Angelex LTD. v. U.S.

Jul 22: In the U.S. Court of Appeals, Fourth Circuit, Case No. 13-1610. Appealed from the United States District Court for the Eastern District of Virginia, at Norfolk. The Appeals Court summarizes saying the U.S. Coast Guard, and the U.S. Customs and Border Protection Agency (collectively, Respondents or the government) appeal the district court's order, which, upon an emergency petition filed in the Eastern District of Virginia, (1) altered the terms of a bond the Coast Guard had fixed for the release of a detained ship that was under investigation; and (2) restricted the types of penalties the government could seek for the ship's potential violations of certain ocean pollution prevention statutes. The matter was not subject to review in the district court because the Coast Guard's actions were committed to agency discretion by law. As a result, the district court lacked jurisdiction to consider the petition and the Appeals Court also determined, ". . .we reverse and remand for dismissal of the Petition for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1)."

 

    The case involves the fact that the U.S. is a signatory to MARPOL, which is a multi-national treaty aimed at achieving the complete elimination of international pollution of the marine environment by oil and other harmful substances and the minimization of accidental discharge of such substances. In fulfilling its obligations pursuant to MARPOL, Congress enacted the Act to Prevent Pollution from Ships (APPS). which requires the Secretary of the Department of Homeland Security  (DHS) to administer and enforce" MARPOL, as well as statutes and regulations designed to preserve the marine environment.

 

    There are two Petitioners in this appeal: the Antonis G. Pappadakis (Pappadakis or the vessel), an ocean-going bulk cargo carrier, which was built in 1995 and registered in Malta; and Angelex Ltd. (Angelex), a company that purchased the vessel on March 9, 2007. Kassian, a Greek company, serves as the vessel's operator.

 

    In this complicated case involving pollution by the vessel and subsequent detaining of the vessel by the Coast Guard subject to posting a bond, the amount of which was in dispute, Angelex asserts that the Coast Guard acted "arbitrarily, capriciously, and unreasonably" in detaining the Pappadakis, setting a bond which Angelex cannot post, and demanding a security agreement with terms that are not authorized by the operative statute.

 

    The Appeals Court says, ". . .we disagree with Appellees' characterization of the Petition as an attack on the statutory authority or constitutionality of the Coast Guard's actions. First, Appellees cannot with a straight face argue that the Coast Guard has acted outside the bounds of § 1908(e). Indeed, those bounds are quite limitless. The Coast Guard may demand a low bond, a high bond, or may refuse to grant clearance altogether. . . In short, the Coast Guard's stringent conformity to § 1908(e) simply does not give rise to a reviewable claim."

 

    The Appeals Court also notes that, "APPS contains a built-in safeguard to governmental abuses, which further convinces us that Angelex's Petition is out of place and time. In addition to the criminal and civil penalties that APPS authorizes the United States to seek, APPS provides for compensation for loss or damage as a result of unreasonable detention by the Coast Guard. . . the Coast Guard's decisions regarding bond conditions with regard to the Pappadakis are unreviewable, and the district court thereby did not possess subject matter jurisdiction under the APA."

    Access the complete opinion (click here). [#Water, #CA4]

State Of Oklahoma v. U.S. EPA

Jul 19: In the U.S. Court of Appeals, Tenth Circuit, Case No. 12-9526 & 12-9527. Petition for review of final decision issued by U.S. EPA Re: EPA-R06-OAR-2010-0190. The Appeals Court explains that in these consolidated petitions for review, petitioners challenge a final rule promulgated by U.S. EPA under the Clean Air Act. The petitioners -- Oklahoma, the Oklahoma Industrial Energy Consumers interest group, and the Oklahoma Gas and Electric Company -- argue that the EPA impermissibly rejected Oklahoma's plan to limit the emissions of sulfur dioxide at Oklahoma Gas and Electric (OG&E) Company power plants and replaced it with its own more stringent regulations, which petitioners contend usurped the State's authority and will require sizable expenditures on unnecessary technology. In a split decision, the Majority Appeals Court ruled, "We conclude that the EPA has authority to review the state's plan and that it lawfully exercised that authority in rejecting it and promulgating its own. Exercising our jurisdiction under 42 U.S.C. § 7607(b)(1), we deny the petitions for review."

