Doe Run Resources Corp. v. Lexington Insurance Co.

Jun 13: U.S. Court of Appeals, Eighth Circuit, Case No: 12-2215. Appealed from the U.S. District Court for the Eastern District of Missouri - St. Louis. The Appeals Court explains that Doe Run Resources Corporation (Doe Run), the largest integrated lead producer in the Western Hemisphere, operates the Sweetwater Mine and Mill near Viburnum, Missouri. Doe Run extracts and crushes ore containing lead and other metals at the mine, processes the crushed ore at a mill near the mine, and either sells the resulting lead concentrate on the world market or transports it by truck to Doe Run's smelter for processing into ingots, bars, and other forms. In 2006, Nadist, LLC, a neighboring landowner, sued Doe Run, alleging environmental property damage resulting from the mine and mill operations (the Nadist Lawsuit).

 

    More than three years later, Doe Run tendered defense of the Nadist Lawsuit to Lexington Insurance Company (Lexington) under Commercial General Liability (CGL) policies Doe Run purchased between 1998 and 2006. When Lexington denied coverage on numerous grounds, Doe Run commenced this declaratory judgment action seeking to enforce Lexington's contractual duty to defend Doe Run. The district court granted summary judgment dismissing the complaint, concluding that Lexington had no duty to defend because the policies' absolute pollution exclusions unambiguously bar coverage of all claims asserted in the Nadist Lawsuit. The Appeals Court indicates that, "Missouri law governs the issues raised on appeal in this diversity case."

 

    The Appeals Court rules, "Here, the more specific lead exclusion, if included, would have overlapped the absolute pollution exclusion as it applies to the release of lead "pollutants," but the two exclusions would not have conflicted. The parties' deletion of the lead exclusion left the remainder of the CGL policy in full force and effect, including its absolute pollution exclusion. The judgment of the district court is affirmed."

 

    Access the complete opinion (click here). [#Remed, #CA8]

 

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Organic Seed Growers & Trade Ass'n v. Monsanto Co.

Jun 10: In the U.S. Court of Appeals, Federal Circuit, Case No. 12-1298. Appealed from the United States District Court for the Southern District of New York. Appellants, a coalition of farmers, seed sellers, and agricultural organizations, sought declaratory judgments of non-infringement and invalidity with respect to twenty-three patents owned by Monsanto Co. and Monsanto Technology, LLC (collectively Monsanto). The district court concluded that there was no justiciable case or controversy and dismissed for lack of jurisdiction.

 

    The Appeals Court indicates that, "Because Monsanto has made binding assurances that it will not 'take legal action against growers whose crops might inadvertently contain traces of Monsanto biotech genes (because, for example, some transgenic seed or pollen blew onto the grower's land),' . . . and appellants have not alleged any circumstances placing them beyond the scope of those assurances, we agree that there is no justiciable case or controversy. We affirm."

 

    Among other allegations, ". . .appellants also complain that they are harmed by exposure to the allegedly adverse health effects of genetically modified seeds and glyphosate; longterm environmental impacts of genetically modified seeds; economic costs following from contamination of conventional crops by transgenic seeds and glyphosate; and the costs of anti-contamination precautions taken for purposes other than avoiding suit (i.e., to maintain organic certification). But as the appellants concede, 'a declaratory judgment here would do nothing to eliminate the risk of transgenic seed contamination.' . . . Aside from the risk of suit by Monsanto, none of the alleged harms caused by contamination is traceable to Monsanto's enforcement of its patents, they could not be remedied by a declaratory judgment, and they cannot serve as a basis for jurisdiction in this case.

 

    "In sum, Monsanto's binding representations remove any risk of suit against the appellants as users or sellers of trace amounts (less than one percent) of modified seed. The appellants have alleged no concrete plans or activities to use or sell greater than trace amounts of modified seed, and accordingly fail to show any risk of suit on that basis. The appellants therefore lack an essential element of standing. The district court correctly concluded that it lacks Declaratory Judgment Act jurisdiction."

 

    The organization, Beyond Pesticides, summarizes the case saying, ". . .the Federal Circuit ruled Monday that a group of organic and otherwise non-GE farmer and seed company plaintiffs are not entitled to bring a lawsuit to protect themselves from Monsanto's transgenic seed patents after Monsanto made binding assurances that it will not take legal action against growers whose crops might inadvertently be contaminated with traces of Monsanto biotech genes."

