The White House has announced long-awaited final guidance to federal agencies to implement domestic content and manufacturing requirements in federally funded infrastructure projects.
The Biden Administration guidance applies broadly to the use of iron, steel, and other common construction materials and products and, as a result, is expected to have broad implications for awardees of federal funding, prospective applicants, contractors, and suppliers.
P3 state legislation continues to expand and move forward with governors signing legislation into law and sending some bills back to legislatures for review and revision. The states have in common efforts to define the breadth and depth of projects suitable for public private partnerships and many are working to establish specific offices to manage their infrastructure projects. Suffice it to say that the infrastructure to build infrastructure is being built out through state legislation. You can find our current P3 State Legislation Tracker here.
In Mahoney v. U.S. Department of the Interior, the United States District Court for the Eastern District of New York recently addressed an environmental challenge to the South Fork Wind Farm (“Wind Farm”) that is being constructed on the Outer Continental Shelf (“OCS”) approximately 35 miles off Montauk Point, New York. The Mahoney decision is illustrative of the “shore side” legal challenges faced by the offshore wind industry and is a reminder of the continued significance of constitutional standing doctrine, which requires parties bringing suit to demonstrate that they are appropriate parties to bring an environmental challenge to court.
Plaintiffs, residents of East Hampton, New York, brought an action to halt the construction of the Wind Farm and the Wind Farm’s Export Cable Project (“Export Cables”). The Export Cables Project required onshoring trenching to tie the cables carrying power offshore into the shore-side power grid. As the proposed trenching location was adjacent to their property, the Plaintiffs were concerned that the Export Cable trenching would worsen pre-existing perfluoroalkyl and polyfluoroalkyl (“PFAS”) groundwater contamination in their groundwater. Plaintiffs challenged permits issued by Bureau of Ocean Energy Management (“BOEM”), and the U.S. Department of the Army, and U.S. Army Corps of Engineers (the “Army Corps”) for the Wind Farm and the Final Environmental Impact Statement (“FEIS”) issued in connection with the permits.
The District Court’s Decision
Plaintiffs suit was based on the assertion that the Wind Farm’s permits and FEIS did not adequately consider the potential of PFAS contamination as required under the National Environmental Policy Act (“NEPA”), Clean Water Act (“CWA”), Outer Continental Shelf Lands Act (“OCSLA”) and the Administrative Procedure Act (“APA”). The Government moved to dismiss suit under the constitutional standing doctrine.
Under Article III of the Constitution, federal courts can only hear disputes if the plaintiff has standing to sue. “[T]o establish standing, a plaintiff must show (i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.” A plaintiff has the burden to establish each element of the standing test.
The Court’s analyses focused on the second element – whether the Plaintiffs established a causal connection between the federal agencies decision to permit the Wind Farm and Plaintiffs’ alleged damages, which the loss of Plaintiffs’ property value due potential PFAS contamination. Plaintiffs alleged that the causation element was met because “but for” the federal agencies requiring the wind farm developer to use the route for the Export Cables specified in the permits, Plaintiffs would not sustain any property damage.
The District Court noted that the location and manner of onshore trenching for the Export Cables were dictated by local and state agencies, which included the New York State Power Commission (“NYSPC”), which approved the trenching after a lengthy administrative process in which Plaintiffs participated. The NYSPC rejected Plaintiffs’ argument that the Project would exacerbate the existing PFAS contamination in their groundwater, given the preventative measures employed by the Project to ensure groundwater flow was not altered. By contrast, the federal agency defendants did not require or specify the location of the onshore trenching of the Export Cables in connection with their approvals, leaving these details to NYSPC and its administrative process. The District Court rejected Plaintiffs’ contention as too attenuated that “but for” the federal agencies permitting the Wind Farm as a whole, there would not be any need for the Export Cables.
