Sahu v. Union Carbide Corporation

Nov 3: In the U.S. Court of Appeals, Second Circuit, Case No. 065694. In this case involving an appeal from a judgment of the United States District Court for the Southern District of New York that granted a summary judgment in favor of defendants Union Carbide Corporation and Warren Anderson on all the claims of the plaintiffs related to water pollution allegedly caused by the operations at a factory owned and operated by a former Union Carbide subsidiary in Bhopal, India.

According to the Appeals Court, with respect to the plaintiffs' claims for injunctive relief and their theories of liability other than their attempt to pierce the corporate veil between Union Carbide and its subsidiary, the district court, sua sponte [taking action on its own], converted the defendants' motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) to one for summary judgment
under Federal Rule of Civil Procedure 56 and granted the motion.

The Appeals Court said, "We conclude that the district court did not give the plaintiffs sufficient notice to allow them adequately to respond to the converted summary judgment motion." Therefore, the Appeals Court vacated the district court action and remanded the case for further consideration consistent with its opinion.

According to their complaint, "the plaintiffs have suffered a variety of ailments caused by 'the highly carcinogenic chemicals and toxic pollutants in the drinking water supply emanating from the premises of the former UCIL plant'. . . The plaintiffs also contend that Union Carbide was aware of the danger of water pollution and other environmental damage yet failed to take adequate precautions to prevent it. . . [and] Finally, the plaintiffs fault Union Carbide's response to the 1984 disaster. They contend that the cleanup effort undertaken by the company was only 'a site-based project, undertaken at minimal expense, which would conceal both the seriousness of on-site pollution and the potential risks of off- site contamination, while enabling Union Carbide to recover money from the sale of its remaining assets at UCIL.'"

The Appeals Court concluded in part, ". . . we view this as a close case. But we think there is a reasonable likelihood that, in light of the peculiarly difficult procedural history of this and related litigation, the plaintiffs were not aware that they were in danger of an adverse grant of summary judgment based on the submissions prior to the district court's order converting the motion and then deciding it. We conclude that further notice was required and that consequently it is appropriate to remand for what would appear to be relatively limited further proceedings in connection with consideration of summary judgment."

Access the complete opinion (click here).

Sycamore Industrial Park v. Ericsson, Inc.

Oct 20: In the U.S. Court of Appeals, Seventh Circuit, Case No. 08-1118. The Appeals Court explains that in 1985, plaintiff Sycamore Industrial Park Associates bought an industrial property with fixtures, including a boiler-based steam heating system, from defendant Ericsson, Inc. Before it sold the property, Ericsson installed a new natural gas heating system, but it left the old heating system in place. Several years after purchasing the property, Sycamore discovered that the boilers, pipes, and various pipe joints that make up the old system were insulated with asbestos-containing material.

Sycamore sued to force Ericsson to remove and dispose of the abandoned asbestos insulation and reimburse Sycamore for alleged "response costs it has incurred or will incur in removing the asbestos insulation." The suit was brought under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Resource Conservation and Recovery Act (RCRA). The district court granted Ericsson’s motion for summary judgment, and Sycamore appealed. The Appeals Court affirmed the district court’s grant of summary judgment.

In its ruling, the district court found that the defendant abandoned the asbestos insulation in place at the property prior to sale. Yet it held as a matter of law that the abandonment did not constitute “disposal” of a solid or hazardous waste into or on any land or water so that such solid waste or hazardous waste might enter the environment, as CERCLA requires. In addition, the district court held as a matter of law that the abandonment of the boiler-based heating system and the subsequent sale of the Sycamore property was not “handling, storage, treatment, transportation or disposal of any solid or hazardous waste,” as required by RCRA.

In its review the appeals Court notes that the Ninth Circuit reached the same conclusion in Stevens Creek, 915 F.2d 1355. The Seventh Circuit said, "Our sister Circuit determined there was no private cause of action under CERCLA for the sale of a building containing materials with asbestos because the defendant never 'disposed' of a hazardous substance." The Seventh Circuit ruled further, "Here, there is no evidence that Ericsson transferred the Sycamore property with the intent to dispose of a hazardous substance. It incidentally left the old heating equipment in place when it sold otherwise useful realty. It simply does not make sense to hold that Ericsson is a responsible party just because Sycamore decided to remove asbestos in place decades after it purchased valuable real estate in a legitimate transaction."

On the RCRA claim, the Appeals Court said, ". . .as a matter of law, by leaving equipment that is insulated by asbestos in place and then selling the Sycamore property, Ericsson did not handle, store, treat, transport, or dispose of the asbestos as required for RCRA liability.

Access the complete opinion (click here).