 

    While this may seem confusing, Beyond Pesticides explains saying, "Organic farmers and others have worried for years that they will be sued by Monsanto for patent infringement if their crops get contaminated with Monsanto genetically engineered (GE) material from GE crops. Organic and non-GE farms get contaminated when pollen or seed migrate from neighboring GE farms. Even though wind or insect transfer of pollen is a natural process, Monsanto has been suing farmers for infringing on their patents if contamination is found on their farms. Monsanto's history of aggressive investigations and lawsuits brought against farmers is a major source of concern for organic and non-GE agricultural producers since Monsanto's first lawsuit brought against a farmer in the mid-'90s. As of 2012, Monsanto has filed 142 alleged seed patent infringement lawsuits involving 410 farmers and 56 small farm businesses in 27 states." The case was a preemptive effort by plaintiffs to protect themselves from being accused of patent infringement should their crop ever become contaminated by Monsanto's GE seed.

 

    Plaintiffs' attorney, Dan Ravicher of the Public Patent Foundation (PUBPAT), views the decision as a partial victory.  He said, "Before this suit, the Organic Seed plaintiffs were forced to take expensive precautions and avoid full use of their land in order to not be falsely accused of patent infringement by Monsanto. The decision today means that the farmers did have the right to bring the suit to protect themselves, but now that Monsanto has bound itself to not suing the plaintiffs, the Court of Appeals believes the suit should not move forward." Maine organic seed farmer Jim Gerritsen, president of lead plaintiff Organic Seed Growers and Trade Association said, "Even though we're disappointed with the Court's ruling not to hear our case, we're encouraged by the court's determination that Monsanto does not have the right to sue farmers for trace contamination. However, the farmers went to court seeking justice not only about contamination, but also the larger question of the validity of Monsanto's patents. Justice has not been served."

 

    Dave Murphy, founder and executive director of Food Democracy Now!, a co-plaintiff in the lawsuit, "Today's ruling may give farmers a toehold in courts regarding the unwanted contamination of their crops, but it does not protect our food supply from the continued proliferation of Monsanto's flawed technology. The real threat of continued contamination of our nation's food supply was only highlighted last week when Monsanto's unapproved GMO wheat was discovered in an Oregon farmer's field more than 10 years after it was legally planted in that state." Beyond Pesticides indicates, "The decision allows farmers who are contaminated to sue Monsanto and Monsanto's customers for the harm caused by that contamination without fear of a retaliation patent infringement claim against them by Monsanto." Despite this Court of Appeals' decision, the plaintiffs still have the right to ask the Supreme Court to review the Court of Appeals decision and ultimately reinstate the case. Organic Seed plaintiffs are considering such action.

 

    Access the complete opinion (click here). Access lengthy release with links to related information from Beyond Pesticides (click here). [#CAFed, #Agriculture, #Toxics]

 

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Center For International Environmental Law v. U.S. Trade Rep.

Jun 7: In the U.S. Court of Appeals, D.C. Circuit, Case No. 12-5136. Appealed from the United States District Court for the District of Columbia. In this FOIA case, the Appeals Court begins its opinion with a quote from President George Washington, stating in part that, ". . .The nature of foreign negotiations requires caution, and their success must often depend on secrecy. . ." In overturning the district court decision and upholding the Trade Representative's ability to withhold a document that Earthjustice, representing Center For International Environmental Law (CIEL) said,  ". . .set out U.S. positions on the interpretation of international trade laws that affect the environment."

 

    The Appeals Court explains that during the 1990s and early 2000s, the United States and thirty-three other countries participated in negotiations seeking to establish the Free Trade Agreement of the Americas, a proposed agreement that would have governed international trade and investment throughout the Western Hemisphere. In July 2000, the Center for International Environmental Law, a not-for-profit public-interest organization, submitted a Freedom of Information Act, 5 U.S.C. § 552, request to the Office of the United States Trade Representative. The Center sought, among other things, documents circulated or tabled by the United States during sessions of the Free Trade Agreement of the Americas Negotiating Group on Investment held in February and May 2000. The Trade Representative identified forty-six documents responsive to the Center's request but withheld the documents as exempt from disclosure. The Center sued to compel production.

 

    After years of litigation, only one document remains in dispute -- a white paper referred to in the district court proceedings as "document 1." The Trade Representative classified the white paper as "confidential" and invoked FOIA exemption 1, which applies to classified materials, as the basis for withholding it. The district court concluded that the risk of adverse arbitration decisions was "insufficiently substantiated" and said, Arbitrators, "are generally aware of the non-binding, preliminary nature of the interpretive position articulated in [the disputed document]," and "the risk that international arbitrators will adopt the position, much less rely on it to the United States' detriment in arbitration, is too speculative to justify a reasonable expectation of harm to foreign relations."

