under the Louisiana Public Trust Doctrine and that LDEQ’s EJ analysis was inadequate. While the First Circuit reversed the district court on nearly every point and reinstated the permits, it agreed that an EJ analysis was part of the Louisiana public trust duty applicable to state permitting. It, however, found that LDEQ had fulfilled its duty in this instance. In undertaking this analysis, the court provided guidance on several key EJ questions.

Is EJ analysis required under the Louisiana Public Trust Doctrine? The First Circuit opinion firmly answered this question yes.On appeal, LDEQ and FG LA argued that the Louisiana Public Trust Doctrine does not mandate analyzing EJ in conjunction with permitting decisions. The First Circuit disagreed. The court stated, “[W]e find 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.” Opinion, at 46. While current industry and agency practice generally incorporate EJ analyses into the permitting process, the court’s decision cements the need for environmental justice analyses to satisfy the Public Trust Doctrine and provides a more definite avenue for challenging permits based on EJ.

What is EJ? The First Circuit opinion incorporated the following EPA definition for EJ, (noting it had been utilized by LDEQ): “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies,” with “fair treatment” meaning that “no group of people should bear a disproportionate share of the negative environmental consequences resulting from industrial operations.”

What analysis is required? The First Circuit largely accepted LDEQ’s EJ analysis framework. Under this framework, the agency first determines whether there are any adverse impacts and then determines whether the impacts are disparate. For the FG LA permits, LDEQ found that because the facility would meet the standards for criteria pollutants and toxic air pollutants, and because the facility would not increase the emission burden or associated risks in the surrounding community, there were no adverse impacts. The First Circuit explained that upon a determination of no adverse impacts, LDEQ was not required to analyze disparate impacts.

What is EJScreen and how is it used? EJScreen is a data-driven tool used to screen for communities that may be candidates for additional EJ consideration, analysis, or outreach. The First Circuit accepted EPA’s directive that EJScreen, by itself, does not label an area as an EJ community, does not “quantify specific risk values for a selected area,” and is not “a basis for agency decision-making regarding the existence or absence of environmental justice concerns.” Therefore, the court found that LDEQ’s decision not to rely on certain EJScreen values was not arbitrary and capricious, where it had legitimately and rationally considered the data underlying those values and come to a contrary conclusion.

How are disparate impacts and cumulative impacts analyzed? While the court found that LDEQ was not required to analyze disparate impacts, the court noted LDEQ had done so and also found the disparate impact analysis to be adequate. While the court opinion does not use the word “cumulative” to explain LDEQ’s analysis of disparate impacts, LDEQ’s analysis took a multi-pronged approach, looking at past permitting decisions, emission trends, and cancer rates. These analyses showed declining criteria pollutant and toxic air pollutant emissions for the community. They also indicated that the emissions were comparable to state averages. Additionally, LDEQ addressed cancer rates for minority residents in the surrounding community, noting that the rates were near state averages, and that the NATA Cancer Risk value for the surrounding community did not reflect the actual risk faced by the community, because the risk value assumed unrealistic exposure levels and relied on outdated data.

What about community engagement? In its examination of the agency’s EJ analysis, the First Circuit explained that LDEQ “provided an opportunity for all parties to be meaningfully involved in the permits process, provided a lengthy comment period and a public hearing on the proposed permits, and, as evidenced by its Public Comments Response Summary, it carefully considered the community’s concerns in the decision-making process.” LDEQ’s public engagement supported the court’s conclusion that LDEQ appropriately considered EJ in its permitting decision.

The First Circuit’s opinion provides valuable insight as to how EJ should be addressed in state permitting. It also aligns with nationwide developments elevating the importance of an EJ analysis as a vital piece of the permitting process. While the opinion does not define a baseline EJ analysis or address appropriate outcomes where adverse and disparate impacts exist, it does provide signposts for compliance with the Public Trust Doctrine.

This decision provides industry in Louisiana with three key EJ takeaways:

  1. Because this opinion asserts that the Louisiana Public Trust Doctrine includes consideration of environmental justice, industry can likely expect more permit challenges based on the adequacy of EJ analyses.
  2. Accordingly, permit applicants should ensure that a robust EJ analysis is undertaken and well documented in the permitting record; and
  3. Community engagement is a significant component in the permitting process, and permit applicants should ensure that public input, including input on EJ issues, is obtained and thoroughly considered by the agency.

For any further questions about the First Circuit opinion, its impact on permitting, and environmental justice issues, contact Liskow attorneys Emily von Qualen, Clare Bienvenu, Greg Johnson, and Cherrell Simms Taplin.

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