Thursday, June 30, 2011

Reese v. BP Exploration (Alaska) Inc.

Jun 29: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-35128. Appeal from the United States District Court for the Western District of Washington. BP Exploration (Alaska) Inc. (BPXA) appeals the district court's order granting in part and denying in part BPXA's motion to dismiss a securities fraud action filed against it by Claude A. Reese (Reese) on behalf of a class of purchasers of BP p.l.c. shares. On an interlocutory appeal, which was accepted by the Ninth Circuit, BPXA asserts that Reese's surviving claims do not state a claim, warranting dismissal under Federal Rule of Civil Procedure 12(b)(6), because Reese has pled neither an actionable misrepresentation made by or attributable to BPXA nor sufficient evidence of scienter [intent or knowledge of wrongdoing]. Reese, in turn, urges the Appeals Court to affirm the district court on the issues certified for interlocutory appeal and reverse part of the district court's order granting partial dismissal of his claims, or, alternatively, that the Appeals Court vacate the order granting interlocutory appeal.
    The Appeals Court ruled, "We hold that BPXA's breach of a contractual promise of specific future conduct, even though the contract is filed in conjunction with U.S. Securities and Exchange Commission (SEC) reporting requirements, was not a sufficient foundation for a securities fraud action. We decline Reese's invitation to review other issues that were not certified for interlocutory appeal. In light of our conclusion that breached contractual obligations do not constitute misrepresentations by BPXA that are actionable under the securities laws, we need not reach the issue of scienter."
    The Appeals Court said further, "BPXA's contractual promise to act as a prudent operator did not expressly or implicitly assert that BPXA was in full compliance with its obligations thereunder, and we do not view the public filing of the ORC Agreement as the sort of traditional fraudulent misrepresentation of fact that could induce investors mistakenly to buy securities. We hold that, in this case, the public filing of a contract containing a promise of future compliance did not, upon the contract's breach at a time after execution, provide an actionable misrepresentation for the purposes of a private damages action for securities fraud."
    Access the complete opinion (click here). [*Haz, *Water, *CA9]

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NRDC v. South Coast Air Quality Management District

Jun 29: In the U.S. Court of Appeals, Ninth Circuit, Case No. 09-57064. Appeal from the United States District Court for the Central District of California. The Natural Resources Defense Council and other groups (collectively, the NRDC) appeal the district court dismissal of their claims against the South Coast Air Quality Management District (SCAQMD). The case focuses on the SCAQMD new source review permit program included in its Regulation XIII, most of which the U.S. EPA has approved and incorporated into the State Implementation Plan (SIP).
    The Appeals Court affirmed the decision of the district court and said, "The district court did not err in determining it lacked jurisdiction over the alleged violations of Clean Air Act § 173(c). Nor did it err in concluding that the NRDC otherwise failed to state a claim upon which relief can be granted: Regulation XIII does not contain validity requirements for SCAQMD's internal offsets, and Environmental Protection Agency (EPA) rules do not require SCAQMD to use a tracking system."
    The Appeals Court said further, "The EPA rule approving the SIP does contain a reference to a tracking system in its preamble. . . Yet we are not to consider such references unless the regulation itself is ambiguous. . . There is no ambiguity here. Nothing in the EPA-approved SIP even suggests a tracking system must be applied. The district court thus properly dismissed the NRDC's third and fourth claims for failure to allege a violation of the EPA rule or the SIP."
    Access the complete opinion (click here). [*Air, *CA9]

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Re: MDL-1824 Tri-State Water Rights Litigation

Jun 28: In the U.S. Court of Appeals, Eleventh Circuit, Case No. 09-14657. Appealed from the United States District Court for the Middle District of Florida. The Georgia Parties, Gwinnett County, Georgia, and the United States Army Corps of Engineers (the Corps) appeal from the Middle District of Florida's grant of summary judgment in this consolidated suit. The appeal arises from more than 20 years of litigation involving the above parties as well as the States of Alabama and Florida, Alabama Power Company, the City of Apalachicola, Florida, and Southeastern Federal Power Customers, Inc. (SeFPC), a consortium of companies that purchase power from the federal government. All of the underlying cases relate to the Corps' authority to operate the Buford Dam and Lake Lanier, the reservoir it created, for local water supply.
    In its order, the district court found that the Corps' current operation of the Buford Project -- Buford Dam and Lake Lanier collectively -- had allocated more than 21% of Lake Lanier's storage space to water supply. The court determined that such an allocation exceeded the Corps' statutory authority and ordered the Corps to drastically reduce the quantity of water that it made available for water supply. The court's summary judgment order also affirmed the Corps' rejection of Georgia's 2000 request for additional water supply allocations to meet the needs of the localities through 2030. The court stayed its order for three years to give the parties time to reach a settlement or to approach Congress for additional water supply authority.
    The Appeals Court outlines the claims of the various parties and ruled in a multipart decision, ". . .we hold: First, the district court erred in finding that it had jurisdiction to hear Alabama, SeFPC, and Apalachicola because the Corps has not taken final agency action. The three cases therefore must be remanded to the Corps in order to take a final agency action. Second, the district court and the Corps erred in concluding that water supply was not an authorized purpose of the Buford Project under the RHA [the 1946 Rivers and Harbors Act]. The Corps' denial of Georgia's 2000 water-supply request is therefore not entitled to Chevron deference, and the request must be remanded to the Corps for reconsideration. Third, the district court erred in finding that the 1956 Act, which authorized the Corps to contract with Gwinnett County to withdraw 10 million gallons of water per day, expired after 50 years. Gwinnett County's contractual and just-compensation claims are without merit. Fourth, we also provide certain instructions to the Corps on remand. And finally, the Corps shall have one year to make a final determination of its authority to operate the Buford Project under the RHA and WSA [the 1958 Water Supply Act]."
    Access the complete 95-page decision (click here). [*Water, *Drink, *CA11]

