Martin Whiteman v. Chesapeake Appalachia

Sep 4: In the U.S. Court of Appeals, Fourth Circuit, Case No. 12-1790. Appealed from the United States District Court for the Northern District of West Virginia, at Wheeling. The Appeals Court summarized, "The plaintiffs below, Martin and Lisa Whiteman (Whitemans), appeal from a final order of the United States District Court for the Northern District of West Virginia that granted summary judgment to the defendant, Chesapeake Appalachia, L.L.C. (Chesapeake), upon the Whitemans' claim for common law trespass. We find no error in the district court's decision and affirm for the reasons that follow."

 

    The Whitemans own the surface rights to approximately 101 acres in Wetzel County, West Virginia, pursuant to a general warranty deed dated March 2, 1992. See JA at 93-94. Chesapeake owns lease rights to minerals beneath the Whitemans' surface property. See JA at 608. The property rights of both the Whitemans and Chesapeake ultimately flow from two severance deeds that originally split the surface and mineral estates of the 101 acres relevant here. The two severance deeds effected severance by granting the respective surface estates to grantees while "reserving and excepting" the mineral estate to the grantor.

 

    The Whitemans live on and farm their 101 acres, primarily raising sheep and, relatedly, using part of the land to produce hay for the sheep. Conversely, Chesapeake operates three natural gas wells on approximately ten acres of the Whitemans' property that was formerly used for hay production. The Whitemans can no longer produce hay on those ten acres because Chesapeake's well operations and permanent drill waste disposal on the surface have rendered that portion of the Whitemans' property unusable for any suitable purpose.

 

    For each of their gas wells located on the Whitemans' surface property, Chesapeake obtained valid well work and pit waste discharge permits from the West Virginia Department of Environmental Protection (WVDEP). As part of the permitting process, Chesapeake gave the Whitemans notice of Chesapeake's intent to drill and dispose of drill waste in on-site waste pits. Chesapeake disposed of the drill cuttings in accord with the waste disposal method listed on their well work and pit waste discharge permit applications, namely by depositing the drill cuttings into open pits located near the wellheads on the Whitemans' surface property.

 

    The Appeals  Court indicates that the drill cuttings consist of earth, rock, and other debris necessarily removed from the ground when the drill bores the well, as well as drilling mud ranging from water-based fluid mixed with minerals to oil-based fluid with a composition similar to diesel fuel to synthetic oil-based fluid with a composition similar to food-grade mineral oil.

 

    In their complaint, the Whitemans asked for an injunction and damages based on claims arising from the drilling and operation by Chesapeake of three natural gas wells on surface property owned by the Whitemans. The complaint alleged claims under West Virginia common law only, namely nuisance, trespass, negligence, strict liability, recklessness or gross negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress.

 

    The Appeals  Court concluded, ". . .the district court was correct to hold that creating drill waste pits was reasonably necessary for recovery of natural gas and did not impose a substantial burden on the Whitemans' surface property, that creation of the pits was consistent with Chesapeake's rights under its lease, was a practice common to natural gas wells in West Virginia, and consistent with requirements of applicable rules and regulations for the protection of the environment. Accordingly the decision of the district court is affirmed."

 

    Access the complete opinion (click here). [#Energy/NatGas, #Agriculture, #Land, #Haz, #CA4]

Drakes Bay Oyster Company v. Jewell

Sep 3: In the U.S. Court of Appeals, Ninth Circuit, Case No. 13-15227. Appealed from the United States District Court for the Northern District of California. In a split decision the panel affirmed the district court's order denying a preliminary injunction challenging the Secretary of the Interior's discretionary decision to let Drakes Bay Oyster Company's permit for commercial oyster farming at Point Reyes National Seashore expire on its own terms.

 

Drakes Bay challenges the Secretary of the Interior's discretionary decision to let Drakes Bay's permit for commercial oyster farming expire according to its terms. The permit, which allowed farming within Point Reyes National Seashore, was set to lapse in November 2012. Drakes Bay requested an extension pursuant to a Congressional enactment; however, the Secretary declined to extend the permit, and Drakes Bay sought a preliminary injunction.

