Apr 21: In the U.S. Court of Appeals, Ninth Circuit, Case No. 06-35384. The Appeals Court indicates that the primary question before the court is whether the Eleventh Amendment precludes Federal jurisdiction over an action seeking compensation under the Fifth and Fourteenth Amendments for a taking of property by a State.
Seven Up Pete Venture (the Venture) and other plaintiffs acquired leases of Montana State property for the purpose of mining gold, silver and other trace minerals. Subsequently, voters of Montana enacted Initiative 137 (I-137), which banned open-pit mining for gold or silver by the cyanide heap leaching process. The Venture then brought the reverse condemnation action in Federal district court against the Governor of Montana and the Director of the Montana Department of Environmental Quality in their official capacities.
They argued that Initiative 137 effected a regulatory taking of their property, for which the State of Montana must pay just compensation under the Fifth and Fourteenth Amendments of the United States Constitution. At the same time, the Venture brought a reverse condemnation action in Montana State court. The Venture then obtained a stay of the Federal proceedings pending resolution of the State claims. After the Montana Supreme Court rejected the Venture’s claims, the district court dismissed the Federal takings claims under the Eleventh Amendment and, in the alternative, under the "doctrine of issue preclusion." The Venture then appealed that dismissal.
The Ninth Circuit said in its ruling, "We join a number of our sister circuits and hold that the Eleventh Amendment bars a reverse condemnation action brought in federal court against state officers in their official capacities. We therefore affirm the district court’s dismissal of the Venture’s takings claims on that ground without reaching the question of issue preclusion."
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Wednesday, April 23, 2008
International Tech. Corp. v. Secretary of the Navy
Apr 18: In the U.S. Court of Appeals, Federal Circuit, Case No. 07-1276. The case involves a claim for breach of a cost-plus-fixed-fee contract for treatment of contaminated soil at a Navy facility in Stockton, California.The contractor, International Technology Corporation (ITC), sought to recover additional soil treatment expenses incurred by a subcontractor, Terra Kleen Response Group, Inc. (TK), because of unexpectedly high concentrations of clay in the treated soil. The Armed Services Board of Contract Appeals (Board) held that ITC was not entitled to an award of costs and also determined that ITC was not entitled to damages for breach of the contract. The Federal Circuit affirmed the Boards decision.
The Federal Circuit said, "we conclude that ITC has not established that there was any representation in the contract documents as to the clay content of the overall stockpile of contaminated soil and, alternatively, because ITC has failed to establish that it would have been reasonable for TK to rely on any such representation under the circumstances.
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The Federal Circuit said, "we conclude that ITC has not established that there was any representation in the contract documents as to the clay content of the overall stockpile of contaminated soil and, alternatively, because ITC has failed to establish that it would have been reasonable for TK to rely on any such representation under the circumstances.
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Monday, April 21, 2008
Kotrous v. Bayer Cropscience
Apr 17: In the U.S. Court of Appeals, Ninth Circuit, Case Nos. 06-15162, 06-16019. The case involves the Circuit Court's reconsideration of the continued viability of its opinion in Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298 (9th Cir. 1997), in light of the Supreme Court’s most recent precedent addressing the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) -- i.e. United States v. Atlantic Research Corp., 127 S. Ct. 2331, 2333 (2007) [See WIMS 6/12/07]. Sections 107 and 113(f) of CERCLA, “allow private parties to recover expenses associated with cleaning up contaminated sites.”
U.S. v. Atlantic Research Corp., the Supreme Court held that § 107(a) provides “so-called potentially responsible parties (PRPs) . . . with a cause of action to recover costs from other PRPs,” whereas § 113 provides an action for contribution. In so holding, the Ninth Circuit said, the High Court "undermined Pinal Creek’s holding that § 107 entitles PRPs to seek only contribution, not cost recovery, from other PRPs. To the extent, therefore, that Pinal Creek conflicts with Atlantic Research, we conclude that Pinal Creek has been overruled."
The Appeals Court explained further that its opinion addressed two separate appeals, in separate actions, seeking recovery of costs associated with the cleanup of hazardous waste sites. In the first appeal, James Kotrous sued numerous defendants, including Bayer Crop-Science, Inc., seeking contribution under CERCLA for costs he had incurred in cleaning soil and groundwater contamination on land he owned. The district court denied Bayer’s motion to dismiss Kotrous’ claim under CERCLA § 107 for contribution. It then granted Bayer’s motion for certification for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).