 

    On one claim by petitioners that EPA violated procedural requirements of the Clean Air Act, the Majority rules that, "The statute itself makes clear that the mere filing of a SIP by Oklahoma does not relieve the EPA of its duty. And the petitioners do not point to any language that requires the EPA to delay its promulgation of a FIP until it rules on a proposed SIP. As the EPA points out, such a rule would essentially nullify any time limits the EPA placed on states. States could forestall the promulgation of a FIP by submitting one inadequate SIP after another."

 

    The Majority explains on one of the contested issues that, petitioners argue that EPA lost authority to promulgate its FIP [Federal Implementation Plan] because more than two years had passed since the EPA made its initial finding that Oklahoma failed to submit a SIP [State Implementation Plan]. The Majority said, "Although the statute undoubtedly requires that the EPA promulgate a FIP within two years, it does not stand to reason that it loses its ability to do so after this two-year period expires. Rather, the appropriate remedy when the EPA violates the statute is an order compelling agency action."

 

    The Majority cites the Supreme Court decision of Brock v. Pierce County, 476 U.S. 253 (1986) and said, "The petitioners do not explain why the principles of Brock would not also control this case. The provision here is 'clearly intended to spur [the EPA] to action, not to limit the scope of [its] authority.' Id. at 265. In the absence of any other indication from Congress, the appropriate remedy is simply a suit to compel agency action, not to eliminate the EPA's authority to file a FIP." [citing Mont. Sulphur & Chem. Co. v. EPA, 666 F.3d 1174, 1190-91 (9th Cir. 2012)].

 

    In a dissenting opinion that also concurred in part, one Justice said, "Although I agree with much of the court's analysis, I dissent with respect to whether certain EPA actions were arbitrary and capricious. See Ct. Op. Pt. IV(A) (analyzing the EPA's calculations of baseline emissions and its determination regarding the technical feasibility of the smaller scrubbers on which it based its cost/benefit analysis). Therefore, I would grant the petition for review."

 

    The dissent concludes, "Although the EPA has at least some authority to review BART [best available retrofit technology] determinations within a state's SIP, it has no authority to condition approval of a SIP based simply on a preference for a particular control measure. . .  Oklahoma considered the cost and resulting benefit of such a large investment in scrubbers, and its conclusion was not unreasonable. Assuming the EPA has authority to review Oklahoma's SIP in the manner it did, its rejection of the SIP and promulgation of its own FIP was arbitrary and capricious. Accordingly, I respectfully dissent on this issue."

 

    Sierra Club, a party in the case, issued a release calling the decision "major victory." Whitney Pearson, with Sierra Club said, "Today the court has upheld a common-sense solution to a serious pollution problem. Both in Oklahoma and around the nation, we see smart utilities showing leadership and making the right choices for our pocketbooks and our health. Now we have another signal that OG&E needs to make these smart choices too." David Ocamb, director of the Oklahoma Chapter of the Sierra Club said, "OG&E sends hundreds of millions of dollars out of state each year to import coal and the pollution that comes with it. For a state with abundant, homegrown natural resources, this makes no sense,. The Court upheld the law and acted in Oklahoma's best interests when OG&E wouldn't. It's time for OG&E to do what's right and phase out their coal plants. "

 

    Access the complete opinion and dissent (click here). Access the release from Sierra Club (click here). [#Air, #CA10]

USA v. Citgo Petroleum Corporation

Jul 17: In the U.S. Court of Appeals, Fifth Circuit, Case No. 11-31117. Appealed from the United States District Court for the Western District of Louisiana. The Appeals Court summarizes saying the United States brought suit against Citgo Petroleum Corporation, seeking civil penalties and injunctive relief under the Clean Water Act (CWA). After a bench trial, the district court imposed a $6 million penalty against Citgo and ordered injunctive relief. The United States appeals, arguing the amount of the penalty is inadequate. Citgo cross-appeals, arguing the district court lacked jurisdiction.

 

    The Appeals Court rules, "There is jurisdiction, but we conclude the district court erred in failing to provide a reasonable approximation of economic benefit as required under the CWA and our caselaw. We vacate the civil penalty award and remand for further proceedings."

 

    Significantly, the Appeals Court indicates that, ". . .the district court concluded in less than one page of analysis that Citgo was not grossly negligent." Citing that a district courts' "finding that a party is negligent or grossly negligent is a finding of fact and must stand unless clearly erroneous." Houston Exploration Co. v. Halliburton Energy Servs., Inc., 269 F.3d 528, 531 (5th Cir. 2001). "And saying, "A finding of fact is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." The Appeals Court said, "In our view, though, almost winning a highly risky gamble with the environment does not much affect the egregiousness of having been gambling in the first place."

