Boston Edison Co. v. US

Sep 28: In the U.S. Court of Appeals, Federal Circuit, Case No. 2010-5136 & 2010-5137. Appealed from the United States Court of Federal Claims. The Appeals Court explains that this is another in a series of cases dealing with the consequences of the Federal government's ongoing breach of its contractual obligation to collect and dispose of the nation's nuclear waste. This case involves the Pilgrim Nuclear Power Station in Plymouth, MA.

 

    The Appeals Court said, "Our recent precedent dictates the outcome of two of the issues raised in this litigation -- the right of a non-breaching party contracting with the government to recover indirect overhead costs associated with mitigation activities, and the right of such a party to recover the costs of financing those activities. We affirm the trial court's judgment on both of those issues. There is one novel question presented by this case: whether the sale of a nuclear plant and the transfer of a decommissioning fund affects the rights of the buyer and seller to recover future damages for the government's partial breach of contract. As to that issue, we reverse the trial court and hold that a sale of assets by a non-breaching party does not alter the settled common law principle that when the breaching party has not repudiated the contract and is still expected to perform, damages are not recoverable until they are incurred as a result of the breach. In addition, we address issues involving the award of damages in connection with fees paid to the United States Nuclear Regulatory Commission (NRC), and we remand for further proceedings on that issue."

 

    Access the complete opinion (click here). [#Haz/Nuclear, #CAFed]

 

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Hayden v. Elf Atochem North America

Sep 27: In the U.S. Court of Appeals, Fifth Circuit, Case No. 10-20305. Appeal from the United States District Court for the Southern District of Texas. The appeal arises from the settlement of a class action. The defendant paid substantial sums for res judicata [already judged by a competent court] protection from the claims of persons assertedly injured by the toxic emissions of an industrial plant near Bryan, Texas. The monies were allocated among three subclasses, one of which was to receive medical monitoring. Upon the monitoring program's completion, substantial sums remained unused.

 

    The district court denied the settlement administrator's request to distribute the unused medical-monitoring funds to another subclass of persons suffering serious injuries. Instead, the court repaired to the doctrine of cy pres [i.e. "as near as possible" to that intended] and ordered that the money be given to three charities suggested by the defendant and one selected by the court. The gift of class funds to charity is attacked on two fronts: that the district court moved too quickly from the terms of the settlement agreement to a cy pres distribution, and alternatively that the district court neglected a prerequisite of the cy pres doctrine by not selecting charities with a sufficient nexus to the underlying substantive objectives of the class suit.

 

    The Appeals Court said, "Persuaded by the first contention, we do not reach the second. We hold that the district court abused its discretion by ordering a cy pres distribution in the teeth of the bargained-for terms of the settlement agreement, which required residual funds to be distributed within the class. We reverse the district court's order distributing the unused medical-monitoring funds to third-party charities and remand with instructions that the district court order that the funds be distributed to the subclass comprising the most seriously injured class members."

 

    By way of background, Lillian Hayden and five others instituted this action in April of 1992 by filing suit in State district court in Brazos County, Texas. Seeking to represent themselves and a class of others similarly situated, they sought compensation for exposure to arsenic and other toxic chemicals alleged to have been emitted into the air around Bryan, Texas, by an agrochemicals plant owned and operated by the defendant, Arkema, Inc. (formerly known as Elf Atochem North America, Inc.). The defendant removed the case to Federal court supported by diversity jurisdiction.

 

    At issue in the appeal is the district court's use of the cy pres doctrine to dispose of approximately $830,000 that went unused during the administration of the medical-monitoring program created for the benefit of Subclass B -- one of three subclasses created in the settlement. The program allowed members of Subclass B to forego receipt of a small cash payment and instead enroll in a program through which they would receive regular checkups and physician visits over a five-year period. The aim was to assist members of the subclass in monitoring their health for any indication that they were developing an arsenic-related illness. Two primary factors contributed to the program's not exhausting its allocated funds. First, the initial participation rate was low. Some 329 members of Subclass B -- less than three percent of the total subclass membership -- opted to receive medical monitoring in lieu of a cash payment; just 221 attended their first monitoring examination. Second, in the course of this monitoring, no significant health problems were found. Among those who initially chose to participate, demand for monitoring greatly diminished, yielding a high dropout rate. Only 46 class members participated in all three rounds of screening as scheduled.

 

    Access the complete opinion (click here). [#Toxics, #Air, #CA5]

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American Trucking Associations, Inc. v. The City of Los Angeles

Sep 26: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-56465. Appealed from the United States District Court for the Central District of California.

 

    Beginning in 2008, the Port of Los Angeles (POLA, or the Port) prohibited motor carriers from operating drayage trucks on Port property unless the motor carriers entered into "concession agreements" with the Port. The concession agreements set forth fourteen specific requirements covering, among other things, truck driver employment, truck maintenance, parking, and Port security. The agreements were adopted as part of the Port's "Clean Truck Program" (CTP), which includes a progressive ban on older (and higher polluting) trucks on Port property, a multi-faceted incentive program to support acquisition of clean trucks, and a system of penalties on transport of cargo by older trucks. The Port adopted the CTP in response to community opposition, including litigation, that had successfully stymied Port growth from the mid-1990s through 2007.

