Yankee Atomic Electric Co. v. US

May 18: In the U.S. Court of Appeals, Federal Circuit, Case No. 2011-5020, -5021, -5022, -5027, -5028, -5029. Appealed from the United States Court of Federal Claims. The Appeals Court explains that the consolidated appeal is the latest manifestation of the numerous contract disputes arising from the Government's failure to accept and dispose of radioactive waste from the nation's nuclear utilities. Specifically, the appeal flows from this court's decision in Yankee Atomic Electric Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008), which reversed the United States Court of Federal Claims' initial damages determination, and remanded for a calculation of damages according to the rate at which the Government was contractually obligated to accept the utilities' waste.

 

    Yankee Atomic Electric Company (Yankee Atomic), Maine Yankee Atomic Power Company (Maine Yankee), and Connecticut Yankee Atomic Power Company (Connecticut Yankee) (collectively, the Yankees) originally brought this action seeking damages to compensate for the cost of storing spent nuclear fuel (SNF) and high-level radioactive waste (HLW) beyond the time that the Government promised by contract to begin storing that waste in a permanent and secure repository. The Appeals Court indicated that on remand, the trial court correctly calculated damages for dry storage construction costs, deferred costs of loading waste to the Department of Energy (DOE), and reracking costs.

 

    However, the Appeals Court said, ". . .the trial court erred in denying Yankee Atomic's claim for a portion of its wet pool storage costs and Nuclear Regulatory Commission (NRC) fees. Unlike Consolidated Edison Co. of N.Y. v. United States, __ F.3d __, 2012 WL 1284402 (Fed. Cir. Apr. 16, 2012), this case does not include a claim for NRC fees that allegedly increased due to DOE's breach. Rather, the plaintiff here claims that no NRC fees would have been incurred by the inactive plant if the SNF had been removed in a timely manner pursuant to the Standard Contract. See Yankee Atomic Power Co. v. United States, 94 Fed. Cl. 678, 725 (2010). Therefore, this court affirms-in-part and reverses-in-part the trial court's damages award. . ."

 

    Clarifying, the Appeals Court said, "The trial court wisely foresaw that this court could reverse its refusal to consider these costs. For this reason, the Court of Federal Claims found that Yankee Atomic had established these costs with reasonable certainty. Thus, this court need not remand for further damages calculations, but only for entry of judgment in an additional amount of $17,021,742. Yankee Atomic's claims for wet storage pool costs and NRC fees were within this court's mandate in Yankee II. As such, the trial court's denial of these costs is reversed. The remainder of the trial court's decision is affirmed. Judgment should be entered to award Yankee Atomic Electric Co. an additional $17,021,742."

 

    Access the complete opinion (click here). [#Haz/Nuclear, #CAFed]

OneBeacon America Insurance Co v. American Motorists Insurance Co

May 17: In the U.S. Court of Appeals, Sixth Circuit, Case No. 10-4530. Appealed from Northern District of Ohio at Akron. OneBeacon American Insurance Company (OneBeacon) and American Motorists Insurance Company (AMICO) were insurers of the B.F. Goodrich Corporation (Goodrich) and, among others, were liable for environmental cleanup at the Goodrich plant in Calvert City, Kentucky. AMICO settled with Goodrich, but OneBeacon's predecessor, Commercial Union Insurance Company (hereinafter OneBeacon), refused to settle and went to trial. A State court jury found for Goodrich, and OneBeacon was ordered to pay $42 million in compensatory damages and $12 million in attorney fees. The State court also denied OneBeacon's request for settlement credits to reflect amounts paid by other insurers, such as AMICO, through settlements with Goodrich. OneBeacon then brought this action for equitable contribution in State court, which AMICO removed to Federal court. The district court adopted the rationale reflected in the State court's settlement-credit decision and granted AMICO's motion for summary judgment. The Appeals Court affirmed the judgment of the district court.

