Miccosukee Tribe of Indians v. USA

Feb 15: In the U.S. Court of Appeals, Eleventh Circuit, Case No. 06-13309. The Miccosukee Tribe of Indians (the Tribe) appeals from an order granting summary judgment in favor of the United States of America and U.S. EPA with respect to the Tribe’s claims pursuant to the Freedom of Information Act (FOIA). The Tribe contends that the district court erred by finding the EPA conducted an adequate search in response to the Tribe’s two FOIA requests (an initial request on February 18, 2004, and a supplemental request on June 3, 2004) for documents concerning the EPA’s Clean Water Act review of Florida’s amendments to the Everglades Forever Act (EFA) and the Phosphorus Rule for the Everglades Protection Area. The Tribe also challenges the district court’s determination, after an in camera review, that all withheld documents were properly designated by the EPA as privileged. After a review, the Eleventh Circuit affirmed in part and vacated in part, and remanded the case to the district court for further proceedings consistent with this opinion.

In further explanation in its 66-page decision, the Appeals Court said, ". . . there was extraordinary discovery in this case, there was extraordinary substantiation of the privileges. . . the district court’s failure to enunciate specific findings of segregability for each of the withheld documents at the least requires remand so that the district court can make clear its findings as to whether any segregable portions of the withheld documents should have been disclosed. . . we vacate the district court’s grant of summary judgment because genuine issues of material fact exist regarding the reasonableness and adequacy of the EPA search for, and disclosure of, responsive documents to the Tribe’s 2004 FOIA request. We affirm, however the district court’s sustaining of the EPA’s assertion of privileges and consequent withholding of responsive documents under FOIA Exemption 5. We remand this case to the district court for further proceedings consistent with this opinion."

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Certain Underwriters at Lloyds London v. Inlet Fisheries Inc.

Feb 11: In the U.S. Court of appeals, Ninth Circuit, Case No. 06-35383. According to the Ninth Circuit, the case involves the interplay between an ancient legal doctrine and contemporary vessel pollution insurance. Historically, all insurance policies were contracts uberrimae fidei, meaning that both parties were held to the highest standard of good faith in the transaction. The doctrine of uberrimae fidei was grounded both in morality and efficiency; insureds were considered morally obligated to disclose all information material to the risk the insurer was asked to shoulder, but such a principle was also an economic necessity where insurers had no reasonable means of obtaining this information efficiently, without the ubiquity of telephones, email, digital photography, and air travel.

The reasons which brought into being the strict marine insurance law doctrine as to disclosures, go far back into the early days of marine insurance, when sailing ships in faraway seas were insured in London by underwriters who could get no information except from the shipowners. Today, uberrimae fidei has been displaced in most insurance contexts. Nevertheless, the Appeals Court says, the doctrine enjoys continuing vitality in the world of marine insurance.

With the advent of significant environmental legislation in the 1970s, coupled with a number of high profile disasters involving oil tankers, liability of shipowners for environmental damages was expanded, culminating, at the federal level, with the Oil Pollution Act of 1990 (the OPA). The OPA increased substantially both the regulation and pollution liabilities of entities engaged in the transportation and production of oil within the United States. Pollution insurance, which traditionally had been part of P&I coverage, has emerged as a separate coverage in the United States. This stand-alone pollution coverage is often referred to as "vessel pollution insurance," and Lloyd’s of London is currently the second-largest provider of such policies.

The Appeals Court said, "The question we consider is whether the doctrine of uberrimae fidei applies to vessel pollution insurance policies covering statutory environmental liabilities. We answer that query in the affirmative, and affirm the district court’s grant of summary judgment in favor of the Lloyds’ underwriters."

The case arose when Water Quality Insurance Syndicate (WQIS), Inlet’s then-provider of stand-alone vessel pollution insurance, sent notice that it was cancelling Inlet’s (an Alaska-based fish buying and processing businesses) policy. The stated and most immediate reasons for the cancellation were Inlet’s failures to conduct a survey of its vessels as requested by WQIS and to pay its premiums. After receiving WQIS’s notice of cancellation, but before its effective date, Inlet, through its broker, sought vessel pollution insurance from Lloyds for several ships. The information Inlet provided on its application forms the basis of the current dispute.

