WIMS Publishing Notice

Subscribers & Readers Note: We will not be publishing today, February 15, 2010, in observance of the Washington's Birthday/President's Day holiday. We will return on Tuesday, February 16, 2010.

John Dubinsky v. Mermart

Feb 10: In the U.S. Court of Appeals, Eighth Circuit, Case No. 09-2072. John Dubinsky, et al (Subordinate Bondholders) invested in a refinancing venture for a real estate development. They sued the developer of the project, Mermart, L.L.C. (Mermart), alleging breach of contract and demanding equitable accounting for failure to pay interest under the financing documents, as well as alleging unjust enrichment, negligence, and fraudulent misrepresentation based on alleged representations that the project was free from environmental hazards. The district court dismissed the contract claims, finding that the Subordinate Bondholders failed to obtain written consent of UMB Bank, N.A. (UMB Bank), the Senior Mortgagee, as required by the financing documents. The district court also dismissed the negligence, unjust enrichment, and fraudulent misrepresentation claims because the economic loss doctrine precluded recovery. The Appeals Court affirmed the district court ruling.

    The Appeals Court said further, "We agree with the district court that the negligence claim is an enforcement action under the Subordination Agreement. Id. Similarly, we find that, like the negligence claim, the failure to make interest payments due to the characterization of the lead paint remediation as an "upgrade expense," is a matter that arises out of the Financing Documents. . . We affirm the dismissal of the negligence and unjust enrichment claims because the Subordinate Bondholders did not obtain written permission to sue. . .

    "Finally, the Subordinate Bondholders argue that Mermart made fraudulent misrepresentations pertaining to the absence of lead-based paint. Mermart counters that any such alleged statements are also covered solely by contractual duties. . . we find that the claimed fraudulent misrepresentation is also a matter that arises out of the Financing Documents. Again, we affirm the dismissal of this claim because the Subordinate Bondholders did not first obtain the written permission from the Senior Mortgagee to sue."

    Access the complete opinion (click here).

Crandall v. Denver

Feb 8: In the U.S. Court of Appeals, Tenth Circuit, Case No. 08-1197. Plaintiffs Terri Crandall and JoAnn Hubbard sued for injunctive relief against the City and County of Denver under the citizen-suit provision of the Resource Conservation and Recovery Act of 1976 (RCRA). Their concern is that aircraft deicing fluid (ADF), which can produce hydrogen-sulfide gas when it decomposes, endangers human health at Concourse B of the Denver International Airport. The gates on Concourse B are used almost exclusively by United Airlines. Crandall is a United employee, and Hubbard is a former employee who now frequently uses Concourse B as a passenger. Plaintiffs seek: (1) to prohibit full-plane deicing at Concourse B gates; and (2) to require other precautionary steps relating to ADF.

 

    Following a five-day bench trial, the United States District Court for the District of Colorado denied Plaintiffs relief. It found that Denver no longer permits full-plane deicing at the gates and held that Plaintiffs had not shown that the current use of ADF "may present an imminent and substantial endangerment to health," which is a prerequisite for RCRA relief. The court also held that RCRA does not govern all the ADF by Concourse B at the Denver Airport, but only the ADF "that flows in storm water into Concourse B and degrades in Concourse B." The ADF that degrades outside the concourse, it said, was governed exclusively by permits issued under the Clean Water Act (CWA).

 

    On appeal Plaintiffs argue that the district court misconstrued RCRA's requirements with respect to injunctive relief. They also contend that the court erred in holding that the CWA, rather than RCRA, governs some of the ADF at the Denver Airport. The Appeals Court ruled, "We affirm the district court's denial of injunctive relief. Plaintiffs failed to demonstrate that ADF at the airport (whether it degrades inside or outside Concourse B) may present an imminent and substantial endangerment to health. Because relief under RCRA would therefore not be available even if RCRA governs the ADF that degrades outside the concourse, we need not address whether such ADF is governed exclusively by the CWA."

 

    The Appeals Court said further, "A RCRA suit cannot be brought because someone may sometime begin disposing of solid waste in a manner that presents an endangerment. The endangering practice -- here, the resumption of gate deicing -- must be imminent. See 42 U.S.C. § 6972(a)(1)(B). Plaintiffs' suit was properly dismissed because the evidence showed that resumption of full-plane gate deicing at Concourse B was not imminent, but merely speculative. If the district court had been persuaded by the evidence that Denver would likely resume full-plane deicing at the gates upon conclusion of this litigation and that such a practice may present an imminent and substantial endangerment to health, we presume that it could properly issue an injunction under RCRA. That, however, is not the case we have before us."

 

    Access the complete opinion (click here).

River Runners For Wilderness v. Martin (Interior Dept.)