In the second appeal, Adobe Lumber, Inc., the owner of contaminated land, sued the owners of a dry cleaning business run on the property, as well as prior landowners, chemical and equipment manufacturers, and the City of Woodland, for contribution for costs Adobe had incurred in dealing with the contamination. The district court denied the defendants’ motion to dismiss for failure to state a claim. Adobe Lumber, Inc. v. Hellman, 415 F. Supp. 2d 1070 (E.D. Cal. 2006). The district court subsequently certified its order for appeal and the Appeals Court agreed to hear both interlocutory appeals.
The Ninth Circuit concludes, "Atlantic Research overruled our holding in Pinal Creek that an action between PRPs is necessarily for contribution. Under Atlantic Research, Kotrous and Adobe are entitled to bring a claim for recovery of costs under § 107(a), even if they are PRPs. The Supreme Court’s holding, however, has made it clear that they must seek cost recovery under § 107, not contribution under § 113, because they have not been subject to an action under § 106 or § 107. In each of these appeals, the judgment of the district court is vacated and the case remanded for further proceedings. Each party shall bear its own costs on appeal.
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U.S. v. Atlantic Research Corp., the Supreme Court held that § 107(a) provides “so-called potentially responsible parties (PRPs) . . . with a cause of action to recover costs from other PRPs,” whereas § 113 provides an action for contribution. In so holding, the Ninth Circuit said, the High Court "undermined Pinal Creek’s holding that § 107 entitles PRPs to seek only contribution, not cost recovery, from other PRPs. To the extent, therefore, that Pinal Creek conflicts with Atlantic Research, we conclude that Pinal Creek has been overruled."
The Appeals Court explained further that its opinion addressed two separate appeals, in separate actions, seeking recovery of costs associated with the cleanup of hazardous waste sites. In the first appeal, James Kotrous sued numerous defendants, including Bayer Crop-Science, Inc., seeking contribution under CERCLA for costs he had incurred in cleaning soil and groundwater contamination on land he owned. The district court denied Bayer’s motion to dismiss Kotrous’ claim under CERCLA § 107 for contribution. It then granted Bayer’s motion for certification for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).
In the second appeal, Adobe Lumber, Inc., the owner of contaminated land, sued the owners of a dry cleaning business run on the property, as well as prior landowners, chemical and equipment manufacturers, and the City of Woodland, for contribution for costs Adobe had incurred in dealing with the contamination. The district court denied the defendants’ motion to dismiss for failure to state a claim. Adobe Lumber, Inc. v. Hellman, 415 F. Supp. 2d 1070 (E.D. Cal. 2006). The district court subsequently certified its order for appeal and the Appeals Court agreed to hear both interlocutory appeals.
The Ninth Circuit concludes, "Atlantic Research overruled our holding in Pinal Creek that an action between PRPs is necessarily for contribution. Under Atlantic Research, Kotrous and Adobe are entitled to bring a claim for recovery of costs under § 107(a), even if they are PRPs. The Supreme Court’s holding, however, has made it clear that they must seek cost recovery under § 107, not contribution under § 113, because they have not been subject to an action under § 106 or § 107. In each of these appeals, the judgment of the district court is vacated and the case remanded for further proceedings. Each party shall bear its own costs on appeal.
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Friday, April 11, 2008
U.S. v. Vasquez-Ramos
Apr 10: In the U.S. Court of Appeals, Ninth Circuit, Case Nos. 06-50553 & 06-50694. Defendants were charged for possessing feathers and talons of bald and golden eagles and other migratory birds without a permit in violation of the Bald and Golden Eagle Protection Act (BGEPA) and the Migratory Bird Treaty Act (MBTA). They moved to dismiss the information claiming that prosecuting their possession of the feathers and talons violated the Religious Freedom Restoration Act (RFRA).
The Appeals Court said, "In United States v. Antoine, 318 F.3d 919, 924 (9th Cir. 2003), under nearly identical facts, we held that there was no RFRA violation. Antoine remains binding law in our circuit, and we affirm the district court’s order denying Defendants’ motion to dismiss.
In its final argument the Ninth Circuit says, "Defendants contend that Antoine was decided on the incorrect premise that the demand for eagle parts exceeds a fixed supply. They argue that the government could remedy the problem of a demand that outstrips supply by increased diligence in salvage and recovery of eagle carcasses. Even if this were true, RFRA does not require the government to make the practice of religion easier. . . Because the government is not obligated to increase the supply of available carcasses, Defendants cannot be heard to complain that their rights under RFRA are violated by the government’s refusal to expand its collection and distribution practices.