Lloyds conditioned its renewal on Inlet providing accurate information on a newly requested application. In addition, Lloyds immediately commenced an investigation into Inlet’s history and the condition of its vessels. Finally, once Lloyds obtained sufficiently sound information, despite considerable stonewalling by Inlet, it filed this suit. The district court granted Lloyds’ motion, and ruled that uberrimae fidei applied and that Lloyds was entitled to void the policy. The Ninth Circuit agreed.

Access the complete opinion (click here).

State of Missouri v. U.S. Army Corps of Engineers

Feb 8: In the U.S. Court of Appeals, Eighth Circuit, Case No. 07-1149. The United States Army Corps of Engineers (Corps) manages the Missouri River Mainstem Reservoir System (the System) under the Flood Control Act of 1944. The System consists primarily of a series of dams and reservoirs on the upper River. The Corps’ governing operational document is the Missouri River Mainstem Reservoir Master Water Control Manual (the Master Manual), which has been revised five times since its initial adoption in 1960. The Corps also publishes specific operational details in an Annual Operating Plan.

In recent years, persistent drought conditions have challenged the Corps’ ability to perform its dominant Flood Control Act functions of flood control and maintaining downstream navigation while also continuing to benefit secondary uses such as irrigation, recreation, fish, and wildlife. Forced to make difficult choices, the Corps has faced repeated lawsuits by competing beneficial users of the River as controlled by the System. In South Dakota v. Ubbelhode, the Eighth Circuit reversed the grant of preliminary injunctions preventing the Corps from releasing drought-depleted waters from reservoir lakes in South Dakota and North Dakota in order to maintain downstream navigation.

Meanwhile, environmental groups sued, and the Judicial Panel on Multi-District Litigation consolidated all actions in the District of Minnesota. In March 2004, the Corps issued a revised Master Manual (the 2004 Master Manual) containing provisions prompted by a Biological Opinion issued by the U.S. Fish and Wildlife Service (FWS) under the Endangered Species Act. Competing users challenged the actions of both agencies on numerous grounds. In In re Operation of the Missouri River System Litigation, (2006) (hereinafter Mo. River), the Eighth Circuit affirmed the district court’s grant of summary judgment in favor of both agencies.

The Appeals Court explains, "In this action, a sequel to Mo. River, the State of Missouri claims that the Corps violated the National Environmental Policy Act (NEPA) by implementing March 2006 revisions to the 2004 Master Manual without preparing a supplemental environmental impact statement (SEIS). The district court granted the Corps’ motion for summary judgment. Missouri appeals. We conclude that the Corps’ actions were not arbitrary and capricious and therefore affirm."

In its final analysis the Appeals Court makes an important observation saying, "Finally, Missouri argues that the Corps violated NEPA when it failed to follow the EA with either an EIS or a FONSI [finding of no significant impact}. This is an unduly restricted view of the agency’s options for complying with NEPA’s procedural mandates. The Corps’ regulations provide that an EA is used 'for determining whether to prepare an EIS or a FONSI,' and '[a] FONSI shall be prepared for a proposed action . . . for which an EIS will not be prepared.' 33 C.F.R. §§ 230.10(a), 230.11. However, these provisions must be read in conjunction with CEQ’s implementing regulations, see 33 C.F.R. § 230.1, which sensibly provide that '[a]gencies may prepare an environmental assessment on any action at any time in order to assist agency planning and decisionmaking.' 40 C.F.R. § 1501.3(b). Neither the Corps’ nor CEQ’s regulations prescribe a specific process to determine whether to prepare an SEIS. Here, the Corps prepared an EA, not to help it decide whether to prepare an EIS, but rather to determine whether the change in agency action required an SEIS. As this case illustrates, it is reasonable to expect that the Corps will sometimes determine that a FONSI is not appropriate because the action being taken has a significant impact on the environment, but an SEIS is not required because the impact was sufficiently analyzed in an earlier FEIS. This approach is neither a misuse of the EA procedure nor a violation of NEPA."

Access the complete opinion (click here).

