Thursday, October 30, 2014
On October 30, the Ninth Circuit (Noonan, Wardlaw, Fisher) issued a decision in NRDC v. Department of Transportation, No. 12-56467. This case arose out of approvals by the U.S. and California Departments of Transportation of an elevated expressway connecting the Ports of Los Angeles and Long Beach to the I-405 Freeway. The expressway is intended to ease traffic congestion and thereby reduce pollutant emissions from port traffic. The Clean Air Act prohibits federal agencies from supporting or approving activities that do not conform to the applicable State Implementation Plan. 42 U.S.C. § 7506(c)(1)(B). EPA regulations implementing this provision require a “hot-spot analysis,” which looks for whether a project will lead to localized pollutant concentrations that violate air quality standards. 40 C.F.R. § 93.101. As part of their process for approving the expressway project at issue in this case, the agencies conducted a hot-spot analysis, which they based on data from a receptor five miles from the project.
NRDC and two other environmental groups—East Yard Communities for Environmental Justice and Coalition for a Safe Environment—sued, contending that the agencies’ analysis was faulty, and violated the Clean Air Act and NEPA. The Ninth Circuit rejected NRDC’s argument that the Clean Air Act’s conformity provision, which refers to a project’s impacts on air quality levels in “any area,” required the agencies to evaluate particulate matter concentrations in areas directly adjacent to the project. Instead, the court held, the term “any area” is ambiguous, and the agencies did not err by interpreting it to mean an area broader than the immediate vicinity of the project. As to NRDC’s NEPA claim, the court held that the Environmental Impact Statement (EIS) appropriately relied on the particulate matter standard in place at the time of the Conformity Determination, rather than a new standard that went into effect one year later, and discussed the new standard. The EIS also adequately disclosed the likely health impacts of the expressway, including an acknowledgement that similar transportation projects usually increase particulate matter concentrations in areas immediately adjacent to the project.
Tuesday, October 28, 2014
Cosponsored by the Environmental Law Institute and Stetson University College of Law
November 13, 2014
11:00 am - 6:00 pm
Stetson University College of Law
Gulf Port, FL
From phosphate mining to oil and gas exploration, these activities can be both land- and water-intensive uses that can impact Florida’s remaining wetlands. This workshop will explore the wetland impacts from various types of mining operations and look at how enforcing wetland permits and mitigation is a crucial component to protecting Florida wetlands. More information is available here.
Friday, October 24, 2014
On October 24, the D.C. Circuit (Henderson, Rogers, Griffith) issued a decision in National Oilseed Processors Association v. OSHA, No. 12-1228. In 2012, OSHA revised its Hazard Communication Standard, 29 C.F.R. § 1910.1200, which requires employers to communicate with their employees regarding chemical hazards in the workplace. Among other things, the 2012 Standard designates combustible dust as a hazardous chemical subject to regulation under the Standard. A group of businesses that handle and process grain and other agricultural products filed a petition for review challenging OSHA’s rule as it applies to combustible grain dust. The court of appeals denied the petition, holding (a) that OSHA had provided adequate notice in its proposed rule that the Standard would cover combustible grain dust; and (b) that OSHA adequately defined combustible dust in the Standard.
Wednesday, October 22, 2014
Tenth Circuit Denies Petition for Review Challenging EPA’s Approval of Regional Haze Program for Colorado Plateau
On October 21, the Tenth Circuit (Bacharach, Seymour, Murphy) issued a decision in WildEarth Guardians v. EPA, No. 12-9596. Five environmental organizations filed a petition for review challenging an EPA rule approving a regional cap-and-trade program to improve visibility over the Colorado Plateau by regulating sulfur dioxide emissions. The Clean Air Act’s “regional haze” program requires major existing sources that contribute to visibility impairment to install and operate “best available retrofit technology” (BART). 42 U.S.C. § 7491(b)(2)(A). EPA regulations allow states to employ an alternative, cap-and-trade regulatory program, providing that it is at least as effective as BART in improving visibility. 40 C.F.R. § 51.309. EPA approved such an alternative program for the Colorado Plateau, on the ground that the program would yield better results than BART because it covered sources that would not have been subject to BART; encompassed emissions from new sources which would not have been subject to BART; and encouraged sources to expedite equipment upgrades and to operate below full capacity. The petitioners raised a series of fact-intensive arguments against EPA’s approval of the Colorado Plateau program, arguing that it does not achieve greater reasonable progress than implementation of BART; will not achieve reasonable progress toward eliminating visibility impairment; and failed to analyze emissions from a particular New Mexico coal plant. The Tenth Circuit rejected each of the petitioners’ arguments. Some specific points were waived. The court dismissed the remainder based on a detailed examination of EPA’s reasoning.