 

    The majority ruled, "Congress authorized, but did not require, the Secretary to extend the permit. Congress left the decision to grant or deny an extension to the Secretary's discretion, without imposing any mandatory considerations. . . any asserted errors in the NEPA review were harmless. . . Drakes Bay's disagreement with the value judgments made by the Secretary is not a legitimate basis on which to set aside the decision. Once we determine, as we have, that the Secretary did not violate any statutory mandate, it is not our province to intercede in his discretionary decision. We, therefore, affirm the district court's order denying a preliminary injunction."

 

    The dissenting Judge said, "I think Congress, by including the 'notwithstanding' clause in § 124, intended to do more than that. In particular, it sought to override the Department of the Interior's misinterpretation of the Point Reyes Wilderness Act. . . I think Drakes Bay is likely to prevail on its claim that the Secretary's decision is arbitrary, capricious, or otherwise not in accordance with law. . . Because the other preliminary injunction factors also weigh in Drakes Bay's favor, injunctive relief preserving the status quo should have been granted here. . ."

 

    Access the complete opinion and dissent (click here). [#Wildlife, #Land, #Water, #CA9]

U.S. v. EME Homer City Generation, L.P. & Other Cases

Aug 21: In the U.S. Court of Appeals, Third Circuit, Case No. 11-4406. Appealed from the United States District Court for the Western District of Pennsylvania. The Appeals Court summarizes, "The owners of a coal-fired power plant failed both to obtain a preconstruction permit and to install certain pollution-control technology before making changes to the plant. The Environmental Protection Agency and several states say the owners were required to do so. But the EPA did not cry foul until more than a decade after the changes, well after the owners had sold the plant. Now the EPA wants to force the former owners to obtain the missing preconstruction permit and to install the missing pollution controls on a plant they no longer own or operate. And they seek damages and an injunction against the current owners who neither owned nor operated the plant when it was allegedly modified illegally. The relief now sought would require us to distort plain statutory text to shore up what the EPA views as an incomplete remedial scheme. That we cannot do, and so we will affirm the District Court's dismissal of their claims."

 

    Access the complete opinion (click here). [#Air, #Energy/Coal, #CA3]

 

Quick Summaries Of  Additional Cases During The Break

• Trinity Industries, Inc. v. Chicago Bridge & Iron Company - Aug 20: In the U.S. Court of Appeals, Third Circuit, Case No. 12-2059. Appealed from the United States District Court for the Western District of Pennsylvania. The case involves the assignment of liability for environmental cleanup under two federal statutes: CERCLA and RCRA. The Appeals Court considers the extent to which a settlement of state liability for environmental contamination affects the contribution scheme provided by CERCLA, and whether injunctive relief under RCRA is available when a remediation plan is already underway. The Appeals Court affirms in part and vacates and remands in part. Access the complete opinion (click here). [#Remed, #CA3]

• Bell v. Cheswick Generating Station - Aug 20: In the U.S. Court of Appeals, Third Circuit, Case No. 12-4216. Appealed from the United States District Court for the Western District of Pennsylvania. Plaintiffs in a class action complaint against Cheswick Generating Station, GenOn Power Midwest, L.P. (GenOn). The Class is made up of at least 1,500 individuals who own or inhabit residential property within one mile of GenOn's 570-megawatt coal-fired electrical generation facility in Springdale, PA, complaining of ash and contaminants settling on their property.

