South Coast Air Quality Mgmt. Dist. v. FERC

Sep 9: In the U.S. Court of Appeals, Ninth Circuit, Case No. 08-72265. This case involves the interstate natural gas pipeline system as regulated by the Federal Energy Regulatory Commission (FERC); the varying quality of natural gas as measured by the Wobbe Index (WI); and the resulting air pollution from burning varying qualities of natural gas.

 

    In general, FERC issued an order approving a project, which authorized the construction of new facilities to allow for the northward flow of gas by North Baja Pipeline, LLC. The order confirmed FERC's earlier environmental review and adopted twenty-one enumerated environmental conditions relating to the construction of the pipeline and its continued transport of gas. FERC also required that the North Baja pipeline only deliver gas that meets the strictest gas quality standards imposed by state regulatory agencies on downstream end-users and pipelines, which, in light of California's gas standards, meant that the North Baja gas could not exceed a WI level of 1385. FERC found that compliance with these standards "should not result in a material increase in air pollutant emissions and, therefore, should not result in material changes in air quality in the Basin."

 

    South Coast Air Quality Management District (South Coast) argued for a maximum WI of 1360 in California, however, FERC observed that "[t]he record contains no analysis or evidence showing a material change in air quality impacts as a result of the consumption of natural gas with a WI of 1385 . . . compared to that of [South Coast's] proposed WI limit of 1360." South Coast, acting alone, filed a Request for Rehearing of FERC's Order. FERC denied the request and South Coast filed the instant petition for review with the Appeals Court.

 

    The Appeals Court ruled in part, ". . . while South Coast correctly states that the gas quality of the North Baja gas 'would be up to a 1385 Wobbe Index,' this number does not take into account any blending or conditioning of gases that may occur in either the North Baja pipeline itself or the California pipeline system, nor does it reflect the WI of gas in the Basin at the time it is actually burned. Indeed, because the actual WI of the North Baja gas by the time it reaches the Basin is unknown at this time, the expected NOx emissions and resulting environmental harm that may occur are equally unknown. Again, even South Coast acknowledged this uncertainty during its challenge to the CPUC proceedings. Consequently, the emissions that may result from the consumptive burning of North Baja gas are not reasonably foreseeable within the definition provided by the EPA's regulations.

 

    "Because the CAA does not require that FERC attempt to 'leverage its legal authority to influence or control' state air quality issues, and because there remains substantial uncertainty regarding the eventual burning of North Baja gas, FERC is not obligated to perform a full conformity determination regarding such burning under the CAA. South Coast's petition for review is denied."

 

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Chevron Corp. v. 3TM International, Inc.

Sep 8: In the U.S. Court of Appeals, Fifth Circuit, Case No. 10-20389. The case is appealed from the Southern District of Texas (Houston Division) and involves a group of Ecuadorian citizens (the plaintiffs) who have sued Chevron Corporation in Ecuador appeal from the district court's order allowing Chevron to depose their consultant, 3TM.

 

    In 2003, the plaintiffs sued Chevron in Ecuador, seeking to hold Chevron liable as the successor to Texaco Petroleum Company. The plaintiffs allege that Texaco polluted the Ecuadorian Amazon Rainforest over the course of several decades while engaging in oil extraction in the region. The appeal arises out of the plaintiffs' Ecuadorian lawsuit against Chevron. Specifically, it concerns Richard Stalin Cabrera Vega (Cabrera), an individual appointed by the Ecuadorian court to serve as a neutral expert in the Ecuadorian proceedings. In 2008, Cabrera released a report recommending that Chevron be held liable for $27.3 billion in damages, but the Ecuadorian court has yet to render a judgment against Chevron.

 

    Despite Cabrera's professed impartiality, Chevron claims that Cabrera actually worked closely with the plaintiffs to produce his report, much of which Chevron alleges was secretly ghostwritten by the plaintiffs' U.S. consultants. Chevron filed a § 1782(a) application seeking discovery from 3TM, an environmental consultancy firm in Houston. The plaintiffs' consultant Stratus retained 3TM to assist the plaintiffs in mediation and settlement discussions with Chevron in 2007, and Chevron alleges that 3TM and Stratus produced a report that Cabrera integrated into his report, without disclosing his reliance on it. After the plaintiffs intervened to quash Chevron's subpoena of 3TM, the district court ordered 3TM to submit to limited discovery.

