National Pork Producers, et al v. U.S. EPA

Mar 15: In the U.S. Court of Appeals, Fifth Circuit, Case No. 08-61093. This high profile case involves many agricultural associations versus U.S. EPA and intervening Natural Resources Defense Council (NRDC), Sierra Club and Waterkeepers. The parties argued the issue of EPA's regulations relating to Concentrated Animal Feeding Operations (CAFOs).

 

    In 2003, EPA revised its regulations, implementing the Clean Water Act's (CWA) oversight of Concentrated Animal Feeding CAFOs. Several parties challenged the 2003 revisions (the 2003 Rule), and the Second Circuit reviewed the challenges in Waterkeeper Alliance, Inc. v. Environmental Protection Agency, 399 F.3d 486 (2d Cir. 2005). In 2008, EPA, responding to Waterkeeper, and revised its regulations (the 2008 Rule or the Rule). Subsequently, the Farm Petitioners jointly with the Poultry Petitioners filed petitions for review of the 2008 Rule with the Fifth Circuit and the Seventh, Eighth, Ninth, Tenth, and D.C. Circuits.

 

    Shortly after the issuance of the 2008 Rule, EPA sent guidance letters to members of Congress and to a CAFO executive (hereinafter the EPA Letters or guidance letters). The Poultry Petitioners filed a petition for review in the Fifth Circuit, challenging the EPA's procedures for issuing rules that the Poultry Petitioners allege were final. The petitions for review were consolidated by the Judicial Panel on Multi-district Litigation (JPML), pursuant to 28 U.S.C. § 2112(a)(3), and the Fifth Circuit was randomly selected to review the parties' challenges. Subsequently, the Environmental Intervenors filed a motion to intervene in support of the EPA's position. Also, EPA filed a motion to dismiss the Poultry Petitioners' challenges to the guidance letters. In its decision the Fifth Circuit grants the petitions in part, denies the petitions in part, and grants the EPA's motion to dismiss.

 

    At issue in the present petitions for review is the 2008 Rule, the EPA's response to the Second Circuit's decision in Waterkeeper. See 71 Fed. Reg. 37,744 (June 30, 2006). Also at issue are three guidance letters issued by the EPA in response to questions raised by members of Congress and a farm executive about the 2008 Rule. On appeal, the Farm Petitioners primarily challenge the EPA's "duty to apply" for an NPDES permit, imposition of liability for failing to apply for a permit, and the EPA's regulation of a permitted CAFO's land application. On the issue of the guidance letters, the Poultry Petitioners filed petitions for review challenging the EPA Letters. They argue that the EPA Letters constituted "final agency actions" subject to judicial review and, among other things, were required to have undergone notice and comment per the rulemaking procedures articulated in the APA. The Fifth Circuit first analyzes the Farm Petitioners' challenges and grants the petition in part and denies it in part. Secondly, the decision analyzes the Poultry Petitioners' challenge to the EPA Letters and dismisses their petition for lack of jurisdiction per the EPA's motion.

 

    On the "duty to apply" liability, the Appeals Court says, "We conclude that the CWA provides a comprehensive liability scheme, and the EPA's attempt to supplement this scheme is in excess of its statutory authority." The decision states further, ". . .we decline to uphold the EPA's requirement that CAFOs that propose to discharge apply for an NPDES permit." Citing various previous case, the Fifth Circuit says, "These cases leave no doubt that there must be an actual discharge into navigable waters to trigger the CWA's requirements and the EPA's authority. Accordingly, the EPA's authority is limited to the regulation of CAFOs that discharge. Any attempt to do otherwise exceeds the EPA's statutory authority. Accordingly, we conclude that the EPA's requirement that CAFOs that 'propose' to discharge apply for an NPDES permit is ultra vires and cannot be upheld. . . In summary, we conclude that the EPA cannot impose a duty to apply for a permit on a CAFO that 'proposes to discharge' or any CAFO before there is an actual discharge. However, it is within the EPA's province, as contemplated by the CWA, to impose a duty to apply on CAFOs that are discharging."