  The Appeals Court addresses a matter of first impression: whether the Clean Air Act preempts state law tort claims brought by private property owners against a source of pollution located within the state. Based on the plain language of the Clean Air Act and controlling Supreme Court precedent, the Appeals Court concludes that "such source state common law actions are not preempted. Accordingly, we reverse the decision of the District Court and remand the case for further proceedings." Access the complete opinion (click here). [#Air, #CA3]

• U.S. v. Manne - Aug 27: In the U.S. Court of Appeals, Second Circuit, Case No. 12-3079. Appealed from an order of the District Court for the Southern District of New York. The Appeals Court vacates a district court decision relating to a consent decree that resolved an environmental enforcement action and rules, ". . .that under the circumstances the statutory exception to the Anti-Injunction Act which permits a federal court to enjoin state proceedings 'where necessary in aid of its jurisdiction' does not apply. We therefore conclude that the Anti-Injunction Act's general prohibition against a federal injunction of state proceedings precludes the district court from enjoining appellant's state suit." Access the complete opinion (click here). [#Remed, #CA2]

• Town Of Nags Head v. Toloczko - Aug 27: In the U.S. Court of Appeals, Fourth Circuit, Case No. 12-1537. Appealed from the United States District Court for the Eastern District of North Carolina, at Elizabeth City. The case involves a "slew of federal and state law claims" concerning the legality of efforts by the Town of Nags Head, North Carolina to declare beachfront properties that encroach onto "public trust lands" a nuisance, and regulate them accordingly. The Appeals Court reverses the district court's decision to abstain and remands the case for further proceedings consistent with the opinion. Access the complete opinion (click here). [#Land, #CA4]

National Association of Clean Water Agencies v. U.S. - EPA & Other Cases

Aug 20: In the U.S. Court of Appeals, D.C. Circuit, Case No. 11-1131. The Appeals Court explains that in March 2011, U.S. EPA issued a final rule establishing emission standards for sewage sludge incinerators under § 129 of the Clean Air Act, 42 U.S.C. § 7429. See Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Sewage Sludge Incineration Units, 76 Fed. Reg. 15,372 (Mar. 21, 2011). Determining that sewage sludge incinerators were "solid waste incineration unit[s]" as defined in § 129(g)(1), EPA promulgated "maximum achievable control technology" (MACT) standards for two subcategories of sewage sludge incinerators [See WIMS 1/21/11].

 

    The Appeals states, "The Clean Air Act cabins EPA's discretion in setting MACT standards, requiring EPA to base the standards on the emissions achieved by the best-performing existing incinerators. See 42 U.S.C. § 7429(a)(2). But acting under pressure of a court order to establish the MACT standards by a set deadline, EPA took a targeted approach to collecting emissions data and used several different methods to estimate the emissions levels achieved by existing incinerators. See 76 Fed. Reg. at 15,386.

 

    The petitioners challenge several different aspects of the rulemaking. Petitioners National Association of Clean Water Agencies and Hatfield Township Municipal Authority (collectively, NACWA) challenge EPA's authority to regulate sewage sludge incinerators under §129, asserting that sewage sludge incinerators do not fall within the scope of § 129(g)(1)'s definition of 'solid waste incineration unit.'"

 

    Petitioners NACWA and Sierra Club seek review of the sewage sludge incinerator emission standards, challenging several aspects of EPA's methodology for estimating the emission levels achieved by the best performing units. In addition to these petitioners, MaxWest Environmental Systems, developer of a proprietary biosolids management process, intervenes to challenge EPA's treatment of its

technology in the sewage sludge incinerator rule.

 

    The Appeals rules, ". . .we deny NACWA's petition for review as to EPA's authority to regulate sewage sludge incinerators under §129. As to the petitioners' challenges to EPA's methodology in setting emission standards, we agree that in some respects EPA has not adequately established that its estimations are reasonable, and so remand parts of the sewage sludge incinerator rule to EPA for further proceedings without vacating the current standards. We otherwise deny the petitions for review, and will not consider intervenor MaxWest's arguments as they are not within the scope of issues raised by the petitioners."

 

    The Appeals Court notes in the opinion that in the final rule, EPA candidly noted that its MACT floor methodology -- including the emissions testing dataset from less than 12 percent of incinerators -- was motivated in part by the impending court-ordered deadline to establish emission standards. EPA explained that "given the court-ordered deadline for EPA to issue the final [sewage sludge incinerator] rule, it was not possible to undertake the time-consuming process of sending an [information collection request] to all the affected [sewage sludge incinerators] consistent with the requirements of the [Paperwork Reduction Act]."

