City Sanitation, LLC v. Allied Waste Services of MA

Aug 31: In the U.S. Court of Appeals, First Circuit, Case No. 10-2284. Appealed from the District Court of MA, Worcester. In the colorful words of the Appeals Court, "This appeal is the culmination of a pitched battle between two waste-disposal firms, squabbling over the carcass of a third. The littered battlefield brings to mind the familiar adage that one man's trash is another man's treasure.

 

    "Telling the tale requires us to resolve questions of standing to prosecute claims arising out of a bankruptcy; questions of first impression as to the distinction between 'commercial tort claims' and 'proceeds' and as to the force and effect of Bankruptcy Rule 8006; and a question anent the fairness of a negotiated settlement. After careful consideration, we conclude that the disputed claims are commercial tort claims; that the trustee in bankruptcy had exclusive standing to pursue and settle those claims; that the appellant, by failing to comply with Bankruptcy Rule 8006, waived its theory of abandonment; and that the bankruptcy court's approval of the proposed settlement was within the realm of its discretion. Accordingly, we affirm the judgment . . . [and] we reject City's appeal."

 

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Jefferson Block 24 Oil & Gas, v. Aspen Insurance UK

Aug 29: In the U.S. Court of Appeals, Fifth Circuit, Case No. 10-30190. Appealed from the United States District Court for the Eastern District of Louisiana. In this insurance coverage dispute, Plaintiff–Appellant Jefferson Block 24 Oil & Gas, L.L.C. (Jefferson Block) appealed from the district court's grant of summary judgment in favor of Defendants–Appellees, Aspen Insurance UK Limited, Ace European Group Limited, and Certain Underwriters at Lloyd's, London (collectively Underwriters). In a split decision, the Appeals Court reversed and remanded the case to the district court.

 

    The majority opinion concludes, "In short, we believe that the district court erred when it refused to apply the contra-insurer rule in this case. As we have discussed, the OPA [Oil Pollution Act] Policy is ambiguous with respect to the issue of coverage for Jefferson Block's 16-inch pipeline. This ambiguity arises because the policy's schedule of insured facilities refers to an MMS-1021 form that lists only the locations of facilities. Whether the pipeline -- which begins at one of the locations designated on the form but crosses others not so designated -- is a facility "thereon" one of the locations on the form cannot be determined through reference to the plain language of the policy. . . the extrinsic evidence in the record does not conclusively resolve this ambiguity. Since Jefferson Block offers a reasonable interpretation of the policy -- that a right-of-way pipeline originating in one of the lease blocks designated on an MMS-1021 form is included in that designation -- and did not completely draft the ambiguous provisions of the OPA Policy, the contra-insurer rule should apply and the ambiguity should be resolved in favor of the insured, Jefferson Block. The 16-inch pipeline was a 'covered offshore facility' designated on Jefferson Block's MMS-1021 form and thus included within the scope of coverage afforded by the OPA Policy."

 

    The dissenting opinion states that Jefferson Block contends that its OPA insurance policy insures it against the costs of a recent spill from a particular 16-inch right-of-way oil pipeline and the Underwriters contend that the policy does not. "The majority reverses, relying on the rule of contra proferentem to construe ambiguity in the policy against the Underwriters. The substantial weight of recent New York authority, however, suggests that contra proferentem should not apply in this case. I therefore

dissent." The dissent explains that contra proferentem has taken the form of the so-called "contra-insurer" rule, which provides that when an ambiguity is found in a policy, it must be construed against the insurer and in favor of coverage. However, the dissent indicates that, "A review of the case law reveals numerous opinions suggesting that contra proferentem will not apply where the party seeking the benefit of the doctrine was sophisticated and negotiated the legal instrument at issue."

 

    The dissent concludes that, ". . . 'the touchstone for applying contra proferentem is the insured's lack of sophistication,' particularly where the parties do not have 'equivalent bargaining power.' U.S. Fire Ins. Co., 949 F.2d at 574. A sophisticated party with a means to influence the terms of the contract should be able to identify and, if necessary, remedy ambiguities at the time of drafting. Such a party does not need a thumb on the scales in its favor."