Wednesday, October 15, 2014
Eleventh Circuit Holds that Legislative Amendment to North Carolina Statute of Repose for Groundwater Contamination Claims Cannot Apply Retroactively
On October 14, the Eleventh Circuit (Tjoflat, Wilson, Bucklew (by designation)) issued a decision in Bryant v. United States, No. 12-15424. This appeal arose out of multi-district litigation in which plaintiffs sued the United States under the Federal Tort Claims Act, alleging that they experienced adverse health effects from toxic substances in the drinking water at Camp Lejeune, North Carolina. The United States moved to dismiss the case based on North Carolina’s ten-year statute of repose. On certified interlocutory appeal under 28 U.S.C. § 1292(b), the Eleventh Circuit addressed (a) whether CERCLA preempts the North Carolina statute of repose, and (b) whether the North Carolina statute of repose contains an exception for latent diseases. The first question was easy; during the pendency of the appeal, the Supreme Court decided CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014), which held that CERCLA does not preempt North Carolina's statute of repose. As to the second question, the Eleventh Circuit held that, at the time the plaintiffs brought their suit, the North Carolina statute of repose contained no exception for latent diseases. After the Supreme Court decided Waldburger, however, the North Carolina legislature enacted an exception to the statute of repose that applies to tort claims based on groundwater contamination and directed that the exception should apply to actions filed, arising, or pending on the effective date of the exception. N.C. Gen. Stat. Ann. § 130A–26.3.8. On its face, therefore, the 2014 legislation would validate the plaintiffs’ claims. The Eleventh Circuit held, however, that the 2014 legislation could not apply retroactively without depriving the United States of vested rights. Despite language in the 2014 legislation that characterized it as “clarifying” the statute of repose, the court of appeals held that the legislation enacted a new exception that did not merely clarify ambiguities.
Tuesday, October 14, 2014
D.C. Circuit Upholds Nuclear Regulatory Commission’s Transfer of Regulatory Authority under Atomic Energy Act to State of New Jersey
On October 14, the D.C. Circuit (Garland, Srinivasan, Sentelle) issued a decision in Shieldalloy Metallurgical Corp. v. Nuclear Regulatory Commission, No. 13-1259. This case is the latest chapter in the lengthy history of a dispute between Shieldalloy and regulators over radioactive byproducts at Shieldalloy’s manufacturing facility in Newfield, New Jersey. By the time Shieldalloy stopped its operations at the facility in 1998, it had accumulated over 65 thousand cubic meters of radioactive materials at the site, stored in uncovered waste piles. The Nuclear Regulatory Commission (NRC) regulates disposal of radioactive waste under the Atomic Energy Act. Shieldalloy repeatedly asked the NRC for permission to dispose of its radioactive materials on site, with limitations on future use of the site, but the agency refused. Meanwhile, the State of New Jersey asked the NRC to transfer regulatory authority under the Atomic Energy Act to the State. Shieldalloy apparently worries that the State will regulate its site more stringently than the NRC and has opposed the transfer. Twice the NRC granted the transfer, only to have Shieldalloy challenge the NRC’s decision and the D.C. Circuit set the transfer aside. In 2013, the NRC granted the transfer for a third time, and this one was the charm. Today, the D.C. Circuit held that New Jersey’s regulatory program approved by the NRC adequately protects public health and safety and is consistent with the NRC’s own regulatory regime, including an option to decommission a site with restricted future use but also a preference for removal of radioactive materials to allow unrestricted future use.