State of New Jersey v. EPA Vacates Agency Mercury Rules

Feb 8: In the U.S. Court of Appeals, D.C. Circuit, Case No. 05-1097, consolidated with 05-1104, 05-1116, 05-1118, 05-1158, 05-1159, 05-1160, 05-1162, 05-1163, 05-1164, 05-1167, 05-1174, 05-1175, 05-1176, 05-1183, 05-1189, 05-1263, 05-1267, 05-1270, 05-1271, 05-1275, 05-1277, 06-1211, 06-1220, 06-1231, 06-1287, 06-1291, 06-1293, 06-1294. In this high profile case involving many states [CA, CT, DE, IL, ME, MA, MN, NH, NJ, NM, NY, PA, VT and WI], environmental organizations and industry groups, the Appeals Court considered petitions for review of two final rules promulgated by U.S. EPA regarding the emission of hazardous air pollutants (HAPs) from electric utility steam generating units (EGUs) -- the so-called Delisting Rule and CAMR.

The Appeals Court sets the stage saying New Jersey and fourteen additional States, the Michigan Department of Environmental Quality, the Pennsylvania Department of Environmental Protection, the City of Baltimore (Government Petitioners), and various environmental organizations (Environmental Petitioners) contend that EPA violated Section 112’s plain text and structure when it did not comply with the requirements of section 112(c)(9) in delisting EGUs. Government and Environmental Petitioners further contend that CAMR is inconsistent with provisions of section 111, and that both the Delisting Rule and CAMR should be vacated. Certain intervenors -- including various industry representatives, States, and state agencies -- join EPA in urging the lawfulness of the two rules.

The first rule removes coal- and oil-fired EGUs from the list of sources whose emissions are regulated under section 112 of the Clean Air Act (CAA), Revision of December 2000 Regulatory Finding (Delisting Rule), 70 FR 15,994 (3/29/05). The second rule sets performance standards for new coal-fired EGUs and establishes total mercury emissions limits for States and certain tribal areas, along with a voluntary cap-and-trade program for new and existing coal-fired EGUs. Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units (CAMR), 70 FR 28,606 (5/1805).

The Appeals Court said, "Petitioners contend that the Delisting Rule is contrary to the plain text and structure of section 112. In response, EPA and certain intervenors rely on section 112(n), which sets special conditions before EGUs can be regulated under section 112, to justify the rule. We hold that the delisting was unlawful. Section 112 requires EPA to regulate emissions of HAPs. Section 112(n) requires EPA to regulate EGUs under section 112 when it concludes that doing so is 'appropriate and necessary.'"

The Appeals Court states further that, "In December 2000, EPA concluded that it was 'appropriate and necessary' to regulate mercury emissions from coal- and oil-fired power plants under section 112 and listed these EGUs as sources of HAPs regulated under that section. In 2005, after reconsidering its previous determination, EPA purported to remove these EGUs from the section 112 list. Thereafter it promulgated CAMR under section 111. EPA’s removal of these EGUs from the section 112 list violates the CAA because section 112(c)(9) requires EPA to make specific findings before removing a source listed under section 112; EPA concedes it never made such findings. Because coal-fired EGUs are listed sources under section 112, regulation of existing coalfired EGUs’ mercury emissions under section 111 is prohibited, effectively invalidating CAMR’s regulatory approach. Accordingly, the court grants the petitions and vacates both rules."

New Jersey Attorney General Anne Milgram issued a release saying, "In ruling as it did, the U.S. Court of Appeals for the District of Columbia agreed with New Jersey and other states, as well as numerous environmental petitioners that EPA cannot avoid its legal duty to promulgate strict limits on mercury emissions from all power plants -- and do so expeditiously. The ruling means elimination of the EPA’s cap-and-trade approach to regulating mercury emissions. Cap-and-trade allows power plants to purchase emissions reduction credits from other plants that have cut emissions below targeted levels, rather than meet strict emission levels by installing stringent pollution controls to reduce mercury emissions at their own plants."

Milgram added, “From the beginning we have maintained that the EPA adopted standards for regulating mercury, a dangerous neurotoxin, which were weak, ineffectual and ran counter to the clear intent of the Clean Air Act.” Milgram's release indicates that, "Coal-fired power plants are the largest source of uncontrolled mercury emissions, generating 48 tons of mercury emissions per year nationwide. EPA finalized its cap-and-trade system for regulating mercury emissions from power plants in May 2006 despite reports that called into question the conclusions underlying the rule. Research funded by the EPA itself found that wet mercury deposition rates from local coal-fired industrial sources were many times higher than EPA projections. The research, conducted in Steubenville, Ohio, bolstered arguments that there was significant potential for uncontrolled local emission sources to perpetuate mercury hot-spots."