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Wednesday, June 29, 2011

Redevelopment Agency of the City of Stockton v. BNSF Railway Co.

Jun 28: In the U.S. Court of Appeals, Ninth Circuit, Case Nos. 09-16585, 09-16739, & 09-17640. Appealed from the United States District Court for the Eastern District of California. The Appeals Court explains that appellants BNSF Railway Company and Union Pacific Railroad Company (the Railroads) formerly maintained railroad tracks on a parcel of land in Stockton, California, that was contaminated by petroleum. The petroleum was spilled at a nearby industrial site and migrated onto the property via an underground french drain the Railroads had installed in order to remove water from the roadbed. The Appeals Court considered whether the Railroads are liable for the contamination of the property under the law of nuisance or under California's Polanco Redevelopment Act (Polanco Act), Cal. Health & Safety Code § 33459 et. seq. The Appeals Court ruled that the Railroads are not liable.
    The Appeals Court said further, "There is no evidence that the Railroads actively or knowingly caused or permitted the contamination as required for nuisance liability and liability under the Polanco Act's Water Code provision. Nor were the Railroads 'owners' of the property under the Polanco Act's CERCLA provision when the contamination occurred. Because the record establishes no genuine issue of material fact as to the Railroads' liability, the Railroads are entitled to summary judgment. Therefore, we need not reach any of the damages issues on appeal or crossappeal. . . We reverse the grant of summary judgment for the Agency on the nuisance and Polanco Act-Water Code provision issues and remand for entry of summary judgment for the Appellants. We affirm the grant of summary judgment to the Appellants on the Polanco Act-CERCLA provision issue. Costs are awarded to the Appellants."
    Access the complete opinion (click here). [*Remed, *CA9]

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Roth v. Norfalco LLC

Jun 28: In the U.S. Court of Appeals, Third Circuit, Case No. 10-2524. Appealed from the United States District Court for the Middle District of Pennsylvania. In a brief summary the Appeals Court explains, David Roth was attempting to unload a railway tank car filled with sulfuric acid when its chemical contents exploded, spraying Roth across his face and chest and inflicting severe burns. Roth brought suit, seeking damages for his personal injuries under the common law, but the District Court held that his lawsuit was preempted by the Hazardous Materials Transportation Act (HMTA), 49 U.S.C. §§ 5101–5128. The Appeals Court agreed and affirmed the district court decision. 

    In further explanation, the Appeals Court says, "the statute and its applicability could not be more clear. Roth seeks to impose a tank car design requirement. Section 5125(b)(1) expressly preempts any common law requirement 'about' the design of a 'package, container, or packaging component . . . qualified for use in transporting hazardous materials in commerce.' Roth concedes that Norfalco's tank cars are containers qualified for use in transporting hazardous materials in commerce. Thus, the HMTA plainly encompasses Roth's common law claims. It is irrelevant what Roth was doing at the precise moment of his injury. This only makes sense, for it cannot be the case that the comprehensive design requirements erected by the HMTA cease to govern simply because the tank car was emptied of its contents days after its delivery. The tank car is, at all times, a container qualified for use in transporting hazardous materials. The proposed design requirement is expressly preempted."
    Access the complete opinion (click here). [*Haz, *Transport, *CA3]

