Dec 31: In the U.S. Court of Appeals, Third Circuit, Case No. 08-3697/3720. In the case, W.R. Grace & Co. (Grace) and the State of Montana appeal an order from the United States District Court for the District of Delaware affirming an order from the District’s Bankruptcy Court denying Grace’s motion to expand a preliminary injunction. The proposed expansion would have enjoined claims against the State of Montana arising from Grace’s mining operations near Libby, Montana. Both the District Court and the Bankruptcy Court determined that the Bankruptcy Court lacked jurisdiction under 28 U.S.C. §§ 1334(b) and 157(a) to expand the injunction to enjoin those claims and, therefore, denied the motion. The Appeals Court agreed and affirmed the lower courts' decisions. This appeal is the fourth to be considered by the Third Circuit from Grace’s ongoing efforts to reorganize under Chapter 11 of the Bankruptcy Code, efforts which began in 2001 when Grace sought shelter from liabilities associated with asbestos litigation.
The Appeals Court said, "In conclusion, our precedent dictates that a federal bankruptcy court does not have related-to jurisdiction over a third-party lawsuit if that lawsuit would affect the bankruptcy proceeding only through the intervention of yet another lawsuit. Grace will not be bound by a judgment against Montana unless there is an additional adjudication. Accordingly, we affirm the judgment of the Bankruptcy Court and the District Court that subject matter jurisdiction does not exist to expand the § 105(a) injunction to include the Montana Actions."
Access the complete opinion (click here).
Tuesday, January 5, 2010
Raytheon Aircraft Co. v. U.S.
Dec 29: In the U.S. Court of Appeals, Tenth Circuit, Case No. 08-3237. The case involves an appeal from a judgment in favor of the United States in a cost recovery action under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). At trial, the parties disputed the degree to which each is liable for trichloroethylene (TCE) contamination near Hangar 1 and Hangar 4 at Tri-County Public Airport in Herington, Kansas. The United States Army used the airfield from 1942 to 1945. Raytheon Aircraft Company is a successor to Beech Aircraft Corporation, which operated the airfield during the 1950s. According to the Appeals Court, the United States and Raytheon agree they are the only two potentially liable parties.
Raytheon appealed the district court’s finding that it is solely liable for contamination at Hangar 1, as well as the court’s decision to award the United States costs associated with its attempts to list the site on the National Priorities List (NPL). The Appeals Court affirmed the district court’s decision.
The Appeals Court ruled, ". . .this court concludes Raytheon has failed to rebut the presumption that the EPA’s efforts to list the site on the NPL were consistent with the national contingency plan. Because Raytheon has presented no evidence to support a
determination that the EPA’s actions were arbitrary and capricious, the district court’s judgment must be affirmed."
In developing its decision, the Appeals Court reasoned, "Were this court to adopt Raytheon’s view that the decision to abandon a good faith attempt to list a site on the NPL makes that attempt arbitrary and capricious as a matter of law, the EPA would be forced to continue expending efforts and funds in support of a listing in order to recover its costs, even where the results of the ESI [expanded site inspection] itself ultimately reveal the contamination is not serious enough to warrant the listing. Such a result is untenable."
Access the complete opinion (click here).
Raytheon appealed the district court’s finding that it is solely liable for contamination at Hangar 1, as well as the court’s decision to award the United States costs associated with its attempts to list the site on the National Priorities List (NPL). The Appeals Court affirmed the district court’s decision.
The Appeals Court ruled, ". . .this court concludes Raytheon has failed to rebut the presumption that the EPA’s efforts to list the site on the NPL were consistent with the national contingency plan. Because Raytheon has presented no evidence to support a
determination that the EPA’s actions were arbitrary and capricious, the district court’s judgment must be affirmed."
In developing its decision, the Appeals Court reasoned, "Were this court to adopt Raytheon’s view that the decision to abandon a good faith attempt to list a site on the NPL makes that attempt arbitrary and capricious as a matter of law, the EPA would be forced to continue expending efforts and funds in support of a listing in order to recover its costs, even where the results of the ESI [expanded site inspection] itself ultimately reveal the contamination is not serious enough to warrant the listing. Such a result is untenable."
Access the complete opinion (click here).
Service Oil, Inc. v. U.S. EPA
Dec 28: In the U.S. Court of Appeals, Eighth Circuit, Case No. 08-2819. In this administrative enforcement proceeding, U.S. EPA imposed a substantial monetary penalty on Service Oil, Inc., the owner of a construction site that did not timely obtain a storm water discharge permit. According to the Appeals Court, EPA based the amount of the penalty not on unlawful discharges, but on Service Oil’s failure to comply with the Agency’s permit application regulations. The Appeals Court concluded that "this is an expansion of EPA’s remedial power not authorized by the governing statutes," and reversed and remanded the decision for redetermination of the penalty.
