Apr 20: In the U.S. Court of Appeals, Sixth Circuit, Case No. 08-3083. Eagle-Picher Technologies, LLC (EP Tech), an electronics manufacturer, filed for Chapter 11 bankruptcy in 2005. The United States, on behalf of U.S. EPA and the Department of Interior, filed a claim in the bankruptcy proceeding against EP Tech under CERCLA -- the Comprehensive Environmental Response, Compensation and Liability Act of 1980. The Appeals Court indicates that under CERCLA, the federal government may recover the cost of cleaning up hazardous waste from the parties responsible for its release.
Over the objections of U.S. Bank, the bankruptcy trustee, the bankruptcy court found EP Tech liable for $357,246 of already-incurred costs and $8,735,434 in estimated future costs for the clean-up of groundwater and soil contamination near a now-vacant manufacturing plant in Socorro, New Mexico. U.S. Bank appealed to the district court, which affirmed the finding.
U.S. Bank appealed to the Sixth Circuit, arguing: (i) EP Tech is not liable under CERCLA for hazardous waste releases that occurred before EP Tech acquired an interest in the Socorro plant in 1998; (ii) even if EP Tech is liable for the clean-up costs at the plant, genuine issues of material fact precluded the bankruptcy court from concluding that EP Tech was responsible for contamination detected at a well located a mile and a half south of the plant; and (iii) the bankruptcy court improperly excluded evidence at the hearing on estimating the future cost of cleaning up the hazardous substances.
The Appeals Court said in affirming the finding, "the bankruptcy court’s decision was legally correct, and it did not abuse its discretion by excluding evidence of future costs."
Further explaining its decision the Appeals Court said, "Our review of the hearing transcript indicates, contrary to U.S. Bank’s characterization, that the bankruptcy court was well-aware that, notwithstanding the finality of the divisibility issue, U.S. Bank was allowed to challenge the estimate derived from EPA’s proposed clean-up strategy. And the transcript shows that the court gave both parties wide latitude. The court appreciated the overlap between the divisibility issue and the estimation of future costs. . . It did not categorically bar questions about the scope of the contamination, and instead probed each of the experts on how their proposed clean-up plans fit with the available data. . ."
Access the complete opinion (click here).
Monday, April 27, 2009
Arizona Public Service Company v. EPA
Apr 14: In the U.S. Court of Appeals, Tenth Circuit, Case No. 07-9546 & 07-9547. Arizona Public Service Company (APS), operator and majority owner of the Four Corners Power Plant (Plant), and Sierra Club, Diné CARE, Diné for the C-Aquifer, and San Juan Citizens Alliance (collectively Environmentalists) challenged a regulation promulgated by the U.S. EPA (EPA). The regulation at issue is known as a source-specific, Federal implementation plan (Federal plan) and was enacted pursuant to sections 301(a) and (d)(4) of the Clean Air Act, 42 U.S.C. §§ 7601(a) and (d)(4). The Federal plan limits particular air emissions from the Plant.
The Appeals Court indicated that because all parties agree that the Federal plan provision pertaining to fugitive dust should be remanded, it did not address those emissions limit in its discussion of the facts. The Appeals Court granted EPA’s motion for voluntary remand and granted in part and denied in part the petitions for review. In particular, the Appeals Court denied APS’s petition for review; denied the Environmentalists’ petition for review, and affirmed the remainder of the Federal implementation plan.
On the APS challenge, the Appeals Court said, "We hold the EPA has established 'an adequate rationale' for the affirmative defense. . . We conclude the EPA has not acted arbitrarily or capriciously. The EPA identified a regulatory need and enacted a source-specific Federal plan to fill this gap. The EPA has neither relied on factors which Congress did not intend it to consider nor failed to consider any important aspect of the problem. . . The EPA addressed all substantive aspects of APS’s comments: startup, shutdown, malfunction, and saturated stack conditions. The EPA based its decision on the evidence before it, i.e., current air quality data for the area surrounding the Plant, and incorporated its negotiations with APS, the Navajo Nation, and the State of New Mexico into its plan. We can ascribe APS’s disagreement with the EPA’s final action to a difference in view."
Regarding the Environmentalists' challenges, the Appeals Court said, "In sum, the key criterion in determining the adequacy of any plan is attainment and maintenance of the national air standards. . . The Federal plan at issue codifies in part the New Mexico plan -- previously studied, analyzed, approved, and in place -- and relies on current data demonstrating that the air quality in the area of the Plant is better than the national air standards for criteria pollutants. Therefore, the EPA had no need to conduct additional modeling and analysis to demonstrate the adequacy of the plan, a fact the EPA already knew. The Federal plan, by necessity, is adequate because the plan is but a stricter version of the satisfactory emissions limits already applied by the Plant and implemented throughout the State of New Mexico. Because the EPA’s interpretation of its own regulation is not 'plainly erroneous or inconsistent with the regulation,' we must defer to the EPA."
Access the complete opinion (click here).
The Appeals Court indicated that because all parties agree that the Federal plan provision pertaining to fugitive dust should be remanded, it did not address those emissions limit in its discussion of the facts. The Appeals Court granted EPA’s motion for voluntary remand and granted in part and denied in part the petitions for review. In particular, the Appeals Court denied APS’s petition for review; denied the Environmentalists’ petition for review, and affirmed the remainder of the Federal implementation plan.
On the APS challenge, the Appeals Court said, "We hold the EPA has established 'an adequate rationale' for the affirmative defense. . . We conclude the EPA has not acted arbitrarily or capriciously. The EPA identified a regulatory need and enacted a source-specific Federal plan to fill this gap. The EPA has neither relied on factors which Congress did not intend it to consider nor failed to consider any important aspect of the problem. . . The EPA addressed all substantive aspects of APS’s comments: startup, shutdown, malfunction, and saturated stack conditions. The EPA based its decision on the evidence before it, i.e., current air quality data for the area surrounding the Plant, and incorporated its negotiations with APS, the Navajo Nation, and the State of New Mexico into its plan. We can ascribe APS’s disagreement with the EPA’s final action to a difference in view."
Regarding the Environmentalists' challenges, the Appeals Court said, "In sum, the key criterion in determining the adequacy of any plan is attainment and maintenance of the national air standards. . . The Federal plan at issue codifies in part the New Mexico plan -- previously studied, analyzed, approved, and in place -- and relies on current data demonstrating that the air quality in the area of the Plant is better than the national air standards for criteria pollutants. Therefore, the EPA had no need to conduct additional modeling and analysis to demonstrate the adequacy of the plan, a fact the EPA already knew. The Federal plan, by necessity, is adequate because the plan is but a stricter version of the satisfactory emissions limits already applied by the Plant and implemented throughout the State of New Mexico. Because the EPA’s interpretation of its own regulation is not 'plainly erroneous or inconsistent with the regulation,' we must defer to the EPA."
Access the complete opinion (click here).
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