Vitol v. Primerose Shipping Co.

Feb 8: In the U.S. Court of Appeals, Fourth Circuit, Case No. 11-1900. Appealed from the United States District Court for the District of Maryland, at Baltimore. The Appeals Court summarizes that Vitol, S.A. (Vitol) brought the underlying action in the district court against Spartacus Navigation Corp. (Spartacus) and Primerose Shipping Company (Primerose) (collectively S&P) seeking to "pierce the corporate veil" and enforce a judgment against S&P it had previously obtained against Capri Marine, Ltd. (Capri Marine). After determining that its exercise of admiralty jurisdiction was proper, the district court granted motions to dismiss and to vacate attachment filed by S&P. The Appeals Court affirmed the judgment of the district court.

 

    By way of background, the Appeals Court explains, "In September 2000, the vessel ALAMBRA was involved in a marine pollution incident (the Oil Spill) while in port in the country of Estonia. The ALAMBRA was owned by Capri Marine and chartered by Vitol at the time of the Oil Spill. Vitol brought suit against Capri Marine in the English High Court of Justice, Queen's Bench Division, Commercial Court, alleging that Capri Marine breached certain warrantees of seaworthiness resulting in the Oil Spill and resulting damages. Vitol prevailed in the English court, and obtained a judgment in 2005 against Capri Marine in the amount of $6.1 million plus costs and interest (the English Judgment). The English Judgment remains unpaid and now totals over $9 million with accrued interest. During the English litigation, the ALAMBRA was sold for scrap by Capri Marine to Aurora Maritime (Aurora) for approximately $2 million."

   

    The Appeals Court concludes, "In sum, we agree with the district court's holding that the allegations in the Amended Verified Complaint fail to state a claim upon which relief may be granted, and dismissal was therefore warranted pursuant to Rule 12(b)(6). Vitol's allegations are conclusory and contain legal conclusions couched as factual allegations. To the extent that the Amended Verified Complaint does properly allege facts, those facts do not show more than 'a sheer possibility that a defendant has acted unlawfully.' See Iqbal, 556 U.S. at 678. Because 'the well-pleaded facts do not permit [this] [C]ourt to infer more than the mere possibility of misconduct, the complaint has alleged but it has not "shown"—'that the pleader is entitled to relief."' See id. at 679. As with the Supplemental Rule E analysis, we conclude the district court did not err in granting S&P's Rule 12(b)(6) motion to dismiss the Amended Verified Complaint."

 

    Access the complete opinion (click here). [#Energy/OilSpill, #CA4]

 

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Center For Biological Diversity v. Salazar (DOI/BLM)

Feb 4: In the U.S. Court of Appeals, Ninth Circuit, Case No. 11-17843. Appealed from the United States District Court for the District of Arizona. The Appeals Court explains that Appellants Center for Biological Diversity, Grand Canyon Trust, Sierra Club, Kaibab Band of Paiute Indians, and Havasupai Tribe contend that Appellees Ken Salazar, Secretary of the Interior, and the U.S. Bureau of Land Management (collectively, BLM) violated the National Environmental Policy Act (NEPA), the Federal Land Policy and Management Act (FLPMA), and its own regulations, by permitting Denison Mines Corp. and Denison Arizona Strip, LLC (collectively, Denison) to restart mining operations at the Arizona 1 Mine in 2009, after a seventeen-year hiatus, under a plan of operations that BLM approved in 1988.

 

    The district court denied the motion for preliminary injunction, holding that the 1988 plan of operations had not become ineffective and that BLM did not have to prepare a supplemental NEPA analysis prior to Denison recommencing mining operations. A panel of the Appeals Court affirmed the district court's denial of the preliminary injunction in an unpublished memorandum disposition.