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Monday, June 27, 2011

Medical Waste Institute v. U.S. EPA

Jun 24: In the U.S. Court of Appeals, D.C. Circuit, Case No. 09-1297. Petitioners Medical Waste Institute and Energy Recovery Council, trade associations representing the medical waste and waste-to-energy industries, respectively, petition for review of a regulation promulgated by U.S. EPA setting performance standards for new and existing hospital/medical/infectious waste incinerators (HMIWI). Petitioners argue that the data set EPA used to establish these standards was flawed, that the Agency's pollutant-by-pollutant approach to setting target emissions levels was impermissible, and that the Agency acted arbitrarily when it removed a provision exempting HMIWI from complying with the standards during periods of startup, shutdown, and malfunction. The EPA counters that the Appeals Court lacks jurisdiction to review the two latter claims, and that the use of the data set was justifiable. The Appeals Court said, "We agree with the EPA and deny the petition for review."
    The challenged regulation, titled "Standards of Performance for New Stationary Sources and Emissions Guidelines for Existing Sources: Hospital/Medical/Infectious Waste Incinerators," was issued pursuant to Section 129 of the Clean Air Act (CAA), 42 U.S.C. § 7429. The statute directs the EPA to set required levels of emissions reduction for nine listed air pollutants, as well as for opacity where appropriate. § 7429(a)(4). The statute sets forth the factors EPA is to consider in establishing the standards.
    The Appeals Court concluded, "We hold that the EPA's decision to use emissions data from the HMIWI units remaining in operation after the implementation of the 1997 standards, once it determined that the data set upon which it had relied in 1997 was flawed, was reasonable. We do not have jurisdiction to review the challenges to the EPA's long-standing practice of setting emissions floors based on emissions levels achieved by the best performing unit or units for each individual pollutant, and to the agency's removal of an exemption from compliance with emissions limitations during periods of startup, shutdown, and malfunction. The petition is dismissed in part and denied in part."
    Access the complete opinion (click here). [*Haz/Medical, *CADC]

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Dairyland Power Cooperative v. United States

Jun 24: In the U.S. Court of Appeals, Federal Circuit, Case No. 2010-5110. The case concerns the Department of Energy's ("DOE's" or "the government's") breach of its obligation to accept spent nuclear fuel from the nation's nuclear power utilities. Liability is not at issue. The parties dispute various aspects of the U.S. Court of Federal Claims' damages award.
    As described by the Appeals Court, first, the government contends that the trial court erred in awarding damages based on testimony that absent breach, the plaintiff would have successfully bargained its way to the front of DOE's fuel acceptance queue and would have transferred away all spent nuclear fuel in the first year of performance. Relatedly, Dairyland cross-appeals the amount of damages award, contending that the trial court erred in reducing the damages awarded by the cost of purchasing the exchange. Second, the government argues that the trial court erred in awarding the plaintiff damages to compensate for various indirect overhead costs it claims were caused by the breach. Third, the government contests the trial court's award of plaintiff's investment in an industry consortium to build a private spent fuel storage facility, particularly because, the government points out, plaintiff received significant equity in the venture for its investment. See generally Dairyland Power Coop. v. United States, 90 Fed. Cl. 615 (2009) (Trial Op.).
    The Appeals Court explains that the appeal, like a number of others recently before or pending with this court, concerns the government's liability for damages in connection with its failure to develop a permanent solution for the storage of spent nuclear fuel (SNF). From 1967 to 1987, Plaintiff Dairyland Power Cooperative (Dairyland) operated a nuclear power plant in Genoa, Wisconsin called the La Crosse Boiling Water Reactor. The reactor is no longer active, but Dairyland maintains 38 metric tons of spent uranium there in a wet storage pool. The fact that there is SNF stored on-site prevents Dairyland from permanently decommissioning the La Crosse plant.
    The Appeals Court ruled, "We hold that the Court of Federal Claims did not commit reversible error in three of these four issues. We therefore affirm the award of damages based on plaintiff's 'exchange' model and the award of indirect costs, as well as the cross-appealed discounting of plaintiff's damages. Regarding the plaintiff's investment in a private venture to build a spent fuel storage facility, we hold that the court was required to only award the cost of that investment to the extent it was made for mitigation, and not as a speculative venture for profit. We vacate the award of damages for the investment in the private fuel storage venture, and we remand for determination of the extent to which the investment was mitigation and the extent (if any) to which it was speculation."
    The Appeals Court concludes, ". . .we affirm the Court of Federal Claims' award of damages based on Dairyland's 'exchange' model and its reasoning in awarding overhead and G & A costs. We also affirm its discounting of damages for the cost of the year-one delivery commitment schedules, which Dairyland raised on cross-appeal. We vacate those portions of the award concerning Dairyland's investment in PFS and remand for further proceedings."
    Access the complete opinion (click here). [*Haz/Nuclear, CAFed]