 

    The Appeals Court explains, "while both NACWA's and Sierra Club's arguments on this point share a similar element -- EPA's alleged failure to account for sewage sludge variability makes its MACT floor methodology arbitrary and capricious -- Sierra Club focuses on EPA's assumption about control technology installed on the incinerator, while NACWA focuses on EPA's assumptions about the effect of sewage sludge characteristics on emission levels." The Appeals Court addresses the concerns separately.

 

    The Appeals Court concludes, ". . .we remand to EPA portions of its rule for further explanation without vacating the current MACT standards. Specifically, we direct EPA to clarify why its Clean Water Act Part 503 regulations control for other non-technology factors. We also direct EPA to clarify issues related to its upper prediction limit and variability analysis. In particular, EPA should explain why the upper prediction

limit represents the "average emissions limitation achieved by the best performing 12 percent of" incinerators; why the upper prediction limit reasonably estimates the worst foreseeable operating conditions; and why the upper prediction limit can account for more than intra-unit variability, as EPA claimed it could on petition for review. Finally, we direct EPA to elaborate on how it can use a statistical method to determine whether a limited dataset is representative of incinerators for which it has no data, and to explain why it chose the variables it did for that statistical analysis.

 

    In all other respects, we uphold EPA's rule against the petitioners' challenges. Because the issues MaxWest raised in its intervenor brief are outside the scope raised by the petitioners, we do not consider its arguments."

 

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

 

Quick Summaries Of  Additional Cases During The Break

• Anderson Brothers, Inc. v. St. Paul Fire and Marine Insurance Co. - Aug 30: In the U.S. Court of Appeals, Ninth Circuit, Case No. 12-35454. Appealed from the United States District Court for the District of Oregon. The panel affirmed the district court's judgment in favor of an insured, holding that the insurer breached its duty to defend when it refused to provide a defense after the insured received letters from the Environmental Protection Agency, notifying the insured of its potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act for environmental contamination of the Portland Harbor Superfund Site. Access the complete opinion (click here). [#Remed, #CA9]
  
  

• Northwest Environmental Defense Center v. Brown - Aug 30: In the U.S. Court of Appeals, Ninth Circuit, Case No. 07-35266. On Remand From The United States Supreme Court [See WIMS 3/21/13]. The Appeals Court said, "The Court left intact our holding that "when stormwater runoff is collected in a system of ditches, culverts, and channels and is then discharged into a stream or river, there is a 'discernable, confined and discrete conveyance' of pollutants, and there is therefore a discharge from a point source" within the meaning of the Clean Water Act's basic definition of a point source in 33 U.S.C. § 1362(14). Brown, 640 F.3d at 1070–71; see Decker, 133 S. Ct. at 1338. . . We vacate the decision of the district court and remand to that court for proceedings consistent with the Supreme Court's opinion."  Access the complete opinion (click here). [#Water, #CA9]
  

• In Re: Deepwater Horizon - Aug 29: In the U.S. Court of Appeals, Firth Circuit, Case No. 12-30230. Appealed from the United States District Court for the Eastern District of Louisiana. The original opinion in this case was filed on March 1, 2013.1 Because this case involves important and determinative questions of Texas law as to which there is no controlling Texas Supreme Court precedent, the panel, upon the petition for rehearing, unanimously withdraws the previous opinion and substitutes the [specified] certified questions to the Supreme Court of Texas." Access the complete opinion (click here). [#Energy/OilSpill] 

• Land O'Lakes, Inc.  v.  Employers Insurance Company - Aug 29: In the U.S. Court of Appeals, Eighth Circuit, Case No. 12-1752. Appealed from the U.S. District Court for the District of Minnesota - Minneapolis. The Appeals Court ruled that the district court did not err in concluding that a letter the U.S. EPA sent the insured in 2011 informing it that the EPA considered it a Potentially Responsible Party in connection with an environmental cleanup constituted a suit for purposes of determining whether the insured's breach of contract action against the insurer was barred by the applicable statute of limitations; the insured's costs to remediate the site fall within the "owned-property" exclusion in the policy at issue. Access the complete opinion (click here). [#Remed] 