 

    The Appeals Court said further, "Based on decisions by the Ohio courts and the logic expressed in GenCorp, Bondex, and Koppers, we agree that settlement can exhaust a settling insurer's policy, and that such exhaustion precludes a non-settling insurer from seeking equitable contribution from the settling insurers. Such a position best comports with the Ohio Supreme Court's proposition. . . Our conclusion also receives support elsewhere in Ohio law. See Ohio Rev. Code § 2307.28(B) ('The release or covenant discharges the person to whom it is given from all liability for contribution to any other tortfeasor.'). A decision allowing OneBeacon to pursue equitable contribution from AMICO would not only fail to encourage settlements, it would actively discourage such settlements. An insurer would have no incentive to settle with a policyholder if it knew that it would be liable to another insurer down the road. And an insurer considering going to trial would be economically rational in doing so if the expected value of prevailing at all exceeds the expected cost of defending the lawsuit."

 

    Access the complete opinion (click here). [#Remed, #CA6]

 

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USA v. J. Pruett, et al

May 15: In the U.S. Court of Appeals, Fifth Circuit, Case No. 11-30572. Appealed from the United States District Court for the Western District of Louisiana. J. Jeffrey Pruett, the president and chief executive officer of both Louisiana Land & Water Co., and LWC Management, who own and operate numerous wastewater treatment facilities, were charged with knowingly violating the Clean Water Act. After a ten-day trial, they were convicted on multiple counts and the Appeals Court affirmed the convictions and sentences.

 

    The seventeen-count indictment charged four broad categories of offenses, all in violation of 33 U.S.C. §§ 1311(a), 1342, and 1319(c)(2)(A): (1) failure to provide proper operation and maintenance of the facilities; (2) failure to maintain monitoring results as required by the permits; (3) discharge in excess of effluent limitations; and (4) unpermitted discharge. Several counts were dismissed on the government's motion.

 

    In part of its decision, the Appeals Court said, "The district court rejected the defendant's argument that gross negligence was required under the statute, and this court affirmed. The O'Keefe court explained, 'when the plain meaning of the statute is clear on its face, courts are required to give effect to the language of the statute according to its terms.' Id. at 279. The court then evaluated § 1115, and found 'nothing in the statute's terms suggesting that the words "misconduct, negligence or inattention," were ever meant to imply gross negligence or heat of passion . . . .' Id. This rationale is equally applicable to § 1319(c)(1)(A), and bolsters our conclusion that this subsection imposes an ordinary negligence standard."

 

    The district court imposed the following fines on each Appellant, jointly and severally: (1) $310,000 for Pruett, (2) $300,000 for LLWC, and (3) $240,000 for LWC Management. Appellants objected to these fines on various grounds. The Appeals Court said "the fines imposed upon Appellants were reasonable."

 

    Access the complete opinion (click here). [#Water, #CA5]

 

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North Carolina Wildlife v. North Carolina Dep't of Transportation

May 3: In the U.S. Court of Appeals, Fourth Circuit, Case No. 11-2210. Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. The North Carolina Department of Transportation and the Federal Highway Administration (collectively, the Agencies) recently approved construction of a new twenty-mile toll road in North Carolina linking Mecklenburg and Union Counties -- the Monroe Connector Bypass. Seeking to enjoin construction of the toll road, the North Carolina Wildlife Federation, Clean Air Carolina, and Yadkin Riverkeeper (collectively, the Conservation Groups) filed this suit, contending that the process by which the Agencies approved the road violated the National Environmental Protection Act (NEPA).

 

    The district court granted summary judgment to the Agencies. The Conservation Groups appealed. The Appeals Court said, "Because the Agencies failed to disclose critical assumptions underlying their decision to build the road and instead provided the public with incorrect information, they did indeed violate NEPA. Accordingly, we must vacate the judgment of the district court and remand for further proceedings consistent with this opinion."

 

    The Appeals Court ruled, "In sum, although we need not and do not decide whether NEPA permits the Agencies to use MUMPO's [Mecklenburg-Union Metropolitan Planning Organization's] data in this case, we do hold that by doing so without disclosing the data's underlying assumptions and by falsely responding to public concerns, the Agencies failed to take the required 'hard look' at environmental consequences. Shenandoah Valley, 669 F.3d at 196. We therefore vacate the judgment of the district court and remand so that the Agencies and the public can fully (and publicly) evaluate the 'no build' data."

