In re: MTBE Products Liability Litigation

Jul 26: In the U.S. Court of Appeals, Second Circuit, Case Nos. 10-4135 & 10-4329. The Appeals Court explains that After an eleven-week bellwether trial and years of related litigation, the District Court entered a $104.69 million judgment for the City of New York, the New York City Water Board, and the New York City Municipal Water Finance Authority (collectively, the City) and against Exxon Mobil Corporation, Exxon Mobil Oil Corporation, and Mobil Corporation (collectively, Exxon). The jury found Exxon liable under New York tort law for contaminating City-owned wells in Queens by its release of the chemical methyl tertiary butyl ether (MTBE), which Exxon used as a gasoline additive from the mid-1980s through the mid-2000s, and whose use New York State banned as of 2004.

 

    On appeal, Exxon challenges the verdict, arguing primarily that the City's common law claims are preempted by the Federal Clean Air Act, which, from the mid-1990s through 2004, required use of gasoline oxygenates, such as MTBE, in New York City. Exxon also argues that because (among other reasons) the jury projected MTBE levels equal to the State's maximum contaminant level, the City's injury was not legally cognizable; that the City's action was not ripe for adjudication (or alternatively, that it was barred by the statute of limitations); that the City failed sufficiently to prove the elements of negligence, trespass, public nuisance, and failure-to-warn; and that the District Court erred in its handling of alleged jury misconduct. On cross-appeal, the City faults the District Court for instructing the jury to offset its damages award by the cost of remediating pre-existing contamination, and for its ruling that, as a matter of law, the City was not entitled to an award of punitive damages. The Appeals Court affirmed the decision of the District Court in its entirety.

 

    The Appeals Court concludes, "To summarize: We conclude that the state law tort verdict against Exxon is not preempted by the federal Clean Air Act. We conclude that the jury's finding that the MTBE levels in Station Six Wells will peak at 10 ppb in 2033 -- the MCL for MTBE since 2004 -- is not inconsistent with a conclusion that the City has been injured. We conclude that the City's suit was ripe because the City demonstrated a present injury, and that the City's suit was not barred by the statute of limitations. We conclude that the jury's verdict finding Exxon liable under state tort law theories is not precluded by the jury's concurrent conclusion that the City had not carried its burden, in the design-defect context, of demonstrating a feasible, cost-reasonable alternative to MTBE available to satisfy the standards of the now repealed Reformulated Gasoline Program. We conclude that Exxon's demand for a retrial because of an incident of juror misconduct is unavailing. And we conclude that the jury properly offset the gross damages award by amounts it reasonably

attributed to cleanup of contaminants other than MTBE, and that the City was not entitled to a jury determination of Exxon's liability for punitive damages."

 

    Access the complete 117-page opinion (click here). [#Air, #Water, #Toxics, #Drink, #CA2]

Voggenthaler v. Maryland Square, LLC

Jul 26: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-17520, 11-15174, 11-15176, 12-16409, and 12-16412. Appealed from the United States District Court for the District of Nevada. The Appeals Court explains, "Two environmental statutes "everyone loves to hate" are the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Resource Conservation and Recovery Act (RCRA). "In combination, they make owners of contaminated property and contributors to contamination responsible for cleaning up toxic waste, and, if someone else cleans up the waste, liable for the costs of that clean up. This litigation illustrates the point. It involves seepage over several decades of a toxic dry cleaning chemical into the ground under a Las Vegas shopping center. There have been two district court actions leading to multiple appeals."

    Two companies leased the Site and operated the dry cleaning facility. Shapiro Bros. Investment Co. (SBIC) operated it from 1969 until 1984. Johnson Group, Inc., the predecessor of DCI USA, Inc., (collectively DCI) purchased the dry cleaning business in 1984 and operated it until 2000. Neighboring homeowners brought the first action, seeking injunctive relief against the property owners of the shopping center and operators of the dry cleaning facility. The Nevada Division of Environmental Protection (NDEP) brought the other action to recover its clean up costs. The district court granted summary judgment for both sets of plaintiffs on all claims. The current owner and the former operators of the dry cleaning facility appeal. There are numerous procedural issues, but the principal legal contention is that application of CERCLA to this conduct that occurred solely in Nevada violates the Commerce Clause.

 

    The Appeals Court rules, "We largely affirm the district court, including its rejection of that constitutional challenge. We vacate the grant of summary judgment under CERCLA against the current owner and remand so the owner may have an opportunity to make the additional showing that would be necessary to establish that it meets an exception to CERCLA liability. We reverse on procedural grounds the grant of summary judgment under RCRA against the current owner and the operators because those defendants did not have an adequate opportunity to respond to plaintiffs' claims. We also reverse the grant of summary judgment against one guarantor, because there is no evidence of spills during the term of his guaranty.