Vickie Patton, an attorney with Environmental Defense, which along with Sierra Club and the National Wildlife Federation was represented by Earthjustice in the lawsuit said, “The federal court agrees with the American Medical Association that EPA's flawed mercury program for coal plants is hazardous to our health. This decision is a victory for the health of all Americans, but especially for our children who can suffer permanent brain damage from toxic mercury pollution.” Alice McKeown, coal analyst for the Sierra Club said, “Coal company claims of ‘clean coal’ will now be put to the test. These mercury pollution reductions will be an important trial run to see if coal is still viable in a cleaner energy future.” The environmental groups said that approximately 1,100 coal-fired units at more than 450 existing power plants account for the emissions of 48 tons of mercury annually. Yet only 1/70th of a teaspoon of mercury is needed to contaminate a 25-acre lake to the point where fish are unsafe to eat.

Access the complete 18-page opinion (click here). Access a release from the New Jersey AG (click here). Access a release from Environmental Defense (click here).

Southeastern Federal Power Customers, Inc. v. Green (Dept. of Army)

Feb 5: In the U.S. Court of Appeals, D.C. Circuit, Case Nos. 06-5080, 06-5081. The case arises out of the requirements of three States for water stored in a federal reservoir. The States of Alabama and Florida appealed the order of the district court approving a Settlement Agreement between Southeastern Federal Power Customers, Inc. (Southeastern), a group of Georgia water supply providers (Water Supply Providers), the U.S. Army Corps of Engineers (the Corps), and the State of Georgia. The Agreement provides for a ten or twenty year “temporary” reallocation of over twenty percent (20%) of the water storage in the Lake Lanier reservoir, which is located in the State of Georgia and operated by the Corps. Alabama and Florida contend that the Agreement violates the Water Supply Act (WSA), 43 U.S.C. § 390b(d), the Flood Control Act (FCA), 33 U.S.C. § 708, and the National Environmental Protection Act (NEPA), 42 U.S.C. § 4321 et. seq.

The Appeals Court said "We need address only one of the statutory challenges. Under the WSA, the Corps must obtain prior Congressional approval before undertaking 'major . . . operational changes.' § 301(d), 43 U.S.C. § 390b(d). Because the Agreement’s reallocation of Lake Lanier’s storage space constitutes a major operational change on its face and has not been authorized by Congress, we reverse the district court’s approval of the Agreement."

In their decision, the Majority concluded, "Congress envisioned that changed circumstances or 'difficult situations' might arise and specified that any solution involving 'major operational . . . changes' required its prior authorization. . . We therefore need not reach the other contentions of Alabama and Florida. The Agreement’s reallocation of Lake Lanier’s storage capacity to local
consumption is a major operational change that under section 301(d) of the WSA, 43 U.S.C. § 390b(d), may not occur without Congress’ prior authorization. Accordingly, because no authorization has been obtained, we hold that the district court erred in approving the Agreement and reverse." The third judge issued a separate, but concurring opinion.

Access the complete opinion (click here).

Lemon, et al v. Green (Dept. of Army)

Feb 5: In the U.S. Court of Appeals, D.C. Circuit, Case Nos. 06-5278. Plaintiffs live near and enjoy Fort Ritchie, a closed Army base in western Maryland. The Appeals Court said the only issues on this appeal are whether, as the district court ruled, plaintiffs lack standing to pursue claims regarding the disposition of Fort Ritchie under the National Environmental Policy Act (NEPA) and the National Historic Preservation Act (NHPA), and whether the case became moot while the appeal was pending.

On the standing issue, the Appeals Court said, "...We think the court misperceived the nature of plaintiffs’ claim... Preparation of an environmental impact statement will never 'force' an agency to change the course of action it proposes. The idea behind NEPA is that if the agency’s eyes are open to the environmental consequences of its actions and if it considers options that entail less environmental damage, it may be persuaded to alter what it proposed... Countless lawsuits in which this court and others upheld a plaintiff’s standing were predicated on that understanding. The plaintiffs in some of those cases had standing because they lived -- as do the plaintiffs here -- near where the federal action would occur and would feel the environmental effects of that action if it went forward... it is clear that individuals in the same position as the plaintiffs in this case have standing to seek compliance with the impact statement requirement of NEPA. The Supreme Court recognizes as much, as do we. For similar reasons we believe plaintiffs had standing to pursue their claim under NHPA..."