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The Appeals Court said, "In United States v. Antoine, 318 F.3d 919, 924 (9th Cir. 2003), under nearly identical facts, we held that there was no RFRA violation. Antoine remains binding law in our circuit, and we affirm the district court’s order denying Defendants’ motion to dismiss.
In its final argument the Ninth Circuit says, "Defendants contend that Antoine was decided on the incorrect premise that the demand for eagle parts exceeds a fixed supply. They argue that the government could remedy the problem of a demand that outstrips supply by increased diligence in salvage and recovery of eagle carcasses. Even if this were true, RFRA does not require the government to make the practice of religion easier. . . Because the government is not obligated to increase the supply of available carcasses, Defendants cannot be heard to complain that their rights under RFRA are violated by the government’s refusal to expand its collection and distribution practices.
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Esso Standard Oil Co. v. Lopez-Freytes
Apr 10: In the U.S. Court of Appeals, First Circuit, Case No. 07-1218. The case is an appeal from the Puerto Rico district court's issuance of an order permanently enjoining the defendants -- several members and officials of the Puerto Rico Environmental Quality Board (EQB) -- from imposing a $76 million fine on the plaintiff, Esso Standard Oil Company (Esso). On appeal, the defendants argue that the district court should have abstained from exercising jurisdiction pursuant to the "Younger abstention doctrine" and, in any event, they say the court erred in concluding that there existed bias necessitating the imposition of the injunction. The Appeals Court affirmed the district court's order.
The case involves an underground fuel storage system at a service station in Barranquitas, Puerto Rico. Beginning in 1979, Esso had leased storage tanks and other fuel supplies to the station and in 1991 replaced the entire underground storage system. Between August 1998 and October 1999, the EQB issued three orders directing Esso to test the fuel storage system. Those investigations revealed and recovered about 550 gallons of spilled fuel.
Despite Esso's efforts to comply with the EQB's directives, the EQB issued a show cause order on May 21, 2001, proposing a $76 million fine against Esso for its failure to notify the EQB upon initial discovery of the fuel leakage and its failure to timely investigate, clean up, and remedy the harm. In September 2002, the EQB initiated hearings on this proposed penalty against Esso. The hearings were marked by contentious debates and allegations of severe bias.
The Appeals Court said, "Not only is the defendants' argument utterly unsupported by the law, but we have already rejected it. . . [in a previous appeal] Last time, we properly concluded that the bias stems from the potential financial benefit to the EQB's budget as a result of an imposed fine. . . The district court concluded that the contractual relationship between the EQB and the Hearing Examiners exhibited structural bias on account of both the method by which the Hearing Examiners receive assignments and because of the particularities within the pay structure. We agree. . . This case involves evidence that the EQB's
decisionmaking process with respect to Esso is constitutionally infirm. The serious harm inflicted upon Esso is not outweighed by the EQB's concern that this injunction may alter the perceived strength of the EQB's governance. . . "
Access the complete opinion (click here).
The case involves an underground fuel storage system at a service station in Barranquitas, Puerto Rico. Beginning in 1979, Esso had leased storage tanks and other fuel supplies to the station and in 1991 replaced the entire underground storage system. Between August 1998 and October 1999, the EQB issued three orders directing Esso to test the fuel storage system. Those investigations revealed and recovered about 550 gallons of spilled fuel.
Despite Esso's efforts to comply with the EQB's directives, the EQB issued a show cause order on May 21, 2001, proposing a $76 million fine against Esso for its failure to notify the EQB upon initial discovery of the fuel leakage and its failure to timely investigate, clean up, and remedy the harm. In September 2002, the EQB initiated hearings on this proposed penalty against Esso. The hearings were marked by contentious debates and allegations of severe bias.
The Appeals Court said, "Not only is the defendants' argument utterly unsupported by the law, but we have already rejected it. . . [in a previous appeal] Last time, we properly concluded that the bias stems from the potential financial benefit to the EQB's budget as a result of an imposed fine. . . The district court concluded that the contractual relationship between the EQB and the Hearing Examiners exhibited structural bias on account of both the method by which the Hearing Examiners receive assignments and because of the particularities within the pay structure. We agree. . . This case involves evidence that the EQB's
decisionmaking process with respect to Esso is constitutionally infirm. The serious harm inflicted upon Esso is not outweighed by the EQB's concern that this injunction may alter the perceived strength of the EQB's governance. . . "
Access the complete opinion (click here).