 

    Further, the Fifth Circuit says, "The 2008 Rule provides that a CAFO can be held liable for failing to apply for a permit. The Farm Petitioners contend that the EPA does not have the authority to create this liability. We agree. . . the imposition of 'failure to apply' liability is outside the bounds of the CWA's mandate. . . The CWA simply does not authorize this type of supplementation to its comprehensive liability scheme. Nor has Congress been compelled, since the creation of the NPDES permit program, to make any changes to the CWA, requiring a non-discharging CAFO to apply for an NPDES permit or imposing failure to apply liability. . ."

 

    On the subject of land application, the Farm Petitioners argue that the EPA's requirement that all NMPs [Nutrient Management Plans] address protocols for land application exceeds the EPA's statutory authority. The Appeals Court rules, "The Farm Petitioners' arguments are problematic because they are challenging a requirement promulgated in the 2003 Rule. Thus, the Farm Petitioners' arguments had to be made within the 120-day time period for challenging rules promulgated by an agency. . . Thus, the Farm Petitioners' arguments, regarding NMPs and the protocols for land application, brought almost six years after they were promulgated, are time barred."

 

    On the subject the EPA Letters which state that poultry growers must apply for NPDES permits for the releases of dust through poultry confinement house ventilation fans, the Poultry Petitioners argue that this requirement is a substantive rule because it creates new legal consequences and affects individual rights and obligations. The Appeals Court explains that, "The CWA establishes a bifurcated jurisdictional scheme whereby courts of appeals have jurisdiction over some categories of challenges to EPA action, and the district courts retain jurisdiction over other types of complaints.

 

    As such, the decision states, "Although the guidance letters do, as the Poultry Petitioners note, obligate them to obtain a permit if they discharge manure or litter through ventilation fans or face legal consequences, the EPA Letters neither create new legal consequences nor affect their rights or obligations. Here, the guidance letters merely restate section 1342's prohibition against discharging pollutants without an NPDES permit. Agency actions that have no effect on a party's rights or obligations are not reviewable final actions. . . Accordingly, we grant the EPA's motion to dismiss because we lack jurisdiction to consider the Poultry Petitioners' challenge to the EPA Letters."

 

    In a final conclusion the Fifth Circuit rules, "For the foregoing reasons, the petitions are granted in part, denied in part, and dismissed in part. We hereby vacate those provisions of the 2008 Rule that require CAFOs that propose to discharge to apply for an NPDES permit, but we uphold the provisions of the 2008 Rule that impose a duty to apply on CAFOs that are discharging. We vacate those provisions of the 2008 Rule that create liability for failing to apply for an NPDES permit. Additionally, we uphold the provisions of the 2008 Rule that allow permitting authorities to regulate a permitted CAFO's land application and include these requirements in a CAFO's NPDES permit. Finally, we dismiss the Poultry Petitioners' challenge of the guidance letters for lack of jurisdiction."

 

    The American Farm Bureau Federation (AFBF) and other farm organizations, issued a release saying, ". . .a unanimous federal court of appeals has ruled that the Environmental Protection Agency cannot require livestock farmers to apply for Clean Water Act permits unless their farms actually discharge manure into U.S. waters." The ruling was welcomed by the American Farm Bureau Federation, National Pork Producers Council and several other agriculture groups that filed suit against EPA in the U.S. Court of Appeals for the Fifth Circuit. AFBF President Bob Stallman said, "For the second time, a U.S. Court of Appeals has ruled that EPA's authority is limited by the Clean Water Act to jurisdiction over only actual discharges to navigable waters, not potential discharges. We are pleased that the federal courts have again reined in EPA's unlawful regulation of livestock operations under the Clean Water Act. The court has affirmed that EPA, like other federal agencies, can only regulate where it has been authorized by Congress to do so."

 

    Access the complete opinion (click here). Access a release from AFBF (click here).

