Alaska Survival, et al v. Surface Transportation Board

Jan 23: In the U.S. Court of Appeals, Ninth Circuit, Case No. 12-70218. The Appeals Court explains that in this appeal it considers whether principles of administrative law and a controlling statute governing railroad extensions and applicable protections of environmental laws require it to grant a petition for review of a specialized Agency's decision to permit the extension of a railroad line to Port MacKenzie, Alaska [See WIMS 1/29/12]. Petitioners Alaska Survival, Sierra Club, and Cook Inletkeeper seek review of the Surface Transportation Board's (STB) decision authorizing Alaska Railroad Corporation (ARRC) to construct about thirty-five miles of new rail line between Port MacKenzie, located in Alaska's Cook Inlet, and the railroad's main line, located near Wasilla, Alaska.

 

    The STB granted ARRC an exemption under 49 U.S.C. § 10502 of the Interstate Commerce Commission Termination Act of 1995 (ICCTA) and authorized ARRC to construct the rail line. Petitioners challenge the STB's authority to exempt the railroad from the full licensing provisions of 49 U.S.C. § 10901 and the Agency's compliance with the National Environmental Policy Act (NEPA). Respondents claim that Petitioners did not administratively exhaust the issue of whether the STB properly granted the exemption and that the issue is not properly before us. The Appeals Court said, "we deny the petition for review."

 

    In its final conclusion, the Appeals Court said, "We hold that the procedures of the STB under the ICCTA [Interstate Commerce Commission Termination Act] were sufficient and were satisfied and that there was no error under NEPA because the purpose and need statement was adequate; the agency considered all viable, reasonable alternatives; and the EIS contains a detailed, thorough, and thoughtful discussion of the wetlands impacts and mitigation measures. Concluding that there was no violation of the ICCTA, NEPA, or the APA, we deny the petition for review."

 

    Access the complete opinion (click here). [#Transport, #CA9]

 

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Sierra Club v. U.S. EPA

Jan 22: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1413. On Petition for Review of Final Actions of the United States Environmental Protection Agency.

 

    The Appeals Court explains that in October 2010, U.S. EPA issued a final rule establishing regulations for particulate matter less than 2.5 micrometers (PM2.5) under § 166 of the Clean Air Act (the Act), 42 U.S.C. § 7476. See Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5) -- Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC), 75 Fed. Reg. 64,864 (Oct. 20, 2010). In this rule, the EPA established Significant Impact Levels (SILs) and a Significant Monitoring Concentration (SMC) for PM2.5, screening tools the EPA uses to determine whether a new source may be exempted from certain requirements under § 165 of the Act, 42 U.S.C. § 7475. 75 Fed. Reg. at 64,890– 91, 64,895. Petitioner Sierra Club seeks review of this regulation.

 

    After the Sierra Club filed its petition, the EPA acknowledged that portions of the rule establishing SILs did not reflect its intent in promulgating the SILs, and now requests that we vacate and remand some (but not all) parts of its PM2.5 SIL regulations. The Appeals Court indicated that, "Notwithstanding the EPA's concession, the Sierra Club maintains that the EPA lacks authority to establish SILs and requests that we rule accordingly. The Intervenor, Utility Air Regulatory Group (UARG), on the other hand, urges us to uphold the SIL provisions EPA established, or alternatively, to remand the SIL provisions without ordering that they be vacated."

 

    The Appeals Court said, "Although the EPA conceded that it needs to revise some of the SIL provisions, it continues to assert that the portions of its rule establishing the SMC were valid. For the reasons stated below, we accept the EPA's concession on the SILs, and vacate and remand some portions of the EPA's rule establishing SILs. We further conclude that the EPA exceeded its authority in establishing the SMC, and grant the Sierra Club's petition as to those portions of the EPA's rule."

 

    The Appeals Court explains further that, "After the Sierra Club filed its petition, the EPA acknowledged that portions of the rule establishing SILs did not reflect its intent in promulgating the SILs, and now requests that we vacate and remand some (but not all) parts of its PM2.5 SIL regulations. Notwithstanding the EPA's concession, the Sierra Club maintains that the EPA lacks authority to establish SILs and requests that we rule accordingly. . .

 

    "Despite the EPA's concession, the Sierra Club asserts that vacatur and remand, while warranted, does not fully resolve its challenge, and asks that we determine whether the EPA has authority to promulgate SILs. We disagree with the Sierra Club that it is necessary to decide the EPA's authority to promulgate SILs at this point. To do so would require that we answer a question not prudentially ripe for determination. On remand the EPA may promulgate regulations that do not include SILs or do include SILs that do not allow the construction or modification of a source to evade the requirements of the Act as do the SILs in the current rule. In such an event, we would not need to address the universal disallowance of all de minimis authority. If the EPA promulgates new SIL provisions for PM2.5 and those provisions are challenged, we can then consider the lawfulness of those SIL provisions."