 

    Access the complete majority opinion and dissent (click here). [#Remed, #CA5]

 

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Dine Citizens Against Ruining v. Klein (DOI)

Aug 26: In the U.S. Court of Appeals, Tenth Circuit, Case No. 11-1004. The Office of Surface Mining Reclamation and Enforcement (OSM) under the Department of Interior (DOI) approved an application by BHP Navajo Coal Company (BNCC) to revise the mining plan at its Navajo Mine -- a large open pit coal mine on tribal reservation lands in northwestern New Mexico. Diné Citizens Against Ruining Our Environment and San Juan Citizens Alliance (collectively Citizens) sought judicial review under the Administrative Procedures Act (APA). The district court concluded OSM had violated the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-4370h, in approving the application and remanded the case for further proceedings. BNCC appealed from the district court's remand order. The Appeals Court said, "Lacking jurisdiction, we must dismiss the appeal as premature."

 

    The Appeals Court explained, "Our jurisdiction extends only to review of 'final decisions of the district courts of the United States . . . .' 28 U.S.C. § 1291. 'The purpose of the finality requirement is to avoid piecemeal review.' Bender v. Clark, 744 F.2d 1424, 1426 (10th Cir. 1984). 'A final decision is one that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.' Graham v. Hartford Life & Accident Ins. Co., 501 F.3d 1153, 1156 (10th Cir. 2007) (quotations omitted). 'The remand by a district court to an administrative agency for further proceedings is ordinarily not appealable because it is not a final decision.' Bender, 744 F.2d at 1426-27; see also Trout Unlimited v. United States Dep't of Agric., 441 F.3d 1214, 1218 (10th Cir. 2006); Baca-Prieto v. Guigni, 95 F.3d 1006, 1008 (10th Cir. 1996). This is often referred to as the administrative-remand rule. See, e.g., S. Utah Wilderness Alliance v. Kempthorne, 525 F.3d 966, 970 (10th Cir.2008); Trout Unlimited, 441 F.3d at 1218; Baca-Prieto, 95 F.3d at 1008"

 

    The Appeals Court notes that, "There is a 'narrow' exception to the rule 'when the issue presented is both urgent and important.' Trout Unlimited, 441 F.3d at 1218-19. . . In this case, although the issues may be important (an issue we need not decide),

they are not urgent. . ."

 

    Access the complete opinion (click here). [#Energy/Coal, #CA10]

 

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Gates v. Rohm and Haas Co.

Aug 25: In the U.S. Court of Appeals, Third Circuit, Case No. 10-2108. Appealed from the United States District Court for the Eastern District of Pennsylvania. This is an interlocutory appeal under Fed. R. Civ. P. 23(f) from the denial of class certification for medical monitoring and property damage. Plaintiffs charge that chemical companies dumped an alleged carcinogen at an industrial complex near their residences. In denying the class certification, the District Court found individual issues predominated on exposure, causation, and the need for medical monitoring and also found individual issues predominated as to a liability-only issue class for the property damage claims.

    Plaintiffs seek certification of two classes: (1) a class seeking medical monitoring for village residents exposed to the airborne vinyl chloride between 1968 and 2002; and (2) a liability-only issue class seeking compensation for property damage from the exposure. At issue is whether the District Court erred in finding individual issues barred certification of the proposed trial classes under Fed. R. Civ. P. 23(b)(2) or 23(b)(3). The Appeals Court affirmed the district court decision.

    The Appeals Court explained further that, "Plaintiffs appear to rely on the same "common" evidence used for the medical monitoring class, but fail to explain how their estimates of exposure to residents over substantial periods of time corresponds to the level of contamination currently present at each home. It may prejudice absent class members whose properties may be shown to have suffered greater contamination. Given the inability to separate common issues from issues where individual characteristics may be determinative, the District Court did not abuse its discretion in refusing to certify a liability-only property damage class."