The Eighth Circuit said in part, "As the Second Circuit held in invalidating a portion of EPA’s regulations governing concentrated animal feeding operations, 'unless there is a "discharge of any pollutant," there is no violation of the Act, and point sources are, accordingly, neither statutorily obligated to comply with EPA regulations for point source discharges, nor are they statutorily obligated to seek or obtain an NPDES permit.'" [citing Waterkeeper Alliance, Inc. v. E.P.A., 399 F.3d 486, 504 (2d Cir. 2005).
The Appeals Court said further, "While acknowledging 'the policy considerations underlying the EPA’s approach,' the court [2nd Circuit] concluded that 'it contravenes the regulatory scheme enacted by Congress; the Clean Water Act gives the EPA jurisdiction to regulate and control only actual discharges -- not potential discharges, and certainly not point sources themselves.'”
The Appeals Court rules, "Our conclusion that EPA lacks statutory authority to assess administrative penalties for failure to submit a timely permit application does not mean, as the EAB [Environmental Appeals Board] posited, that the agency must either guess the identities of potential new point sources, or allow unpermitted discharges to ensue. Prudent builders know that permits do not issue overnight and that storm water discharges can happen any time after the start of construction makes the site a point source. They will apply and obtain permits before starting construction to avoid penalties for unlawful discharge that may prove to be severe. That is the regulatory regime Congress crafted. By contrast, under the EAB’s interpretation of § 1318(a), a person about to commence construction could apply to EPA for a storm water discharge permit less than the ninety days “before the date on which construction is to commence” prescribed in 40 C.F.R. § 122.21(c)(1); obtain the permit before construction commences and any discharge occurs; and still face a costly administrative enforcement proceeding and potential monetary penalties for failing to comply with the regulation. The statute is to the contrary.
"The decision of the EAB based the amount of monetary penalty assessed primarily on Service Oil’s 'complete failure to apply for its storm water permit prior to starting construction.' As a violation of the permit application regulations is not within the purview of 33 U.S.C. § 1319(g)(1)(A), this was a statutorily impermissible factor. Accordingly, we grant the petition for review, vacate the order assessing a civil penalty of $35,640, and remand to the agency for redetermination of the amount of the penalty in accordance with § 1319(g)(3) and this opinion."
Access the complete opinion (click here).
The Eighth Circuit said in part, "As the Second Circuit held in invalidating a portion of EPA’s regulations governing concentrated animal feeding operations, 'unless there is a "discharge of any pollutant," there is no violation of the Act, and point sources are, accordingly, neither statutorily obligated to comply with EPA regulations for point source discharges, nor are they statutorily obligated to seek or obtain an NPDES permit.'" [citing Waterkeeper Alliance, Inc. v. E.P.A., 399 F.3d 486, 504 (2d Cir. 2005).
The Appeals Court said further, "While acknowledging 'the policy considerations underlying the EPA’s approach,' the court [2nd Circuit] concluded that 'it contravenes the regulatory scheme enacted by Congress; the Clean Water Act gives the EPA jurisdiction to regulate and control only actual discharges -- not potential discharges, and certainly not point sources themselves.'”
The Appeals Court rules, "Our conclusion that EPA lacks statutory authority to assess administrative penalties for failure to submit a timely permit application does not mean, as the EAB [Environmental Appeals Board] posited, that the agency must either guess the identities of potential new point sources, or allow unpermitted discharges to ensue. Prudent builders know that permits do not issue overnight and that storm water discharges can happen any time after the start of construction makes the site a point source. They will apply and obtain permits before starting construction to avoid penalties for unlawful discharge that may prove to be severe. That is the regulatory regime Congress crafted. By contrast, under the EAB’s interpretation of § 1318(a), a person about to commence construction could apply to EPA for a storm water discharge permit less than the ninety days “before the date on which construction is to commence” prescribed in 40 C.F.R. § 122.21(c)(1); obtain the permit before construction commences and any discharge occurs; and still face a costly administrative enforcement proceeding and potential monetary penalties for failing to comply with the regulation. The statute is to the contrary.
"The decision of the EAB based the amount of monetary penalty assessed primarily on Service Oil’s 'complete failure to apply for its storm water permit prior to starting construction.' As a violation of the permit application regulations is not within the purview of 33 U.S.C. § 1319(g)(1)(A), this was a statutorily impermissible factor. Accordingly, we grant the petition for review, vacate the order assessing a civil penalty of $35,640, and remand to the agency for redetermination of the amount of the penalty in accordance with § 1319(g)(3) and this opinion."
Access the complete opinion (click here).
AES Sparrows Point LNG, LLC v. Wilson (Maryland)
Dec 22: In the U.S. Court of Appeals, Fourth Circuit, Case No. 09-1539. The case involves a petition pursuant to the Natural Gas Act, by AES Sparrows Point LNG, LLC and Mid-Atlantic Express Holdings, LLC (collectively AES) to review the State of Maryland Department of the Environment’s denial of a request for water quality certification pursuant to § 401(a)(1) of the Clean Water Act, with respect to a proposed large-scale liquefied natural gas marine import terminal and pipeline project.