 

    After further proceedings in the district court, both parties moved for summary judgment. The district court granted summary judgment in favor of Appellees as to all of Appellants' claims, with one exception. The district court determined that BLM "provided no more than a 'cursory statement' of no cumulatively significant impacts in applying the categorical exclusion" when issuing Mohave County the "Free Use Permit" to remove gravel from Robinson Wash and remanded the issue to the BLM. A short time later, BLM provided further explanation as to its use of the categorical exclusion. The district court found that BLM had presented

a rational explanation for its use of the categorical exclusion. Accordingly, the district court concluded that use of the categorical exclusion as to the gravel permit was not arbitrary and capricious. The district court thus granted summary judgment on the categorical exclusion issue in favor of Appellees.

 

    The Appeals Court concluded, "In sum, we conclude that BLM's invocation of the categorical exclusion was not arbitrary and capricious or otherwise not in accordance with law. Alaska Ctr. for Env't v. U.S. Forest Serv., 189 F.3d 851, 859 (9th Cir. 1999). We thus affirm the district court's summary judgment against Appellants as to BLM's invocation of the categorical exclusion for issuance of the Robinson Wash gravel permit."

 

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

 

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American Petroleum Institute v. U.S. EPA

Jan 25: In the U.S. Court of Appeals, D.C. Circuit, Case No. 12-1139. The Appeals Court explains that, "This case arises out of Congress's command that the Environmental Protection Agency make predictions about a promising technology. While the program as a whole is plainly intended to promote that technology, we are not convinced that Congress meant for EPA to let that intent color its work as a predictor, to let the wish be father to the thought."

 

    Further the Appeals Court indicates that in 2005 and again in 2007, Congress amended the Clean Air Act (Act) to establish a renewable fuel standard (RFS) program, now codified at 42 U.S.C. § 7545(o). See Energy Policy Act of 2005, Pub. L. No. 109-58; Energy Independence and Security Act of 2007, Pub. L. No. 110-140. Under the RFS program, EPA must promulgate regulations to ensure that transportation fuel sold or introduced into commerce (hereafter collectively, sold) in the 48 contiguous U.S. states contains an increasing measure of renewable fuel through 2022. See generally 42 U.S.C. § 7545(o)(2). The Act enumerates yearly "applicable volume" requirements not only for renewable fuel but also for a subclass known as "advanced biofuels," which produce lower greenhouse gas emissions than conventional renewable fuels such as corn-based ethanol. Id. §§ 7545(o)(1)(B) (definition of advanced biofuel), 7545(o)(2)(B) (applicable volumes). The "applicable volume" for a particular fuel (a phrase used repeatedly in the statute and thus in this opinion) determines how much of that fuel refiners, importers and blenders must purchase each year in order to comply with the RFS program. Id. § 7545(o)(3)(B).

 

    The Act requires that more than three quarters of advanced biofuel sold in the United States after January 1, 2022 be cellulosic biofuel. When Congress introduced the cellulosic biofuel requirement in 2007, there was no commercial-scale production at all. Yet Congress mandated cellulosic biofuel sales in the U.S. of 100 million gallons in 2010, 250 million in 2011, and half a billion in 2012. However, Congress provided an escape valve in case those levels could not be reached and called for a determination by EPA of the "projected volume of cellulosic biofuel production" for each calendar year. The Administrator "may also reduce the applicable volume of renewable fuel and advanced biofuels" required for that year.

 

    The Appeals Court indicates, "In a January 2012 Final Rule (the 2012 RFS rule), EPA projected that 8.65 million gallons of cellulosic biofuel (10.45 million ethanol-equivalent gallons) would be produced in 2012, well short of the 500 million ethanol-equivalent gallons mandated by the Act for that year. . . In the same rule, EPA considered but rejected a reduction in the volume of total advanced biofuels required for 2012, stating that other kinds of advanced biofuels could make up for the shortfall...

 

    "Petitioner American Petroleum Institute (API) objects both to EPA's 2012 projection for cellulosic biofuel and to its refusal to reduce the applicable advanced biofuels volume for 2012. We reject API's argument that EPA failed to justify its determination not to reduce the applicable advanced biofuels volume for 2012. But we agree with API that because EPA's methodology for making its cellulosic biofuel projection did not take neutral aim at accuracy, it was an unreasonable exercise of agency discretion. . . We accordingly vacate that aspect of the 2012 RFS rule and remand for further proceedings consistent with this opinion."