 

    Further, the Appeals Court rules, "We are not now ruling on the methodology the EPA used to determine the SILs. Instead, we are vacating and remanding §§ 51.166(k)(2) and 52.21(k)(2) based on the EPA's lack of authority to exempt sources from the requirements of the Act. Therefore, vacatur and remand of § 51.165(b)(2) is not necessary at this point. Accordingly, we vacate and remand the portions of the EPA's rule regarding SILs, with the exception of those portions codified in 40 C.F.R. § 51.165(b)(2). . .

 

    "We disagree with the EPA that the Sierra Club's petition is time-barred, and we agree with the Sierra Club that the EPA did not have de minimis authority to promulgate the SMC because we hold Congress was "extraordinarily rigid" in mandating preconstruction air quality monitoring. . ."

 

    Finally, the Appeals Court concludes, ". . .we vacate and remand to the agency for further consideration the portions of the EPA's rule addressing SILs, except for the parts of its rule codifying PM2.5 SILs in 40 C.F.R. § 51.165(b)(2). We grant the Sierra Club's petition as to the parts of the EPA's rule establishing a PM2.5 SMC, and vacate them because these parts of the rule exceed the EPA's statutory authority. See 42 U.S.C. § 7607(d)(9)(3)."

 

    Access the complete opinion (click here). [#Air, #CADC]

 

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Honeywell International, Inc. v. U.S. EPA

Jan 22: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1347, consolidated with 10-1348, 10-1349, 10-1350. On Petitions for Review of Rules of the Environmental Protection Agency. The Appeals Court explains that under the Clean Air Act, U.S. EPA administers a cap-and-trade program regulating the production and consumption of hydrochlorofluorocarbons, a class of ozone-depleting pollutants. (It is noted parenthetically: "We frown on excessive use of acronyms, but in a case involving a 24-letter word, we think it appropriate to use HCFCs for hydrochlorofluorocarbons.") This cap-and-trade program entails overall caps on production and consumption of various HCFCs for each year, as well as EPA-administered baseline allowances of HCFCs for each participating company. Companies are then permitted to transfer their

allowances, subject to certain statutory and regulatory restrictions.

 

    The Appeals Court said, "Honeywell and DuPont, whom we refer to collectively as Honeywell, complain that certain 2008 transfers made by their competitors Arkema and Solvay were deemed to permanently increase those competitors' future baseline

allowances of HCFC-22. Because there is an overall cap on HCFC-22 production, this is a zero-sum system: The increased allowances to Arkema and Solvay in turn reduced Honeywell's market share and allowances of HCFC-22. The problem for Honeywell here is that this Court concluded in Arkema Inc. v. EPA that those permanent transfers were valid under the Clean Air Act. 618 F.3d 1, 6-9 (D.C. Cir. 2010). Honeywell believes that Arkema was incorrectly decided. Absent en banc review, we must adhere to circuit precedent. And because Honeywell's other challenges to the 2008 transfers are meritless, we deny the petitions for review."

 

    The Appeals Court said further and concluded, "Honeywell disagrees strongly with this Court's decision in Arkema. For that matter, EPA says that it too disagrees with Arkema. (Intervenors Arkema and Solvay are of course happy with Arkema.) Absent en banc review, we are bound by the Arkema decision. In a roundabout attempt to undermine the now-permanent 2008 transfers, Honeywell also raises longshot procedural challenges to the 2008 transfers themselves. The basic answer to those various arguments is that Honeywell had notice and an opportunity to present its views during EPA's pre-Arkema regulatory proceedings, during the Arkema litigation, and during EPA's subsequent post-Arkema proceedings. Because Honeywell had notice and an opportunity to comment, and EPA's reasonable interpretation of its regulation controls, see Auer v. Robbins, 519 U.S. 452, 461 (1997), its procedural objections to the 2008 transfers are unavailing. As is apparent from the briefing, Honeywell's real problem here is the permanence of the 2008 interpollutant transfers by Arkema and Solvay and the altered HCFC-22 allowances for the 2010-2014 period. In other words, Honeywell's real problem is Arkema. But a panel cannot remedy that problem."