 

    The court concluded that discovery was appropriate based on the Intel factors that the Supreme Court has directed courts to consider in reviewing requests for discovery in aid of foreign proceedings. See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004). The court also found that although some of the documents and information sought by Chevron could be protected under various privileges, this protection would have been waived by the provision of any documents to Cabrera.

 

    The Appeals Court affirmed the district court's order requiring 3TM to submit to a foundational deposition, and remanded the case for further proceedings consistent with the opinion and said, ". . .the district court did not err in ordering a foundational deposition, despite the lack of definite evidence of a waiver. Although we approve of the course chosen by the district court, we believe the terms that the court set for the deposition should be further refined. As already explained, the court ordered that 3TM's deposition be limited to 'whether 3TM collaborated with Cabrera' and 'the extent to which 3TM recognizes its work in the Cabrera report.' However, the district court did not clearly specify the level of similarity between the Cabrera report and 3TM work product necessary to show that a waiver of immunity from discovery occurred. Depending on 3TM's interpretation of the district court's order, it could conceivably 'recognize' material in the Cabrera report as its own that actually has another provenance. As such, for remand, we stress that similarities between the Cabrera report and 3TM work product are only relevant to the extent that they collectively show that Cabrera more likely than not incorporated 3TM work product into his report. We also note that if disputes between the parties persist after the foundational deposition, the district court may review the Cabrera report and any relevant 3TM work product in camera to help it determine whether a waiver occurred."

 

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Scottsdale Insurance Co. v. Universal Crop Protection

Sep 8: In the U.S. Court of Appeals, Eighth Circuit, Case No. 09-1774, appealed from the District of Minnesota. Scottsdale Insurance Company (Scottsdale) issued a general commercial liability insurance policy for the benefit of Universal Crop Protection Alliance, LLC (UCPA). The policy contained a pollution exclusion. In 2007, scores of Arkansas farmers sued UCPA, alleging one of UCPA's herbicides destroyed their cotton crops. Scottsdale then brought the instant declaratory judgment action against UCPA, seeking a ruling that the pollution exclusion relieved Scottsdale of any obligation to defend or indemnify UCPA. Scottsdale moved for summary judgment, which the district court granted. UCPA appealed, arguing the district court lacked jurisdiction and construed the pollution exclusion too broadly. The Appeals Court affirmed the district court decision.

 

    The Appeals Court said, "The Policy's pollution exclusion is broad and unambiguously relieves Scottsdale of any obligation to defend or indemnify UCPA from the cotton farmers' claims -- under either the off target drift or relofting theories of migration. . . Neither theory 'arguably' falls outside the scope of the exclusion. . . The Policy plainly excludes coverage for 'property damage which would not have occurred . . . but for the . . . migration . . . of pollutants, defining pollutants in relevant part as including any solid, liquid, gaseous or thermal . . . contaminant, including . . . . chemicals. Again, the cotton farmers' relofting theory is concerned only with the migration of a chemical, i.e., 2,4-D. This is not a case in which the plaintiffs in the underlying litigation have made vague allegations that might permit a construction arguably falling outside of the governing pollution exclusion." [internal quotations omitted].

 

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Wilcox v. Homestake Mining Company

Sep 8: In the U.S. Court of Appeals, Tenth Circuit,  Case No. 08-2282. In the case brought under the Price-Anderson Act, 42 U.S.C. § 2210, the Appeals Court must decide whether Plaintiffs alleging they suffered cancer due to exposure to radiation from Defendants' uranium mill have made a sufficient showing of causation under New Mexico law to survive summary judgment. The Appeals Court said, "We first determine the test for causation in this context, then evaluate whether the evidence submitted by Plaintiffs was sufficient to satisfy this test for summary judgment purposes."