Wednesday, April 9, 2008
Commonwealth of Massachusetts v. U.S. NRC
Apr 8: In the U.S. Court of Appeals, First Circuit, Case Nos. 07-1482, 07-1483. In the case the Commonwealth of Massachusetts wants to make sure that the U.S. Nuclear Regulatory Commission (NRC) will consider the Commonwealth's safety concerns about treatment of spent fuel rods before the NRC decides whether to renew the operating licenses of two nuclear energy plants -- the Pilgrim plant in Plymouth, MA; and the Vermont Yankee plant in Vernon, VT, which is within ten miles of the Massachusetts border. The licenses were originally issued in 1972 and will expire in 2012; the re-licensing proceedings have been initiated and are ongoing.
Massachusetts indicates that old assumptions about safe storage of spent fuel rods -- on which the NRC has relied since at
least the early 1970s -- no longer hold. They claim that more recent studies and changed circumstances indicate an increased risk that the plants' method of storing spent fuel rods will lead to an environmental catastrophe. Massachusetts also raises its concern that the plants' method of storing spent fuel leaves the plants vulnerable to terrorist attack.
Both sides agree that the safety issues raised are deserving of careful consideration. Both sides also agree that the Massachusetts is by law permitted to raise its various concerns by "some path" and to obtain judicial review of any NRC decision that adversely affects its interests in this matter. The question argued in this case is whether Massachusetts has, "from the regulatory maze, chosen the correct path for doing so." Massachusetts insists it has chosen the appropriate path, indeed, the only one available to it -- i.e. participating directly in the re-licensing proceedings as a party.
The NRC says the Commonwealth has chosen the "wrong path, indeed, one precluded by its regulations." The Agency also says that another option is available, is the proper path to be followed, and will adequately protect the state's interests.
According to the NRC, the Commonwealth must abandon its attempt to attain formal "party" status in the licensing proceedings and instead seek to participate in those proceedings as an "interested governmental entity."
The First Circuit rules that Massachusetts "has chosen the wrong path in seeking to raise the safety issues as a party in the licensing proceedings and deny its petition. We also bind the NRC to its litigation position. . . this leaves the Commonwealth free to follow the NRC's preferred path if it so chooses. To the extent the Commonwealth seeks an order from this court interfering with the NRC's ongoing re-licensing proceedings by imposing decision-making timetables on the agency, we issue a very brief stay but otherwise decline to issue such relief."
Access the complete opinion (click here).
Massachusetts indicates that old assumptions about safe storage of spent fuel rods -- on which the NRC has relied since at
least the early 1970s -- no longer hold. They claim that more recent studies and changed circumstances indicate an increased risk that the plants' method of storing spent fuel rods will lead to an environmental catastrophe. Massachusetts also raises its concern that the plants' method of storing spent fuel leaves the plants vulnerable to terrorist attack.
Both sides agree that the safety issues raised are deserving of careful consideration. Both sides also agree that the Massachusetts is by law permitted to raise its various concerns by "some path" and to obtain judicial review of any NRC decision that adversely affects its interests in this matter. The question argued in this case is whether Massachusetts has, "from the regulatory maze, chosen the correct path for doing so." Massachusetts insists it has chosen the appropriate path, indeed, the only one available to it -- i.e. participating directly in the re-licensing proceedings as a party.
The NRC says the Commonwealth has chosen the "wrong path, indeed, one precluded by its regulations." The Agency also says that another option is available, is the proper path to be followed, and will adequately protect the state's interests.
According to the NRC, the Commonwealth must abandon its attempt to attain formal "party" status in the licensing proceedings and instead seek to participate in those proceedings as an "interested governmental entity."
The First Circuit rules that Massachusetts "has chosen the wrong path in seeking to raise the safety issues as a party in the licensing proceedings and deny its petition. We also bind the NRC to its litigation position. . . this leaves the Commonwealth free to follow the NRC's preferred path if it so chooses. To the extent the Commonwealth seeks an order from this court interfering with the NRC's ongoing re-licensing proceedings by imposing decision-making timetables on the agency, we issue a very brief stay but otherwise decline to issue such relief."
Access the complete opinion (click here).
Thursday, April 3, 2008
Rick's Mushroom Service Inc. v. U.S.