 

    Access the complete opinion (click here). [#Transport, #CA4]

 

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LA Environmental Action Network v. City of Baton Rouge

Apr 17: In the U.S. Court of Appeals, Fifth Circuit, Case No. 11-30549. Appealed from the United States District Court for the Middle District of Louisiana. The Louisiana Environmental Action Network filed a citizen suit against the City of Baton Rouge and the Parish of East Baton Rouge, alleging violations of the Clean Water Act. The Defendants filed a Rule 12(b)(6) motion to dismiss, asserting that the citizen suit was barred under the "diligent prosecution" provision of the Act. 33 U.S.C. § 1365(b)(1)(B). The district court granted the motion to dismiss, but on the ground that the 2002 consent decree mooted Plaintiff's claims.

 

    On appeal, Plaintiff contends that the district court erred in granting the Defendants' motion to dismiss. The Appeals Court reversed the district court's judgment and remanded the case for further proceedings consistent with its opinion. The Appeals Court said, ". . .we conclude that Congress has not provided a clear statement that the "diligent prosecution" bar is jurisdictional. Absent such a clear statement from Congress, we hold that the 'diligent prosecution' bar is a nonjurisdictional limitation on citizen suits. See Arbaugh, 546 U.S. at 516 ('[W]hen Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.').

 

    The Appeals Court explains, "Our conclusion that the CWA's 'diligent prosecution' provision is nonjurisdictional is buttressed by the Seventh Circuit's recent decision in Adkins v. VIM Recycling, Inc., 644 F.3d 483 (7th Cir. 2011). There, the court held that the "diligent prosecution" provision of the Resource Conservation and Recovery Act ('RCRA') -- which is virtually identical to the 'diligent prosecution' provision of the CWA  -- is not jurisdictional. Id. at 492. Applying the guiding principles of the recent Supreme Court cases, the Seventh Circuit concluded that, because 'RCRA's limits on citizen suits appear in separate provisions that do not "speak in jurisdictional terms,"' the RCRA 'diligent prosecution' bar is a nonjurisdictional claim-processing rule. Id. (citations omitted).

 

    "Having determined that the CWA's 'diligent prosecution' bar is not jurisdictional, the question still remains whether the 'diligent prosecution' provision precludes LEAN's action in the present case. The Defendants assert that the EPA's continued enforcement of the 2002 consent decree constitutes diligent prosecution. Indeed, the Defendants point to the extensive remedial measures they are undertaking, as required by the 2002 consent decree, which are projected to cost the Defendants over $1 billion. The Defendants contend that LEAN's 'lawsuit stands as an impediment' to their efforts to achieve compliance with the CWA. However, LEAN asserts that the EPA is not diligently prosecuting the 2002 consent decree, noting the plants' ongoing, noncompliant discharges and the EPA's failure to impose stipulated penalties for these violations. LEAN argues that the issue of 'diligent prosecution' is a fact-intensive question that can only be answered after the proper development of a record. We take no position on these arguments. We think it wise for the district court to determine in the first instance whether LEAN's suit is precluded under the "diligent prosecution" provision. See Breaux v. Dilsaver, 254 F.3d 533, 538 (5th Cir. 2001) ('Although this court may decide a case on any ground that was presented to the trial court, we are not required to do so.') (citation omitted)."

 

    Access the complete opinion (click here). [#Water, #CA5]

 

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Conservancy Of Southwest Florida v. U.S. Fish & Wildlife Service

Apr 18: In the U.S. Court of Appeals, Eleventh Circuit, Case No. 11-11915. Appealed from the United States District Court for the Middle District of Florida. The case concerns a challenge, brought by a number of environmental groups under the Administrative Procedure Act (APA) to the United States Fish and Wildlife Service's denial of petitions to designate critical habitat for the Florida panther. The Endangered Species Act of 1973 (ESA) empowers the Secretary of the Interior to designate "critical habitat" for species of fish, wildlife, or plants that have been identified by the Secretary as "endangered" or "threatened." The practical result of designating critical habitat is that Federal agencies must then, in consultation with the Secretary, ensure not only that their actions are "not likely to jeopardize the continued existence" of such species, but also that they do not "result in the destruction or adverse modification" of critical habitat.