On the mootness issue, the Appeals Court said, "A case becomes moot when 'intervening events make it impossible to grant the prevailing party effective relief... But all of the parties to the transaction are before the court. If unraveling the transfer is necessary after the district court decides the merits, it will be within the court’s power to do so... The case therefore is not moot. The judgment of the district court dismissing the action for lack of standing is reversed and the case is remanded for further proceedings."

Access the complete opinion (click here).

State of North Carolina v. Tennessee Valley Authority

Jan 31: In the U.S. Court of Appeals, Fourth Circuit, Case No. 06-2131. As explained by the Fourth Circuit, in 1933, Congress created the Tennessee Valley Authority (TVA) "in the interest of the national defense[,] for agricultural and industrial development, . . . to improve navigation in the Tennessee River[,] and to control the destructive flood waters in the Tennessee River and Mississippi River Basins." As part of its mission, the TVA operates coal-fired power plants in Tennessee, Alabama, and Kentucky.

The State of North Carolina brought a "common-law nuisance action" against the TVA, contending that these plants emit various pollutants which travel through the atmosphere into North Carolina, adversely impacting human health and environmental
quality. North Carolina seeks an injunction prohibiting the TVA from operating its plants in a harmful manner and requiring it to abate the alleged nuisance.

The TVA moved to dismiss North Carolina’s suit, arguing that it is barred by (1) the "discretionary function doctrine," (2) the Supremacy Clause, and (3) the holding of Ferris v. Wilbur, 27 F.2d 262 (4th Cir. 1928). The district court rejected each of these arguments and denied the motion to dismiss. The district court then certified its decision for immediate appeal pursuant to 28 U.S.C. § 1292(b), and the Appeals Court accepted the appeal. The Appeals Court said, "The TVA now reasserts the same arguments it raised in the district court" and affirmed the decision of the district court. The case involved 20 intervening states supporting North Carolina. Two judges affirmed the opinion and one judge wrote an opinion concurring in part and dissenting in part.

In the case, the State of North Carolina sues TVA under the North Carolina common law of nuisance to enjoin the way that the TVA operates its coal-fired power plants in other States, namely Tennessee, Alabama, and Kentucky. North Carolina alleges that the "lawful emissions" from the TVA’s power plants in other States travel downwind and reach North Carolina airspace, where they damage human health and the environment in North Carolina. "Even though such emissions are regulated by and in compliance with the federal Clean Air Act and State law at the location of the plants," North Carolina contends that the emissions, whether permitted under applicable statutory laws, nonetheless create a public nuisance under North Carolina common law.

In his concurring/dissenting opinion, Judge Niemeyer explains, "The threshold question presented to us is whether the TVA, a federal agency, is immune from such a suit. Arguing that it is not, North Carolina points to waivers of immunity contained in the TVA Act, 16 U.S.C. § 831c. . . and in the Clean Air Act, 42 U.S.C. § 7418(a). . . The majority concludes that North Carolina may proceed under either waiver, as either is sufficiently broad to authorize North Carolina’s suit against the TVA. While I agree that the language of both statutes is sufficiently broad to authorize the district court to consider the North Carolina suit on its merits, I conclude that 16 U.S.C. § 831c must be read in light of the Constitution’s separation of powers doctrine, which precludes a suit challenging a governmental agency’s exercise of its discretionary functions. . ."

North Carolina's Attorney General Roy Cooper issued a brief statement saying, "Clean air is critical to our health and our economy. This ruling clears the way for us to make TVA clean up its pollution that’s dirtying our air and making North Carolinians sick.” He said North Carolina can now move forward with its suit seeking to get TVA to clean up air pollution from its power plants. Cooper filed suit against the TVA in January of 2006 seeking to stop "dirty air from TVA coal-fired power plants that harms North Carolina’s health, environment and economy." North Carolina’s case against TVA pollution is currently pending trial in federal district court in Asheville before United States District Judge Lacy H. Thornburg.

Access the complete majority opinion and the concurring/dissenting opinion (click here). Access the statement from AG Cooper (click here).