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Wednesday, June 22, 2011

GenOn Mid-Atlantic v. Montgomery Co., MD

Jun 20: In the U.S. Court of Appeals, Fourth Circuit, Case No. 10-1882. Appealed from the United States District Court for the District of Maryland, at Greenbelt. The Appeals Court explains that the question in the case is whether a Montgomery County, Maryland exaction on carbon dioxide emissions, levied only upon GenOn Mid-Atlantic's electricity-generating facility, is a tax or a fee. After holding that the carbon charge was a tax, the district court determined that the Tax Injunction Act deprived it of jurisdiction to hear GenOn's challenge. The Appeals Court ruled, "We think, however, that because the charge was levied upon a single 'taxpayer' and formed part of a wide-ranging regulatory program, the district court had jurisdiction over GenOn's claims. We accordingly reverse and remand for further proceedings.
    By way of background in the case, the Montgomery County Council enacted Expedited Bill 29-10 on May 19, 2010 to impose a levy on large stationary emitters of carbon dioxide within the county. The County Executive signed the bill on May 28. Bill 29-10 imposes what it terms an 'excise tax' of $5 per ton of carbon dioxide emitted, but only on emitters that end up exceeding 1 million tons of carbon dioxide in a year. For those large emitters, the $5 per ton charge applies to every ton emitted. The revenue generated by the levy is to be deposited in the Montgomery County general fund, with 50% earmarked for funding greenhouse gas reduction programs such as mass transit and 50% available for the County's general use. The County projects that the levy will raise annual revenue between $11.7 and $17.6 million.
    GenOn operates an electricity plant in Montgomery County that emits carbon dioxide. As the only entity in Montgomery County expected to exceed 1 million tons of carbon dioxide emissions annually, GenOn is the only entity likely to be subject to the $5/ton levy on its entire volume of emissions. After consulting with the County's electricity service provider, the Council determined that GenOn would not be able to pass the cost of the carbon charge on to its Montgomery County customers because its power is sold via competitive auction.
    Four days after Bill 29-10 was signed into law, GenOn sought to enjoin enforcement on the ground that it violates the United States and Maryland Constitutions. The district court noted that the charge had some indicia of a regulatory fee, but ultimately concluded that it was more like a tax for purposes of the Tax Injunction Act. The court then dismissed GenOn's suit without prejudice.
    The Appeals Court said, "The chief problem with Montgomery County's carbon charge is that the burden falls on GenOn alone. But the whole idea of a tax is that it is, to some extent, a burden generally borne. Thus, an 'assessment imposed upon a narrow class' is less likely to be a tax than an 'assessment imposed upon a broad class of parties.' Bidart Bros. v. Cal. Apple Comm'n, 73 F.3d 925, 931 (9th Cir. 1996). The fact that this charge affects the narrowest possible class is compelling evidence that it is a punitive fee rather than a tax. . . In addition to its punitive scope, Montgomery County's carbon charge falls outside the ambit of the Tax Injunction Act because of its plainly regulatory purpose. . ."
    Finally, the Appeals Court concludes, "Of course we do not resolve this case on the merits, nor do we suggest that one party or the other should prevail on remand. We do not at all begrudge Montgomery County its regulatory purpose here, and there is much to be said for the worthy office of environmental stewardship. All we hold is that the Tax Injunction Act is no bar to federal jurisdiction in this case. We accordingly reverse the judgment of the district court and remand for consideration of GenOn's claims."
    Access the complete opinion (click here). [*Climate, *Air, CA4]

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Greif Industrial Packaging v. R. Sharp, III

Jun 21: In the U.S. Court of Appeals, Fifth Circuit, Case No. 10-30387. Appealed from the United States District Court for the Eastern District of Louisiana. In this unpublished decision, the dispute concerns the proper interpretation of an asset purchase agreement between a Chapter 11 debtor and the company that purchased it out of bankruptcy. The Appeals Court said, "We affirm the judgment of the district court with respect to the holdback claims for environmental liabilities and the Ingersoll-Rand industrial equipment. We reverse and remand the judgment of the district court with respect to the Lexington insurance premium.   

    Evans Industries, Inc., (Evans) operated a series of five leased facilities in Louisiana and Texas that manufactured, filled, warehoused and distributed steel drums and industrial containers. Evans filed a Chapter 11 petition in April 2006, and the bankruptcy court confirmed the reorganization plan in October 2006. The plan formed a Distribution Trust of Evans Industries (the Trust) and allocated most of Evans's assets to that Trust. R. Patrick Sharp, III was appointed Trustee. In November 2006, on the plan's closing date, Greif Industrial Packaging (Greif) entered into an asset purchase agreement (APA) with Evans.   