 

    The action was originally brought by several plaintiffs who alleged they or the decedents they represented suffered from a large variety of injuries and diseases as a result of exposure to radioactive and non-radioactive hazardous substances released from Defendants' uranium milling facility in Cibola County, New Mexico. The district court entered a scheduling order requiring each plaintiff to produce expert affidavits making a prima facie showing of harmful exposure and specific causation for each alleged injury, but only three plaintiffs -- the appellants in the current action -- did so. The district court dismissed the other twenty-five plaintiffs from the action with prejudice, and that dismissal is not contested in the current appeal.

 

    The three Plaintiffs involved in the appeal and their experts opined that Plaintiffs' exposure to radiation from Defendants' operations was a substantial factor contributing to each of them developing cancer. The district court concluded that New Mexico law required a showing of "but-for causation" and that Plaintiffs' expert affidavits failed to meet that showing. The court therefore granted summary judgment to Defendants on Plaintiffs' claims. The appeal followed.

 

    The Appeals Court said, the experts evidence was "simply insufficient to meet Plaintiffs' burden of making a prima facie case that Defendants' operations either (1) were a but-for cause of their cancer, either alone or as a necessary part of a combination of different factors, or (2) would have been such a but-for cause were it not for another sufficient coincident cause." The Appeals Court said additionally, "We also note Plaintiffs have neither alleged nor presented evidence that exposure to Defendants' radiation resulted, more probably than not, in the aggravation of their cancer symptoms. Therefore, to the extent Tafoya alters the but-for test in situations where a defendant's actions aggravate but do not cause an injury, it is not applicable in this case. . . we conclude the district court correctly granted summary judgment to Defendants based on Plaintiffs' failure to make a sufficient showing of but-for causation. We therefore affirm the district court's entry of summary judgment in favor of Defendants.

 

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Cook v. Rockwell International Corp

Sep 3: In the U.S. Court of Appeals, Tenth Circuit,  Case No. 08-1224, 08-1226 and 08-1239. The owners of property near the former Rocky Flats Nuclear Weapons Plant (Rocky Flats) filed a class action against the facility's operators under the Price-Anderson Act (PAA), alleging trespass and nuisance claims arising from the release of plutonium particles onto their properties. The district court conducted a lengthy trial, resulting in a jury verdict in favor of the plaintiff class. After a series of post-trial motions, the district court entered judgment in favor of Plaintiffs, awarding a total of just over $926 million, inclusive of compensatory damages, punitive damages, and prejudgment interest. Defendants, Dow Chemical Company (Dow) and Rockwell International Corporation (Rockwell), timely appealed the judgment, and the class members filed a timely

cross-appeal.

 

    The Appeals Court said, "Exercising appellate jurisdiction pursuant to 28 U.S.C. § 1291, this court reverses and remands the case to the district court. We direct the district court to vacate the judgment and conduct further proceedings not inconsistent with this opinion."

    By way of background, Rocky Flats, located near Denver, Colorado, was established by the United States Government in the 1950s to produce nuclear weapon components. The government contracted with Dow to operate the facility from 1952 to 1975, and then with Rockwell from 1975 to 1989. Operations at Rocky Flats ceased in June 1989 after the Federal Bureau of Investigation and the Environmental Protection Agency searched the facility. Rockwell was subsequently charged with, and ultimately pleaded guilty to, certain environmental crimes at the site. The facility has since undergone remediation efforts and is now designated as a wildlife refuge.

 

    In an important part of the Appeals Court ruling the court said, ". . . the date of the occurrence controls when determining whether the nuclear incident took place prior to August 20, 1988. . . While the district court's decision to focus on the date of the occurrence was correct, its instruction failed to instruct the jury how to identify the date of the occurrence. Here, the "occurrence" constituting a nuclear incident in a PAA action must arise from Defendants' release of plutonium onto Plaintiffs' properties. The jury instruction ultimately given, however, permits consideration of Defendants' conduct prior to August 20, 1988, regardless of whether an 'occurrence' causing Plaintiffs' injury took place prior to that date. This is an important distinction, because certain conduct prior to August 20, 1988, might contribute to a nuclear incident, even though the release of plutonium might not have occurred until after August 20, 1988. For instance, if a defendant began improperly storing drums containing nuclear waste in 1987 and consistently failed to maintain them, but no waste leaked from the drums until after August 21, 1988, a jury could not find the 'occurrence' took place prior to August 20, 1988. . ."