 

    The Appeals Court rules, "We have acknowledged the need to uphold the district court's findings unless clearly erroneous. We make no ruling on this question now. The category of negligence into which Citgo's conduct is placed is part of the overall analysis underlying the setting of the appropriate penalty. Because of the conclusions we have already set out, the district court will have the obligation on remand to re-analyze the civil penalty award. At that time, the district court should reconsider all its findings with respect to Citgo's conduct, giving special attention to what Citgo knew prior to the oil spill and its delays in addressing recognized deficiencies."

 

    Another issue is that the government contends that district court used of Citgo's estimate of the amount of oil spilled in calculating the penalty. On the question of how much oil was spilled, the district court accepted Citgo's estimation. After evaluating the methods of calculation used by the parties' experts, the court found Citgo's estimate of 54,000 barrels "more reasonable and credible" than the government's higher estimate of 76,800 barrels. The government's argument on this issue is essentially that the court credited the wrong expert.

 

    The Appeals Court cites, "Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Bertucci Contracting Corp. v. M/V ANTWERPEN, 465 F.3d 254, 258 (5th Cir. 2006); and says, "Consequently, we reject the government's argument that the district court erred with respect to its findings on the amount of oil spilled.

 

    "The district court's civil penalty is vacated and this case is remanded for further consideration of the statutory penalty factors and its finding of negligence consistent with this opinion."

 

    Access the complete opinion (click here). [#Water, #Remed, #CA5]

Colon-Cabrera v. Esso Standard Oil Company

Jul 17: In the U.S. Court of Appeals, First Circuit, Case No. 11-2477. Appealed from the District Court of Puerto Rico, San Juan. The Appeals Court explains that appellant Manuel Colón Cabrera filed suit against appellee Esso Standard Oil Company under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6972, seeking to compel Esso to remediate environmental contamination at a gas station he owned. After lengthy proceedings in the district court and in a concurrent action in the Puerto Rico commonwealth courts, Colón Cabrera filed a motion for voluntary dismissal under Federal Rule of Civil Procedure 41(a)(2), stating that the Federal lawsuit was no longer necessary in light of Esso's alleged concession that it would clean up his gas station.

 

    The district court held its ruling on the motion in abeyance while the parties engaged in settlement negotiations. Although it appeared for a time that the parties would be able to resolve the matter, the Negotiations were ultimately unsuccessful. The district court Subsequently granted Colón Cabrera's motion, but chose to dismiss the case with prejudice pursuant to Rule 41(a)(2) and assess attorneys' fees and costs against him.

 

    Colón Cabrera appealed, arguing that the district court abused its discretion in dismissing the case with prejudice. The Appeals Court rules that, "The parties offer different portrayals of the proceedings. . . but the issue that concerns us here is the district court's emphasis on Colón Cabrera's refusal to accept Esso's settlement offers. We conclude that dismissing the case with prejudice based on appellant's refusal to settle was an abuse of discretion. We therefore vacate the dismissal order and remand for further proceedings."

 

    In concluding, the Appeals Court states, "Given our present understanding of the record, we see no justification for dismissal with prejudice. Nevertheless, we owe deference to the district court's familiarity with the litigation and its grasp of all the relevant facts. We therefore remand so that the district court can reconsider the issue with the benefit of our guidance. If on remand the district court concludes that dismissal with prejudice is a proper exercise of its discretion, it should take care to evaluate the appropriate factors fully and provide an explanation of its reasons."

 

    Access the complete opinion (click here). [#Remed, #Haz, #CA1]

Hoosier Environmental Council v. U.S. Army Corps of Engineers

Jul 16: In the U.S. Court of Appeals, Seventh Circuit, Case No. 12-3187. Appealed from the United States District Court for the Southern District of Indiana, Indianapolis Division. The Appeals Court explains that the case involves the scope of the duty imposed on the Army Corps of Engineers by section 404 of the Clean Water Act and its implementing regulations, to protect wetlands that contain or are covered by waters of the United States (and so are within Federal jurisdiction) from environmental degradation by caused by the construction of a highway. Implementing regulations state that a permit will be denied if the Corps finds that there is "a practicable alternative to the proposed discharge which would have less adverse impact on the aquatic ecosystem," or if the discharge "would be contrary to the public interest." The Appeals Court highlights the above words with italics saying they "are the ones critical to this case."