    After Greif took over the facilities, it made two disputed claims against the "holdback" fund. First, it claimed $649,633.75 in expenses it incurred removing and disposing of hundreds of barrels of environmentally hazardous waste left behind by Evans at four of the five sites. Second, it claimed $10,452.06 for payments it made to a third party, Ingersoll-Rand, for five pieces of industrial equipment ("Bobcat loaders") that Evans had purchased but not yet fully paid off. Added up, the disputed holdback claims totaled $660,085.81. The bankruptcy court ruled for the Trustee and against Greif as to the holdback amounts and the utility deposits, but ruled for Greif as to the setoff claim for the prorated insurance premium. The parties cross-appealed as to the holdback issues and insurance premium setoff.
    On the environmental issues, the Appeals Court said, "After taking possession of the business premises and assets, Greif spent nearly $650,000 to remove and properly dispose of hundreds of barrels of hazardous waste left behind by Evans at several sites. It is not disputed that this cleanup complied with applicable government environmental regulations. Greif attempted unsuccessfully to claim that amount from the holdback. Greif argues on appeal that Evans breached its warranty that the facilities complied with all relevant environmental regulations, and, in the alternative, that the bankruptcy court and district courts misread the relevant portion of the APA in which Evans retained responsibility for environmental cleanup costs that accrued prior to the APA. We reject Greif's contentions."

    Access the complete opinion (click here). [*Remed]

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Monday, June 20, 2011

SCOTUS Decides American Electric Power Co. v. Connecticut

Jun 20: In the U.S. Supreme Court (SCOTUS), Appealed from the Second Circuit, Case No. 10-174. In this important case the High Court addresses the issue of whether the plaintiffs (several States, the city of New York, and three private land trusts) can maintain Federal "common law public nuisance" claims against greenhouse gas (GHG) carbon-dioxide emitters (four private power companies and the Federal Tennessee Valley Authority). The plaintiffs asked for a decree setting carbon-dioxide emissions for each defendant at an initial cap, to be further reduced annually. The Supreme Court ruled that U.S. EPA's authority under the Clean Air Act "displace the claims the plaintiffs seek to pursue." The High Court reversed the judgment of the Second Circuit and remanded the case for further proceedings consistent with its opinion. The Supreme Court ruling was unanimous, with two justices -- Alito and Thomas -- filing a separate concurring in part and concurring in the judgment opinion; and Justice Sotomayor took no part in the consideration or decision of the case.
    The Supreme Court heard oral arguments in the case on April 19, [See WIMS 4/25/11WIMS 2/8/11 & WIMS 2/15/11]. Petitioners in the case involve five investor-owned utilities [American Electric Power Co. Inc., American Electric Power Service Corp., Cinergy Corp., Southern Co. and Xcel Energy Inc.] (Petitioners) and the Tennessee Valley Authority (TVA), an electric utility owned by the U.S. government which filed a separate brief. Respondents include: CT, NY, CA, IA, RI, VT, the City of NY and Open Space Institute, Inc., Open Space Conservancy, Inc., and Audubon Society of New Hampshire. Additionally many amicus briefs on both sides of the issue were filed.
    The High Court ruled in part, "It is altogether fitting that Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of greenhouse gas emissions. The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions. Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order. See generally Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 865–866 (1984). Judges may not commission scientific studies or convene groups of experts for advice, or issue rules under notice-and-comment procedures inviting input by any interested person, or seek the counsel of regulators in the States where the defendants are located. Rather, judges are confined by a record comprising the evidence the parties present. Moreover, federal district judges, sitting as sole adjudicators, lack authority to render precedential decisions binding other judges, even members of the same court.

    "Notwithstanding these disabilities, the plaintiffs propose that individual federal judges determine, in the first instance, what amount of carbon-dioxide emissions is 'unreasonable,' App. 103, 145, and then decide what level of reduction is 'practical, feasible and economically viable,' App. 58, 119. These determinations would be made for the defendants named in the two lawsuits launched by the plaintiffs. Similar suits could be mounted, counsel for the States and New York City estimated, against 'thousands or hundreds or tens' of other defendants fitting the description 'large contributors' to carbon-dioxide emissions. Tr. of Oral Arg. 57.

    "The judgments the plaintiffs would commit to federal judges, in suits that could be filed in any federal district, cannot be reconciled with the decisionmaking scheme Congress enacted. The Second Circuit erred, we hold, in ruling that federal judges may set limits on greenhouse gas emissions in face of a law empowering EPA to set the same limits, subject to judicial review only to ensure against action 'arbitrary, capricious, . . . or otherwise not in accordance with law.' §7607(d)(9)."

     The High Court also addressed the issue of plaintiffs request for relief "under state law, in particular, the law of each State where the defendants operate power plants." The High Court said,  "The Second Circuit did not reach the state law claims because it held that federal common law governed. . . In light of our holding that the Clean Air Act displaces federal common law, the availability vel non of a state lawsuit depends, inter alia, on the preemptive effect of the federal Act. Id., at 489, 491, 497 (holding that the Clean Water Act does not preclude aggrieved individuals from bringing a 'nuisance claim pursuant to the law of the source State'). None of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law. We therefore leave the matter open for consideration on remand."
    Access the complete opinion (click here). Access the Supreme Court docket indicating the various briefs filed, questions presented and attorneys involved in the case (click here). Access a transcript of the oral arguments (click here). Access links to the 2nd Circuit decision, briefs and petitions filed (click here). Access the various other briefs in the case (click here). [*Air, *Climate, *SCOTUS] (click here for information on getting the links and more information about eNewsUSA).