 

    American Trucking Associations, Inc. (ATA, a national association of motor carriers), challenged the concession agreements, arguing that they are preempted by the Federal Aviation Administration Authorization Act (FAAA Act), 49 U.S.C. § 14501 et seq. After obtaining a preliminary injunction against several provisions of the concession agreements, ATA challenged five specific provisions at trial. The district court held that none of the challenged provisions fell within the scope of FAAA Act preemption, first because some did not relate to motor carriers' rates, routes, and services, and second because the State adopted the entire agreement (and the challenged provisions in particular) in its capacity as a market participant, rather than a market regulator. The district court further held that the FAAA Act's exemption for regulation "genuinely responsive to motor vehicle safety" saved from preemption the provision requiring motor carriers to create and administer regular maintenance plans.

 

    ATA appealed. In a split decision, the majority Appeals Court affirmed the district court in large part, but reversed its decision that the employee-driver provision of the concession agreement falls within the market participant doctrine and is not preempted. The Majority said further, "The district court meticulously identified and applied the governing law. We affirm the district court's holdings that the financial capability, maintenance, off-street parking, and placard provisions are not preempted. We reverse the district court's conclusion that the employee-driver provision is saved from preemption by the market participant doctrine, and remand for further proceedings consistent with this opinion."

 

    The dissenting justice said, "I must dissent from the majority opinion because: (1) the market participant exception to preemption does not apply. Drayage services (not port services) form the relevant market, and the Port of Los Angeles (the Port) acts as a regulator of drayage services. (2) Even assuming the Port qualifies as a proprietor, the off-street parking provisions are preempted, because they affect parties unrelated to contractual obligations to the Port. (3) The placard provision is preempted and not saved by the market participant doctrine or the safety exception, because California cannot revoke access to channels of interstate commerce and identification requirements on motor carriers are expressly preempted under 49 U.S.C. § 14506(a)."

 

    American Trucking Associations President and CEO Bill Graves issued a release hailing the decision as a decisive victory for the trucking industry and consumers. He said, "By striking down the Port's unjustified ban on owner-operators, the Court has upheld the rights of trucking companies to structure their businesses to maximize efficiency and productivity. By throwing out the ban, the court has ensured that competition, not government regulation, will establish motor carrier's rates, routes, and services. This is a win for all involved; trucking companies; small business owner-operators; freight shippers; and ultimately average American consumers. The historic gains in air quality at the Port clearly show that the interests of clean air have been served without running independent contractors out of the Port.

    He said, "This plan was never about clean air, it was about promoting special interests of a few well-connected, labor groups. "Successful clean trucks plans in Long Beach, Seattle and the Ports of New York and New Jersey have shown you can improve air quality without forcing owner-operators out of your port." ATA Chief Counsel Robert Digges said, "We are evaluating the rest of the court's ruling. While the court upheld our argument on the central issue, we will be deciding whether a further appeal is warranted. We firmly believe the other challenged provisions of the Concession Agreement should have been preempted as explained in a strong dissent by the panel's Chief Judge. Should we appeal, that dissent will be very helpful to our effort."

    Access the complete opinion and dissent (click here). Access a release from ATA (click here). [#Air, #Transport, #CA9]
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Minard Run Oil Co. v. U.S. Forest Service

Sep 20: In the U.S. Court of Appeals, Third Circuit, Case Nos. 10-1265 and 10-2332. Appealed from the United States District Court for the Western District of Pennsylvania. The Appeals Court explains that this appeal concerns a dispute between the U.S. Forest Service (the Service) and owners of mineral rights in the Allegheny National Forest (ANF). Although the Service manages the surface of the ANF for the United States, mineral rights in most of the ANF are privately owned. Mineral rights owners are entitled to reasonable use of the surface to drill for oil or gas and from 1980 until recently the Service and mineral owners had managed drilling in the ANF through a cooperative process. Mineral rights owners would provide 60 days advance notice to the Service of their drilling plans and the Service would issue owners a Notice to Proceed (NTP), which acknowledged receipt of notice and memorialized any agreements between the Service and the mineral owner about the drilling operations. However, as a result of a settlement agreement with environmental groups, the Service dramatically changed its policy and decided to postpone the issuance of NTPs until a multi-year, forest-wide Environmental Impact Study (EIS) under the National Environmental Policy Act (NEPA) is completed.

 

    Mineral owners and related businesses affected by this new policy sought to enjoin the Service from implementing the policy, which would halt new drilling in the ANF. After holding a hearing and carefully considering the evidence, the District Court issued a preliminary injunction against the Service, prohibiting it from making the completion of the forest-wide EIS a condition for issuing NTPs and requiring it to return to its prior, cooperative process for issuing NTPs. The Service, the Attorney General, and several environmental organizations appeal the preliminary injunction, contending that the District Court lacked jurisdiction and erred in issuing a preliminary injunction. However, the Appeals Court affirmed in all respects the District Court's "thorough, well-reasoned opinion."