 

    However, the Appeals Court concluded, ". . .the Trade Representative has satisfied its burden to explain the damage that reasonably could be expected to result from disclosure of the white paper. Because the white paper was properly classified as confidential, the Trade Representative properly withheld the document as exempt from disclosure under FOIA exemption 1. Accordingly, the judgment of the district court is reversed."

 

    CIEL President Carroll Muffett said, "It is with great irony that at a time when reports about government intrusion into individual privacy are escalating by the day, the U.S. government would go to such lengths to protect the confidentiality of its trade negotiations -- the terms of which will have real impacts on its citizens. By denying the public access to these negotiations, the US has created a fundamental barrier to the development of democracy. Most troubling, we have already seen the US aggressively pushing information in a similar black box in other trade negotiations, like the recently announced Transatlantic Trade and Investment Partnership with the European Union." Earthjustice attorney and director of international programs Martin Wagner said, "Transparency and public participation are hallmarks of democracy. If citizens are kept in the dark until negotiations are completed, they will never be able to provide useful advice concerning rules that would directly affect their lives and health. This case was about giving people a role in the creation of the laws that govern their lives."

 

    According to an Earthjustice release, at issue was a document that contains the U.S. Trade Representative's interpretation of "in like circumstances," meaning when the United States must treat foreign investors as favorably as it does domestic ones. CIEL argued that weak provisions in the North American Free Trade Agreement (NAFTA) led to a successful billion-dollar challenge to California's plan to phase out a toxic gasoline additive. Earthjustice indicates, the  Free Trade Area of the Americas (FTAA) "would have extended NAFTA-type rules throughout the Western Hemisphere. The document contains the U.S. interpretation of terms that would determine the extent of government's ability to prevent threats to human health and the environment. . . USTR's refusal prevented the public from having a voice in how much power the United States should surrender in the negotiations."

 

    Access the complete opinion (click here). Access the release from Earthjustice (click here). [#CADC, #All]

 

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Illinois Commerce Commission, Et Al v. FERC

Jun 7: In the U.S. Court of Appeals, Seventh Circuit, Case Nos. 11-3421, 11-3430, 11-3584, 11-3585, 11-3586,11-3620, 11-3787, 11-3795, 11-3806, 12-1027. Petitions to Review Orders of the Federal Energy Regulatory Commission (FERC). The Appeals Court explains that control of more than half the nation's electrical grid is divided among seven Regional Transmission Organizations (RTOs). These are voluntary associations of utilities that own electrical transmission lines interconnected to form a regional grid and that agree to delegate operational control of the grid to the association. Power plants that do not own any part of the grid but generate electricity transmitted by it are also members of these associations, as are other electrical companies involved in one way or another with the regional grid.

 

    Two Regional Transmission Organizations are involved in this case -- Midwest Independent Transmission System Operator, Inc. (MISO) and PJM Interconnection, LLC (PJM). MISO operates in the midwest and in the Great Plains states while PJM operates in the mid-Atlantic region but has midwestern enclaves in and surrounding Chicago and in southwestern Michigan. Each RTO is responsible for planning and directing expansions and upgrades of its grid. It finances these activities by adding a fee to the price of wholesale electricity transmitted on the grid. The Federal Power Act requires that the fee be "just and reasonable," and therefore at least roughly proportionate to the anticipated benefits to a utility of being able to use the grid. 

 

    The Appeals Court continues the case explanation saying in 2010 it sought FERC's approval to impose a tariff on its members to fund the construction of new high-voltage power lines that it calls "multi-value projects" (MVPs), beginning with 16 pilot projects. The tariff is mainly intended to finance the construction of transmission lines for electricity generated by remote wind farms. Every state in MISO's region except Kentucky (which is barely in the region) encourages or even requires utilities to obtain a specified percentage of their electricity supply from renewable sources, mainly wind farms. Indiana, North Dakota, and South Dakota have aspirational goals; the rest have mandates. The details vary but most of the states expect or require utilities to obtain between 10 and 25 percent of their electricity needs from renewable sources by 2025 -- and by then there may be federal renewable energy requirements as well.

 

    MISO identified what it believes to be the best sites in its region for wind farms that will meet the region's demand for wind power. Most are in the Great Plains, because electricity produced by wind farms there is cheaper despite the longer transmission distance; the wind flow is stronger and steadier and land is cheaper because population density is low (wind farms require significant amounts of land). Among other benefits, MISO has estimated that the cost of the transmission lines necessary both to bring electricity to its urban centers from the Great Plains and to integrate the existing wind farms elsewhere in its region with transmission lines from the Great Plains -- transmission lines that the multi-value projects will create -- will be more than offset by the lower cost of electricity produced by western wind farms. FERC approved (with a few exceptions) MISO's rate design and pilot projects.