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In Re: Natural Res. Defense Council

Jun 17: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1142. On Petition for Writ of Mandamus to the Food and Drug Administration. The appeal concerns whether this court or the district court has jurisdiction over matters relating to a citizen petition filed pursuant to Food and Drug Administration (FDA) regulations promulgated under the Food, Drug, and Cosmetic Act (the Act) , 21 U.S.C. §§ 301 et seq.
    The Appeals Court explains that because its citizen petition to revoke regulations permitting Bisphenol A (BPA) to be used as a food additive, see, e.g, 21 C.F.R. § 177.1555; id. § 177.1595, has been pending since October 21, 2008, the Natural Resources Defense Council (NRDC) seeks what amounts to a writ of mandamus directing the FDA to issue a final decision on its petition. The Appeals Court rules, "We hold that exclusive jurisdiction over citizen petitions lies in the district court, and accordingly we dismiss the petition." The Appeals Court says further, "Accordingly, because the NRDC cannot show that jurisdiction over its citizen petition lies exclusively in this court, or that all final FDA action on its petition would be directly and exclusively reviewable in this court, we dismiss the petition for lack of jurisdiction."
    In further explanation, the Appeals Court said, "during oral argument, counsel for the NRDC suggested that section 10.30(e)(1) of the regulations, providing that the FDA 'shall . . . rule upon each petition . . . taking into consideration . . . time requirements established by statute,' requires the FDA to comply with the statutory timeline in section 409(c)(2) of the Act, and thereby establishes that the citizen petition process is governed by the requirements of section 409 generally. Oral Arg. Recording at 3:02-3:23. The NRDC referred to section 10.30(e) in its Petition at 8, but only in the context of listing the three possible responses by the FDA to a citizen petition. This was insufficient to put the FDA on notice of the argument presented during oral argument. Ordinarily this would mean that the argument is forfeited. Cf. U.S. v. Southerland, 486 F.3d 1355, 1360 (D.C. Cir. 2007). Inasmuch as the NRDC's petition is filed as an original proceeding in this court and the issue goes to our jurisdiction, however, we reach the merits. See Shays v. FEC, 528 F.3d 914, 922–23 (D.C. Cir. 2008). The FDA correctly argued in its response that section 10.30(e)(1) does nothing more than make the statutory deadlines one of several factors that the FDA must consider and weigh in its discretion. This provision simply highlights the difference between the food additive petition review process, which is subject to the statutory timeline, and review of a citizen petition established by regulation, which treats the timeline as a guideline for the FDA to consider and allows for a "tentative response" by the FDA. The NRDC's reliance on section 10.30(e) is thus insufficient to support its position that section 409 applies generally to its citizen petition."
    Access the complete opinion (click here). [*Toxics, *CADC] (click here for information on getting the links and more information about eNewsUSA).

