Service Oil, Inc. v. U.S. EPA

Dec 28: In the U.S. Court of Appeals, Eighth Circuit, Case No. 08-2819. In this administrative enforcement proceeding, U.S. EPA imposed a substantial monetary penalty on Service Oil, Inc., the owner of a construction site that did not timely obtain a storm water discharge permit. According to the Appeals Court, EPA based the amount of the penalty not on unlawful discharges, but on Service Oil’s failure to comply with the Agency’s permit application regulations. The Appeals Court concluded that "this is an expansion of EPA’s remedial power not authorized by the governing statutes," and reversed and remanded the decision for redetermination of the penalty.

The Eighth Circuit said in part, "As the Second Circuit held in invalidating a portion of EPA’s regulations governing concentrated animal feeding operations, 'unless there is a "discharge of any pollutant," there is no violation of the Act, and point sources are, accordingly, neither statutorily obligated to comply with EPA regulations for point source discharges, nor are they statutorily obligated to seek or obtain an NPDES permit.'" [citing Waterkeeper Alliance, Inc. v. E.P.A., 399 F.3d 486, 504 (2d Cir. 2005).

The Appeals Court said further, "While acknowledging 'the policy considerations underlying the EPA’s approach,' the court [2nd Circuit] concluded that 'it contravenes the regulatory scheme enacted by Congress; the Clean Water Act gives the EPA jurisdiction to regulate and control only actual discharges -- not potential discharges, and certainly not point sources themselves.'”

The Appeals Court rules, "Our conclusion that EPA lacks statutory authority to assess administrative penalties for failure to submit a timely permit application does not mean, as the EAB [Environmental Appeals Board] posited, that the agency must either guess the identities of potential new point sources, or allow unpermitted discharges to ensue. Prudent builders know that permits do not issue overnight and that storm water discharges can happen any time after the start of construction makes the site a point source. They will apply and obtain permits before starting construction to avoid penalties for unlawful discharge that may prove to be severe. That is the regulatory regime Congress crafted. By contrast, under the EAB’s interpretation of § 1318(a), a person about to commence construction could apply to EPA for a storm water discharge permit less than the ninety days “before the date on which construction is to commence” prescribed in 40 C.F.R. § 122.21(c)(1); obtain the permit before construction commences and any discharge occurs; and still face a costly administrative enforcement proceeding and potential monetary penalties for failing to comply with the regulation. The statute is to the contrary.

"The decision of the EAB based the amount of monetary penalty assessed primarily on Service Oil’s 'complete failure to apply for its storm water permit prior to starting construction.' As a violation of the permit application regulations is not within the purview of 33 U.S.C. § 1319(g)(1)(A), this was a statutorily impermissible factor. Accordingly, we grant the petition for review, vacate the order assessing a civil penalty of $35,640, and remand to the agency for redetermination of the amount of the penalty in accordance with § 1319(g)(3) and this opinion."

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AES Sparrows Point LNG, LLC v. Wilson (Maryland)

Dec 22: In the U.S. Court of Appeals, Fourth Circuit, Case No. 09-1539. The case involves a petition pursuant to the Natural Gas Act, by AES Sparrows Point LNG, LLC and Mid-Atlantic Express Holdings, LLC (collectively AES) to review the State of Maryland Department of the Environment’s denial of a request for water quality certification pursuant to § 401(a)(1) of the Clean Water Act, with respect to a proposed large-scale liquefied natural gas marine import terminal and pipeline project.

The proposal by AES is to construct and operate a liquefied natural gas (LNG) marine import terminal at Sparrows Point (a heavily industrialized area adjacent to Baltimore Harbor) and an eighty-eight-mile pipeline connecting the terminal to three interstate natural gas pipelines in Eagle, Pennsylvania.

The Appeals Court said in conclusion, "we: (1) hold that Maryland waived any potential claim of sovereign immunity in connection with the present petition for review by expressly consenting to defending, in federal court, its decision to deny AES’s Request for § 401(a)(1) Water Quality Certification; (2) hold that AES has failed to establish any basis for us to disturb the Corps’ determination that Maryland had not waived its right to grant or deny AES’s § 401(a)(1) Certification Request; and (3) deny AES’s petition for review of Maryland’s denial of its§ 401(a)(1) Certification Request on the merits." One of the Judges issued a separate concurring opinion.

