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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