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

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Sierra Club v. Khanjee Holding

Aug 24: In the U.S. Court of Appeals, Seventh Circuit, Case No. 09-4008. Appealed from the United States District Court for the Southern District of Illinois. The case is a successive appeal. The original defendants wanted to build a power plant in southern Illinois. In the first appeal, the Appeals Court concluded that the defendants' Prevention of Significant Deterioration (PSD) permit, which they needed in order to build the power plant, had expired. The Appeals Court held that it was proper for the district court to grant summary judgment in favor of plaintiff Sierra Club and to enjoin the defendants from engaging in further construction activities until they obtained a new permit.

 

    After the first ruling, the district court assessed a penalty of $100,000 on all of the defendants, jointly and severally, and awarded attorneys' fees to Sierra Club. Defendant Khanjee Holding then appealed that decision. In this appeal, Khanjee contends that the district court lacked subject matter jurisdiction. But the Appeals Court said, "we already determined in the previous appeal that the district court had subject matter jurisdiction, and there is no reason to revisit that ruling."

 

    Khanjee also argued that the district court assessed penalties and fees in violation of Khanjee's constitutional rights. On that argument, the Appeals Court said, "We find, however, that Khanjee waived its constitutional arguments by not raising them before the district court." Finally, Khanjee contended that the district court committed error when it weighed the requisite statutory factors. The Appeals Court said, ". . .we conclude that the district court did not abuse its discretion. The court considered all of the relevant statutory factors and did not make any clearly erroneous findings of fact in assessing a penalty and awarding fees. We affirm."

 

    The Appeals Court explained further that, ". . . the district court did not abuse its discretion in concluding that Sierra Club was successful on the merits and performed a public service consistent with the Clean Air Act's goals. An award of fees was therefore proper. Western States Petroleum Ass'n v. E.P.A., 87 F.3d 280 (9th Cir. 1996), cited by Khanjee, is distinguishable. In that case, the Ninth Circuit described the party that was denied fees as 'a financially able, nongovernmental party having no more than its own economic interests at stake.' Id. at 286. The court also found that the litigation had not served the public interest. Id. Here, Sierra Club did not receive any direct financial benefit from the lawsuit, and it served the public interest. Increased charitable donations are collateral benefits not contemplated by Western States. That Sierra Club may be a well-funded organization does not preclude an award of fees. There is nothing in the Clean Air Act that suggests that fees can only be awarded to indigent parties."

 

    Access the complete opinion (click here). [#Air, #Energy/Coal, #CA7]

 

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Southern California Edison Co. v. U.S.

Aug 23: In the U.S. Court of Appeals, Federal Circuit, Case No. 2010-5147. Appealed from the United States Court of Federal Claims. In brief summary as explained by the Appeals Court, the case involves another of the spent nuclear fuels cases, the United States (Government) had contracted to dispose of plaintiff's spent nuclear fuel and related wastes; as in the other cases, the contract continues to be breached because the United States has yet to perform. The only issue before us is the measure of damages, specifically, whether certain indirect overhead costs incurred by plaintiff can be included in plaintiff's damages calculations. The United States Court of Federal Claims concluded that such indirect costs are includable. The Government appeals. The Appeals Court said, "Because the trial court did not err in its conclusion, we affirm."

 

    The Appeals Court explained further, "In this case, the Government's breach of the Standard Contract caused SCE to build, staff, and maintain an entirely new facility for SNF [spent nuclear fuel] storage. SCE [Southern California Edison] specifically constructed the ISFSI [Independent Spent Fuel Storage Installation] facilities to mitigate the Government's breach. Because the ISFSI facilities had not existed prior to the Government's breach, and indeed were necessitated by the breach, this is not a case where the underlying costs were incurred by operations independent of and unrelated to the breach."