 

    Access the complete opinion (click here). [#Air, #Climate, #CADC] 

 

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Boston Gas Company v. Century Indemnity Company

Jan 18: In the U.S. Court of Appeals, First Circuit, Case No. 11-1931. Appealed from the U.S. District Court for the District of Massachusetts, Boston. In this very detailed and highly complicated decision the Appeals Court explains that this appeal is the latest chapter in a long-running dispute between Boston Gas Company (Boston Gas) and one of its insurers, Century Indemnity Company (Century). What's more, the insured's activities giving rise to the dispute stretch back more than a century. During the latter part of the 19th and well into the 20th century, Boston Gas produced gas fuel at facilities known as manufactured gas plants (MGPs). Faced with liability under Massachusetts law for the costs of investigating and remediating environmental contamination discovered at a number of former MGP sites, see Mass. Gen. Laws ch. 21E (2006), Boston Gas filed this diversity action seeking a declaratory judgment as to Century's obligations under general commercial insurance (GCL) policies issued to Boston Gas by Century's predecessor and damages for breach thereof.

 

    As relevant to the appeal, jury trials were held with respect to two of the sites included in the cleanup, the Everett and Commercial Point sites. Boston Gas operated MGPs at the Everett and Commercial Point sites during the periods 1908-1969 and 1886-1930, respectively, and insured both sites with Century from 1951-1969. The Everett site litigation was the first to go to trial. The jury awarded Boston Gas over $6.1 million in past remediation expenses, and the district court issued a declaratory judgment obligating Century to pay all future costs associated with the cleanup of the site.

 

    On appeal, a central issue involved the proper method under Massachusetts law for allocating liability for long-term environmental contamination where the defendant GCL insurer had provided coverage for the risk for only a portion of the time during which the contamination took place. Based on an existing intermediate state court decision, the district court had applied an "all sums" or "joint and several" allocation method, whereby an insurer is responsible for an insured's total remediation costs as long as some property damage for which the insured is liable occurs during the policy period. Noting that the Commonwealth's highest court had not yet ruled on the issue, which was "determinative of the scope of Boston Gas' claim," a panel of this court certified the allocation question to the Supreme Judicial Court (SJC).

 

    The SJC rejected an "all sums" approach in favor of pro rata allocation, pursuant to which each insurer is obligated to pay only those costs associated with damage occurring during its policy period. . . The court held that the preferred method for allocating damages on a pro rata basis is a "fact-based" determination of the losses occurring during each policy period, but in the event that the evidence does not permit such an allocation, losses should be allocated based on the insurer's "time on the risk."

 

    The trial judge deferred ruling on post-trial motions and entry of final judgment pending the outcome of the Everett appeal. The Appeals Court said, "Those motions now having been resolved, and entry of judgment in the Commercial Point litigation stipulated to, Boston Gas appeals on multiple grounds. For the reasons set forth below, we affirm in all respects." Further, the Appeals Court concluded the following:

"Discerning no abuse of discretion in the district court's application of judicial estoppel, we affirm its entry of judgment allocating damages evenly across the 121-year span from the time of plant operations to trial. Consequently, Century is, as was found below, liable for 14.9% of the sum total of Boston Gas's recoverable costs."

 

"A reasonable jury could determine from this evidence that inhalation risks related solely to Boston Gas's use of its own property and presented no potential for third party impact. Absent such potential, Boston Gas's motion for judgment as a matter of law on the owned property exclusion was properly denied."

 

"Unable to reconcile the damages award with the arguments and evidence presented at trial, the district court properly vacated the verdict as being against the clear weight of the evidence. While Boston Gas accuses the district court of improperly invading the province of the jury, we view its decision to grant a new trial as designed to avoid just that. In short, there was no abuse of discretion."

    Finally, the Appeals Court concludes, ". . .we affirm the district court in all respects and remand for further proceedings in accordance with this opinion. We do so noting, once again, that '[t]his litigation, plainly unusually complicated, has been well handled by the district court,' and urge 'the parties . . . to consider whether a settlement between them is feasible before more time and expense is devoted to further litigation.' Boston Gas, 588 F.3d at 23-24."

 

    Access the complete opinion (click here). [#Remed, #CA1]

 

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Grocery Manufacturers Association v. U.S. EPA

Jan 15: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1380, Consolidated with 10-1414, 11-1002, 11-1046, 11-1072, 11-1086. On Petitions for Rehearing En Banc. Plaintiffs seek a hearing of the full Court of Appeals following a split 2-1 decision of the Appeals Court in the case for review of two EPA decisions approving the introduction of E15 -- a blend of gasoline and 15 percent ethanol -- for use in select motor vehicles and engines [See WIMS 8/17/12]. In the controversial decision, the majority Appeals Court ruled, "Because we hold that no petitioner has standing to bring this action, we dismiss all petitions for lack of jurisdiction."

