Sierra Club v. EPA

Jan  20: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-71457 and 10-71458. On Petition for Review of an Order of U.S. EPA. The Appeals Court explains that Sierra Club and several environmental groups, (collectively, Petitioners), petition for review of U.S. EPA's approval of the 2004 State Implementation Plan (2004 SIP) for the San Joaquin Valley's nonattainment area for the one-hour ozone National Ambient Air Quality Standard (NAAQS). Petitioners contend that: 1) EPA acted arbitrarily and capriciously, in violation of the Administrative Procedures Act (APA), by approving the 2004 SIP knowing that the emissions inventory data on which the plan relied were, as an actual matter, outdated and inaccurate by the time EPA approved the plan in 2010; 2) EPA violated the Clean Air Act (CAA) by approving the 2004 SIP because the emissions inventory data on which it relied were outdated and inaccurate within the meaning of the statute; 3) EPA violated the CAA by approving the 2004 SIP without the inclusion of the State-adopted regulations on which the plan relied; and 4) EPA violated the CAA by approving the 2004 SIP knowing that attainment of the one-hour ozone NAAQS by the 2010 deadline was impossible.

 

    The Appeals Court held that EPA's 2010 approval of the 2004 SIP, which was based on data current only as of 2004, was arbitrary and capricious. The Appeals Court indicated that no other issued need be decided. The Appeals Court concluded, "Our role is not to substitute our conclusions based on the facts presented for those of the agency, and we express no opinion as to what conclusion EPA should have reached, with respect to the validity of the 2004 SIP, upon consideration of the 2007 data. But we should not silently rubber stamp agency action that is arbitrary and capricious in its reliance on old data without meaningful comment on the significance of more current compiled data. We hold that EPA's failure to even consider the new data and to provide an explanation for its choice rooted in the data presented was arbitrary and capricious. . . We grant the petition for review and remand the matter to EPA for further proceedings consistent with our decision."

 

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

 

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Montana Sulphur & Chemical v. U.S. EPA

Jan 19: In the U.S. Court of Appeals, Ninth Circuit, Case Nos. 02-71657 and 08-72642. On Petition for Review of an Order of U.S. EPA. In these appeals, consolidated for decision, the Appeals Court address the propriety of various actions taken by U.S. EPA under the Clean Air Act with respect to Montana air quality from 1993 to 2008.

 

    In No. 02-71657, Montana Sulphur & Chemical Company (Montana Sulphur) seeks review of the EPA's final rule which partially disapproved a proposed revision to Montana's State Implementation Plan (SIP) governing sulfur dioxide (SO2) emissions. 67 Fed. Reg. 22,168 (May 2, 2002). Montana Sulphur also seeks review of a prior EPA action in 1993 known as a "SIP Call," which preceded the formal SIP revision and started the review process. 58 Fed. Reg. 41,430 (Aug. 4, 1993). The final agency action incorporated documents supporting its SIP Call -- in particular EPA reliance on various modeling calculations -- into the administrative record for partial disapproval of the SIP.

 

    In No. 08-72642, Montana Sulphur seeks review of the EPA's April 2008 final rule promulgating a Federal Implementation Plan (FIP) for the State of Montana's SO2 emissions. 73 Fed. Reg. 21,418 (April 21, 2008). The FIP is designed to fill perceived gaps the EPA identified in the SIP. This later appeal focuses on the EPA's authority to promulgate the FIP and the reasonableness of certain specific requirements set forth therein.

 

    The Appeals Court ruled, "Because we conclude that the agency did not act arbitrarily or capriciously with respect to either the SIP or FIP, we deny both petitions for review." The Justices said further, ". . . we conclude the EPA did not act arbitrarily or capriciously or abuse its discretion by making the SIP Call, disapproving portions of the revised SIP, or promulgating the requirements set forth in the FIP. We therefore deny the petition for review in both 02-71657 and 08-72642."

 

    Explaining further, they said, "The EPA's continued use of the ISC model was not arbitrary or capricious. The model was properly employed at both the time of the state SIP and the proposed FIP. The FIP did not replace the entire SIP, but only the limited portions the EPA had disapproved; because use of a different model could have yielded results that did not comport with the remainder of the SIP, it was not arbitrary or capricious for the EPA to continue with the existing model despite some later technological improvements." Montana Sulphur had argued that the EPA acted arbitrarily and capriciously because it used outdated modeling in the FIP.

 

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

 

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Hearts Bluff Game Ranch, Inc. v. U.S.