• Chinatown Neighborhood Association v. State of California - Aug 27: In the U.S. Court of Appeals, Ninth Circuit, Case No. 13-15188, unpublished opinion. Appealed from the United States District Court for the Northern District of California. The Appeals Court upheld the district court's denial of a preliminary injunction against the enforcement of sections 2021 and 2021.5 of the California Fish and Game Code (the Shark Fin Law). Subject to certain exceptions, the Shark Fin Law makes it "unlawful for any person to possess, sell, offer for sale, trade, or distribute a shark fin" in California. Access the complete opinion (click here). [#Wildlife]

• More Summaries - Subscribers Note: There were additional U.S. Appeals Court cases during the break. WIMS will include more summaries in tomorrow's report.

Subscribers & Readers Notice

Subscribers & Readers Notice:

 

WIMS is on our late Summer publication break continuing through Labor Day. We will resume publication on Tuesday, September 3, 2013.

Alaska Wilderness League v. U.S. EPA

Aug 15: In the U.S. Court of Appeals, Ninth Circuit, Case No. 12-71506. On Petition for Review of an Order of the U.S. EPA Environmental Appeals Board. In its summary of the opinion the Appeals Court indicates, "42 U.S.C. § 7661c(e) is ambiguous as to whether 'increment' requirements are 'applicable' to a temporary source like Shell Offshore, Inc.'s (Shell) drill vessel Kulluk. Accordingly, we defer to the EPA Environmental Appeals Board's (EAB) reasonable interpretation of § 7661c(e). See Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). The EAB reasonably concluded that Shell need not analyze the Kulluk's potential impact on increment before obtaining an oil exploration permit. We also deny the petition for review of the Environmental Protection Agency's (EPA) exemption of a 500-meter radius surrounding the Kulluk from ambient air quality standards, because the decision was 'a permissible application of the EPA's regulations.' See Resisting Envtl. Destruction on Indigenous Lands, REDOIL v. EPA, 716 F.3d 1155, 1158, 1160–61 (9th Cir. 2013)."

 

    To comply with Title V of the Clean Air Act, Shell sought and obtained three related permits in 2011. At Shell's request, the EPA subsequently consolidated the permits into one permitting document (the Permit). The Permit allows Shell to construct, operate, and conduct "pollutant emitting activities" associated with the Kulluk in the Beaufort Sea off Alaska's

North Slope. Before issuing the Permit, the EPA released a Statement of Basis. The Statement of Basis provided that the EPA would not require Shell to analyze the effect its emissions would have on the "increment for the Kulluk's area of operation." EPA concluded that increment analysis was unnecessary, because, under § 7661c(e) and the other relevant statutes, no increment requirements were "applicable" to the Kulluk.

 

    Alaska Wilderness raised the increment and ambient air issues, among others, in its challenge of the Permit before the EAB. Alaska Wilderness contended that the EPA misinterpreted "applicable increment" under § 7661c(e). Alaska Wilderness argued that EPA's "source-based" interpretation erred by applying increment standards to temporary sources only if the PSD would impose increment standards on a similar stationary source. Alaska Wilderness maintained a "geography based" interpretation -- that increment requirements are "applicable" to all sources any time they are established for the geographic area. Alaska Wilderness also argued that the "ambient air" exemption was inconsistent with the Costle Letter, because Shell did not own and could not, by physical barrier, exclude the public from accessing the space. In a 100-page decision (the EAB Decision), the EAB rejected both challenges.

 

    The Appeals Court rules, "As a threshold matter, we reject Alaska Wilderness's argument that the EAB Decision is not entitled to Chevron deference. . . Section 7661c(e) is ambiguous, and the EPA's interpretation is reasonable under the applicable statutes' plain language. Thus, we owe Chevron deference to the EAB Decision not to require a preconstruction increment analysis for the Kulluk. Similarly, as we held in REDOIL, the EPA permissibly granted a 500-meter exemption to the Kulluk from "ambient air" standards. Petition denied."