 

    The Appeals Court concludes as follows: "The district court properly rejected Maryland Square's constitutional challenge to the application of CERCLA in this case, and correctly granted judgment against Maryland Square and in favor of NDEP on its state law claims. The district court's judgment in favor of NDEP and against SBIC on both the CERCLA and the state law claims must be affirmed. The judgment against SBIC on the claims of the prior Site owners for indemnity was in accordance with the provisions of the leases and must be affirmed.

 

    "The district court erred, however, in entering judgment against Maryland Square on NDEP's CERCLA claim without giving Maryland Square an opportunity to correct the deficiencies in its 'bona fide prospective purchaser' submission. The district court also erred in denying for lack of jurisdiction Maryland Square's motion for reconsideration of the RCRA judgment, and we remand for consideration on the merits. In the homeowners' RCRA action, the district court erred in entering judgment against SBIC sua sponte and the judgment, as well as the ensuing injunction, must be vacated. Although the district court properly held that the prior Site owners were entitled to indemnification from SBIC, the court erred in holding Melvin Shapiro was individually liable for indemnification on the basis of his personal guaranty that operated only prospectively."

 

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

State Of Texas v. U.S. EPA

Jul 26: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1425, consolidated with 11-1062, 11-1128, 11-1247, 11-1249, 11-1250; and 11-1037, consolidated with 11-1038, 11-1039, 11-1040, 11-1041, 11-1059, 11-1060, 11-1063, 11-1075, 11-1076, 11-1077, 11-1078, 11-1287, 11-1288, 11-1289, 11-1290, 11-1291, 11-1292, 11-1293.  On Petitions for Review of Final Actions of the U.S. EPA. In this high profile case, a 2-1 majority supports EPA's greenhouse gas rules and dismisses the states and industry petitions for lack of jurisdiction

 

    The Appeals Court explains that the cases present another set of challenges to rules promulgated by the Environmental Protection Agency (EPA) in response to the Supreme Court's holding that greenhouse gases unambiguously qualify as an "air pollutant" under the Clean Air Act (the Act or CAA). See Massachusetts v. EPA, 549 U.S. 497, 528–32 (2007). Last year, in Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102 (D.C. Cir. 2012) (Coalition), the D.C. Circuit upheld EPA's regulation in the Tailpipe Rule of greenhouse gases emitted by cars and light trucks under Title II of the CAA, id. at 116–29, as well as its determination that the rule triggered permitting requirements for new major stationary sources of greenhouse gases under Part C of Title I of the CAA, id. at 132–44. The court dismissed for lack of standing under Article III of the U.S. Constitution challenges by States and industry groups to Timing and Tailoring Rules that ameliorated the burden of Part C permitting for greenhouse gases. Id. at 144–48.

 

    The Majority says, "At issue here is implementation of the Part C permitting requirements in several States without implementation plans for greenhouse gases as of January 2, 2011, when the emission standards in the Tailpipe Rule took effect. The States of Texas and Wyoming and industry groups petition for review of five rules designed to ensure that a permitting authority existed to issue the required greenhouse gas permits. Petitioners contend the rules are based on an impermissible interpretation of the Part C Prevention of Significant Deterioration program, CAA §§ 160–169, and violate the Act's "orderly process" for revision of state implementation plans (SIPs) pursuant to CAA § 110.

 

    "The court on more than one occasion has interpreted CAA § 165(a) unambiguously to prohibit construction or modification of a major emitting facility without a Part C permit that meets the statutory requirements with regard to each pollutant subject to regulation under the Act. Because we now hold that under the plain text of CAA § 165(a) and § 167 the permitting requirements are self-executing without regard to previously approved SIPs, industry petitioners fail to show how they have been injured in fact by rules enabling issuance of the necessary permits. State petitioners likewise fail, in the face of Congress's mandate in CAA § 165(a), to show how vacating the rules would redress their purported injuries. Accordingly, because petitioners lack Article III standing to challenge the rules, we dismiss the petitions for lack of jurisdiction. . . Accordingly, because "[p]etitioners have failed to establish that the [challenged] Rules caused them 'injury in fact,' much less injury that could be redressed by the Rules' vacatur," id. at 146, we must dismiss the petitions for lack of jurisdiction."