Andrews v. Columbia Gas

Oct 10: In the U.S. Court of Appeals, Sixth Circuit, Case No. 07-3632. The case involved a property agreement initiated in 1947 with previous owners to allow an Ohio gas company to construct and maintain gas pipelines. Until 2004, Columbia Gas (current owner) made no efforts to clear a right of way around its pipelines on plaintiffs’ property. In June 2004, a work crew informed Donald Andrews that the location of the pipeline required them to remove a stand of the pine trees on his property and Columbia Gas claimed the right to remove the trees and to maintain a right of way totaling approximately eighty feet. In April 2005 the company informed plaintiff that the company planned to enter the property and remove the trees.

Plaintiffs filed suit in Licking County Court and the company removed the action to the U.S. District Court for the Southern District of Ohio based on diversity jurisdiction. After trial, the magistrate judge entered judgment in favor of Columbia Gas. Plaintiffs appealed making four arguments: (1) that the magistrate judge incorrectly construed the right of way agreement as granting Columbia Gas a fifty-foot easement to operate and maintain each of its pipelines on plaintiffs’ property; (2) that the doctrines of laches, estoppel, and waiver, as well as the statute of limitations, precluded Columbia Gas from clearing the right of way forty years after the trees were planted; (3) that they are entitled to damages for the removed trees; and (4) challenging the district court’s denial of their motion for additional time to serve a jury demand. After review of all plaintiff claims, the Appeals court affirmed the decision of the district court.

Access the complete opinion (click here).

Salmon Spawning & Recovery Alliance v. Gutierrez

Oct 8: In the U.S. Court of Appeals, Ninth Circuit, Case No. 06-35979. The Ninth Circuit explains that wild salmon and steelhead, which are listed as threatened or endangered under the Endangered Species Act (ESA), have been the subject of much litigation in the Federal courts. As they swim back and forth from the Pacific Northwest to Canada, the fish have no cognizance of an international boundary, or the Pacific Salmon Treaty of 1999 (Treaty), an effort by Canada and the United States to manage salmon populations originating in Alaska and the Pacific Northwest.

The appeal concerns whether three conservation groups have standing to challenge the decision of Federal agencies and officials to enter into, and remain a party to, that Treaty. The groups alleged that "take levels" permitted under the Treaty have allowed Canadian fisheries to overharvest endangered and threatened salmon and steelhead. The Western District Court of Washington dismissed all three of their claims for lack of standing. The Appeals Court affirmed the dismissal of the first and second claims; but reversed the district court in part because the groups have "procedural standing" to bring their third claim for relief.

The Ninth Circuit concluded that, "Salmon Spawning has properly alleged procedural injury. . . [and] also meets the requirements for statutory standing under the ESA and the APA. . . [and] Finally, Salmon Spawning has established associational standing. Public Citizen, 316 F.3d at 1019. Each of the conservation groups’ members has standing to sue individually; the interests the groups seek to protect are germane to their purposes as conservation organizations; and neither the claim asserted nor the relief requested requires the participation of the individual members in the lawsuit. Id. Therefore, we reverse the district court’s dismissal of Salmon Spawning’s third claim for lack of standing and remand for further proceedings." The Appeals Court also noted, "We remand to the district court to determine whether attorneys’ fees under the Equal Access to Justice Act, 28 U.S.C. § 2412, should be granted. Each party shall pay its own costs on appeal."

Access the complete opinion (click here).

USA v. Hagerman

Sep 26: In the U.S. Court of Appeals, Seventh Circuit, Case No. 08-2670. The defendants, Hagerman and Wabash Environmental Technologies were convicted of criminal violations of the Clean Water Act, and the company Wabash was ordered to pay $250,000 in restitution to a federal Superfund account and was placed on probation for five years. Corporate probation has been called “a flexible vehicle for imposing a wide range of sanctions having the common feature of continued judicial control over aspects of corporate conduct.”

The district court dismissed the petition after the government and Wabash resolved their differences by Wabash’s agreeing to start paying restitution and to furnish specified information concerning the company’s finances. Nevertheless, Wabash filed an appeal from the order of dismissal, as has its codefendant, Hagerman.

The Appeals Court rules, "Hagerman’s appeal must be dismissed because he was not a party to the probation-violation proceeding and no order naming him was entered. Wabash’s appeal must also be dismissed, apart from doubts that Wabash was aggrieved by the dismissal of the probation-violation proceeding. Wabash has no lawyer in this court (it was represented in the district court by a lawyer who has since withdrawn)." Hagerman, who is not a lawyer, claims the right to represent Wabash because he “is not only a major stockholder [presumably he means ‘member,’ since Wabash is an LLC, not a corporation] but is [also the] current President of [Wabash]. And it was Hagerman who filed the appeal on behalf of Wabash as well as himself." The Appeals Court said, "He complains about the deal that Wabash struck with the government, making this like an appeal by a party that agrees to a settlement but later thinks better of his decision and tries to get the appellate court to rescind it."