 

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

 

Entergy Nuclear Vermont Yankee, LLC v. Gov. Shumlin

Aug 14: In the U.S. Court of Appeals, Second Circuit, Case No. 12-707. Appealed from U.S. District Court for the District of Vermont. A summary indicates that the owners of the nuclear power plant brought action against officials of the State of Vermont, seeking a declaratory judgment and permanent injunction that three Vermont statutes are preempted by the Atomic Energy Act, and that Vermont's efforts to require a below-market power purchase agreement is preempted by the Federal Power Act and violates the dormant Commerce Clause. Following a bench trial, the United States District Court for the District of Vermont ruled in plaintiffs' favor on the Atomic Energy Act preemption claim and the dormant Commerce Clause claim, and found that the Federal Power Act preemption claim was not ripe. The Appeals Court affirmed We the district court as to the Atomic Energy Act and Federal Power Act preemption claims, and reversed the district court as to the dormant Commerce Clause claim. One Judge issued a separate and "reluctantly" concurring opinion.

 

    Without getting into the complete details, at the heart of the litigation are two relatively new Vermont laws which would have limited or prohibited the continued operation of the Vermont Yankee nuclear power plant. Act 74, which was enacted on June 21, 2005, had two principal effects. First, Entergy would only need to seek a "certificate of public good" (CPG) from the Board before constructing storage facilities for new spent nuclear fuel, rather than the Vermont Legislature as had been required by section 6501(a). However, the CPG would remain in effect only until March 21, 2012. The second effect of Act 7 74 was that after March 21, 2012, the storage of any new spent nuclear fuel in Vermont would require an affirmative vote by the Vermont Legislature. If no such affirmative vote occurred, storage of nuclear waste generated from operations after March 21, 2012, would not be permitted. Thus, Vermont Yankee would have to shut down. Act 160 was passed on May 18, 2006, and provides that "a nuclear energy generating plant may be operated in Vermont only with the explicit approval of the General Assembly."

 

    In its conclusion the Appeals Court said, ". . .we affirm the district court's grant of a declaratory judgment that Act 74 and Act 160 are facially preempted by the Atomic Energy Act. We reverse the district court's determination that Vermont's efforts to condition a new Certificate of Public Good for Vermont Yankee on the execution of a favorable power purchase agreement violate the dormant Commerce Clause. We affirm the district court's determination that Entergy's challenge under the Federal Power Act is unripe. We affirm the district court's grant of a permanent injunction enjoining the defendants from enforcing sections 6522(c)(2) or 6522(c)(4) in title 10 of the Vermont Statutes, as enacted by Act 74, or sections 248(e)(2), 248(m), or 254 in title 30 of the Vermont Statutes, as enacted by Act 160. Finally, we vacate the district court's permanent injunction enjoining the defendants from conditioning the issuance of a Certificate of Public Good on the execution of a below-wholesale-market power purchase agreement between Entergy and Vermont utilities or otherwise requiring Vermont Yankee to sell power to Vermont utilities at preferential rates."

 

    Judge Susan Carney issued a separate concurring opinion stating in part, "I concur, reluctantly, in the majority's detailed and carefully reasoned opinion striking down Vermont Acts 74 and 160. My reluctance stems not from any flaw in the majority's analysis, but rather from my concern that Congress, in enacting the Atomic Energy Act (AEA), did not intend the result we reach. Rather, we are led to our conclusion principally by an expansive gloss on the preemptive scope of the AEA first set forth in Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Commission, 461 U.S. 190 (1983) (Pacific Gas). There, the Supreme Court instructed that '[a] state moratorium on nuclear construction grounded in safety concerns falls squarely within the prohibited field' and would therefore be preempted. Id. at 213 (emphasis added)."

 

    Access the complete opinion and concurrence (click here). [#Energy/Nuclear, #CA2]