State of North Carolina v. EPA

Nov 24: In the U.S. Court of Appeals, D.C. Circuit, Case No. 08-1225. The State of North Carolina petitions for review of the final rule of U.S. EPA removing the northern part of the State of Georgia from EPA’s regulations under its national ambient air quality standard (NAAQS) for ozone measured during a one-hour period [See 73 FR 21,528, 4/22/08]. In 1998 EPA called upon several states to revise their state implementation plans (SIPs) for attaining the NAAQS for ozone by reducing emissions of oxides of nitrogen (NOx), a precursor of ozone [63 FR 57,356, 10/27/98, NOx SIP Call].

Following the remand in Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert. denied, 532 U.S. 904 (2001), EPA promulgated a rule that included only the northern portion of Georgia in the NOx SIP Call under the one-hour ozone standard [69 FR 21,604, 4/21/04, Remand Rule]. Georgia’s inclusion was based on EPA’s findings in the NOx SIP Call that emissions from Georgia were significantly contributing to non-attainment of the one-hour ozone NAAQS in Birmingham, Alabama and Memphis, Tennessee.

Upon the petition of an industry coalition, an intervenor, EPA reconsidered its inclusion of Georgia in light of its determinations that recently Birmingham, and earlier Memphis, had attained the one-hour ozone standard. North Carolina now challenges the Withdrawal Rule as contrary to EPA policy requiring states’ adherence to NOx emissions budgets based on the one-hour ozone standard after the repeal of the one-hour standard, as nonconformance with the mandate in Michigan v. EPA, and as disparate treatment of Georgia without lawful justification.

The Appeals Court rules, "We do not reach the merits of these contentions because we conclude that North Carolina lacks standing, specifically that North Carolina failed to show redressability." Further, the Appeals Court says, "The Division’s [Georgia Environmental Protection Division] showing in its sur-reply that Georgia intends to use CSP credits to cover its excess emissions thus resolves the question of redressability, for North Carolina can no longer show that vacating the Withdrawal Rule and re-including northern Georgia in the NOx SIP Call is likely to redress North Carolina’s difficulty in meeting the 1997 NAAQS eight-hour
ozone standard. As counsel for North Carolina stated at oral argument, if reinstating Georgia in the NOx SIP Call would not lower Georgia’s emissions, then North Carolina has a standing problem. Accordingly, we dismiss North Carolina’s petition for lack of standing."

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Boston & Maine Corp. v. Massachusetts Bay Transportation

Nov 24: In the U.S. Court of Appeals, First Circuit, Case No. 09-1185. The Appeals Court explains that on June 30, 1983, the Boston and Maine Corporation (B&M), a railroad operator, was discharged from bankruptcy by a Consummation Order stating that it was "free and clear of all claims." The Order was pursuant to § 77 of the Bankruptcy Act of 1898, 11 U.S.C. § 205 (repealed 1978). B&M was the operator of what is now known as the MBTA Commuter Rail Maintenance Facility (the Terminal), a thirty-four-acre railroad terminal in the greater Boston area used for refueling diesel trains. In 1983, the Terminal was owned by the Massachusetts Bay Transportation Authority (the MBTA), having been purchased by the MBTA from B&M in 1976; B&M had operated the Terminal under bankruptcy protection from 1970 to June 1983 and had owned the Terminal since the late 1920s. B&M continued to operate the Terminal under an agreement with and for the benefit of the MBTA until December 31, 1986.

The MBTA asserted no claims against B&M regarding environmental matters before B&M's June 1983 discharge from bankruptcy, pursuant to the Consummation Order. The MBTA did, however, assert a claim on May 4, 2004, almost 21 years later, against B&M. The claim was for 95 percent of $15,340,810 for past costs and 95 percent of all future costs, as contribution, under state environmental law, the Massachusetts Oil and Hazardous Material Release Prevention and Response Act (Chapter 21E), for certain cleanup activities the MBTA had undertaken at the Terminal.

The Appeals Court ruled, "We hold that the MBTA's contribution claims under Chapter 21E for contamination prior to the 1983 discharge from bankruptcy are barred as a matter of law by the Consummation Order. We reverse and direct entry of judgment on these claims for B&M." Further the Appeals Court concluded, "Both sides have been ably represented by counsel; the facts and the law require rejection of the MBTA's arguments. The MBTA's contribution claims arising out of pre-June 30, 1983, conduct by B&M are barred by the Consummation Order, so B&M is entitled to an order enjoining the MBTA from pursuing claims for investigation or remediation costs for contamination at the Terminal occurring before June 30, 1983."

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