United States v. Desnoyers

Mar 14: In the U.S. Court of Appeals, Second Circuit, Case No. 10-0447. The Appeals Court indicates that a jury convicted Defendant-Appellee Mark Desnoyers on multiple counts, including one count of conspiracy to

violate the Clean Air Act (CAA) and to commit mail fraud. After trial, the United States District Court for the Northern District of New York (Hurd, J.) entered a judgment of acquittal on the conspiracy count citing both factual and legal insufficiency as grounds

for its decision. The Government appealed the acquittal ruling. The Appeals Court ruled, "We vacate the judgment of acquittal on the conspiracy count, and remand the case to the district court with instructions to reinstate the jury verdict, enter a judgment of conviction on the conspiracy count, and resentence Desnoyers accordingly."

 

    Desnoyers was licensed in New York to conduct air monitoring at asbestos abatement projects and to document the results of asbestos removal work. Based on evidence that Desnoyers conducted his work fraudulently and sometimes not at all, the Government charged Desnoyers with conspiracy to CAA. The jury was asked to determine, among other things, whether each property in the conspiracy count was (1) a commercial property or a residential property with more than four units containing

(2) a sufficient quantity of (3) friable asbestos. According to the opinion, the Government could prove that one of those properties was subject to the CAA asbestos regulations by introducing evidence of the three factors.

 

    The Appeals Court concluded, "The fact that the Government may not have established that the properties at issue in the conspiracy count were subject to the CAA asbestos regulations was a factual deficiency in the Government's case, not a legal one. As a result, the district court erred when it characterized the Government's CAA theory as 'legally impossible.' In sum, the conspiracy count suffered neither a factual nor a legal defect."

 

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Del-Ray Battery Company, et al v. Douglas Battery

Mar 14: In the U.S. Court of Appeals, Fifth Circuit, Case No. 10-40515. Appellants, battery recyclers, were sued under the Texas Solid Waste Disposal Act (SWDA) in Texas State court for contribution to environmental clean-up costs incurred by Appellees. Appellants asserted in their defense that the Superfund Recycling Equity Act (SREA) -- an amendment to the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) that exempts certain recyclers from liability for clean-up costs under CERCLA, and awards costs and fees to any recyclers improperly sued for contribution under CERCLA -- applied to protect them from the State court action brought pursuant to the SWDA. After Appellees non-suited the State court case, Appellants brought the Federal court action requesting declaratory relief as to the SREA and seeking, under the SREA, the attorneys' and experts' fees they incurred in defending the State court action. They appealed the district court's judgment dismissing their complaint and the Appeals Court affirmed the district court's decision.

 

    By way of background, Appellants Del-Ray Battery Company and Golden Eagle Battery, Inc. (together, Plaintiffs") and Appellees Douglas Battery Company and Interstate Battery Systems of America, Inc. (together, Defendants) are battery recyclers that sold intact, spent lead acid batteries to a recycling facility in Tecula, Texas until the Environmental Protection Agency (EPA") declared the facility a Superfund site and closed it down. The Texas Commission on Environmental Quality (TCEQ), the State's counterpart to the EPA, identified Defendants, among other battery recyclers, as potentially responsible parties and directed them to perform a remedial investigation/feasibility study at the Tecula site. The EPA ultimately paid $4 million in removal and remediation costs to clean up the site, but neither the EPA nor the TCEQ brought suit against any of the battery recyclers to recover the costs of this clean-up.

 

    The Appeals Court concluded, "It is also clear from case law that CERCLA and the SWDA co-exist as regulatory regimes. See Cooper, 543 U.S. at 166–67 (holding that the portion of § 113(f)(1) cited above 'rebuts any presumption that the express right of

contribution provided by the enabling clause is the exclusive cause of action for contribution available to a [potentially responsible party]'); MSOF Corp. v. Exxon Corp., 295 F.3d 485, 491 (5th Cir. 2002) ('This court and other courts have construed the CERCLA saving clauses in accordance with their plain meanings and have held that they preserve parties' rights arising under state law.'). Because the SREA on its face does not apply to state law causes of action, and because CERCLA does not preempt the SWDA, the district court properly dismissed the remainder of Plaintiffs' claims."