The Appeals Court notes that a corporation is not permitted to litigate in a federal court unless it is represented by a lawyer licensed to practice in that court and then determines that an LLC also comes under that rule. In dismissing the case, the Appeals Court ruled, ". . .the right to conduct business in a form that confers privileges, such as the limited personal liability of the owners for tort or contract claims against the business, carries with it obligations one of which is to hire a lawyer if you want to sue or defend on behalf of the entity. Pro se litigation is a burden on the judiciary . . . and the burden is not to be borne when the litigant has chosen to do business in entity form. From that standpoint there is no difference between a corporation and a limited liability company, or indeed between either and a partnership, which although it does not provide its owners with limited liability confers other privileges, relating primarily to ease of formation and dissolution. That is why the privilege of pro se representation is, as we noted, denied to partnerships too."

Access the complete opinion (click here).

Casitas Municipal Water District v. U.S.

Sep 25: In the U.S. Court of Appeals, Federal Circuit, Case No. 07-5153. Casitas Municipal Water District (Casitas) appealed the judgment of the United States Court of Federal Claims granting summary judgment in favor of the government holding that there was no governmental breach of contract and no compensable taking under the Fifth Amendment. The Appeals Court affirmed-in-part, reversed-in-part, and remand the case.

In its opinion summary the Appeals Court said, "In sum, governmental deprivation of some water use rights absent the government’s active or appropriative hand in diverting water for its own or a third party’s consumptive or proprietary use does not amount to a physical taking. The only case holding to the contrary is Tulare Lake Basin Water Storage District v. United States, 49 Fed. Cl. 313 (2001), which its author expressly disclaimed in the present case in light of the intervening Tahoe-Sierra case. Casitas Mun. Water Dist. v. U.S., 76 Fed. Cl. 100, 106 (2007) ('Tahoe-Sierra . . . compels us to respect the distinction between a government takeover of property (either by physical invasion or by directing the property’s use to its own needs) and government restraints on an owner’s use of that property.'). Casitas has been restrained from making full use of its California water license under certain circumstances related to the endangerment of the steelhead trout. When the government requires a usufructuary holder of water rights to allow a specified amount of dam-diverted water to circle back to its natural flow by way of a fish ladder for the purpose of endangered species preservation, a classic regulatory restriction on private property rights to prevent a public harm has occurred. It is logically incongruent to analyze ESA-based land use restrictions as regulatory takings, and ESA-based water use restrictions as physical takings. The government is not appropriating or taking possession of Casitas’ property, but rather is prohibiting Casitas from making private use of a certain amount of the river’s natural flow under a public program to promote the common good. Labeling such an action a physical taking blurs the line Tahoe-Sierra carefully draws between physical and regulatory takings.

Access the complete opinion (click here).

Abagninin v. AMVAC Chemical Corp

Sep 24: In the U.S. Court of Appeals, Ninth Circuit, Case No. 07-56326. Akebo Abagninin and others who live and work in the Ivory Coast (Abagninin) [Côte d'Ivoire, Africa] appeal the district court’s dismissal with prejudice of their claims against manufacturers, distributors, and users of the pesticide DBCP for genocide and crimes against humanity under the Alien Tort Statute (ATS), 28 U.S.C. § 1350. Abagninin alleges that DBCP caused male sterility and low sperm counts, which AMVAC knew. The district court granted with prejudice AMVAC’s motion for judgment on the pleadings as to the genocide claim for failure to allege that AMVAC acted with specific intent. Abagninin’s claim for crimes against humanity was subsequently dismissed for failure to allege that AMVAC’s conduct occurred within the context of a State or organizational policy. The Appeals Court affirmed the district court decision.

In part, the Appeals Court ruled on the "intent" issue, "The Second Circuit has recognized that dismissal of a genocide claim is appropriate when the complaint fails to allege facts sufficient to show specific intent [Cite: In re Agent Orange Prod. Liability Litig., 373 F. Supp. 2d 7, 115 (E.D.N.Y. 2005), aff’d, 517 F.3d 104 (2d Cir. 2008)]. . . Abagninin’s attempts to distinguish Agent Orange because the harmful effects of those chemicals were not known at the time assume, but incorrectly, that knowledge is the standard for intent. The key similarity between this case and Agent Orange is Abagninin’s failure to allege that AMVAC intended to harm him through the use of chemicals."

Access the complete opinion (click here).