   

    The district court found as follows: "The Settlement Agreement and the Marten Statement represented 'a fundamental „sea change' in the Service's policy; therefore, they constituted final agency action subject to review under the APA. . . The effect of this policy was a 'drilling ban,' which precluded new drilling in the ANF (with the exception of the 54 grandfathered NTP applications) until the Service completed a forest-wide EIS. . . The Service had instituted the drilling ban without following the APA's notice and comment procedures, and the ban was not justified under NEPA because the issuing of an NTP was not a major federal action. The preparation of the EIS would likely last several years, resulting in irreparable harm to the plaintiffs, and the balance of the equities and the public interest favored an injunction."

 

    Access the complete opinion (click here). [#Energy, #Land, #CA3]

 

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Natural Resources Defense Council v. U.S. EPA

Sep 16: In the U.S. Court of Appeals, Second Circuit, Case No. 08-3771. Natural Resources Defense Council, Inc. (NRDC) sought review of an Environmental Protection Agency (EPA) order overruling NRDC's objections to, inter alia, EPA's risk assessments for the pesticide dichlorvos, and denying NRDC's requests for a public evidentiary hearing. Because EPA conducted certain dichlorvos risk assessments without using a tenfold children's safety factor that Congress provided should presumptively apply, and EPA failed to explain why it did not apply this margin of safety, the Appeals Court granted NRDC's petition for review in part, vacated EPA's order in part, and remanded the case for further proceedings.

 

    The Appeals Court indicates that, "In its petition, NRDC requested that EPA revoke all tolerances and cancel all registrations for dichlorvos. NRDC argued, inter alia, that EPA relied on inadequate data in its 2000 preliminary risk assessment, inadequately performed that risk assessment, and failed to apply required safety factors. Despite the numerous issues raised in its petition, we focus here on only the two issues relevant to NRDC's appeal: (1) EPA's reliance on a 1997 intentional human dosing study by A.J. Gledhill; and (2) EPA's failure to provide a legally adequate rationale for applying a children's safety factor lower than the FQPA's presumptive 10X factor."

 

    Importantly, the Appeals Court said, "EPA did not explain how this conclusion related to 'potential pre- and post-natal toxicity and completeness of the data with respect to infants and children.' See 21 U.S.C. § 346a(b)(2)(C)(ii). FQPA requires such an explanation if a 10X children's safety factor is not used. . . Because EPA failed to explain why it did not use a 10X children's safety factor for dichlorvos risk assessments that relied on the Gledhill study, EPA acted in an arbitrary and capricious manner. Accordingly, we vacate those portions of EPA's July 23, 2008 order assessing the risk of dichlorvos based on the Gledhill study, as it was not 'reliable data' on which EPA could base its decision to choose a lower children's safety factor.. ."

 

    On a separate issue, the Appeals Court explains, "NRDC challenges neither the data on which EPA relies, nor the way in which the data relate to infants and children. Instead, NRDC argues that regardless of other evidence of potential endocrine-related effects, EPA must apply the 10X children's safety factor unless it relies on data from its estrogen disruptor screening program. We reject this argument." Explaining further, "FQPA specifies that EPA may apply a children's safety factor of less than 10X if it

determines, 'on the basis of reliable data,' that a margin lower than 10X "will be safe for infants and children. . . Congress did not bar EPA from concluding that it has 'reliable data' regarding potential endocrine-related effects. . . NRDC does not challenge the non-Gledhill risk assessments on any other basis. Therefore, we deny NRDC's request to find arbitrary and capricious the risk assessments not based on the Gledhill study. . ."

 

    Access the complete opinion (click here). [#Toxics, #CA2]

 

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Potrero Hills Landfill, Inc. v. County of Solano

Sep 13: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-15229. Appealed from the United States District Court for the Eastern District of California. Potrero Hills Landfill (Potrero Hills), a privately owned solid waste and recycling business (one of the three largest landfills servicing the San Francisco Bay Area) in Solano County, California (the County), and twenty-two related businesses appeal the dismissal on Younger abstention grounds [See Younger v. Harris, 401 U.S. 37 (1971)] of their 42 U.S.C. § 1983 action for declaratory and injunctive relief challenging the constitutionality of a voter-enacted county ordinance restricting the import of out-of-county solid waste into Solano County -- an ordinance that the County itself believes to be unconstitutional and refuses to enforce.

 

    The Appeals Court rules, "We hold that Younger abstention does not apply here. Although private mandamus actions seeking to compel the County to enforce the challenged ordinance were ongoing in state court at the time this case was filed, those state proceedings were brought by private interest groups and therefore did not implicate the state's unique interest in protecting its vital executive function of law enforcement; nor did they implicate the state's unique interests in protecting its vital judicial or legislative functions. Put differently, a federal court's exercise of jurisdiction over Potrero Hills' claim would not interfere with the state's exercise of a basic state function and would not offend the principles of comity and federalism that Younger abstention was designed to uphold. Accordingly, we vacate and remand. As part of the remand, we ask the district court to consider whether Pullman [See R.R. Comm'n of Tex. v. Pullman Co., 312 U.S. 496 (1941)], rather than Younger, abstention might be appropriate."

 

    By way of background, in 1984, voters in Solano County enacted a ballot initiative, titled "Initiative Ordinance to Protect Solano County's Environment from Excessive Importation of Solid Waste" (Measure E), capping the annual amount of solid waste that may be imported into Solano County at 95,000 tons. The measure contained no restrictions on the disposal of solid waste generated within the County. Although the County initially complied with Measure E by including annual waste import limits in its Solid Waste Management Plan, it stopped doing so in 1992, in reliance on a legal opinion issued by the Solano County Counsel concluding that Measure E was likely unconstitutional, in light of two recent Supreme Court decisions striking down similar local waste import restrictions as violative of the dormant Commerce Clause. The Legislative Counsel of California reached the same conclusion in its own legal opinion on the measure.