 

    The Appeals Court noted further that, "The agency adequately grounded its determination in historical data on sugarcane ethanol imports and biodiesel production, as well as governmental and non-governmental projections for future production of those fuels. See 77 Fed. Reg. at 1,331-37. We find especially relevant EIA's projection of 300 million gallons of sugarcane ethanol imports for 2012 and EPA's estimation of 2.4 billion gallons in U.S. biodiesel production capacity. See id. at 1,332, 1,334. These data plausibly suggest that some combination of the two sources of advanced biofuels will be available to make up for the shortfall in cellulosic biofuel. Moreover, in sharp distinction with cellulosic biofuel, there appears to be no great obstacle to the production of advanced biofuel generally; to the extent that estimates in the record are relatively low, that seems to be based on want of a market, which of course continued pressure will tend to solve."

 

        In a release from API on the decision, Group Downstream Director Bob Greco said, "We are glad the court has put a stop to EPA's pattern of setting impossible mandates for a biofuel that does not even exist. This absurd mandate acts as a stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers. This decision relieves refiners of complying with the unachievable 2012 mandate and forces EPA to adopt a more realistic approach for setting future cellulosic biofuel mandates. The court has provided yet another confirmation that EPA's renewable fuels program is unworkable and must be scrapped."

    Greco said API continues to recommend that "EPA base its prediction on the previous year of actual cellulosic biofuel production in the current year when establishing the mandated volumes for the following year. This approach would provide a more realistic assessment of potential future production rather than simply relying on the assertions of companies whose ability to produce the cellulosic biofuel volumes EPA hopes for is questionable."

 

    Access the complete opinion (click here). Access a release from API (click here). [#Energy/RFS, #Energy/Biofuel, #CADC]

 

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D.C. Circuit Denies Full Panel Review Of Cross State Air Pollution Rule

Jan 24: In the U.S. Court of Appeals, D.C. Circuit, Case No. 11-1302, EME Homer City Generation, L.P v. U.S. EPA, consolidate with 44 additional cases. In this high-profile case, on August 21, 2012, the Appeals Court, in a split 2-1 decision, dealing with U.S. EPA's controversial Cross State Air Pollution Rule (CSAPR), vacated the Transport Rule and the Transport Rule FIPs and remand this proceeding to EPA. EPA and others requested an en banc (full panel) rehearing of the case and the Appeals Court denied the request. Judge Kavanaugh wrote the opinion of the court when the three-judge panel ruled in August, joined by Judge Griffith. The opinion expressly left in place the existing Clean Air Interstate Rule (CAIR) pending EPA's further action.

 

    In its August ruling the majority ruled in part, ". . .this Court has affirmed numerous EPA clean air decisions in recent years when those agency decisions met relevant statutory requirements and complied with statutory constraints. . . In this case, however, we conclude that EPA has transgressed statutory boundaries. Congress could well decide to alter the statute to permit or require EPA's preferred approach to the good neighbor issue. Unless and until Congress does so, we must apply and enforce the statute as it's now written. Our decision today should not be interpreted as a comment on the wisdom or policy merits of EPA's Transport Rule. It is not our job to set environmental policy. Our limited but important role is to independently ensure that the agency stays within the boundaries Congress has set. EPA did not do so here."

 

    The Transport Rule defined emissions reduction responsibilities for 28 upwind States based on those States' contributions to downwind States' air quality problems.The Transport Rule targets two pollutants -- sulfur dioxide (SO2) and nitrogen oxides (NOx). In a release on the decision, the Environmental Defense Fund (EDF) said that CSAPR was an "historic pollution reduction measure that would have protected air quality for 240 million Americans across the Eastern United States and saved up to 34,000 lives each year. EDF General Counsel Vickie Patton said, "We urge EPA, states and cities alike to take corrective action and secure healthier, longer lives for millions of Americans. The states and cities afflicted by power plant pollution can and should petition EPA under the nation's clean air laws to safeguard the health of their citizens."   