The proposal by AES is to construct and operate a liquefied natural gas (LNG) marine import terminal at Sparrows Point (a heavily industrialized area adjacent to Baltimore Harbor) and an eighty-eight-mile pipeline connecting the terminal to three interstate natural gas pipelines in Eagle, Pennsylvania.
The Appeals Court said in conclusion, "we: (1) hold that Maryland waived any potential claim of sovereign immunity in connection with the present petition for review by expressly consenting to defending, in federal court, its decision to deny AES’s Request for § 401(a)(1) Water Quality Certification; (2) hold that AES has failed to establish any basis for us to disturb the Corps’ determination that Maryland had not waived its right to grant or deny AES’s § 401(a)(1) Certification Request; and (3) deny AES’s petition for review of Maryland’s denial of its§ 401(a)(1) Certification Request on the merits." One of the Judges issued a separate concurring opinion.
Access the complete opinion (click here).
The proposal by AES is to construct and operate a liquefied natural gas (LNG) marine import terminal at Sparrows Point (a heavily industrialized area adjacent to Baltimore Harbor) and an eighty-eight-mile pipeline connecting the terminal to three interstate natural gas pipelines in Eagle, Pennsylvania.
The Appeals Court said in conclusion, "we: (1) hold that Maryland waived any potential claim of sovereign immunity in connection with the present petition for review by expressly consenting to defending, in federal court, its decision to deny AES’s Request for § 401(a)(1) Water Quality Certification; (2) hold that AES has failed to establish any basis for us to disturb the Corps’ determination that Maryland had not waived its right to grant or deny AES’s § 401(a)(1) Certification Request; and (3) deny AES’s petition for review of Maryland’s denial of its§ 401(a)(1) Certification Request on the merits." One of the Judges issued a separate concurring opinion.
Access the complete opinion (click here).
New York v. Nuclear Regulatory Commission
Dec 21: In the U.S. Court of Appeals, Second Circuit, Case No. 08-3903. The case involves a petition for review of a decision of the Nuclear Regulatory Commission denying rulemaking petitions filed by Massachusetts and California. The Appeals Court indicated, "As the Nuclear Regulatory Commission has given due consideration to the relevant studies concerning the rulemaking petitions, we must defer to its expertise in determining the proper risk level associated with the storage of nuclear material in spent fuel pools, and therefore deny the petition to review the Nuclear Regulatory Commission’s decision."
The two States filed rulemaking petitions (Massachusetts in 2006, and California in 2007) asking the NRC to reverse its 1996 Generic Environmental Impact Statement, which found (among other things) that spent fuel pools at nuclear power plants do not create a significant environmental impact within the meaning of the National Environmental Policy Act (NEPA). The States petitioning for review here (New York, Connecticut, and Massachusetts) claim standing on the ground that nuclear power plants are within or near their borders and that an accident at one of these plants could harm their citizens.
The States on appeal contended that the risk of a spent fuel pool fire must be a Category II rather than a Category I risk, because the risk is affected by mitigation that varies from plant to plant. It is true that the NRC relies in part upon mitigation at nuclear power plants -- including various coolant sprays and makeup water systems in case of pool drainage -- to conclude that the risk of an accidental or terrorist-caused fire in the pools is uniformly low. However, the NRC has mandated that these mitigation tactics be implemented at all nuclear power plants. The Appeals Court ruled, "The NRC relies on numerous studies detailing the effectiveness of its required mitigation measures; these studies constitute substantial evidence."
Access the complete opinion (click here).
The two States filed rulemaking petitions (Massachusetts in 2006, and California in 2007) asking the NRC to reverse its 1996 Generic Environmental Impact Statement, which found (among other things) that spent fuel pools at nuclear power plants do not create a significant environmental impact within the meaning of the National Environmental Policy Act (NEPA). The States petitioning for review here (New York, Connecticut, and Massachusetts) claim standing on the ground that nuclear power plants are within or near their borders and that an accident at one of these plants could harm their citizens.
The States on appeal contended that the risk of a spent fuel pool fire must be a Category II rather than a Category I risk, because the risk is affected by mitigation that varies from plant to plant. It is true that the NRC relies in part upon mitigation at nuclear power plants -- including various coolant sprays and makeup water systems in case of pool drainage -- to conclude that the risk of an accidental or terrorist-caused fire in the pools is uniformly low. However, the NRC has mandated that these mitigation tactics be implemented at all nuclear power plants. The Appeals Court ruled, "The NRC relies on numerous studies detailing the effectiveness of its required mitigation measures; these studies constitute substantial evidence."
Access the complete opinion (click here).
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