 

    The Appeals Court indicates that six issues are presented: (1) the proportionality of benefits to costs; (2) the procedural adequacy of the Commission's treatment of proportionality; (3) the propriety of apportioning the cost of the multi-value projects among utilities on the basis of their total power consumption while allocating no MVP costs to the plants that generate the power; (4) whether MISO should be permitted to add the MVP fee to electricity transmitted to utilities that belong to the PJM Regional Transmission Organization rather than to MISO; (5) whether MISO should be permitted to assess some of the multi-value projects' costs on departing members of MISO; (6) and whether the Commission's approval of the MVP tariff -- which if implemented will influence decisions by state utility commissions regarding the siting of transmission lines -- violates the Tenth Amendment to the Constitution by invading state prerogatives.

 

    The Appeals Court immediately dispatches the Tenth Amendment issue calling it "frivolous" and then addresses each of the other five. On the issue of Proportionality and Procedure which the Panel discusses together, and says the petitioners' objections fall into two groups -- One consists of objections lodged by the Michigan utilities and their regulator (i.e. Michigan objectors) and the other, led by the Illinois Commerce Commission (i.e. Illinois objectors). [Note: The issues are far too complicated to adequately summarize here. The reader is referred to the complete opinion for a full explanation.]

 

    The Appeals Court concludes, "In summary, the challenged orders are affirmed, except that the challenge by the departing MISO members is dismissed as premature and the determination regarding export pricing to PJM is remanded for further analysis by the Commission in light of the discussion of the issue in this opinion."

 

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

 

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Western Watersheds Project v. Abbey

Jun 7: In the U.S. Court of Appeals, Ninth Circuit, Case No. 11-35705. Appealed from the United States District Court for the District of Montana. The panel affirmed in part and reversed in part the district court's summary judgment in favor of United States agencies and officials in an action challenging the Bureau of Land Management's management of grazing within the Upper Missouri River Breaks National Monument in Montana.

 

    In 2001, President Clinton recognized the biological, historical, and cultural significance of the Breaks country by designating the area as the Upper Missouri River Breaks National Monument (Breaks Monument or Monument). The Bureau of Land Management (BLM), an agency of the United States Department of the Interior, manages the Monument, an area of unparalleled scenic beauty, great geological and biological import, and special historical significance.

 

    Appellants Western Watersheds Project, et al argued that BLM's management of grazing within the Breaks Monument violates the Federal Land Policy and Management Act of 1976 (FLPMA) and the National Environmental Policy Act of 1969 (NEPA). Western Watersheds contends that BLM improperly interpreted the Proclamation to exclude programmatic grazing changes from the Breaks Monument Resource Management Plan (Breaks Resource Plan). It further argues that the Breaks Monument Environmental Impact Statement (Breaks EIS) and the site-specific Environmental Assessment (EA) for the Woodhawk Allotment violated NEPA by not adequately assessing the impacts of livestock grazing within the Monument. The district court granted summary judgment in favor of Appellees United States Department of the Interior, BLM

 

    The Appeals Court concludes, "We hold that BLM reasonably interpreted the Proclamation to not require programmatic changes to grazing management policies in the Breaks Resource Plan and that the Breaks EIS complied with NEPA by taking a hard and careful look at grazing impacts. By contrast, we hold that the EA for the Woodhawk Allotment violated NEPA by not considering a reasonable range of alternatives that included a no- or reduced-grazing option. We reverse and remand for the district court to enter an appropriate order requiring BLM to remedy the deficiencies in the EA for the Woodhawk."

 

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

 

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American Petroleum Institute v. Cooper

Jun 6: In the U.S. Court of Appeals, Fourth Circuit, Case No. 12-1078. Appealed from the United States District Court for the Eastern District of North Carolina, at Raleigh. The Appeals Court explains that the appeal involves the complex interplay of federal and state regulatory schemes concerning the distribution of renewable fuels. Plaintiffs American Petroleum Institute (API) and American Fuels and Petrochemical Manufacturers Association (AFPMA) (collectively Plaintiffs) brought Federal preemption-based challenges in the district court seeking to enjoin enforcement of North Carolina's Ethanol Blending Statute (the Blending Statute), N.C. Gen. Stat. § 75-90 (2008). Concluding that the Blending Statute was not preempted under any of the grounds advanced by Plaintiffs, the district court granted summary judgment in favor of the State of North Carolina and the Intervenor-Defendant, the North Carolina Petroleum and Convenience Marketers Association (NCPCMA) (collectively Defendants). The Appeals Court affirmed the district court's judgment in part, vacated it in part, and remand the case for further proceedings consistent with the opinion.