 

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City of Los Angeles v. San Pedro Boat Works et al

Mar 14: In the U.S. Court of Appeals, Ninth Circuit, Case No. 08-56163. Appeal from the United States District Court for the Central District of California. The case, in the first instance determines whether the holder of a revocable permit to use real property is an "owner" of that real property for purposes of imposing liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for the cleanup of hazardous substances disposed on that property by others. The Appeals Court said, "A common sense reading of the statute and existing state law persuade us that this permittee, as the holder of a possessory interest, cannot be such an 'owner' under CERCLA, and we so hold.

 

    The City of Los Angeles appealed from the district court's grant of partial summary judgment in favor of BCI Coca-Cola Bottling Company of Los Angeles (BCI Coca-Cola). The City sued BCI Coca-Cola on ten counts arising from environmental contamination caused by operation of the San Pedro Boat Works located at Berth 44 in the Port of Los Angeles (Berth 44"). The City sought reimbursement for the expense of cleaning up hazardous substances disposed of at Berth 44. The parties do not dispute whether hazardous substances were released at Berth 44; they were.

 

    The disagreement is over who should pay the clean-up costs. Under CERCLA, BCI Coca-Cola must pay if and only if it or its predecessor-in-interest -- Pacific American -- was an "owner or operator" of the boatworks when the hazardous substances were disposed at Berth 44. In a separate decision, the district court held that Pacific American, and thus BCI Coca-Cola, was not an "operator" of the boatworks at Berth 44. The City, for reasons unexplained by the record, did not appeal the district court's ruling on "operator" liability. Thus, the Appeals Court said, it focused its analysis on the district court's determination that Pacific American, and thus BCI Coca-Cola, was not an "owner" of the boatworks for purposes of CERCLA.

 

    The Appeals Court concluded, "We affirm the district court's decision granting summary judgment to BCI Coca-Cola on the City's CERCLA and nuisance claims. Pacific American, and thus BCI Coca-Cola, lacked the necessary possessory interests in Berth 44 to establish liability under either theory. Further, the district court did not abuse its discretion in denying the City's motion to file its Fourth Amended Complaint."

 

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American Commercial Lines LLC v. Water Quality Ins. Syndicate

Mar 14: In the U.S. Court of Appeals, Second Circuit, Case No. 10-1650. In this summary order, which does not have precedential effect, the Appeals Court dismissed the appeal for lack of jurisdiction. The case involved a dispute over coverage for a $130 million oil spill. Defendant Water Quality Insurance Syndicate (WQIS) appeals from the district court's March 29, 2010 grant of partial judgment on the pleadings in favor of plaintiff American Commercial Lines LLC (ACL), determining the scope of WQIS's obligation under maritime pollution insurance policy number 40-27083 (the Policy) to reimburse ACL for costs incurred investigating and defending against claims arising from a July 23, 2008 oil spill. WQIS submits that this court has jurisdiction over the appeal pursuant to 28 U.S.C. § 1292(a)(3), because the district court's interlocutory order determined the rights and liabilities of the parties in an admiralty case in which appeals from final decrees are allowed. The Appeals Court said "We conclude that because the district court's order did not conclusively determine the rights and liabilities of the parties, jurisdiction under § 1292(a)(3) is lacking, and the appeal must be dismissed."

 

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Southern Nuclear Operating Co. AL, & GA v. U.S.