Apr 2: In the U.S. Court of Appeals, Federal Circuit, Case No. 07-5137. The case is an appeal from the United States Court of Federal Claims pertaining to a cost-share agreement between the government and Rick’s Mushrooms, Inc. (Rick’s) for implementing conservation practices in a facility for recycling of mushroom waste. Rick’s seeks indemnification from the government for costs incurred in defending and settling claims by a third party for violation of certain State and Federal environmental laws. The Court of Federal Claims dismissed the action for lack of subject matter jurisdiction. The Federal Circuit affirmed that decision.
As noted by the court, mushroom farming is a major economic activity in Chester County, Pennsylvania. Historically, the organic by-product waste of mushroom farming, known as "spent mushroom substrate" (SMS), was dumped in nearby woods or streams, resulting in severe nitrogen pollution. Rick’s operates an SMS transfer facility, which processes SMS by leaching out the excess nitrogen and then recycling it as potting soil or other products. Following a dispute regarding contamination and proper permitting, and an order by the district court, Rick’s agreed to settle the case for $950,000. Thereafter, the Natural Resources Conservation Service (NRCS) drafted a rehabilitation plan and a plan for a roof structure to help eliminate some of the problems with waste discharge. The NRCS did not indemnify Rick’s for its losses in the litigation and did not pay for the new roof structure.
On November 4, 2005, Rick’s submitted a claim under the Contract Disputes Act (CDA) to the contracting officer at the NRCS for $5 million in damages. J.A. 188-89. The claim alleged that the NRCS had breached its implied warranty of the specifications, and, as a consequence, Rick’s had incurred additional costs, including attorneys’ fees in defending the lawsuit; the lost value of its contribution to the original design, its substantial design revisions, and the installation of the new roof structure; and its liability for environmental impact. The court further held that, because the contract between Rick’s and the NRCS was a cooperative agreement and not a procurement contract, and there was no basis for jurisdiction under the CDA for the breach of contract claim. The court, therefore, dismissed the case for lack of subject matter jurisdiction.
The Federal Circuit said that the Court of Federal Claims did not err in concluding that it lacked subject matter jurisdiction to hear the professional negligence claim; it did not err in holding that it lacked subject matter jurisdiction over Rick’s breach of contract claim; did not err in dismissing Rick’s implied warranty claim for lack of subject matter jurisdiction; and found no abuse of discretion by the Court of Federal Claims in its dismissal of the professional negligence claim. It therefore, affirmed the Court of Federal Claim’s dismissal of Rick’s claims for lack of subject matter jurisdiction.
Access the complete opinion (click here).
As noted by the court, mushroom farming is a major economic activity in Chester County, Pennsylvania. Historically, the organic by-product waste of mushroom farming, known as "spent mushroom substrate" (SMS), was dumped in nearby woods or streams, resulting in severe nitrogen pollution. Rick’s operates an SMS transfer facility, which processes SMS by leaching out the excess nitrogen and then recycling it as potting soil or other products. Following a dispute regarding contamination and proper permitting, and an order by the district court, Rick’s agreed to settle the case for $950,000. Thereafter, the Natural Resources Conservation Service (NRCS) drafted a rehabilitation plan and a plan for a roof structure to help eliminate some of the problems with waste discharge. The NRCS did not indemnify Rick’s for its losses in the litigation and did not pay for the new roof structure.
On November 4, 2005, Rick’s submitted a claim under the Contract Disputes Act (CDA) to the contracting officer at the NRCS for $5 million in damages. J.A. 188-89. The claim alleged that the NRCS had breached its implied warranty of the specifications, and, as a consequence, Rick’s had incurred additional costs, including attorneys’ fees in defending the lawsuit; the lost value of its contribution to the original design, its substantial design revisions, and the installation of the new roof structure; and its liability for environmental impact. The court further held that, because the contract between Rick’s and the NRCS was a cooperative agreement and not a procurement contract, and there was no basis for jurisdiction under the CDA for the breach of contract claim. The court, therefore, dismissed the case for lack of subject matter jurisdiction.
The Federal Circuit said that the Court of Federal Claims did not err in concluding that it lacked subject matter jurisdiction to hear the professional negligence claim; it did not err in holding that it lacked subject matter jurisdiction over Rick’s breach of contract claim; did not err in dismissing Rick’s implied warranty claim for lack of subject matter jurisdiction; and found no abuse of discretion by the Court of Federal Claims in its dismissal of the professional negligence claim. It therefore, affirmed the Court of Federal Claim’s dismissal of Rick’s claims for lack of subject matter jurisdiction.
Access the complete opinion (click here).
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