 

    Environmentalists opposed building a highway (Interstate 69 connection) on the direct route from Indianapolis to Evansville on the ground that it would destroy wetlands, disrupt forests, and also disrupt "karst" ecosystems, unusual landscapes permeated by caves and other formations that provide rich habitats for wildlife, including such endangered and threatened species as the Indiana bat (endangered) and the bald eagle (threatened). The Appeals Court indicates that most of the environmental concerns have been resolved, and this case is concerned just with the filling of wetlands and of stream crossings.

 

    Environmental groups object to the choice of the direct route. They argue that the Corps failed to consider whether the direct route as a whole, rather than one section of it, would be in the public interest and whether the indirect route would be a practicable alternative. But the district court found the Corps' analysis adequate to justify the grant of the permit and so awarded summary judgment to the defendants, precipitating this appeal.

 

    The Appeals Court said, "The plaintiffs have not shown that the conclusion the Corps drew from its detailed and highly technical analysis -- that section 3 of the direct route is in the public interest -- was unreasonable. The Appeals Court concludes in affirming the district decision, "Anyway the highway agencies' Environmental Impact Statements had covered most, maybe all, of the ground that a public interest analysis would have covered. The plaintiffs argue neither that the project as a whole is contrary to the public interest nor that it was sectioned in order to prevent consideration of its total environmental harms. . .They may be playing a delay game: make the Corps do a public interest analysis from the ground up (along with an all-at-once six-section permit analysis) in the hope that at least until the analysis is completed there will be no further construction, so that until then the highway will end at the northernmost tip of section 3 -- making it a road to nowhere."

 

    Access the complete opinion (click here). [#Water/Wetlands, #Transportation, #CA7]

Center for Biological Diversity v. U.S. EPA

Jul 12: In the U.S. Court of Appeals, D.C. Circuit, Case No. 11-1101, consolidated with 11-1285, 11-1328, 11-1336. On Petitions for Review of Administrative Action of the Environmental Protection Agency. In a split decision, the majority explains that as part of its ongoing effort to limit the emission of greenhouse gases, U.S. EPA issued a rule deferring regulation of "biogenic" carbon dioxide -- non-fossil-fuel carbon dioxide sources such as ethanol -- for three years. Citing scientific uncertainty over how to account for biogenic carbon dioxide's unique role in the carbon cycle, EPA justified this "Deferral Rule" on the basis of the de minimis, one-step-at-a-time, and administrative necessity doctrines. Several environmental groups petitioned for review, arguing that EPA's invocation of these doctrines was arbitrary and capricious. The majority vacated EPA's Deferral Rule.

 

    The majority indicates that EPA defines biogenic carbon dioxide emissions, as emissions "directly resulting from the combustion or decomposition of biologically-based materials other than fossil fuels and mineral sources of carbon." Deferral for CO2 Emissions from Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs ("Deferral Rule"), 76 Fed. Reg. 43,490, 43,493 (July 20, 2011). Biogenic carbon dioxide emissions are generated from, among other things, "the biological decomposition of waste in landfills, wastewater treatment[,] or manure management processes," "fermentation during ethanol production," and the "combustion of biological material, including all types of wood and wood waste, forest residue, and agricultural material." The majority also indicates that the Deferral Rule contains a sunset provision on July 21, 2014, and it is voluntary, i.e. "Each state may decide if it wishes to adopt the deferral and proceed accordingly." At least one State, Massachusetts, is currently regulating biogenic carbon dioxide sources at Step Two of the Tailoring Rule.

 

    The Center for Biological Diversity and several other environmental organizations now petition for review. The Appeals Court reviews the actions of the EPA to determine whether they are (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (B) contrary to constitutional right, power, privilege, or immunity; or (C) in excess of statutory jurisdiction, authority, or limitations. The Appeals Court also determines that the case is ripe for review. Because EPA regulates carbon dioxide as an "air pollutant," petitioners contend that the agency has no authority to exempt any sources of carbon dioxide, including biogenic sources, from the PSD permitting program.

 

    The majority quickly rejects EPA's use of the de minimis doctrine saying, "EPA expressly disavows this doctrine, explaining that the Deferral Rule has a three-year sunset provision whereas the de minimis doctrine 'is used to establish permanent exemptions'. . . Given this concession, the Deferral Rule cannot be sustained under the de minimis doctrine. On the "one-step-at-a-time" the majority says, "EPA failed to explain in the Deferral Rule what 'full compliance' with the 'statutory mandate' means. EPA's brief. . . nowhere offers an interpretation of the Clean Air Act that would allow the agency to treat biogenic carbon dioxide sources differently. . . Without a clear answer to that question, EPA has no basis for invoking the one-step-at-a-time doctrine."