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New York v. Nuclear Regulatory Commission

Dec 21: In the U.S. Court of Appeals, Second Circuit, Case No. 08-3903. The case involves a petition for review of a decision of the Nuclear Regulatory Commission denying rulemaking petitions filed by Massachusetts and California. The Appeals Court indicated, "As the Nuclear Regulatory Commission has given due consideration to the relevant studies concerning the rulemaking petitions, we must defer to its expertise in determining the proper risk level associated with the storage of nuclear material in spent fuel pools, and therefore deny the petition to review the Nuclear Regulatory Commission’s decision."

The two States filed rulemaking petitions (Massachusetts in 2006, and California in 2007) asking the NRC to reverse its 1996 Generic Environmental Impact Statement, which found (among other things) that spent fuel pools at nuclear power plants do not create a significant environmental impact within the meaning of the National Environmental Policy Act (NEPA). The States petitioning for review here (New York, Connecticut, and Massachusetts) claim standing on the ground that nuclear power plants are within or near their borders and that an accident at one of these plants could harm their citizens.

The States on appeal contended that the risk of a spent fuel pool fire must be a Category II rather than a Category I risk, because the risk is affected by mitigation that varies from plant to plant. It is true that the NRC relies in part upon mitigation at nuclear power plants -- including various coolant sprays and makeup water systems in case of pool drainage -- to conclude that the risk of an accidental or terrorist-caused fire in the pools is uniformly low. However, the NRC has mandated that these mitigation tactics be implemented at all nuclear power plants. The Appeals Court ruled, "The NRC relies on numerous studies detailing the effectiveness of its required mitigation measures; these studies constitute substantial evidence."

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Klamath Siskiyou Wildlands Center v. U.S. BLM

Dec 15: In the U.S. Court of Appeals, Ninth Circuit, Case No. 08-35463. The Appeals Court explains, "We must decide whether environmental organizations are prevailing parties within the meaning of the Equal Access to Justice Act when, before judgment, the Bureau of Land Management [BLM] withdraws its challenged decision to conduct a timber sale." The "prevailing party" issue is important because Congress has passed many statutes to allow parties who sue the United States to recover attorney’s fees in certain circumstances, but only if they are the “prevailing parties” in the lawsuit. The Appeals Court cites: Buckhannon Bd. v. W.Va. Dep’t of Health and Human Res., 532 U.S. 598, 600 (2001).

Plaintiffs Klamath Siskiyou Wildlands Center, Cascadia Wildlands Project, and Umpqua Watersheds (Klamath) sued the Bureau of Land Management of the United States Department of the Interior (BLM), alleging that a planned timber sale in the Willy Slide area of the Medford District, among other decisions, violated the National Environmental Protection Act (NEPA) and the Forest Lands Policy and Management Act (FLPMA). Klamath sought “a preliminary injunction; a declaration that the challenged decision violated certain laws; a permanent injunction against the project until the BLM complied with those laws; and an award of costs and
attorneys fees.”

In this case, which has many nuisances, the Appeals Court rules, "In summary, we conclude that Klamath is not a prevailing party in this case because neither the stipulated order, the magistrate judge’s F&R, nor the binding ruling in Boody, a separate case, amounts to a 'material alteration of the legal relationship of the parties' that is 'judicially sanctioned,' as required in Buckhannon. For the foregoing reasons, the district court’s grant of attorney’s fees and costs to Klamath is reversed and vacated. The case is remanded for further proceedings consistent with this opinion.

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American Road & Transportation Builders v. EPA

Dec 11: In the U.S. Court of Appeals, D.C. Circuit, Case No. 08-1381. The American Road and Transportation Builders Association (ARTBA) is a trade organization representing the “transportation construction industry” -- companies that build roads, public transit systems, airports and the like. In 2002 ARTBA petitioned the U.S. EPA to amend two regulations implementing § 209(e) of the Clean Air Act. EPA had originally promulgated the rules in 1994, and then readopted them in 1997. After some litigation over the Agency’s failure to act on ARTBA’s petition, EPA formally opened it to public comment in 2007, then rejected it in 2008.

Shortly thereafter, ARTBA sought review in the D.C. Circuit Appeals Court. The Appeals Court dismissed dismiss the suit for lack of jurisdiction, on the grounds that National Mining Association v. U.S. Department of the Interior, 70 F.3d 1345 (D.C. Cir. 1995), "requires us to treat ARTBA’s petition to EPA as a challenge to the regulations it sought revised, and that judicial review of such a challenge is time-barred under Clean Air Act § 307(b)(1). . ." The Appeals Court dismissed the case saying, "We conclude that we are without jurisdiction to hear this petition."