 

    In a lengthy dissent, Justice Kavanaugh said in part, "In this case, EPA in effect has required all States – including those without automatically updating SIPs, such as Texas and Wyoming – to immediately update their PSD permitting process when PSD requirements are changed. That approach cannot be squared with EPA's regulation. Section 51.166(a)(6)(i) expressly allows the States without automatically updating SIPs three years to update the PSD programs in their SIPs when PSD requirements are changed. That regulation has been on the books and followed by EPA for some 30 years. EPA may now believe that the regulation is bad policy. If so, EPA should change the regulation. But until then, the regulation remains binding law. In light of the regulation, I would therefore vacate the relevant EPA orders in this case. . . "

 

    Also, he said, "EPA did not have authority to disapprove Texas's and Wyoming's SIPs or to issue FIPs to regulate emissions of greenhouse gases in those States until the expiration of the three-year period set forth in EPA's regulation. Under that binding EPA regulation, States without  automatically updating SIPs are entitled to three years to revise their SIPs to cover greenhouse gases. During that time, States have legal authority to issue valid permits under their existing SIPs. EPA's orders should therefore be vacated. For those reasons, I respectfully dissent."

 

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

State Of Mississippi v. U.S. EPA

Jul 23: In the U.S. Court of Appeals, D.C. Circuit, Case No. No. 08-1200, consolidated with 08-1202, 08-1203, 08-1204, 08-1206. On Petition for Review of a Final Rule Issued by U.S. EPA. In this high profile case, involving dozens of attorneys, the Appeals Court summarizes briefly saying, ". . .we consider several challenges to the Environmental Protection Agency's most recent revisions to the primary and secondary National Ambient Air Quality Standards for ozone. For the reasons given below, we deny the petitions, except with respect to the secondary ozone standard, which we remand for reconsideration."

 

    By way of background and summarizing the overall opinion, the Appeals Court says, "Challenging the revised primary and secondary NAAQS, various parties, including several states, the District of Columbia, New York City, and several industry, environmental, and public health groups, filed these petitions for review. We then granted EPA's unopposed motion to hold these cases in abeyance to allow the agency to review the 2008 revisions and determine whether they should be reconsidered. In September 2011, EPA indicated that it was withdrawing its reconsideration proceedings and would instead be completing the reconsideration in conjunction with the next periodic review. Several parties filed petitions for review, challenging EPA's withdrawal of the reconsideration rulemaking. Finding that we lacked jurisdiction over EPA's non-final action, we dismissed the petitions and set a briefing schedule for the present case.

 

    "We now confront the parties' competing petitions for review. One set of petitioners -- comprising several states, the District of Columbia, New York City, and a number of environmental and public health groups -- thinks the primary and secondary NAAQS are not protective enough, while the other set -- comprising the state of Mississippi and several industry groups -- thinks they are too protective.

    "This opinion considers each of these claims in turn. We reject Mississippi and the industry groups' challenge to the primary and secondary standards in Part II. We explain our denial of the governmental and environmental petitions with respect to the primary standard in Part III and our grant of these petitions with respect to the secondary standard in Part IV.

    "In considering challenges to NAAQS, 'we apply the same highly deferential standard of review that we use under the Administrative Procedure Act.' ATA III, 283 F.3d at 362. Accordingly, 'we will set aside the Agency's determination only if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." ' National Environmental Development Ass'n's Clean Air Project v. EPA, 686 F.3d 803, 809–10 (D.C. Cir. 2012) (quoting 42 U.S.C. § 7607(d)(9)(A)). And 'we do not look at the decision as would a scientist, but as a reviewing court exercising our narrowly defined duty of holding agencies to certain minimal standards of rationality.' Id. at 810 (internal quotation marks omitted). That said, "we perform a searching and careful inquiry into the underlying facts." ATA III, 283 F.3d at 362 (internal quotation marks omitted)."

    In its conclusion, the Appeals Court says, "Because EPA failed to determine what level of protection was "requisite to protect the public welfare," EPA's explanation for the secondary standard violates the Act. We therefore remand this portion of the final rule for further explanation or reconsideration by EPA. In the meantime, we leave the standard in place rather than vacating the rule. . . Given these principles, neither EPA nor petitioners advocate vacatur. For the foregoing reasons, we remand the secondary NAAQS to EPA for reconsideration in view of this opinion. In all other respects, the petitions for review are denied.