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Wednesday, June 15, 2011

American Bottom Conservancy v. U.S. Army Corps of Engineers

Jun 14: In the U.S. Court of Appeals, Seventh Circuit, Case No. 10-3488. Appealed from the United States District Court for the Southern District of Illinois. The Appeals Court explains that, the "American Bottom" is a 175-square-mile floodplain of the Mississippi River in southwestern Illinois, across the river from St. Louis. The area contains wetlands that provide habitat for many different species of birds, butterflies, and other wildlife. The American Bottom Conservancy is an environmental organization that seeks to preserve the wetlands. Its members include birdwatchers and other people who enjoy seeing wildlife in the wild.
    Waste Management of Illinois, Inc., owns and operates a landfill in the American Bottom that it calls the "Milam Recycling and Disposal Facility." The landfill, located near the town of Madison, Illinois, is due east of St. Louis and southwest of a state park that contains a large lake -- Horseshoe Lake, the largest in Illinois, after Lake Michigan. Because the Milam landfill is filling up with waste from St. Louis, Waste Management wants to build another landfill -- the "North Milam Recycling and Disposal
Facility" -- on 180 acres of a 220-acre tract ("North Milam") that it owns just north of the Milam RDF; the tract is thus located between that landfill and the State park.
    Obtaining permission to build a new landfill, and building it, will take time. In the meantime Waste Management wants to remove the soil from some of the wetlands and transport it to its existing landfill for daily cover. The consequence will be to transform the wetlands into a dry "borrow pit." The wetlands occupy 26.8 acres of the tract and Waste Management wants to destroy 18.4 of them (69 percent). But to destroy wetlands it needed a permit from the Army Corps of Engineers. The Corps granted the permit on condition that Waste Management create double the amount of wetlands on a nearby tract that it owns. The company accepted the condition. Additionally, The application for permission to build the new landfill is pending.
    The district court dismissed a suit by the Conservancy, without prejudice on the ground that the Conservancy had not established standing to sue under Article III of the Constitution and therefore the suit did not invoke the district court's jurisdiction. The Appeals Court indicates that the only issue before it is the Conservancy's standing.
    The Appeals Court reviews a number of precedent-setting standing decisions and legal writings. The Appeals Court says, ". . .the plaintiff's affidavits claim that the destruction of the 18.4 acres of wetlands will reduce the amount of perceptible wildlife, and the claim is not so implausible that it can be rejected without counteraffidavits, which Waste Management has not submitted. And if a really substantial elimination of wildlife were required to establish standing, a cumulatively immense elimination of wildlife could occur as a result of numerous small projects requiring destruction of wetlands, none of which would create an injury great enough to support standing if such a requirement were imposed."
    The Appeals Court also said, "Since Waste Management has committed to creating twice the wetlands that it will destroy, maybe, despite the probable delay in their developing to the point at which they will provide habitat comparable to what is to be destroyed, the permit granted by the Corps of Engineers is actually a boon to the environment. But that is a question that goes to the merits of the Conservancy's challenge to the Corps; it does not detract from the injuries to the Conservancy's current members, who presented uncontradicted evidence that they will lose present enjoyment of wildlife if the existing wetlands are destroyed."
    Finally, responding to a request from Waste Management (not the Corps), the Appeals Court addresses why it cannot decide on the issue of the case. The Appeals Court said, "The district court dismissed the suit without prejudice, because on the view it took of standing it had no jurisdiction; it therefore could only dismiss without prejudice. Were we to decide the case on the merits we would be directing the entry of judgment with prejudice; otherwise the plaintiff would be free to relitigate the case. An appellee who wants, not that the judgment of the district court be affirmed on an alternative ground, but that the judgment be changed, in this case from a dismissal without to a dismissal with prejudice, must file a cross-appeal. . . Waste Management didn't do so. The judgment is reversed with instructions to reinstate the suit."
    Access the complete opinion (click here). [Please Note: The 7th circuit has a temporary web hyperlink nomenclature system. If the link does not work click on this link and enter the case number above (click here).] [*Solid, *CA7]
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Monday, June 13, 2011

Certain Underwriters at Lloyds v. NFC Mining, Inc.

Jun 10: In the U.S. Court of Appeals, Sixth Circuit Court of Appeals, Case No. 10-5232. Appealed from the Eastern District of Kentucky at Pikeville. After residents of Floyd County, Kentucky sued NFC Mining, claiming the company damaged their homes, Certain Underwriters at Lloyd's of London followed suit, literally. Underwriters filed a second lawsuit trying to establish that NFC's insurance policy did not cover the company's potential liability to the residents. The district court awarded partial summary judgment to Underwriters. The Appeals Court affirmed the district court ruling saying that NFC pursued only one point presented and failed to raise its other appellate arguments.
    In a brief 4-page opinion the Appeals Court said, "NFC first presses the one argument raised and rejected below -- that it reasonably expected the contract to insure against damage from coal dust and that the district court's interpretation of the insurance contract should have respected those expectations. The argument, which is premised on the language of a certificate of insurance Underwriters filed with a state agency, falters at both steps. NFC could not reasonably think that a certificate of liability insurance, as opposed to the insurance contract itself, would confer coverage for coal dust damages. NFC did not sign or approve the certificate; Underwriters filed the certificate with the State. Even then, moreover, the certificate says nothing about this issue. It does not mention the terms of coverage or the coverage limit, except to say that the policy's coverage is consistent with state law. Even had all of this not been true, even in other words if NFC had reasonably anticipated that the policy would cover damages caused by coal dust, the language of the exclusion defeats the company's claim (and expectation). We break no new ground in holding that the language of an insurance policy, not an insured's expectations, controls disputes over the meaning of a policy. In this instance the language of the exclusion is straightforward and inconsistent with NFC's position. . ."
    Access the complete opinion (click here). [*Air, *Energy/Coal]