 

    In a footnote, the Appeals Court references the two historic Supreme Court decisions on this issue, i.e. The Supreme Court struck down as unconstitutional in violation of the dormant Commerce Clause an Alabama statute imposing a waste disposal fee only on hazardous wastes generated outside the State and disposed of at a commercial facility within the State, but not on hazardous wastes generated within the State. Chem. Waste Mgmt., Inc. v. Hunt, 504 U.S. 334, 336-37 (1992). The Court also struck down on dormant Commerce Clause grounds a Michigan statute prohibiting private landfill operators from accepting solid waste originating outside the county in which their facilities are located. Fort Gratiot Sanitary Landfill, Inc. v. Mich. Dep't of Natural Res., 504 U.S. 353, 361 (1992). The Court held that a county's restrictions on interstate commerce violate the dormant Commerce Clause just as much as does a state's. Id. ("[A] State (or one of its political subdivisions) may not avoid the strictures of the Commerce Clause by curtailing the movement of articles of commerce through subdivisions of the State, rather than through the State itself.").

 

    The Appeals Court explains the somewhat complicated case saying, "The issue before us is not the constitutionality of Measure E but rather only whether the district court properly dismissed the case based on Younger abstention, a doctrine that forbids federal courts from unduly interfering with pending state court proceedings that implicate 'important state interests.' Middlesex Cnty. Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 432 (1982). The district court determined that the ongoing state mandamus proceedings implicate the state's important interests in (1) enforcing a local ordinance enacted by California voters and (2) enforcing a local solid waste ordinance, and that the remaining Younger requirements are also satisfied. Although we agree that a state's interest in having its executive branch enforce such measures is sufficiently important for Younger purposes, we conclude that a private litigant's interest in seeing such measures enforced, which is all we have here, does not implicate the principles of comity and federalism with which Younger and its progeny are concerned."

 

    The Appeals Court concludes, "Mindful that a federal court's obligation to exercise its jurisdiction is 'particularly weighty' when the federal plaintiffs before it seek relief under 42 U.S.C. § 1983 for violation of their civil rights, Miofsky, 703 F.2d at 338 (quoting Tovar v. Billmeyer, 609 F.2d 1291, 1293 (9th Cir. 1980)), we decline to expand the 'extraordinary and narrow exception' created by Younger and its progeny to the circumstances presented here, id. (quoting Frank Mashuda, 360 U.S. at 188). Because the state mandamus actions brought by private interest groups did not involve any uniquely state interests in protecting the state's vital executive, judicial, or legislative functions, Younger abstention was not available and did not excuse the district court from its duty to adjudicate this federal constitutional claim. We therefore vacate and remand for the district court to consider Intervenors' alternative grounds for dismissal, including Pullman abstention, in the first instance."

 

    Access the complete opinion (click here). [#Solid, #CA9]

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Jonathan Hirsch v. CSX Transportation Inc.

Sep 9: In the U.S. Court of Appeals, Sixth Circuit, Case No. 09-4548. Appealed from the Northern District of Ohio at Cleveland. The Appeals Court says in brief summary, "Following a train crash that allegedly exposed a small town [Painesville, Ohio] to cancer-causing agents, the Plaintiffs-Appellants sought damages on behalf of a putative class. The district court granted summary judgment for the train company, CSX Transportation (CSX), because the Plaintiffs had not established general or specific causation and, as a matter of law, any increased risk of cancer or other diseases was too insignificant to warrant the court's ordering a lengthy period of medical monitoring. We affirm."

 

    In conclusion the Appeals Court ruled, "The Plaintiffs in this case have failed to produce sufficient evidence such that a reasonable jury could believe that a reasonable physician would order medical monitoring. Our holding today does not foreclose any number of possibilities; for example, perhaps the Plaintiffs might have been able to survive summary judgment had Dr. Kornberg provided some indication of why medical monitoring would be the standard practice for risks this remote. Perhaps, though we do not require blood tests in every toxic tort case, see Redland Soccer Club v. Dep't of the Army, 55 F.3d 827, 847 (3d Cir. 1995), the Plaintiffs might have survived summary judgment had they obtained conclusive medical evidence that they faced a one-in-a-million increased risk of cancer. Those would be harder cases, and we leave them for another day. In this case, the Plaintiffs have failed to show a genuine issue of material fact. We therefore affirm the judgment of the district court."

 

    Access the complete opinion (click here). [#Toxics, #CA6]

 

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Adams v. U.S.