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

State of Alaska v. Lubchenko (NOAA)

Jul 23: In the U.S. Court of Appeals, Ninth Circuit, Case No. 12-35201, consolidated with 12-35203, & 12-35204. Appealed from the United States District Court for the District of Alaska. The Appeals Court explains, the western Distinct Population Segment of the Steller sea lions (wDPS) live in the great northern Pacific Ocean region off Alaska, and they were declared endangered in 1997. More recently, in two of the seven sub-regions they inhabit, they have been experiencing population declines because they have been showing signs of nutritional stress.

 

    In 2010, the National Marine Fisheries Service (NMFS or the agency) therefore limited commercial fishing in those waters, causing representatives of the fishing industry and the State of Alaska (Plaintiffs) to file this action challenging the limitations.

 

    The plaintiffs' principal argument is that the NMFS violated the Endangered Species Act (ESA) because it based the fishing restrictions on declines in sub-regions rather than in the entire population of the endangered species. Plaintiffs also contend the agency utilized the wrong standards in measuring the effects of continued fishing and failed to find a sufficient causal link between authorizing fisheries and the population decline.

 

    The Appeals Court said, "We hold that use of subregions did not violate the ESA and that the agency utilized appropriate standards to find that continuing previous fishing levels in those sub-regions would adversely modify the critical habitat and jeopardize the continued existence of the entire population. We therefore affirm the district court's judgment rejecting plaintiffs' claims."

 

    Reinforcing its decision, the Appeals Court said, "Applying its regulation, the agency indisputably found that the fisheries were removing prey species of the wDPS. It also found evidence of nutritional stress. While the agency admitted it could not find a direct link between the fisheries and the species's decline, it found that the indirect effect of the fisheries was the removal of wDPS's food. The agency was not required to find that the fisheries were the direct cause of the species's decline. . . The district court's order granting summary judgment to the defendants on the ESA claims and injunction on the NEPA claims are affirmed."

   

    Colin O'Brien, attorney for Earthjustice said, "This decision reinforces the importance of maintaining strong measures to protect Steller sea lions from the adverse effects of fishing, particularly in the western and central Aleutians. Not only is it important to protect sea lions in their own right, but the species is a key indicator of overall ecosystem health and fishery sustainability." John Hocevar, Oceans Campaign Director, Greenpeace said, "Instead of attacking the science, it's time for Alaska's fishing industry to start thinking about what can be done to prevent fur seals and other fish-eating species from joining sea lions on the endangered list. The court's decision to uphold protections is great news for endangered Steller sea lions. There's no reason why we can't have both productive commercial fisheries and a healthy ecosystem, but we won't be able to do that unless decisions are based on the best available science and a precautionary approach."

   

    Access the complete opinion (click here). Access a release from Earthjustice with more comments on the decision (click here). [#Wildlife, #CA9]

WildEarth Guardians v. U.S. EPA

Jul 23: In the U.S. Court of Appeals, Tenth Circuit, Case No. 11-9559. On Petition for Review of an Order of U.S. EPA. Petitioner WildEarth Guardians seeks review of an order of the EPA denying in part Petitioner's petition for an objection to a Title V operating permit issued by the Colorado Department of Public Health and Environment (CDPHE) to Intervenor Public Service Company of Colorado, d/b/a Xcel Energy, for its coal-fired power station located in Morgan County, Colorado.

    In its petition for an objection, Petitioner argued, among other things, that the permit needed to include a plan to bring the power station into compliance with the Clean Air Act's Prevention of Significant Deterioration (PSD) requirements. Petitioner contended these PSD requirements, which apply to the construction or "major modification" of a stationary source of air pollution had been triggered when the station underwent major modifications in 1994, 1997, and possibly other years. For support, Petitioner relied in part on a Notice of Violation (NOV) issued to Intervenor by the EPA in 2002.

 

    However, EPA denied Petitioner's petition for an objection on this ground, holding that the NOV was insufficient to demonstrate noncompliance with the Clean Air Act and that Petitioner's additional evidence also failed to demonstrate a violation. The EPA further held the State agency had adequately responded to Petitioner's comments regarding the PSD requirements before it issued the permit. The EPA thus denied the petition for an objection on this ground as well. Petitioner seeks review of the EPA's denial of the petition on these two grounds.

 

    Importantly, the Appeals Court said, "We are not persuaded by the Second Circuit's contrary conclusion that an NOV suffices to demonstrate non-compliance, see N.Y. Pub. Interest Research Grp., Inc., 427 F.3d at 181-82, since this conclusion fails to adequately take into account the preliminary nature of an NOV. Instead, like the Sixth and Eleventh Circuits, we find the EPA's interpretation of the demonstration requirement to be persuasive and thus entitled to deference. Nothing about the statute requires the EPA to find that a petitioner has demonstrated noncompliance simply by pointing to the existence of an NOV, and we will defer to the EPA's persuasive conclusion that an NOV alone is insufficient to meet this burden of demonstration."