Wednesday, June 8, 2011

Supreme Court Denies Hearing GE CERCLA Challenge

Jun 6: The U.S. Supreme Court refused to hear the appeals of General Electric Company, Petitioner v. Lisa P. Jackson, Administrator, Environmental Protection Agency, et al. Case No. 10-871. Appealed from the U.S. Court of Appeals D.C. Circuit (Case No. 09-5092, decided June 29, 2010 [See WIMS 6/30/10], with a rehearing also denied on September 30, 2010.
    In the case, General Electric challenges the constitutionality of a statutory scheme that authorizes U.S. EPA to issue orders, known as "unilateral administrative orders" (UAOs) directing companies and others to clean up hazardous waste for which they are responsible under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In the D.C. Circuit, General Electric argued that the statute, as well as the way in which EPA administers it, violated the Due Process Clause because EPA issues UAOs without a hearing before a neutral decisionmaker. The D.C. Circuit said, "We disagree. To the extent the UAO regime implicates constitutionally protected property interests by imposing compliance costs and threatening fines and punitive damages, it satisfies due process because UAO recipients may obtain a pre-deprivation hearing by refusing to comply and forcing EPA to sue in federal court."  
    The Appeals Court indicated that General Electric insists that the UAO scheme and EPA's implementation of it nonetheless violate due process because the mere issuance of a UAO can inflict immediate, serious, and irreparable damage by depressing the recipient's stock price, harming its brand value, and increasing its cost of financing. But, the Appeals Court said, ". . .such -- 'consequential' injuries -- injuries resulting not from EPA's issuance of the UAO, but from market reactions to it -- are insufficient to merit Due Process Clause protection. We therefore affirm the district court's grant of summary judgment to EPA.
    Access the Supreme Court docket for the case (click here). Access the D.C. Circuit opinion that now stands (click here). [*Remed, *SCOTUS]

Thursday, June 2, 2011

Pakootas v. Teck Cominco Metals, Ltd.

Jun 1: In the U.S. Court of Appeals, Ninth Circuit, Case No. 08-35951 & 10-35045. Appealed from the United States District Court for the Eastern District of Washington. The Appeals Court addresses citizen suit jurisdiction under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The case involves a facility in Canada that is polluting waters across the border in the U.S.
    The Appeals Court indicates Teck Cominco Metals Limited (Teck Cominco), a Canadian mining company, owns a smelter in Trail, British Columbia. From 1905 to 1995, slag from the smelter was dumped in the Columbia River, ten miles north of the border with Washington. Pollution flowed downstream into the United States. Plaintiffs Joseph A. Pakootas and Donald R. Michel sued Teck Cominco to enforce the EPA's unilateral administrative order. They founded jurisdiction on the citizen suit provision of CERCLA, seeking: (1) a declaration that Teck Cominco was in violation of the order; (2) an injunction compelling compliance; (3) penalties for Teck Cominco's failure to comply; and (4) attorneys' fees and costs.
    The Appeals Court explains the complicated legal actions. Teck Cominco moved to dismiss for lack of subject matter and personal jurisdiction, and for failure to state a claim upon which relief could be granted. Before the district court ruled on the motion to dismiss, the State of Washington intervened in the litigation and sought the same relief. The district court denied Teck Cominco's motion to dismiss, but certified the order for interlocutory appeal. While that appeal was before us, the Confederated Tribes of the Colville Reservation joined as a party plaintiff. Subsequently, the State amended its complaint to seek the anticipated costs of the CERCLA recovery and assessment, as well as declaratory relief regarding the reasonable costs of assessing natural resource damages, a claim that is proceeding in district court. The Colville Tribes have added the same demand as the State, and these claims are now proceeding in district court.
    The Appeals Court affirmed the district court's denial of Teck Cominco's motion and held that the suit was not an extraterritorial application of CERCLA because even though the smelter was in Canada, slag had moved downstream into the United States. Because a "site" where a hazardous substance has "come to be located" falls within the definition of a "facility" in CERCLA, the Appeals Court held that the EPA was not acting extraterritorially in addressing that downstream "facility." The Appeals Court said, "The unilateral administrative order, we held, was addressed to this 'facility' within the State of Washington.We did not reach the question of whether Congress intended CERCLA to apply extraterritorially."
    While that appeal was pending, but before we had decided it, the EPA and Teck Cominco settled. The settlement went into effect in June 2006. Teck Cominco, the Canadian company together with its American subsidiary, and the EPA, signed what they called a "contractual agreement" (not a stipulation for a consent decree or other court order) to perform remediation. Teck Cominco consented to personal jurisdiction in the United States District Court "solely for the limited purpose of an action to enforce" designated provisions of the contract.
    Meanwhile, Teck Cominco had petitioned for certiorari from our decision. The Supreme Court, denied certiorari, so the arguments were not ruled upon. The Appeals Court explains that the district court held that the Pakootas-Michel claim for
penalties for the 892 days of noncompliance was a challenge barred by 42 U.S.C. § 9613(h), and that it did not fall within § 9613(h)(2)'s exception. "We generally agree with the district court's careful analysis and affirm." Following a lengthy discussion of the legal issues, the Appeals Court concludes, "As the district court correctly concluded, it lacked jurisdiction to adjudicate the Pakootas and Michel claims for penalties for the 892 days of noncompliance with the unilateral administrative order, and properly dismissed their claims."
    Access the complete opinion (click here). [*Remed]