Sep 8: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-35458, 10-35611, & 10-35592. Appeal from the United States District Court for the District of Idaho. In 1999 and 2000, the Federal Bureau of Land Management (BLM) applied the herbicide Oust to approximately 70,000 acres of Federal lands in South Central Idaho in an effort to combat a devastating wildfire cycle. Wind carried some of the Oust off the Federal land and onto privately owned farmland nearby. The herbicide caused significant damage to the crops on these farmlands. The Plaintiffs in this case, 134 farmers whose crops suffered as a result of the Oust applications, sued the Federal government and Oust's manufacturer E.I. Du Pont De Nemours and Company (DuPont). The district court adopted a bellwether trial plan and selected four Bellwether Plaintiffs to resolve those issues in the case that do not depend on individual circumstances. The resolution of these issues will bind both the Bellwether and all other Plaintiffs. The district court conducted a 16-week trial involving claims against both DuPont and the government. The jury returned an advisory verdict against the Federal government, and a verdict against DuPont.

 

    As required by the Federal Tort Claims Act (FTCA), 28 U.S.C. § 2402, the district court, upon its own fact-finding and independent review of the record, rendered a verdict against the Federal government. Both the jury and the district court allocated 60% of the fault to DuPont and 40% to the Federal government. The government and DuPont appealed. The Appeals Court indicates it is resolving the government's appeal in this opinion and DuPont's appeal, No. 10-35458, in a memorandum disposition

filed simultaneously with this opinion. The total damages for all four Bellwether Plaintiffs were nearly $17 million.

 

    The government argues that jurisdiction is lacking, that the FTCA bars the "debt-based costs" that the district court awarded to Plaintiffs, and that Plaintiffs did not exhaust their administrative remedies for the crop damage they suffered in 2003 and 2004. The Appeals Court said, "Because we agree with the government that jurisdiction is lacking, we address only this threshold issue,

and we accordingly limit our discussion of the complex facts of this case."

 

    As explained by the court Oust is a commercial name for the chemical compound sulfometuron methyl, which belongs to the sulfonylureas chemical family. Sulfonylureas chemicals inhibit amino lactase synthase and are known for their high potency in low doses as compared to other herbicides. Oust kills or injures crops by affecting a plant's root system, preventing it from taking up water and nutrients from the soil and causing drought-like symptoms. Oust is not labeled for any use on agricultural crops. BLM developed fire rehabilitation plans which included the use of Oust on tens of thousands of acres to kill Cheatgrass, an annual non-native plant that grows up early in the spring, dries out very early in the summer, and provides a continuous bed of fuel for wildfires.

 

    The Appeals Court concluded in part, "BLM argues that we lack subject matter jurisdiction over Plaintiffs' FTCA claims for two reasons. First, BLM argues that Plaintiffs filed their lawsuit one day after the FTCA's statute of limitations had run, forever barring their claims. Second, BLM argues that the discretionary function exception, which provides immunity against FTCA claims even where a federal agency abuses its discretion, so long as the abuse occurs in the performance of non-mandatory duties, bars Plaintiffs' claims. Because we conclude that Plaintiffs' claims are barred by the FTCA statute of limitations, we do not address BLM's discretionary function argument."

 

    In the memorandum disposition filed simultaneously with the opinion regarding DuPont's appeal (i.e. No. 10-35458). The Appeals Court explained that DuPont argues that the district court should have granted its Rule 50(b) motion on Plaintiffs' defective product claim because manufacturers cannot be held liable for manufacturing a product that does well what it is intended to do. However, the Appeals Court said, "Plaintiffs presented ample evidence from which a jury could infer that Oust was 'dangerous to an extent beyond that which would be contemplated by' the government, much less an 'ordinary consumer.' Id. For example, Plaintiffs presented evidence that Oust is susceptible to erosion and unusually longlasting -- both of which the jury could have construed as circumstantial evidence that Oust is unreasonably dangerous."

 

    Among other finding, the district court found that Plaintiffs presented evidence that at most showed DuPont's nonfeasance, which cannot, as a matter of law, support an assumed duty of care claim. It therefore granted DuPont's Rule 50(b) motion as to

that claim. The Appeals Court ruled, "DuPont has not, however, identified any case in which a new trial has been granted in circumstances comparable to those here. We find no merit in DuPont's argument, particularly in light of the fact that it made strategic use of its corporate stewardship policy -- which was part of the assumed duty claim -- during the trial. DuPont must bear the risk of its own litigation strategy. Because DuPont has not cited any relevant authority in support of its new trial argument, the district court did not abuse its discretion when it denied DuPont's motion for a new trial on this ground." The Appeals Court subsequently denied a number of other arguments of DuPont and affirmed the district courts ruling in favor of farmers.

 

    Access the complete opinion (click here). Access the unpublished memorandum disposition (click here). [#Toxics, #Agriculture]

 

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R.R. Street & Co., Inc. v. Transport Insurance Co.

Sep 2: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-55361 and 10-55404. Appealed from the United States District Court for the Central District of California. The Appeals Court indicates that the dispute emerges from a web of state and Federal litigation over liability for damages and defense costs in certain environmental tort suits.

 

    The Appeals Court said, "The appeal before us concerns two cases that mirror each other: (1) an action for damages that the Appellants brought in federal court and (2) a declaratory judgment action that the Appellee brought in state court, which Appellants later removed to federal court. The district court declined to entertain these actions, by dismissing the former and remanding the latter, in light of a related third action that had been pending for several years in state court.

 

    "We must examine the propriety of this decision. Considering the particular circumstances of this case, we conclude that the district court had discretion under Wilton v. Seven Falls Co., 515 U.S. 277, 289-90 (1995), and Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942), to remand the declaratory judgment action, and that the action for damages fell within the scope of Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). We therefore affirm."