 

    In the order, the Appeals Court indicates, "The petition of the American Petroleum Institute and the Food Petitioners for rehearing en banc; the petition of the Engine Products Group for rehearing en banc; and the petition of American Fuel & Petrochemical Manufacturers and International Liquid Terminals Association for rehearing en banc, and the responses to the petitions were circulated to the full court, and a vote was requested. Thereafter, a majority of the judges eligible to participate did not vote in favor of the petitions. Upon consideration of the foregoing, it is ordered that the petitions be denied."

 

    Judge Kavanaugh indicated that he would grant the petitions and issued a statement dissenting from the denial of the petition for rehearing en banc. In his dissent, Judge Kavanaugh said, "This case concerns a challenge to EPA's E15 waiver decision. The E15 waiver, in conjunction with the statutory renewable fuel mandate, will require petroleum producers to refine and sell E15, a blend of gasoline that contains 15 percent ethanol. The E15 waiver also will increase the demand for corn and thus increase corn prices for food producers. Two industry groups separately challenged the E15 waivers -- the food producers who will pay higher prices for corn and the petroleum producers who will be forced to refine and sell E15. They contended that the E15 waiver will palpably and negatively affect the American food and petroleum industries, with corresponding impacts on American consumers. And they argued that the E15 waiver is unlawful because it exceeds EPA's statutory authority.

 

    "Even though EPA did not raise a challenge to the standing of the food producers or the petroleum producers, the panel dismissed the case on standing grounds. The panel determined that the food producers have Article III standing but lack prudential standing because, according to the panel, the food producers are not within the zone of interests under the relevant ethanol-related statute. The panel separately held that the petroleum producers lack Article III standing. We must reach the merits if either the food producers or the petroleum producers have standing. In my view, both groups plainly have standing."

 

    In a footnote to his dissent, Judge Kavanaugh noted, "Although not my focus here, I also note that the E15 waiver apparently will harm some cars' engines, a point made by a third set of petitioners in this case (the engine manufacturers). Indeed, just a few weeks ago, the American Automobile Association warned of the damage E15 will cause to car engines and took the extraordinary step of publicly asking EPA to block the sale of E15." [See Gary Strauss, AAA Warns E15 Gasoline Could Cause Car Damage, USA TODAY, November 30, 2012.]

   

    The American Fuel & Petrochemical Manufacturers (AFPM), General Counsel Rich Moskowitz, responded to the decision saying, "We are disappointed that the DC Circuit will not rehear the case and will let stand a procedural block that prevents the court from reaching the merits of this important issue. We remain concerned that EPA's partial waiver will result in significant misfueling and will harm consumers. EPA has authorized the sale of an ethanol blend that virtually every automobile manufacturer has warned will damage existing vehicles. We are analyzing the decision and will determine whether to seek review by the Supreme Court. Judge Kavanaugh issued a strong dissent based on EPA's acknowledgment that E15 damages cars and specifically referenced a recent AAA warning calling upon EPA to block the sale of E15." 

 

    AFPM indicated that several studies have shown that E15 causes engine damage to passenger vehicles, boats and outdoor power equipment, including chainsaws and lawnmowers, and has led AFPM and other industry groups to raise concerns about a fuel not approved for use by the manufacturers of more than 228 million vehicles on the road today. A recent survey by the American Automobile Association (AAA) reported that 95 percent of consumers surveyed had not heard of E15 gasoline which lends credence to the potential for misuse and engine harm as well as creating safety, liability and warranty issues.

 

    Access the order denying an en banc hearing and the dissent (click here). Access the complete original opinion and dissents (click here). Access a release from AFPM (click here). [#Energy/Ethanol, #CADC]

 

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American Road & Transportation v. U.S. EPA

Jan 15: In the U.S. Court of Appeals, D.C. Circuit, Case No. 11-1256. On Petition for Review of Final Agency Action of the Environmental Protection Agency. In its introductory summary, the Appeals Court explains, "The American Road & Transportation Builders Association has repeatedly sought judicial review of Environmental Protection Agency regulations relating to nonroad engines and vehicles. But ARTBA began bringing those challenges several years after the regulations were promulgated. As we have explained before, ARTBA's challenge to EPA's regulations is time-barred under the Clean Air Act's 60-day filing period. See American Road & Transportation Builders Association v. EPA, 588 F.3d 1109, 1113 (D.C. Cir. 2009). In this case, ARTBA is also challenging EPA's approval of California's State Implementation Plan, but that challenge must be brought in the Ninth Circuit. We therefore dismiss the petition for review."