Under the relevant federal statutes, the District Court held that BOEM had jurisdiction over the portion of the Wind Farm on the OCS under the OCSLA and the Army Corps had jurisdiction over permits needed to discharge dredged waste matter under the CWA. The District Court held that Plaintiffs’ alleged injuries were directly traceable to NYPSC, which had exclusive jurisdiction over onshore trenching and whose third-party actions were not before the Court. Accordingly, the District Court dismissed the suit due to lack of standing.
The decision in Mahoney v. U.S. Department of the Interior is a reminder the standing doctrine remains a formidable hurdle to those asserting an environmental challenge. The decision is a further reminder of the complex web of state and federal action that is required to bring offshore wind energy into the shoreside power grind.
See Mahoney v. U.S. Department of The Interior, No. 22-CV-1395, 2023 WL 4564912 (E.D.N.Y. July 17,2023).
It is reported that globally the construction industry is responsible for almost 25% of greenhouse gas emissions, 40% of total energy production, 16% of total water consumption and 30% to 40% of all solid waste. Growing environmental awareness and activism means it is likely that industries with a large carbon footprint and environmental impact, such as the construction industry, will face increasing scrutiny of their “green” claims. Managing the risk of greenwashing is challenging and complex. While at its core it is a matter of “doing what you say you are doing, or are going to do”, in practice it is far from that simple.
The US Environmental Protection Agency (EPA) announced it is seeking applications for two competitive clean energy grant programs, the National Clean Communities Investment Accelerator and the Clean Communities Investment Accelerator, which have combined funding of US$20 billion. These programs are part of the US$27 billion Greenhouse Gas Reduction Fund (GGRF) established under the Inflation Reduction Act (IRA).
Large construction or development companies should be paying attention as manufacturing and other large consumer-facing corporations struggle to address issues related to Environmental, Social, and Governance (ESG) issues. Most publicly traded companies in these sectors are somewhere in the journey of establishing ESG programs and implementing the related accounting and reporting mechanisms.
In particular, companies pursuing public-private partnerships (P3) may encounter unique ESG expectations or demands from public entities. From sustainability and sourcing commitments and labor practice specifications to environmental justice expectations, a company with a robust ESG program will be better equipped to credibly pursue and undertake P3 projects.
As previewed in our earlier post, the National Telecommunications and Information Administration (“NTIA”) announced how much money each state and territory will be allocated as part of the Broadband Equity, Access and Deployment program (the “BEAD Program”). Nineteen states were allocated more than $1 billion: Alabama, Alaska, Arkansas, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Michigan, Mississippi, Missouri, North Carolina, Pennsylvania, Texas, Virginia, West Virginia, Washington, and Wisconsin.
On 24 May 2023, Wales’ first piece of primary legislation on public procurement received royal assent – the Social Partnership and Public Procurement (Wales) Act (the Act). The object of the Act is to improve social responsibility and well-being in public procurement through “social partnership” working.
Public procurement law in England and Wales is one step closer to reform. The procurement bill, which was first introduced in the UK parliament in May 2022, will replace existing European Union-based procurement regulation in England and Wales and is intended to make public procurement simpler, faster, more transparent, and less bureaucratic.
Broadband maps and the promise of a boom in broadband infrastructure projects remain a focus of federal, state, and local leaders. Recently, the Federal Communications Commission (FCC) published an updated version of the National Broadband Map, which identifies all locations in the United States where broadband service is or could be available and what broadband service, if any, is available in each of these locations.
What does this mean? The National Broadband Map is the foundation of the Broadband Equity, Access, and Deployment (BEAD) Program created in the Infrastructure Investment and Jobs Act of 2021 (IIJA). Congress allocated more than $42 billion to the BEAD Program with the mandate to deploy broadband service to all unserved and underserved locations in the US. Because the IIJA directs the National Telecommunications and Information Administration (NTIA) to allocate funds based on the National Broadband Map, the FCC’s findings will shape how much funding each state (including the territories) will receive under the BEAD Program and how states can award funds for specific broadband projects.
As we explain below, the FCC’s publication of the updated version of the National Broadband Plan signals the beginning of an aggressive timeline for funds disbursement and a shift in activity from NTIA and the FCC to the states.