   

    The case involves Vulcan Materials Company (Vulcan) which manufactures a drycleaning solvent called perchloroethylene (PerSec). Between the 1960s and the 1990s, R.R. Street & Co. Inc. (Street) distributed PerSec. During this time, Vulcan named Street as an additional insured under its insurance policies, including an excess liability coverage policy that Transport Insurance Company (Transport) issued to Vulcan in 1981 (the 1981 Policy). Since the 1990s, a number of lawsuits have been filed against Vulcan and Street alleging damage caused by the sale, distribution, use or handling of PerSec (collectively the Tort Actions). Street and Vulcan separately defended these actions. Since 2005, the companies and their insurers have engaged in an ongoing dispute over liability for damages and defense costs in the Tort Actions.

 

    The Appeals Court concludes, "We do not take lightly the district court's decision not to entertain an action for damages. In this case, however, the district court did not abuse its discretion by deciding that the parties' claims should be resolved in the more comprehensive Vulcan Action. The district court had discretion under Wilton/Brillhart to remand the Removed Action, and the court's concerns about piecemeal litigation and interfering with the progress made in the Vulcan Action sufficiently supported dismissal under Colorado River."

 

    Access the complete opinion (click here). [#CA9]

 

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Barnes v. U.S. Dept. of Transportation

Aug 25: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-70718. On Petition for Review of an Order of the Federal Aviation Administration. Petitioners Michelle Barnes, Patrick Conry, and Blaine Ackley (collectively, petitioners) challenge an order of the Federal Aviation Administration (FAA) concerning the proposed construction by the Port of Portland (the Port) of a new runway at Hillsboro Airport (HIO). The FAA issued a Finding of No Significant Impact (FONSI), thus relieving the agency of preparing an Environmental Impact Statement (EIS). Petitioners argue that the decision not to prepare an EIS was unreasonable for several reasons, chief among them the FAA's failure to consider the environmental impacts of any increased demand for HIO resulting from the addition of a runway. Petitioners also argue that the FAA did not afford them a public hearing within the meaning of 49 U.S.C. § 47106.

 

    In a split opinion the Appeals Court majority granted the petition and remanded the case to the FAA with instructions to consider the environmental impact of increased demand resulting from the HIO expansion project, if any, pursuant to 40 C.F.R. § 1508.8(b). HIO is located in the city of Hillsboro in Washington County, Oregon, 12 miles west of downtown Portland. The Port of Portland assumed ownership of HIO in 1966. In 2008, HIO become Oregon's busiest airport, surpassing Portland International Airport (PDX) in number of airport operations.

 

    The dissenting justice said, "It is conventional wisdom among aviators that 'when the weight of the paper equals the weight of the airplane, only then you can go flying.' The majority confirms the truth of this quotation: here a federal agency is trying to reduce airport delays and the concomitant negative environmental effects by commencing a project in anticipation of future growth, and

the majority sides with delay and air pollution by imposing pointless paperwork on the agency before the necessary project can go forward. Because the majority's approach is contrary to our case law and the facts, I dissent."

 

    Access the complete opinion (click here). [#Transport, #CA9]

 

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Center for Environmental Law & Policy v. U.S. Bureau of Reclamation

Aug 19: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-35646. Appealed from the United States District Court for the Eastern District of Washington. The Appeals Court explains that Lake Roosevelt in eastern Washington state serves a variety of purposes, including irrigation, navigation, flood control, power generation, recreation, and fish management. The Appeals Court considered a challenge by environmental groups to a proposed incremental drawdown of water from the lake.

 

    The Appeals Court indicates that the review under the National Environmental Policy Act (NEPA) is limited to determining whether the agency, in this case the United States Bureau of Reclamation (Reclamation), took a "hard look" and genuinely scrutinized the environmental consequences of its proposed action. The Appeals Court said, "Our own close look at the record persuades us that Reclamation was keenly aware of, and appropriately discharged, this duty when it prepared the drawdown project analysis."

 

    According to the Appeals Court, the district court granted summary judgment to the defendants (Reclamation), holding that "the NEPA documents at issue" -- including Ecology's PEIS and SEIS as well as Reclamation's EA -- "thoroughly account for the history of development in the region and the project's cumulative impacts thereto," that the agencies' "analysis of indirect impacts complies with NEPA," that the EA's discussion of alternatives was sufficient in light of the "long collaborative process between [various] stakeholders" that led to the drawdown project, and that because Reclamation "retained the discretion [in the EA] to move forward with the project or not," its NEPA review was timely.

 

    The Appeals Court ruled, "Significantly. . . Reclamation has committed itself to scrutinizing the cumulative effects of the Special Study with the drawdown project before implementing any action resulting from the Special Study. Under our precedents and the circumstances presented here, this procedure does not violate NEPA. Our review reveals no other deficiencies in the substance of the EA, and although Reclamation took several steps toward implementing the drawdown project before drafting the EA, it scrupulously adhered to NEPA's timing requirements. We therefore affirm the district court."