 

    The case involves Section 209(e) of the Clean Air Act which preempts certain state regulation of nonroad engines. See 42 U.S.C. § 7543(e). The term "nonroad engine" covers a wide variety of internal combustion engines, including those found in tractors, construction equipment, lawnmowers, locomotives, and marine craft. In 2002, ARTBA petitioned EPA to amend its Section 209(e) regulations to broaden their preemptive effect. In 2008, EPA rejected that petition. Shortly thereafter, ARTBA brought suit in this Court to challenge the denial of its petition. The D.C. Circuit dismissed that suit for lack of jurisdiction, holding that ARTBA's claims were time-barred under the Clean Air Act.

 

    The latest appeal by ARTBA challenges two EPA actions: (i) EPA's approval of revisions to the California SIP; and (ii) EPA's denial of ARTBA's petition to amend the Section 209(e) preemption regulations. On the first action the Appeals Court ruled, "In this case, then, a challenge to the California SIP revision must be -- and, notably, already has been -- filed in the Ninth Circuit. See Petition for Review, American Road & Transportation Builders Association v. EPA, No. 11-71897 (9th Cir. July 8, 2011). Because venue is proper in the Ninth Circuit and not in this Court, we dismiss ARTBA's challenge to EPA's approval of the California SIP revision."

 

    On the second action, the Appeals Court reiterated its decision in ARTBA I and said further, ". . .if the mere application of a regulation in a SIP approval were sufficient to constitute an after-arising ground and trigger a new 60-day statute of limitations period, ARTBA I's concerns about preserving "the consequences" of failing to bring a challenge within 60 days of a regulation's promulgation would be meaningless. See ARTBA I, 588 F.3d at 1113; see also National Mining, 70 F.3d at 1351 ('Such an interpretation would make a mockery of Congress' careful effort to force potential litigants to bring challenges to a rule issued under this statute at the outset . . . .'). There would be no pressure to challenge regulations within the 60-day period after their promulgation if any petitioner could simply wait to test the substance of those regulations once EPA applies them, for example, in an approval of a state SIP revision – as ARTBA has attempted to do here. Therefore, as we did in ARTBA I, we hold that ARTBA's challenge to EPA's Section 209(e) regulations is time-barred."

 

    Access the complete opinion (click here). [#Air, #CADC]

 

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U.S. v. El Dorado County

Jan 11: In the U.S. Court of Appeals, Ninth Circuit, Case No. 11-17134. Appeal from the United States District Court for the Eastern District of California. A staff summary of the case indicates that the panel dismissed for lack of jurisdiction, due to lack of a final appealable order, an appeal from the district court's order suspending a consent decree between the Federal government and El Dorado County, pending further hearings. The panel held that if a district court order deals with a consent decree that has injunctive effects, an appeal from it should be analyzed under the requirements set out in Carson v. Am. Brands, Inc., 450 U.S. 79 (1981). The panel held that the Federal government failed to satisfy the Carson factors, and concluded that the court lacked jurisdiction at this time to review the district court's order.

 

    The Appeals Court said, "The United States of America (government) entered into a consent decree with El Dorado County (County) concerning the clean up of an abandoned landfill located near Lake Tahoe in California. The County shortly thereafter moved to modify the decree, and the district court suspended the decree pending further hearings. The government appealed. The County later moved to dismiss for lack of jurisdiction, arguing that the order was not appealable because it is nonfinal. We have jurisdiction to determine our own jurisdiction, Special Invs., Inc. v. Aero Air, Inc., 360 F.3d 989, 992 (9th Cir. 2004), and we dismiss the appeal."

 

    Further, the Appeals Court ruled, "The government has not shown that it will suffer serious, perhaps irreparable harm if we do not review the district court's order now. The government argues that if the order freeing the County from its obligations is allowed to stand even temporarily, further damage to the landfill site is a serious possibility. However, at worst, the government must pay for the clean up activities itself and then be reimbursed. This kind of harm does not qualify. . .

 

    "Nor has the government shown that the order can only be challenged by immediate appeal. Once the district court has held its evidentiary hearing and enters the final judgment, the government can appeal the same legal issues. The government argues that the order can only be appealed now because the project will fail if the County is not required to continue clean up. This is merely a repetition of the government's harm arguments, and fails for the same reason. As stated before, at worst, the government must pay for the clean up itself and then be reimbursed. That situation has no impact on the reviewability of the underlying legal issue. Because the government has failed to satisfy the Carson factors, we do not have jurisdiction at this time. The motion to dismiss is therefore granted."

 

    Access the complete opinion (click here). [#Solid, #Remed, #CA9]

 

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