 

    Access the complete opinion (click here). [#Haz/Nuclear, #CAFed]

 

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State of Michigan v. United States

Aug 24: In the U.S. Court of Appeals, Seventh Circuit, Case No. 10-3891. Appealed from the United States District Court for the Northern District of Illinois, Eastern Division. In this important 57-page decision regarding Great Lakes States' continuing attempt to stop the spread of Asian Carp to the Great Lakes, the Appeals Court upheld the district court's ruling denying preliminary relief. However, importantly, unlike the lower court which said the "plaintiffs had shown only a minimal chance of succeeding on their claims"; the Appeals Court said "plaintiffs presented enough evidence at this preliminary stage of the case to establish a good or perhaps even a substantial likelihood of harm." The Appeals Court also agreed with plaintiffs that, "If the invasion comes to pass, there is little doubt that the harm to the plaintiff states would be irreparable." The case involves the State of Michigan, et al and the Grand Traverse Band of Ottawa and Chippewa Indians versus the U.S. Army Corps of Engineers and the City of Chicago, et al.

 

    As explained by the Appeals Court, "Ambitious engineering projects that began at the time that the City of Chicago was founded have established a waterway in northeastern Illinois that connects Lake Michigan to the Mississippi watershed. (Additional links between the Mississippi and the Great Lakes exist elsewhere, from northern Minnesota to New York.) The system of canals, channels, locks, and dams, with which we are concerned, known today as the Chicago Area Waterway System (or CAWS, as the parties call it in their briefs), winds from the mouth of the Chicago River and four other points on Lake Michigan to tributaries of the Mississippi River in Illinois. The navigable link has been a boon to industry and commerce, and it supports transportation and recreation. Public health crises that once were common because the Chicago River emptied the City's sewage into the lake -- the City's freshwater supply – vanished thanks to the Chicago Sanitary and Ship Canal, which reversed the flow of the Chicago River so that it now pulls water from the lake, into the CAWS, and down toward the Mississippi. During heavy rains and seasonal high waters in the region, the CAWS is used to control flooding.

 

    "This effort to connect the Great Lakes and Mississippi watersheds has not been without controversy. At the turn of the 20th century, Missouri sued in the Supreme Court to stop Illinois from opening the Sanitary and Ship Canal. An opinion by Justice Holmes rejected Missouri's challenge; the Court concluded that the state had not presented enough evidence to establish that the flow of sewage toward the Mississippi would create a public nuisance. Missouri v. Illinois, 200 U.S. 496 (1906); see also Missouri v. Illinois, 180 U.S. 208 (1901). Several years later a broader fight erupted among the states bordering the Great Lakes, and the Court began to issue decrees setting the maximum rate at which Illinois may divert water away from Lake Michigan and into the CAWS. E.g., Wisconsin v. Illinois, 449 U.S. 48 (1980); Wisconsin v. Illinois, 388 U.S. 426 (1967); Wisconsin v. Illinois, 311 U.S. 107 (1940); Wisconsin v. Illinois, 278 U.S. 367 (1929). Nor has opening a pathway between these bodies of fresh water come without costs. This appeal requires us to consider one of those costs: the environmental and economic harm posed by two invasive species of carp, commonly known as Asian carp, which have migrated up the Mississippi River and now are poised at the brink of this man-made path to the Great Lakes. The carp are voracious eaters that consume small organisms on which the entire food chain relies; they crowd out native species as they enter new environments; they reproduce at a high rate; they travel quickly and adapt readily; and they have a dangerous habit of jumping out of the water and harming people and property.