 

    Access the complete opinion (click here). [#Water, #CA9]

City Sanitation, LLC v. Allied Waste Services of MA

Aug 31: In the U.S. Court of Appeals, First Circuit, Case No. 10-2284. Appealed from the District Court of MA, Worcester. In the colorful words of the Appeals Court, "This appeal is the culmination of a pitched battle between two waste-disposal firms, squabbling over the carcass of a third. The littered battlefield brings to mind the familiar adage that one man's trash is another man's treasure.

 

    "Telling the tale requires us to resolve questions of standing to prosecute claims arising out of a bankruptcy; questions of first impression as to the distinction between 'commercial tort claims' and 'proceeds' and as to the force and effect of Bankruptcy Rule 8006; and a question anent the fairness of a negotiated settlement. After careful consideration, we conclude that the disputed claims are commercial tort claims; that the trustee in bankruptcy had exclusive standing to pursue and settle those claims; that the appellant, by failing to comply with Bankruptcy Rule 8006, waived its theory of abandonment; and that the bankruptcy court's approval of the proposed settlement was within the realm of its discretion. Accordingly, we affirm the judgment . . . [and] we reject City's appeal."

 

    Access the complete opinion which includes more colorful passages (click here). [#Solid, #CA1]

 

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Jefferson Block 24 Oil & Gas, v. Aspen Insurance UK

Aug 29: In the U.S. Court of Appeals, Fifth Circuit, Case No. 10-30190. Appealed from the United States District Court for the Eastern District of Louisiana. In this insurance coverage dispute, Plaintiff–Appellant Jefferson Block 24 Oil & Gas, L.L.C. (Jefferson Block) appealed from the district court's grant of summary judgment in favor of Defendants–Appellees, Aspen Insurance UK Limited, Ace European Group Limited, and Certain Underwriters at Lloyd's, London (collectively Underwriters). In a split decision, the Appeals Court reversed and remanded the case to the district court.

 

    The majority opinion concludes, "In short, we believe that the district court erred when it refused to apply the contra-insurer rule in this case. As we have discussed, the OPA [Oil Pollution Act] Policy is ambiguous with respect to the issue of coverage for Jefferson Block's 16-inch pipeline. This ambiguity arises because the policy's schedule of insured facilities refers to an MMS-1021 form that lists only the locations of facilities. Whether the pipeline -- which begins at one of the locations designated on the form but crosses others not so designated -- is a facility "thereon" one of the locations on the form cannot be determined through reference to the plain language of the policy. . . the extrinsic evidence in the record does not conclusively resolve this ambiguity. Since Jefferson Block offers a reasonable interpretation of the policy -- that a right-of-way pipeline originating in one of the lease blocks designated on an MMS-1021 form is included in that designation -- and did not completely draft the ambiguous provisions of the OPA Policy, the contra-insurer rule should apply and the ambiguity should be resolved in favor of the insured, Jefferson Block. The 16-inch pipeline was a 'covered offshore facility' designated on Jefferson Block's MMS-1021 form and thus included within the scope of coverage afforded by the OPA Policy."

 

    The dissenting opinion states that Jefferson Block contends that its OPA insurance policy insures it against the costs of a recent spill from a particular 16-inch right-of-way oil pipeline and the Underwriters contend that the policy does not. "The majority reverses, relying on the rule of contra proferentem to construe ambiguity in the policy against the Underwriters. The substantial weight of recent New York authority, however, suggests that contra proferentem should not apply in this case. I therefore

dissent." The dissent explains that contra proferentem has taken the form of the so-called "contra-insurer" rule, which provides that when an ambiguity is found in a policy, it must be construed against the insurer and in favor of coverage. However, the dissent indicates that, "A review of the case law reveals numerous opinions suggesting that contra proferentem will not apply where the party seeking the benefit of the doctrine was sophisticated and negotiated the legal instrument at issue."

 

    The dissent concludes that, ". . . 'the touchstone for applying contra proferentem is the insured's lack of sophistication,' particularly where the parties do not have 'equivalent bargaining power.' U.S. Fire Ins. Co., 949 F.2d at 574. A sophisticated party with a means to influence the terms of the contract should be able to identify and, if necessary, remedy ambiguities at the time of drafting. Such a party does not need a thumb on the scales in its favor."

 

    Access the complete majority opinion and dissent (click here). [#Remed, #CA5]

 

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Dine Citizens Against Ruining v. Klein (DOI)

Aug 26: In the U.S. Court of Appeals, Tenth Circuit, Case No. 11-1004. The Office of Surface Mining Reclamation and Enforcement (OSM) under the Department of Interior (DOI) approved an application by BHP Navajo Coal Company (BNCC) to revise the mining plan at its Navajo Mine -- a large open pit coal mine on tribal reservation lands in northwestern New Mexico. Diné Citizens Against Ruining Our Environment and San Juan Citizens Alliance (collectively Citizens) sought judicial review under the Administrative Procedures Act (APA). The district court concluded OSM had violated the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-4370h, in approving the application and remanded the case for further proceedings. BNCC appealed from the district court's remand order. The Appeals Court said, "Lacking jurisdiction, we must dismiss the appeal as premature."