Feb 1: In the U.S. Court of Appeals, Ninth Circuit, Case No. 08-15112. The case concerns the National Park Service’s decision to permit the continued use of motorized rafts and support equipment in Grand Canyon National Park. Plaintiffs contend that such motorized activities impair the wilderness character of the Canyon and that the Park Service’s decision violates its management policies and various Federal statutes. Plaintiffs asked the District Court to set aside the decision under the Administrative Procedure Act (APA). The Appeals Court indicated that, "For reasons explained in this opinion, Plaintiffs have not satisfied the high threshold required to set aside federal agency actions under the APA." In a footnote, the Appeals Court praised, "The wording of Judge Campbell’s carefully crafted district court opinion with its detailed factual discussion and thorough analysis, with which we agree, has been utilized in this opinion." In its final conclusion, the Appeals Court indicates, "Plaintiffs have failed to establish that the Park Service acted arbitrarily and capriciously when it adopted the 2006 Management Plan."

On one of the primary issues of concern, i.e. noise, or "impairment of the natural soundscape;" the Appeals Court said, "Plaintiffs argue that the Park Service failed to consider 28 previous studies, but they identify no specific studies for the court to consider. Nor do Plaintiffs cite any recent studies that call into question the findings of the 1993 and 2003 studies. Defendants also note that any studies conducted in the 1970s would have concerned louder two-stroke engines rather than the quieter and cleaner four-stroke engines now used in the Corridor. Finally, the 2003 study specifically considered and summarized the earlier studies relied on by Plaintiffs. Given all of these considerations, the court cannot conclude that the Park Service acted arbitrarily and capriciously when it concluded that motorized uses do not impair the soundscape of the Park within the meaning of the Organic Act."

Access the complete opinion (click here).

United Farm Workers Of America v. U.S. EPA

Jan 26: In the U.S. Court of Appeals, Ninth Circuit, Case No. 08-35528. According to the majority decision, "A single issue is presented by this case: Was an appeal from a decision of the Environmental Protection Agency (the EPA) filed in the right court? In the background are the merits of the litigation centered on the continued use of the pesticide Azinphos-Methyl (AZM). Our task is not to decide the merits but to ascertain the appeals process established by Congress."

While perhaps not relevant to the decision, by way of background, in the case EPA used a cost-benefit analysis to allow the continued use of a highly toxic chemical, AZM. The adverse effects of AZM on people exposed to AZM, such as agricultural workers, include headache, nausea, and dizziness. Anxiety and restlessness are also prominent. Worsening may result in twitching, weakness, tremor, incoordination, vomiting, abdominal cramps, diarrhea. In 2006, after receiving written comments from the public (notice and comment), the EPA issued an order that permitted growers to continue spraying of AZM on certain crops until 2012, after which the use of AZM would be “phased out.”

In short, according to the dissenting opinion, "without hearing any witness testimony or reviewing anything other than the submission of written comments, the EPA struck the cost-benefit analysis in favor of the AZM manufacturers and the growers who use AZM and against the agricultural workers and the environment. Because AZM’s toxic effects endanger the health of agricultural workers, the plaintiff-appellants, United Farm Workers of America (Farm Workers) opposed the continued use of AZM and challenged the EPA’s order in federal district court."

The dissenting opinion explains that, "To resolve this case we are required to interpret the words 'public hearing' under Section 16(b) of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. § 136 et seq. Under § 16(b), whether the Farm Workers should have filed for review in federal district court or in the federal court of appeals depends on whether the EPA’s notice and comment procedure amounted to a “public hearing.” 7 U.S.C. § 136n(b). Simply put, if there was a public hearing, the Farm Workers would have been correct to file in the court of appeals. 7 U.S.C. § 136n(b). If there was not a public hearing, the Farm Workers were correct to file in district court. 7 U.S.C. § 136n(a)-(b)."

The majority ruled, "We hold that the choice of the district court by United Farm Workers of America and the other appellants (collectively Farm Workers) was mistaken and that the district court correctly dismissed their suit for lack of jurisdiction." The majority said further, "Jurisdiction in the Court of Appeals is conferred after an order is issued by the EPA 'following a public hearing.' Does the addition of 'public' alter the meaning of 'hearing'? It seems unlikely. If it did, there would be actions by the Administrator following 'a hearing' for which no review was provided. 'Hearing' and 'public hearing' should be read in tandem. Context does determine that 'the hearing' contain written submissions; otherwise, judicial review would be awkward. . . On this construction, review of the contested decision in this case should have been sought in this court. Unfortunately for the appellants it is now too late to seek it here. Petitions for review must be filed 60 days after the decision. . . The time is past."

The dissenting justice said in a lengthy dissent, "The Farm Workers sought review in the district court. They correctly determined that the court of appeals lacked jurisdiction to hear their challenge to the EPA’s order because the only evidentiary material presented to the EPA was in the form of written comments. The Farm Workers correctly concluded that this limited process did not constitute a public hearing. . . The majority would affirm the district court’s ruling that the EPA’s solicitation of written comments from the public is a 'public hearing' under § 16(b) and that the Farm Workers should have filed their challenge to the EPA’s order in the court of appeals. . . I disagree."

Access the complete opinion and dissent (click here).