Jan 19: In the U.S. Court of Appeals, Federal Circuit, Case No. 2010-5164. Appealed from the United States Court of Federal Claims. The Appeals Court explains that Hearts Bluff Game Ranch, Inc. (Hearts Bluff) appeals from the decision of the United States Court of Federal Claims (the Claims Court) dismissing its claim for just compensation under the Fifth Amendment for an alleged taking based on the Army Corps of Engineers' (the Corps') denial of Hearts Bluff's proposal to operate a mitigation bank on its property. Hearts Bluff Game Ranch, Inc. v. United States, No. 09-498L (Ct. Cl. June 11, 2010) (the Order). The Appeals Court ruled, "Because Hearts Bluff did not have a cognizable property interest in obtaining a mitigation banking instrument, we affirm."

 

    The Appeals Court ruled further, "As for Hearts Bluff's assertion that the denial of the mitigation banking instrument was arbitrary and capricious, that issue is not before us. Hearts Bluff brought suit under the Tucker Act, a concession that the government action was valid. Tabb Lakes, Ltd. v. United States, 10 F.3d 796, 802 (Fed. Cir. 1993) ('[The] claimant must concede the validity of the government action which is the basis of the taking claim to bring suit under the Tucker Act.'). In order to challenge the legality of the denial of the mitigation banking instrument, Hearts Bluff would have had to sue in a district court under the Administrative Procedure Act. Crocker v. United States, 125 F.3d 1475, 1476 (Fed. Cir. 1997) (The Court of Federal Claims 'lacks the general federal question jurisdiction of the district courts, which would allow it to review [an] agency's actions and to grant relief pursuant to the Administrative Procedure Act.'). It did not."

 

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

 

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System Fuels v. U.S.

Jan 19: In these two separate and related cases in the U.S. Court of Appeals, Federal Circuit, Case Nos. 2008-5025, -5035; and Case Nos. 2010-5116, -5117. Appealed from the United States Court of Federal Claims.

 

    In the first case, after trial, the United States Court of Federal Claims awarded Plaintiffs-Cross Appellants System Fuels, Inc. and Entergy Arkansas, Inc. (collectively SFI Arkansas or Plaintiffs) damages arising from the Department of Energy's (DOE) partial breach of a contract. System Fuels, Inc. v. United States, 79 Fed. Cl. 37, 40 (2007). The majority Appeals Court said, "Because the trial court properly declined to offset the damages award by the amount of Plaintiffs' one-time fee, this court affirms. On the other hand, this court reverses the trial court's denial of Plaintiffs' capital suspense loader costs. This court also remands the action for analysis in view of this court's decisions in Pacific Gas & Electric Co. v. United States, 536 F.3d 1282 (Fed. Cir. 2008) and Yankee Atomic Electric Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008)."

 

    In the second case, on summary judgment, the United States Court of Federal Claims determined that the United States breached its contract with Plaintiffs-Appellants System Fuels, Inc., System Energy Resources, and South Mississippi Electric Power Association (collectively Plaintiffs) for the removal of spent nuclear fuel. Sys. Fuels, Inc. v. United States, 66 Fed. Cl. 722, 732-33 (2005) (SFI I). The trial court also granted summary judgment in favor of the Government regarding the implied covenant of good faith and fair dealing. Id. at 735. The trial court set damages for the breach at $10,014,114 as well as the cost of borrowed funds for financing the construction of the dry fuel storage project. Sys. Fuels, Inc. v. United States, 78 Fed. Cl. 769, 809 (2007) (SFI II). On reconsideration, the trial court reduced damages to $9,735,634 and denied the cost of borrowed funds. Sys. Fuels, Inc. v. United States, 92 Fed. Cl. 101, 114 (2010) (SFI III). The majority Appeals Court ruled, "This court affirms the trial court's denial of borrowing costs and reverses the denial of overhead costs. On damages, this court affirms the trial court's award."

 

    The majority said further, "Because the trial court properly adhered to the decision of England [England v. Contel Advanced Systems, Inc., 384 F.3d 1372, 1379 (Fed. Cir. 2004)], this court affirms the denial of Plaintiffs' claim for the cost of borrowed funds. This court reverses the trial court's denial of overhead costs. This court affirms the trial court's causation analysis and revised award of nominal damages."

 

    The dissenting Justice in both cases said, "I concur in the court's opinion and the rulings based thereon, with the exception of the ruling that damages for breach of contract cannot include the cost of financing the construction and storage expenditures required to mitigate the breach. As explained in my dissenting opinion in the companion case, System Fuels, Inc. v. United States, No. 2010-5116, -5117, these costs were incurred solely because of the government's breach of contract, and thus are recoverable as damages for the breach."

 

    Access the complete opinion in case one (click here). Access the complete opinion in case two (click here). [#Haz/Nuclear, #Energy/Nuclear, #CAFed]

 

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