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South Fork Band Council v. U.S. Department of Interior

Dec 3: In the U.S. Court of Appeals, Ninth Circuit, Case No. 09-15230. This is an appeal from the denial of a preliminary injunction in an environmental challenge to a major gold mining project on the side of Mt. Tenabo in Nevada. The mountain has religious significance for Indian tribes. The plaintiffs-appellants are the South Fork Band Council of Western Shoshone of Nevada, and other tribes and organizations (the Tribes).

The Tribes originally filed this action against the United States Department of the Interior and its Bureau of Land Management (BLM) after BLM issued its final environmental impact statement approving the project. The project’s developer, Barrick Cortez, Inc., (Cortez) appeared as an intervenor and is also an appellee. The Appeals Court denied the Tribes’ emergency motion for an injunction pending appeal, but expedited the briefing and argument of the appeal.

The district court’s opinion devotes most of its consideration to claims brought under the Religious Freedom Restoration Act (RFRA). Those claims were not pursued on appeal. Instead, the claims allege violations of the Federal Land Policy Management Act (FLPMA) and the National Environmental Policy Act (NEPA). In determining whether a preliminary injunction should issue, the Appeals Court said it is bound by the Supreme Court’s recent opinion in Winter v. Natural Res. Def. Council, 129 S. Ct. 365 (2008) [See WIMS 11/12/08].

The Appeals Court said it "must decide whether the Tribes have shown that they are likely to succeed on the merits of their claims; that they are likely to suffer irreparable harm if a preliminary injunction is denied; that the balance of the equities tips in their favor; and that an injunction is in the public interest. . . The Tribes must make each of these showings to be entitled to injunctive relief. . . To succeed on the merits of their action under the Administrative Procedure Act, the Tribes must show that BLM’s action was arbitrary and capricious or contrary to law. . ."

The Appeals Court ruled, "Given the thorough consideration of the project’s impact on the Tribes religion in the Environmental Impact Statement (EIS), which was approved after more than two years of study and consultation with the Tribes and with the public, we conclude that the Tribes have not satisfied their burden of showing a likelihood of success on the merits of their FLPMA claims. We reverse the denial of injunctive relief on the NEPA claims, however, and remand for the entry of an injunction pending preparation of an EIS that adequately considers the environmental impact of the extraction of millions of tons of refractory ore, mitigation of the adverse impact on local springs and streams, and the extent of fine particulate emissions."

Further, the Appeals Court said, "The likelihood of irreparable environmental injury without adequate study of the adverse effects and possible mitigation is high. Indeed the district court did not question the irreparable environmental harm threatened by this massive project, and that will be visited most directly on the plaintiffs. The resulting hardship asserted by Cortez and the government is cast principally in economic terms of employment loss, but that may for the most part be temporary. Given the narrow scope of our holding, which rejects the broader FLPMA contentions, the balance of hardship favors the appellants. As to the public interest, Congress’s determination in enacting NEPA was that the public interest requires careful consideration of environmental impacts before major federal projects may go forward. Suspending a project until that consideration has occurred thus comports with the public interest."

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Ackerson v. Bean Dredging LLC

Nov 25: In the U.S. Court of Appeals, Fifth Circuit, Case No. 07-30272. In this multi-party case known as the Katrina Canal Breaches Litigation, appellants sued the United States and thirty-two defendants who dredged the Mississippi River Gulf Outlet to recover damages sustained during Hurricane Katrina. The district court dismissed the claims against the dredgers because it determined that the defendants acted pursuant to contracts with the United States government under authority granted by an act of Congress. The appellants argue that the district court improperly: (1) dismissed their claims; (2) refused to allow them to amend their complaint; (3) refused to allow them to conduct discovery; and (4) entered judgment in favor of those defendants whose actions had been stayed after they filed petitions under the Limitation of Liability Act.The Appeals Court affirmed the district court decision.

While admitting that the district court did commit a procedural error, the Appeals Court ruled, "A district court’s failure to comply with formal procedural requirements is a ground for reversing a judgment when “the failure substantially prejudiced one of the parties.” Here, the limitation actions and the merits actions were before the same district court. Because the district court could cure the procedural defect merely by entering a stay in the limitation actions and then entering judgment for the Limitation Defendants in the merits action, the Plaintiffs would be in the same position if the district court followed the proper procedure. The Plaintiffs have not identified any substantial prejudice arising out of the district court’s procedural error. Thus, we affirm the entry of judgment in favor of the Limitation Defendants.

"Because we hold that the Contractor Defendants are entitled to government-contractor immunity under Yearsley and that the Plaintiffs’ other claims are without merit or are harmless error, we affirm the district court’s dismissal and deny the motion to dismiss the appeal as moot."

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