Mar 11: In the U.S. Court of Appeals, Federal Circuit, Case No. 2008-5020. Appealed from the United States Court of Federal Claims. Plaintiffs Southern Nuclear Operating Company, Alabama Power Company, and Georgia Power Company (collectively, plaintiffs) filed suit in the Court of Federal Claims (Claims Court) against the United States, alleging that the United States Department of Energy (Energy) had partially breached contracts by failing to accept spent nuclear fuel (SNF) for storage beginning on January 31, 1998. The Claims Court granted summary judgment for plaintiffs on liability. It then held a trial to determine damages for storage costs incurred that would not have been necessary if Energy had fulfilled its obligation to begin accepting SNF in 1998. S. Nuclear Operat-ing Co. v. United States, 77 Fed. Cl. 396, 460 (2007). The Claims Court also determined that the United States waived its defense that the "unavoidable delays" clause of its contracts precluded expectancy damages. Id. at 452–59. The Appeals Court vacated-in-part the damage award and remanded to the Claims Court for further consideration with respect to two of three power plants (Plant Hatch and Plant Vogtle, owned by GA). However, the Appeals Court affirmed the damage award for one plant (Plant Farley, owned by AL) and affirmed the Claims Court's conclusion that the United States waived its "unavoidable delays" defense.

 

    The United States argued that these storage costs at all three plants would also have been incurred in the non-breach world (i.e., if Energy had performed) and that, therefore, the government's breach did not cause the plaintiffs to make these expenditures. The Claims Court concluded that the plaintiffs' mitigation measures were incurred as a result of Energy's breach, and it awarded $2,716,000 for the rerack at Plant Vogtle; $17,278,000 for dry storage costs at Plant Farley; and $57,203,080 for dry storage costs at Plant Hatch. On appeal, both parties agree that the $3,186,000 award for Plant Hatch was made in error.

 

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NRDC v. County Of Los Angeles

Mar 10: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-56017. Appealed from the United States District Court for the Central District of California. Plaintiffs-Appellants Natural Resources Defense Council (NRDC) and Santa Monica Baykeeper appealed the district court's grant of summary judgment in favor of two municipal entities that Plaintiffs allege are discharging polluted stormwater in violation of the Federal Water Pollution Control Act (the Clean Water Act, Act, or CWA). Plaintiffs contend that Defendants-Appellees County of Los Angeles (County) and Los Angeles County Flood Control District (District) are discharging polluted urban stormwater runoff collected by municipal separate storm sewer systems (ms4) into navigable waters in Southern California. The levels of pollutants detected in four rivers exceed the limits allowed in a National Pollutant Discharge Elimination System (NPDES) permit which governs municipal stormwater discharges in the County.

 

    Although all parties agree that numerous water-quality standards have been exceeded in the Watershed Rivers, Defendants contend that there is no evidence establishing their responsibility for, or discharge of, stormwater carrying pollutants to the rivers. The district court agreed with Defendants and entered a partial final judgment. The Appeals Court, however, said, "We conclude that the district court erred with respect to the evidence of discharges by the District into two of the Watershed Rivers -- the Los Angeles River and San Gabriel River. Specifically, Plaintiffs provided evidence that the monitoring stations for the Los Angeles and San Gabriel Rivers are located in a section of ms4 owned and operated by the District and, after stormwater known to contain standards-exceeding pollutants passes through these monitoring stations, this polluted stormwater is discharged into the two rivers. Accordingly, Plaintiffs were entitled to summary judgment on the District's liability for discharges into the Los Angeles River and San Gabriel River, and therefore we reverse the district court's grant of summary judgment in favor of the District on these claims."

 

    The Appeals Court said further, "Plaintiffs, however, failed to meet their evidentiary burden with respect to discharges by the District into the Santa Clara River and Malibu Creek [the other two water bodies]. Plaintiffs did not provide evidence sufficient for the district court to determine if stormwater discharged from an ms4 controlled by the District caused or contributed to pollution exceedances located in these two rivers. Similarly, Plaintiffs did not delineate how stormwater from ms4s controlled by the County caused or contributed to exceedances in any of the Watershed Rivers. Accordingly, we affirm the district court's grant of summary judgment in favor of the Defendants on these claims."

 

    NRDC issued a release and commented on the decision saying, "This ruling holds LA County responsible for their massive water pollution problem. For years, the County claimed that it could never be held accountable for its toxic discharges, even if the water were so polluted that it literally caught on fire. All of that changes with this ruling. The result will be fewer illnesses, fewer beach closings, a healthier environment, and a healthier regional economy."

 

    Access the complete opinion (click here). Access a release from NRDC (click here).