Hells Canyon Preservation v. U.S. Forest Service

Jan 25: In the U.S. Court of Appeals, Ninth Circuit, Case No. 07-35456. Plaintiffs-Appellants Hells Canyon Preservation Council and The Wilderness Society (collectively, HCPC or plaintiffs) brought suit against the United States Forest Service (Forest Service or Service), seeking a judgment declaring: (1) that the Forest Service has failed to retain the original map of the Wilderness in violation of the Hells Canyon National Recreation Area Act, 16 U.S.C. § 460gg(b); (2) that the Forest Service’s description of the wilderness boundary is arbitrary and capricious in violation of 5 U.S.C. § 706(2)(A); and (3) that the Forest Service’s failure to close the Lord Flat Trail to motorized vehicle use is an “agency action unlawfully withheld or unreasonably delayed” under 5 U.S.C. § 706(1).

Plaintiffs also seek an injunction to close the Lord Flat Trail to motorized vehicle use. The district court held that each of plaintiffs’ claims was barred by the Administrative Procedure Act’s (APA’s) six-year statute of limitations. The Ninth Circuit majority said in a split decision, "Although we rely on different reasoning, we affirm the judgment of the district court." In conclusion the majority ruled, "Over a three-year period, between 1978 and 1981, the Forest Service considered the evidence, consulted the controlling statutes, and then acted to comply with the Wilderness Act by publishing the boundary description. From that time, plaintiffs had six years in which to air their disagreement. They did not. We see no reason to entertain their attempt to revive their disagreement by labeling the Forest Service’s actions as an ongoing failure to act."

In the partial dissent, one of the Justice's ruled, "I concur in the majority’s analysis of the first two claims. Plaintiffs do not have standing to challenge the Forest Service’s failure to retain the original map of the Hells Canyon Wilderness area. Maj. op. Part II-A. And Plaintiffs’ claim that the boundary description is arbitrary and capricious is barred by the six-year statute of limitations. Maj. op. Part II-B. I respectfully dissent, however, from the majority’s analysis of the third claim. Maj. op. Part II-C. . . In my view, Plaintiffs have asserted a viable claim to “compel agency action unlawfully withheld” under 5 U.S.C. § 706(1)."

Access the complete opinion and dissent (click here).

Citizens United v. Federal Election Commission

Jan 21: The U.S. Supreme Court issued an important 5-4 decision with the majority opinion written by Justice Kennedy in the case of Citizens United v. Federal Election Commission (Case No. 08-205). Justice Stevens dissented and was joined by Justices Ginsburg, Breyer, and Sotomayor. According to a summary in the Washington Post, which called the decision a "seismic jolt,"The Supreme Court ruled Thursday that corporations may spend as freely as they like to support or oppose candidates for president and Congress, easing decades-old limits on business efforts to influence federal campaigns. . . They overturned two of the court's past decisions -- including one made as recently as six years ago -- to upend federal legislation that says corporations may not use their profits to support or oppose candidates and to declare unconstitutional a large portion of the McCain-Feingold campaign finance reform act passed in 2002 [i.e. Bipartisan Campaign Reform Act of 2002 (BCRA)]."

President Obama issued a strong statement on the decision saying, "With its ruling today, the Supreme Court has given a green light to a new stampede of special interest money in our politics. It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans. This ruling gives the special interests and their lobbyists even more power in Washington -- while undermining the influence of average Americans who make small contributions to support their preferred candidates. That's why I am instructing my Administration to get to work immediately with Congress on this issue. We are going to talk with bipartisan Congressional leaders to develop a forceful response to this decision. The public interest requires nothing less."

U.S. Senator Russ Feingold (D-WI) issued a statement on the ruling saying, "It is important to note that the decision does not affect McCain-Feingold’s soft money ban, which will continue to prevent corporate contributions to the political parties from corrupting the political process. But this decision was a terrible mistake. Presented with a relatively narrow legal issue, the Supreme Court chose to roll back laws that have limited the role of corporate money in federal elections since Teddy Roosevelt was president. Ignoring important principles of judicial restraint and respect for precedent, the Court has given corporate money a breathtaking new role in federal campaigns. Just six years ago, the Court said that the prohibition on corporations and unions dipping into their treasuries to influence campaigns was ‘firmly embedded in our law.’ Yet this Court has just upended that prohibition, and a century's worth of campaign finance law designed to stem corruption in government. The American people will pay dearly for this decision when, more than ever, their voices are drowned out by corporate spending in our federal elections. In the coming weeks, I will work with my colleagues to pass legislation restoring as many of the critical restraints on corporate control of our elections as possible."

The dissenting opinion by Justice Stevens concludes, "In a democratic society, the longstanding consensus on the need to limit corporate campaign spending should out weigh the wooden application of judge-made rules. The majority’s rejection of this principle “elevate[s] corporations to a level of deference which has not been seen at least since the days when substantive due process was regularly used to invalidate regulatory legislation thought to unfairly impinge upon established economic interests.” Bellotti, 435 U. S., at 817, n. 13 (White, J., dissenting). At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics."

Access the complete opinion and dissent (click here; or here). Access the docket for the case (click here). Access the Washington Post article (click here). Access the statement from the President (click here). Access the statement from Senator Feingold (click here). Access complete background and briefs in the case on the SCOTUS Wiki (click here).