 

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McEvoy v. IEI Barge Services

Sep 7: In the U.S. Court of Appeals, Seventh Circuit, Case No. 09-3494. As explained by the court, East Dubuque, Illinois, is a small town on the Mississippi River. One local company that has profited from the river's proximity is IEI Barge Services, Inc. (IEI). IEI stores coal in an outdoor pile and loads it onto river barges. As the coal is moved around, coal dust is thrown off into the air. One of IEI's neighbors, Charles McEvoy, objected to the coal dust from IEI's

operations, because it was drifting into his home; he filed suit in Federal court. McEvoy's concerns were shared by others in the area.

 

    The Appeals Court notes that this suit, ". . .is about which legal tools are available to someone who wants to shift the cost of pollution to the polluter. We must consider whether the Clean Air Act. . . The district court concluded that the Act's citizen-suit provision does not support such an action. While we have no trouble recognizing why plaintiffs are seeking a remedy, we too conclude that the plaintiffs' allegations fall outside the scope of the Act."

 

    In its final opinion, the Appeals Court said, "Recognizing the ambiguity in the text of the regulation, we asked the parties during oral argument if they could identify any specific rules or background principles in Illinois law to guide our interpretation. The parties submitted supplemental briefs on this question, and we thank them for their efforts. In the final analysis, however, we were convinced by these submissions and our own research that it is not our role to flesh out this regulation without better guidance from the competent administrative bodies. In addition, we do not exclude the possibility that an Illinois court might be able to clarify some of the ambiguity. Any statements from the Illinois executive branch -- including, but not limited to, formal or informal guidance from the Illinois Environmental Protection Agency -- should be given due consideration by any court interpreting this provision and its interaction with the Act. Without any such guidance, however, we conclude that the Fugitive Particulate Matter regulation cannot be used as the basis of a citizen's suit under the Clean Air Act."

 

    Access the complete opinion (click here). [Please Note: The 7th circuit has a temporary web hyperlink nomenclature system. If the link does not work click on this link and enter the case number above (click here).] 

Western Watersheds Project v. Kraayenbrink

Sep 1: In the U.S. Court of Appeals, Ninth Circuit, Case No. 08-35359. The Bureau of Land Management (BLM) is the Federal agency charged with overseeing livestock grazing on over 160 million acres of public land in the western United States. Pursuant to the BLM's authority under the Taylor Grazing Act of 1934, the BLM has adopted regulations that implement its grazing management responsibilities. On July 12, 2006, the Secretary of the Interior proposed eighteen amendments to the BLM's grazing regulations. The stated purpose of the proposed amendments was to improve the working relationships with permittees and lessees (i.e. ranchers), to protect the health of rangelands, and to increase the administrative efficiency and effectiveness of the BLM grazing management program.

 

    Plaintiffs argued that the BLM violated the National Environmental Policy Act (NEPA) by failing to take the required "hard look" at the environmental effects of the revised regulations; failed to consult with the United States Fish & Wildlife Service (FWS) as required by the Endangered Species Act (ESA); and violated the Federal Land Policy and Management Act (FLPMA) in promulgating the 2006 Regulations. Shortly after the suit was filed, Public Lands Council and the American Farm Bureau Federation (collectively Intervenors -- two organizations that represent the interests of ranchers in the western states -- intervened on behalf of the BLM to defend the proposed amendments.

 

    The Appeals Court ruled, "Because we agree with the district court that the BLM violated NEPA and the ESA in adopting the 2006 amendments, we affirm the court's grant of summary judgment to Plaintiffs as to these claims. We also affirm the district court's permanent injunction enjoining the BLM regulations as set forth in the Federal Register of July 12, 2006, amending 43 C.F.R. Part 4100 et seq. Because the district court erred when it failed to consider Plaintiffs' FLPMA claim under the framework and with the deference set forth in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984), we vacate the district court's grant of summary judgment in favor of Plaintiffs on this claim and remand it for further consideration."

 

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