    Three petitions were filed asking the full court for a rehearing. EDF -- joined by the American Lung Association, Clean Air Council, Natural Resources Defense Council, and Sierra Club -- filed one of the petitions in support of the Cross-State Rule. EPA also filed a petition, as did a coalition of 15 states and cities (North Carolina, Connecticut, Delaware, Illinois, Maryland, Massachusetts, New York, Rhode Island, Vermont, Baltimore, Bridgeport, Chicago, New York City, Philadelphia, and Washington, D.C.).

    EDF indicates that CSAPR would have reduced the sulfur dioxide and oxides of nitrogen pollution emitted from coal-fired power plants across 28 eastern states. Those emissions, and the resulting particulate pollution and ozone -- more commonly known as soot and smog -- drift across the borders of those states and contribute to dangerous, sometimes lethal, levels of pollution in downwind states. CSAPR would have reduced power plant sulfur dioxide emissions by 73 percent and oxides of nitrogen by 54 percent from 2005 levels. 

    EPA issued the Cross-State Air Pollution Rule under the "good neighbor" protections of the Clean Air Act, which ensure that the emissions from one state's power plants do not cause harmful pollution levels in neighboring states. While no one is immune to these impacts, children and the elderly in downwind states are especially vulnerable. EPA estimated the Cross-State Rule would have: Saved up to 34,000 lives each year; Prevented 15,000 heart attacks each year; Prevented 400,000 asthma attacks each year; and Provided up to $280 billion in health benefits for America each year .

    On November 19, 2012, EPA Assistant Administrator Gina McCarthy issued a Memorandum regarding the "Next Steps for Pending Redesignation Requests and State Implementation Plan Actions Affected by the Recent Court Decision Vacating the 2011 Cross-State Air Pollution Rule." The Memo explains that while the request for en banc review is pending CAIR remains in effect and says, "In the meantime, we have work to do. Statutory deadlines and other circumstances will require us to take various actions during this period and it is important that we all understand how best to take into account the Court's decision." That Memo now takes on new importance and will apparently guide EPA on this issue until new guidance or new rules are proposed (See link below).

    The coalition of states -- led by New York Attorney General Eric Schneiderman -- urged the court to uphold the Federal Cross-State Air Pollution Rule in earlier arguments before the D.C. Circuit. Schneiderman said back in April 2012, "For too long, New York and other states have been harmed by upwind smokestack pollution. It is critical that strong rules protecting the air we breathe are both upheld and enforced. The transport of this kind of air pollution into our state makes it exceedingly difficult for New York to meet federal air quality standards intended to protect public health, resulting in undue hardship for people suffering from asthma and other health conditions. My office stands ready and willing to fight for our ability to maintain healthy air with the reasonable assurance that our efforts won't be undercut by out-of-state polluters." 

    Access the August 21, 2012 Appeals Court complete 104-page opinion and dissent (click here, dissent begins on pp. 61). Access a lengthy release from EDF with links to related information (click here). Access the EPA November 19, 2012 Memo (click here). Access EPA's petition for rehearing en banc (click here). Access EPA's CSAPR website for background and further details (click here). Access a release from the NY attorney general (click here). [#Air, #MIAir, #CADC]

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Alaska Survival, et al v. Surface Transportation Board

Jan 23: In the U.S. Court of Appeals, Ninth Circuit, Case No. 12-70218. The Appeals Court explains that in this appeal it considers whether principles of administrative law and a controlling statute governing railroad extensions and applicable protections of environmental laws require it to grant a petition for review of a specialized Agency's decision to permit the extension of a railroad line to Port MacKenzie, Alaska [See WIMS 1/29/12]. Petitioners Alaska Survival, Sierra Club, and Cook Inletkeeper seek review of the Surface Transportation Board's (STB) decision authorizing Alaska Railroad Corporation (ARRC) to construct about thirty-five miles of new rail line between Port MacKenzie, located in Alaska's Cook Inlet, and the railroad's main line, located near Wasilla, Alaska.