 

    Finally, EPA next invokes the "administrative necessity" doctrine, which permits an agency to "avoid implementing a statute . . . by showing that attainment of the statutory objectives is impossible." The majority says, "Without deciding whether the middle-ground option could pass muster under the statute, we agree with petitioners that EPA's rejection of that option was arbitrary and capricious."

 

    The majority concludes, "Because the Deferral Rule cannot be justified under any of the administrative law doctrines relied on by EPA, this opinion, contrary to our dissenting colleague's suggestion. . . leaves for another day the question whether the agency has authority under the Clean Air Act to permanently exempt biogenic carbon dioxide sources from the PSD permitting program. If and when EPA adopts a permanent exemption for some or all biogenic carbon dioxide sources, we will have the benefit of three years of scientific study, as well as fully briefed and contextualized arguments about EPA's authority under the Clean Air Act."

 

    The dissenting Justice said, "I believe EPA can -- and should -- defer regulation until it has the time it says it needs to study and resolve the issue it is charged with regulating. I would therefore uphold the Deferral Rule. Alternatively, given that the Deferral Rule expires or will be superseded in a matter of months -- and by then EPA will have at least crystallized the issue before us -- we should hold the case in abeyance as unripe. Accordingly, I respectfully dissent."

 

    Kevin Bundy, a senior attorney with the Center for Biological Diversity's Climate Law Institute said, "Burning trees to generate electricity is dangerous, polluting, and ought to be limited to protect people and the environment. This important decision will reduce respiratory ailments, protect forests and help ensure a healthier, more livable climate." Ann Weeks, legal director of the Clean Air Task Force, who argued the case for the petitioners and appeared on behalf of the Conservation Law Foundation and the Natural Resource Council of Maine said, "Today's ruling upholds EPA's authority to regulate pollution that drives climate change. The court's decision is grounded in an understanding that the science shows that biomass fuels, including tree-burning, can make climate disruption worse. The court clearly noted that the atmosphere can't tell the difference between fossil fuel carbon dioxide and carbon dioxide emitted by burning trees." Niel Lawrence, senior attorney at the Natural Resources Defense Council said, "The science is clear that not all biomass burning is good for the planet and today's ruling rightly affirms science as the guide for how EPA must now move forward on biomass energy production. This decision will ultimately benefit the climate, as well as Americans who want to breathe easier and protect the forests that they love. It will also ensure that our investments in clean energy go to sources that are actually clean."

 

    Access the complete majority opinion, separate concurrence and dissent (click here). Access a release from environmental groups (click here). [#Climate, #Air, #CADC]

GenOn REMA LLC v. U.S. EPA

Jul 12: In the U.S. Court of Appeals, Third Circuit, Case No. 12-1022. On Petition for Review of Final Agency Action of the United States Environmental Protection Agency (EPA-HQ-OAR-2011-0081). The Appeals Court explains that Portland Generating Station (Portland‖) is a 427-megawatt, coal-fired, electricity generating plant located in Upper Mount Bethel Township in Northampton County, Pennsylvania. Portland is directly across the Delaware River within 500 feet of Knowlton Township in Warren County, New Jersey. The EPA has found that Portland emits sulfur dioxide in amounts that significantly interfere with the control of air pollution across state borders. Sulfur dioxide is a toxic air pollutant that endangers life and health, causing burning of the nose and throat, difficulty breathing, and obstruction of the lungs and airways. Because of its location, Portland's sulfur dioxide emissions travel directly across the river into areas of New Jersey. In response to a petition under the Clean Air Act, the EPA issued a rule imposing direct limits on Portland's emissions and a schedule of restrictions to reduce its contribution to air pollution within three years. GenOn REMA, LLC (GenOn‖), the owner and operator of Portland, challenges the EPA's rule as inconsistent with the agency's authority under the Clean Air Act and as arbitrary and capricious. The Appeals Court upholds the EPA rule and denies GenOn's petition for review.

    In its conclusion the Appeals Court rules, ". . .we will uphold the EPA's Portland Rule and deny the petition for review. We hold that it was reasonable for the EPA to interpret Section 126(b) to be an independent mechanism for enforcing interstate pollution control, thereby giving it authority to promulgate the Portland Rule. We also hold that the contents of the Portland Rule are not arbitrary, capricious, or abusive of the EPA's discretion."

    Access the complete opinion (click here). [#Air, #CA3]