    The Plaintiffs alleged that the Blending Statute, enacted by the North Carolina General Assembly in 2008, was preempted by (1) the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. §§ 2801-2841; (2) the Federal renewable fuel program; and (3) the Lanham Act, 15 U.S.C. §§ 1051-1113. Plaintiffs contend that the district court erred in concluding that the Blending Statute was not preempted on the basis of the Lanham Act, the PMPA, or the federal renewable fuel program. Defendants' argue, as a threshold matter, that there is no preemption because suppliers can opt out of the requirements of the Blending Statute. 

    The Appeals Court notes that, one of the Lanham Act's purposes is "to establish uniform regulation of trademarks thereby eliminating the possibility that remedies would vary from state to state." Rickard v. Auto Publisher, Inc., 735 F.2d 450, 457 (11th Cir. 1984). The Lanham Act is intended to, inter alia, "protect registered marks used in [interstate] commerce from interference by State . . . legislation."

    In its conclusion, the Appeals Court rules, "Although we are in agreement with the district court insofar as it rejected Plaintiffs' PMPA and federal renewable fuel program preemption challenges, we hold that genuine issues of material fact remain unresolved as to Plaintiffs' Lanham Act preemption challenge to the Blending Statute. As a consequence, the district court erred in awarding summary judgment to the Defendants on the Lanham Act claim. We therefore affirm the judgment of the district court in part, vacate it in part, and remand for further proceedings consistent with this opinion."

 

    Access the complete opinion (click here). [#Energy/Ethanol, #CA4]

 

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Interfaith Community Organization v. Honeywell International, Inc

Jun 4: In the U.S. Court of Appeals, Third Circuit, Case Nos. 11-3813 and 11-3814. Appealed from the United States District Court for the District of New Jersey. This latest appeal, in this protracted litigation, requires the panel to decide whether offers of judgment pursuant to Fed. R. Civ. P. 68 may be made in the context of attorney's fee disputes under the fee-shifting provisions of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901, et seq. We are also called upon once again to determine whether the fee award is excessive. The Appeals Court says, "Because we conclude that Rule 68 offers of judgment may be made in this context, we will reverse the District Court‟s declaration that the offers of judgment in this case are null and void as well as its decision to bar any further offers of judgment. And, while we uphold as not clearly erroneous the District Court's decisions with respect to the appropriate hourly rates in this case, we are unable to sustain its conclusions with respect to the number of hours claimed by counsel because the District Court‟s findings lack sufficient explanation. Accordingly, we will vacate the fee award and remand for further proceedings."

    The underlying case involves the Mutual Chemical Company of America (Mutual) which operated a chrome manufacturing plant in Jersey City, New Jersey from 1895 to 1954. During that time, the company deposited approximately 1.5 million tons of industrial waste residue containing hexavalent chromium into wetlands along the Hackensack River. In 1954, Allied Corporation purchased the plant and ended the dumping. Allied Corporation was succeeded by AlliedSignal, Inc., and later by Honeywell International, Inc. (Honeywell). Although the dumping stopped, the contaminated area was not cleaned up. In 1995, the Interfaith Community Organization (ICO) and five residents of the nearby community  represented by the Washington, DC law firm of Terris, Pravlik & Millian, LLP (Terris), filed the original suit. In 2004, the District Court awarded ICO more than $4.5 million in fees and expenses for litigating the 1995 action. Additional litigation followed to address and remediate the additional related contaminated sites.

    Initially, the parties were able to reach agreement on fees and expenses, but beginning in the fall of 2009, Honeywell, on the one hand, and ICO and Riverkeeper (an additional party) failed to reach agreement with respect to the fees. On September 8, 2011, the District Court issued an opinion that substantially upheld the Appellees' fee request (approximately #3.2 million).

    [Without getting into the extensive and specific details on the disagreement over expenses between the parties], the Appeals Court finally rules, "For the foregoing reasons, we will reverse the District Court's ruling that Rule 68 offers of judgment are inapplicable in the context of environmental citizen suits brought under RCRA, direct that the previously made offers of judgment be reinstated, affirm the District Court's departure from the forum-rate rule because review of this issue is barred by collateral estoppel, affirm the District Court‟s application of the LSI-updated Laffey Matrix, vacate the District Court‟s fee award, and remand the case for further proceedings consistent with this opinion."

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

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