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]

 

GET THE REST OF TODAY'S NEWS (click here)

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]

 

GET THE REST OF TODAY'S NEWS (click here)

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]

 

GET THE REST OF TODAY'S NEWS (click here)

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]

 

GET THE REST OF TODAY'S NEWS (click here)

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]

 

GET THE REST OF TODAY'S NEWS (click here)

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]

GET THE REST OF TODAY'S NEWS (click here)