 

    In this case, the environmental-advocacy groups petitioned the Fish and Wildlife Service, an agency within the Department of the Interior, to begin rulemaking to designate critical habitat for the Florida panther and, when the Service denied their petitions, sued in district court under the APA. They claimed that the denial of their petitions was arbitrary and capricious. The Appeals Court ruled, "We conclude, however, that the denial of their petitions is not subject to judicial review under the APA because it is 'committed to agency discretion by law.' 5 U.S.C. § 701(a)(2). Accordingly, we affirm the district court's order of dismissal."

 

    The Appeals Court noted further, "We take care to note that not every agency action that is in some sense discretionary is exempt from APA review. Otherwise there would be little sense in the APA's provision for abuse of discretion review. See Heckler, 470 U.S. at 829, 105 S. Ct. at 1654 (pointing out the tension, noted by some commentators, between a too-literal reading of the statutory phrase 'committed to agency discretion by law' and 5 U.S.C. § 706(2)(A)'s provision for review for abuse of discretion). Rulemaking inevitably requires the exercise of discretion, but courts nevertheless review agency rulemaking under the APA. . ."

 

    Access the complete opinion (click here). [#Wildlife, #CA11]

 

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Consolidated Edison Co. v. Entergy Nuclear Indian Point 2

Apr 16: In the U.S. Court of Appeals, Federal Circuit, Case No. 2010-5155, -5157. Appealed from the United States Court of Federal Claims. The Appeals Court explains that the case involves the Federal government's breach of its commitment to dispose of spent nuclear fuel.

 

    On appeal, there is no dispute as to the government's liability. However, the government and Entergy Nuclear Indian Point 2, LLC (ENIP) separately appealed the decision of the Court of Federal Claims (Claims Court) with respect to damages. See Consol. Edison Co. of N.Y., Inc. v. United States, 92 Fed. Cl. 466 (2010). The government appeals the Claims Court's award of two categories of damages: (1) ENIP's Unit 1 wet storage costs for the continued operation of its Unit 1 spent fuel pool; and (2) regulatory fees paid to the United States Nuclear Regulatory Commission (NRC). The Appeals Court rules, ". . .we reverse the Claims Court's award of damages for ENIP's Unit 1 wet storage costs and ENIP's NRC fees."

    ENIP cross appeals the Claims Court's denial of damages for: (1) ENIP's indirect overhead costs associated with its mitigation activities; and (2) ENIP's cost of financing its mitigation activities. The Appeals Court rules further that, "The issues on cross appeal are controlled by our recent precedents, which were not available to the Claims Court at the time of its decision. These recent precedents require that we reverse the denial of ENIP's overhead costs, and that we affirm the denial of ENIP's cost of capital."

    In further explanation, the Appeals Court notes, "In Yankee Atomic Electric Co. v. United States, we explained that 'damages for breach of contract require a showing of causation,' which in turn necessitates a 'comparison between the breach and non-breach worlds.' 536 F.3d 1268, 1273 (Fed. Cir. 2008). Thus, 'a plaintiff seeking damages must submit a hypothetical model establishing what its costs would have been in the absence of breach.' Energy Nw. v. United States, 641 F.3d 1300, 1305 (Fed. Cir. 2011) (emphasis added).

    "Here, ENIP's hypothetical model contemplated that if DOE had not breached the Standard Contract, the SNF stored in the Unit 1 spent fuel pool would have been removed in 1998.5 Thus, ENIP argues, in a non-breach world, ENIP would not have incurred any costs related to the continued operation of the Unit 1 spent fuel pool after acquiring Indian Point in 2001. The Claims Court agreed. Consol. Edison, 92 Fed. Cl. at 502-03. The problem with ENIP's theory is that it does not reflect the fact that in the non-breach world, Unit 2 SNF, rather than Unit 1 SNF, would have been removed from Indian Point in 1998, when Consolidated Edison still owned the Indian Point facility. . ."

    Access the complete opinion (click here). [#Energy/Nuclear, #Haz/Nuclear, #CAFed]

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