 

    The Appeals Court rules further, "We further conclude that the agency did not act arbitrarily or capriciously in concluding that Petitioner failed to demonstrate noncompliance in this case. The agency held that Petitioner had not demonstrated PSD noncompliance because Petitioner's evidence failed to show there had been a major modification as defined by the Colorado SIP, which requires, among other things, consideration of the actual emissions increase resulting from a particular modification, as well as 'a determination of any other increases and decreases in actual emissions at the source that are contemporaneous with the particular change and are otherwise creditable.' (J.A. at 200-01.) As the agency explained, Petitioner's evidence did not address key parts of this test, particularly the question of net emissions increases. . . Viewing the record as a whole, we are not persuaded that the EPA acted arbitrarily or capriciously in holding that Plaintiff had not demonstrated noncompliance. Thus, under our deferential standard of review, we affirm the EPA's denial of the petition on this ground."

 

    On the second claim, the Appeals Court says, "Finally, Petitioner argues the EPA erred in concluding that CDPHE adequately responded to Petitioner's comments during the public comment period. For support, Petitioner relies mainly on a prior EPA order where the EPA held that a state agency had failed to adequately respond to a petitioner's comments. However, the state agency's response in the previous case contained only two sentences referring vaguely to 'the rules that existed at the time of each modification.' (J.A. at 229.) Here, the state agency gave a much more thorough explanation in its response, and we are not persuaded that the EPA acted arbitrarily or capriciously in concluding this response was adequate. We therefore affirm the EPA's denial of the petition on this ground as well."

 

    Access the complete opinion (click here). [#Air, #CA10]

CA Sportfishing Protection Alliance v. Chico Scrap Metal

Jul 22: In the U.S. Court of Appeals, Ninth Circuit, Case No. 11-16959. Appealed from the United States District Court for the Eastern District of California. The Appeals Court explains that the Federal Water Pollution Control Act, or Clean Water Act (the Act) allows a citizen to sue to enforce the Act's prohibition against discharging water pollutants without a National Pollutant Discharge Elimination System (NPDES) permit. In this citizen suit, Plaintiff, California Sportfishing Protection Alliance, a conservationist organization, alleges that Defendants, Chico Scrap Metal, Inc.; et al, have violated an NPDES permit that governs industrial storm water discharges at three scrap metal recycling facilities that Defendants operate.

 

    The district court dismissed this action after ruling that 33 U.S.C. § 1365(b)(1)(B) bars Plaintiff's claims. On appeal, Defendants argue that another statutory bar, 33 U.S.C. § 1319(g)(6)(A)(ii), also applies. The Appeals Court rules, "We hold that § 1365(b)(1)(B) does not apply because the state has commenced no action in court 'to require compliance' with the storm water permit and that § 1319(g)(6)(A)(ii) does not apply because the state has commenced no administrative penalty action comparable to one under the Act. We therefore reverse the judgment of the district court and remand for further proceedings." The Appeals Court says in a footnote that, "We express no view on the merits of any of Plaintiff's claims."

 

    § 1365(b)(1)(B)  bars a citizen suit as stated: "(B) if [a state or federal authority] has commenced and is diligently prosecuting a civil or criminal action in a court of the United States, or a State to require compliance with the standard, limitation, or order . . . ."

 

    The Appeals Court says, "Because Congress omitted any reference to 'comparable' state standards in § 1365, and because § 1365(b)(1)(B) specifically refers to an action 'to require compliance with the standard, limitation, or order' that is the subject of the citizen suit, we hold that its bar applies only if the government's action seeks to do exactly that. . . In sum, because the 2007 and 2008 proceedings aimed to enforce only laws other than the Clean Water Act, § 1365(b)(1)(B) does not bar this action."

 

    On another bar claim by Defendants, the Appeals Court rules, "Because California has commenced no administrative penalty proceeding that is comparable to a proceeding by the EPA under § 1319(g), the statutory bar of § 1319(g)(6)(A)(ii) does not apply to Plaintiff's claims."

 

    In conclusion the Appeals Court says, "Because the state has brought neither a court action to require compliance with the Clean Water Act nor an administrative penalty action comparable to one under the

Act, neither 33 U.S.C. § 1365(b)(1)(B) nor § 1319(g)(6)(A)(ii) bars Plaintiff's citizen suit to enforce California's storm water general permit. -- Reversed and Remanded."

 

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