 

    The Appeals Court explained, "Our jurisdiction extends only to review of 'final decisions of the district courts of the United States . . . .' 28 U.S.C. § 1291. 'The purpose of the finality requirement is to avoid piecemeal review.' Bender v. Clark, 744 F.2d 1424, 1426 (10th Cir. 1984). 'A final decision is one that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.' Graham v. Hartford Life & Accident Ins. Co., 501 F.3d 1153, 1156 (10th Cir. 2007) (quotations omitted). 'The remand by a district court to an administrative agency for further proceedings is ordinarily not appealable because it is not a final decision.' Bender, 744 F.2d at 1426-27; see also Trout Unlimited v. United States Dep't of Agric., 441 F.3d 1214, 1218 (10th Cir. 2006); Baca-Prieto v. Guigni, 95 F.3d 1006, 1008 (10th Cir. 1996). This is often referred to as the administrative-remand rule. See, e.g., S. Utah Wilderness Alliance v. Kempthorne, 525 F.3d 966, 970 (10th Cir.2008); Trout Unlimited, 441 F.3d at 1218; Baca-Prieto, 95 F.3d at 1008"

 

    The Appeals Court notes that, "There is a 'narrow' exception to the rule 'when the issue presented is both urgent and important.' Trout Unlimited, 441 F.3d at 1218-19. . . In this case, although the issues may be important (an issue we need not decide),

they are not urgent. . ."

 

    Access the complete opinion (click here). [#Energy/Coal, #CA10]

 

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Gates v. Rohm and Haas Co.

Aug 25: In the U.S. Court of Appeals, Third Circuit, Case No. 10-2108. Appealed from the United States District Court for the Eastern District of Pennsylvania. This is an interlocutory appeal under Fed. R. Civ. P. 23(f) from the denial of class certification for medical monitoring and property damage. Plaintiffs charge that chemical companies dumped an alleged carcinogen at an industrial complex near their residences. In denying the class certification, the District Court found individual issues predominated on exposure, causation, and the need for medical monitoring and also found individual issues predominated as to a liability-only issue class for the property damage claims.

    Plaintiffs seek certification of two classes: (1) a class seeking medical monitoring for village residents exposed to the airborne vinyl chloride between 1968 and 2002; and (2) a liability-only issue class seeking compensation for property damage from the exposure. At issue is whether the District Court erred in finding individual issues barred certification of the proposed trial classes under Fed. R. Civ. P. 23(b)(2) or 23(b)(3). The Appeals Court affirmed the district court decision.

    The Appeals Court explained further that, "Plaintiffs appear to rely on the same "common" evidence used for the medical monitoring class, but fail to explain how their estimates of exposure to residents over substantial periods of time corresponds to the level of contamination currently present at each home. It may prejudice absent class members whose properties may be shown to have suffered greater contamination. Given the inability to separate common issues from issues where individual characteristics may be determinative, the District Court did not abuse its discretion in refusing to certify a liability-only property damage class."

    Access the complete opinion (click here). [#Toxics, #Remed, #CA3]

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Sierra Club v. Khanjee Holding

Aug 24: In the U.S. Court of Appeals, Seventh Circuit, Case No. 09-4008. Appealed from the United States District Court for the Southern District of Illinois. The case is a successive appeal. The original defendants wanted to build a power plant in southern Illinois. In the first appeal, the Appeals Court concluded that the defendants' Prevention of Significant Deterioration (PSD) permit, which they needed in order to build the power plant, had expired. The Appeals Court held that it was proper for the district court to grant summary judgment in favor of plaintiff Sierra Club and to enjoin the defendants from engaging in further construction activities until they obtained a new permit.

 

    After the first ruling, the district court assessed a penalty of $100,000 on all of the defendants, jointly and severally, and awarded attorneys' fees to Sierra Club. Defendant Khanjee Holding then appealed that decision. In this appeal, Khanjee contends that the district court lacked subject matter jurisdiction. But the Appeals Court said, "we already determined in the previous appeal that the district court had subject matter jurisdiction, and there is no reason to revisit that ruling."

 

    Khanjee also argued that the district court assessed penalties and fees in violation of Khanjee's constitutional rights. On that argument, the Appeals Court said, "We find, however, that Khanjee waived its constitutional arguments by not raising them before the district court." Finally, Khanjee contended that the district court committed error when it weighed the requisite statutory factors. The Appeals Court said, ". . .we conclude that the district court did not abuse its discretion. The court considered all of the relevant statutory factors and did not make any clearly erroneous findings of fact in assessing a penalty and awarding fees. We affirm."

 

    The Appeals Court explained further that, ". . . the district court did not abuse its discretion in concluding that Sierra Club was successful on the merits and performed a public service consistent with the Clean Air Act's goals. An award of fees was therefore proper. Western States Petroleum Ass'n v. E.P.A., 87 F.3d 280 (9th Cir. 1996), cited by Khanjee, is distinguishable. In that case, the Ninth Circuit described the party that was denied fees as 'a financially able, nongovernmental party having no more than its own economic interests at stake.' Id. at 286. The court also found that the litigation had not served the public interest. Id. Here, Sierra Club did not receive any direct financial benefit from the lawsuit, and it served the public interest. Increased charitable donations are collateral benefits not contemplated by Western States. That Sierra Club may be a well-funded organization does not preclude an award of fees. There is nothing in the Clean Air Act that suggests that fees can only be awarded to indigent parties."

 

    Access the complete opinion (click here). [#Air, #Energy/Coal, #CA7]

 

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