 

    "In an attempt to stop the fish, Michigan, Minnesota, Ohio, Pennsylvania, and Wisconsin, all states bordering the Great Lakes, filed this lawsuit against the U.S. Army Corps of Engineers (the Corps) and the Metropolitan Water Reclamation District of Greater Chicago (the District), which together own and operate the facilities that make up the CAWS. The plaintiff states allege that the Corps and the District are managing the CAWS in a manner that will allow invasive carp to move for the first time into the Great Lakes. The states fear that if the fish establish a sustainable population there, ecological disaster and the collapse of billion-dollar industries that depend on the existing ecosystem will follow. They say that the defendants' failure to close down parts of the CAWS to avert the crisis creates a grave risk of harm, in violation of the federal common law of public nuisance, see American Electric Power Co., Inc. v. Connecticut, 131 S. Ct. 2527 (2011), and they advance a related claim against the Corps based on the Administrative Procedure Act (APA), 5 U.S.C. § 702. The states asked the district court for declaratory and injunctive relief and moved for a preliminary injunction that would require the defendants to put in place additional physical barriers throughout the CAWS, implement new procedures to stop invasive carp, and expedite a study of how best to separate the Mississippi and Great Lakes watersheds permanently. Other parties intervened to protect their interests -- the Grand Traverse Band of Ottawa and Chippewa Indians on the side of the plaintiffs, and the City of Chicago, Wendella Sightseeing Company, and the Coalition to Save Our Waterways as defendants. The district court denied the motion for a preliminary injunction, and the states appealed immediately. See 28 U.S.C. § 1292(a)(1).

 

    "We conclude that the court's decision to deny preliminary relief was not an abuse of discretion. Our analysis, however, differs in significant respects from that of the district court, which was persuaded that the plaintiffs had shown only a minimal chance of succeeding on their claims. We are less sanguine about the prospects of keeping the carp at bay. In our view, the plaintiffs presented enough evidence at this preliminary stage of the case to establish a good or perhaps even a substantial likelihood of harm – that is, a non-trivial chance that the carp will invade Lake Michigan in numbers great enough to constitute a public nuisance. If the invasion comes to pass, there is little doubt that the harm to the plaintiff states would be irreparable. That does not mean, however, that they are automatically entitled to injunctive relief. The defendants, in collaboration with a great number of agencies and experts from the state and federal governments, have mounted a full-scale effort to stop the carp from reaching the Great Lakes, and this group has promised that additional steps will be taken in the near future. This effort diminishes any role that equitable relief would otherwise play. Although this case does not involve the same kind of formal legal regime that caused the Supreme Court to find displacement of the courts' common-law powers in American Electric Power, on the present state of the record we have something close to it. In light of the active regulatory efforts that are ongoing, we conclude that an interim injunction would only get in the way. We stress, however, that if the agencies slip into somnolence or if the record reveals new information at the permanent injunction stage, this conclusion can be revisited."

 

    The Appeals Court indicated in its concluding remarks, "We take very seriously the threat posed by the invasive species of carp that have come to dominate parts of the Mississippi River basin and now stand at the border of one of the most precious freshwater ecosystems in the world. Any threat to the irreplaceable natural resources on which we all depend demands the most diligent attention of government. As the case proceeds, the district judge should bear in mind that the risk of harm here depends upon both the probability of the harm and the magnitude of the problem that would result. In the end, however, the question whether the federal courts can offer meaningful equitable relief – either preliminary or permanent -- to help abate a public nuisance in the face of agency action is factual in nature. It depends on the actual measures that the agencies have implemented already and those that they have committed to put in place going forward. Our ruling today is tied to our understanding of the current state of play. We recognize that the facts on the ground (or in the water) could change. The agencies currently working hard to solve the

carp problem might find themselves unable to continue, for budgetary reasons, because of policy changes in Washington, D.C., or for some other reason. If that happens, it is possible that the balance of equities would shift. Similarly, new evidence might come to light which would require more drastic action, up to and including closing locks on Lake Michigan for a period of time. If either situation comes to pass, then the district court would have the authority to revisit the question whether an exercise of its equitable powers is warranted, taking into account the principles we have discussed in this opinion. As things stand now, however, preliminary relief is not appropriate. The district court's judgment is affirmed."

    Access the complete opinion (click here). [*GLakes, *Wildlife, #CA7]