 

    The STB granted ARRC an exemption under 49 U.S.C. § 10502 of the Interstate Commerce Commission Termination Act of 1995 (ICCTA) and authorized ARRC to construct the rail line. Petitioners challenge the STB's authority to exempt the railroad from the full licensing provisions of 49 U.S.C. § 10901 and the Agency's compliance with the National Environmental Policy Act (NEPA). Respondents claim that Petitioners did not administratively exhaust the issue of whether the STB properly granted the exemption and that the issue is not properly before us. The Appeals Court said, "we deny the petition for review."

 

    In its final conclusion, the Appeals Court said, "We hold that the procedures of the STB under the ICCTA [Interstate Commerce Commission Termination Act] were sufficient and were satisfied and that there was no error under NEPA because the purpose and need statement was adequate; the agency considered all viable, reasonable alternatives; and the EIS contains a detailed, thorough, and thoughtful discussion of the wetlands impacts and mitigation measures. Concluding that there was no violation of the ICCTA, NEPA, or the APA, we deny the petition for review."

 

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

 

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Sierra Club v. U.S. EPA

Jan 22: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1413. On Petition for Review of Final Actions of the United States Environmental Protection Agency.

 

    The Appeals Court explains that in October 2010, U.S. EPA issued a final rule establishing regulations for particulate matter less than 2.5 micrometers (PM2.5) under § 166 of the Clean Air Act (the Act), 42 U.S.C. § 7476. See Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5) -- Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC), 75 Fed. Reg. 64,864 (Oct. 20, 2010). In this rule, the EPA established Significant Impact Levels (SILs) and a Significant Monitoring Concentration (SMC) for PM2.5, screening tools the EPA uses to determine whether a new source may be exempted from certain requirements under § 165 of the Act, 42 U.S.C. § 7475. 75 Fed. Reg. at 64,890– 91, 64,895. Petitioner Sierra Club seeks review of this regulation.

 

    After the Sierra Club filed its petition, the EPA acknowledged that portions of the rule establishing SILs did not reflect its intent in promulgating the SILs, and now requests that we vacate and remand some (but not all) parts of its PM2.5 SIL regulations. The Appeals Court indicated that, "Notwithstanding the EPA's concession, the Sierra Club maintains that the EPA lacks authority to establish SILs and requests that we rule accordingly. The Intervenor, Utility Air Regulatory Group (UARG), on the other hand, urges us to uphold the SIL provisions EPA established, or alternatively, to remand the SIL provisions without ordering that they be vacated."

 

    The Appeals Court said, "Although the EPA conceded that it needs to revise some of the SIL provisions, it continues to assert that the portions of its rule establishing the SMC were valid. For the reasons stated below, we accept the EPA's concession on the SILs, and vacate and remand some portions of the EPA's rule establishing SILs. We further conclude that the EPA exceeded its authority in establishing the SMC, and grant the Sierra Club's petition as to those portions of the EPA's rule."

 

    The Appeals Court explains further that, "After the Sierra Club filed its petition, the EPA acknowledged that portions of the rule establishing SILs did not reflect its intent in promulgating the SILs, and now requests that we vacate and remand some (but not all) parts of its PM2.5 SIL regulations. Notwithstanding the EPA's concession, the Sierra Club maintains that the EPA lacks authority to establish SILs and requests that we rule accordingly. . .

 

    "Despite the EPA's concession, the Sierra Club asserts that vacatur and remand, while warranted, does not fully resolve its challenge, and asks that we determine whether the EPA has authority to promulgate SILs. We disagree with the Sierra Club that it is necessary to decide the EPA's authority to promulgate SILs at this point. To do so would require that we answer a question not prudentially ripe for determination. On remand the EPA may promulgate regulations that do not include SILs or do include SILs that do not allow the construction or modification of a source to evade the requirements of the Act as do the SILs in the current rule. In such an event, we would not need to address the universal disallowance of all de minimis authority. If the EPA promulgates new SIL provisions for PM2.5 and those provisions are challenged, we can then consider the lawfulness of those SIL provisions."

 

    Further, the Appeals Court rules, "We are not now ruling on the methodology the EPA used to determine the SILs. Instead, we are vacating and remanding §§ 51.166(k)(2) and 52.21(k)(2) based on the EPA's lack of authority to exempt sources from the requirements of the Act. Therefore, vacatur and remand of § 51.165(b)(2) is not necessary at this point. Accordingly, we vacate and remand the portions of the EPA's rule regarding SILs, with the exception of those portions codified in 40 C.F.R. § 51.165(b)(2). . .

 

    "We disagree with the EPA that the Sierra Club's petition is time-barred, and we agree with the Sierra Club that the EPA did not have de minimis authority to promulgate the SMC because we hold Congress was "extraordinarily rigid" in mandating preconstruction air quality monitoring. . ."

 

    Finally, the Appeals Court concludes, ". . .we vacate and remand to the agency for further consideration the portions of the EPA's rule addressing SILs, except for the parts of its rule codifying PM2.5 SILs in 40 C.F.R. § 51.165(b)(2). We grant the Sierra Club's petition as to the parts of the EPA's rule establishing a PM2.5 SMC, and vacate them because these parts of the rule exceed the EPA's statutory authority. See 42 U.S.C. § 7607(d)(9)(3)."

 

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

 

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Honeywell International, Inc. v. U.S. EPA

Jan 22: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1347, consolidated with 10-1348, 10-1349, 10-1350. On Petitions for Review of Rules of the Environmental Protection Agency. The Appeals Court explains that under the Clean Air Act, U.S. EPA administers a cap-and-trade program regulating the production and consumption of hydrochlorofluorocarbons, a class of ozone-depleting pollutants. (It is noted parenthetically: "We frown on excessive use of acronyms, but in a case involving a 24-letter word, we think it appropriate to use HCFCs for hydrochlorofluorocarbons.") This cap-and-trade program entails overall caps on production and consumption of various HCFCs for each year, as well as EPA-administered baseline allowances of HCFCs for each participating company. Companies are then permitted to transfer their

allowances, subject to certain statutory and regulatory restrictions.

 

    The Appeals Court said, "Honeywell and DuPont, whom we refer to collectively as Honeywell, complain that certain 2008 transfers made by their competitors Arkema and Solvay were deemed to permanently increase those competitors' future baseline

allowances of HCFC-22. Because there is an overall cap on HCFC-22 production, this is a zero-sum system: The increased allowances to Arkema and Solvay in turn reduced Honeywell's market share and allowances of HCFC-22. The problem for Honeywell here is that this Court concluded in Arkema Inc. v. EPA that those permanent transfers were valid under the Clean Air Act. 618 F.3d 1, 6-9 (D.C. Cir. 2010). Honeywell believes that Arkema was incorrectly decided. Absent en banc review, we must adhere to circuit precedent. And because Honeywell's other challenges to the 2008 transfers are meritless, we deny the petitions for review."

 

    The Appeals Court said further and concluded, "Honeywell disagrees strongly with this Court's decision in Arkema. For that matter, EPA says that it too disagrees with Arkema. (Intervenors Arkema and Solvay are of course happy with Arkema.) Absent en banc review, we are bound by the Arkema decision. In a roundabout attempt to undermine the now-permanent 2008 transfers, Honeywell also raises longshot procedural challenges to the 2008 transfers themselves. The basic answer to those various arguments is that Honeywell had notice and an opportunity to present its views during EPA's pre-Arkema regulatory proceedings, during the Arkema litigation, and during EPA's subsequent post-Arkema proceedings. Because Honeywell had notice and an opportunity to comment, and EPA's reasonable interpretation of its regulation controls, see Auer v. Robbins, 519 U.S. 452, 461 (1997), its procedural objections to the 2008 transfers are unavailing. As is apparent from the briefing, Honeywell's real problem here is the permanence of the 2008 interpollutant transfers by Arkema and Solvay and the altered HCFC-22 allowances for the 2010-2014 period. In other words, Honeywell's real problem is Arkema. But a panel cannot remedy that problem."

 

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

 

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