Wednesday, October 8, 2014
On October 6, the Ninth Circuit (Farris, Nelson, Nguyen) issued a decision in Sturgeon v. Masica, No. 13-36165. Plaintiff John Sturgeon used a personal hovercraft on moose hunting trips on the Nation River, part of which lies within the Yukon–Charley Rivers National Preserve in Alaska. A National Park Service regulation bans hovercrafts on waters located within the boundaries of the National Park System. 36 C.F.R. § 2.17(e). Sturgeon brought suit to challenge the regulation, arguing that § 103(c) of the Alaska National Interest Lands Conservation Act (“ANILCA”) precludes the Park Service from regulating use of the Nation River, which he claimed had been conveyed to the State of Alaska. ANILCA § 103(c), 16 U.S.C. § 3103(c), provides that no Alaskan lands which have been conveyed “to the State, to any Native Corporation, or to any private party shall be subject to the regulations applicable solely to public lands within [conservation system units].” The Ninth Circuit, after holding that Sturgeon had standing to bring his claim, held that the Park Service’s regulation against hovercrafts applied to all lands, whether federally owned or not, within park boundaries and therefore was not a regulation “applicable solely to public lands” within the meaning of ANILCA § 103(c). Accordingly, regardless whether the lands underlying the Nation River had been conveyed to the State, ANILCA § 103(c) did not preclude the hovercraft regulation.
On September 29, FERC issued an order authorizing Dominion Cove Point LNG, a subsidiary of Dominion Resources, to site, construct, and operate facilities for the liquefaction and export of domestically produced natural gas at Dominion’s existing liquefied natural gas (LNG) import terminal in Calvert County, Maryland, and to construct and operate related gas transportation facilities in northern Virginia. The Cove Point LNG Terminal was originally authorized in 1972 as an import terminal. The recent surge in domestic natural gas production has created market conditions whereby Dominion has determined it is more profitable to export LNG through Cove Point than to use the facility for imports. FERC issued its order pursuant to its authority under Natural Gas Act § 3, 15 U.S.C. § 717b (requiring FERC authorization to export natural gas), and Natural Gas Act § 7(c), 15 U.S.C. § 717f (requiring FERC authorization to extend or improve natural gas transportation facilities).
The Cove Point project is significant in several respects. First, it is another manifestation of the remarkable change in the world market for natural gas, with increases in domestic production leading to steep decreases in natural gas imports into the United States. The United States is projected to become a net natural gas exporter by 2020. The conversion of Cove Point from LNG imports to exports is not unique. FERC has previously approved three other export projects, the Maritime Administration has approved three others, and thirteen more export terminals have been proposed. The New York Times recently published an article about plans to convert the Golden Pass LNG Import Terminal in Texas to an export facility.
Second, there is considerable controversy regarding the effects of increasing natural gas exports on domestic natural gas prices. In 2012, the Energy Information Administration projected that gas exports would increase average electricity prices by 2-3%. Senator Ron Wyden (D-Ore.) and others have expressed concern that the EIA’s projects are unrealistic and that exports may have adverse effects on the U.S. economy. Proponents of natural gas exports acknowledge some modest effect on domestic natural gas prices (along the lines of EIA’s projections) but emphasize the net macroeconomic benefits of increased exports.
Third, environmental groups worry that exports will further increase natural gas production, leading to increased fossil fuel production (with resulting climate and other environmental impacts). The Sierra Club’s Beyond Natural Gas Campaign, Chesapeake Climate Action Foundation, Earthjustice, and Bill McKibben all have vocally opposed the Cove Point Liquefaction Project on environmental grounds. FERC’s Environmental Assessment for the Cove Point Liquefaction Project did not analyze how exports from Cove Point would affect the development of upstream natural gas production, transportation, and distribution facilities because of the uncertainties of such development. Environmentalists have been particularly critical of this omission. The controversy raises both factual and legal questions. Factually, will LNG exports have a significant impact on domestic gas production? Legally, if there is an impact, to what extent are agencies that authorize LNG exports obligated to consider the environmental impacts of such production? Across a range of areas including but not limited to energy projects, environmentalists have long pushed agencies to consider broader, systemic impacts of their decisions. Agencies have generally resisted, focusing on more immediate impacts that involve less uncertainty. The extent to which NEPA documents are a useful and appropriate tool for assessing systemic impacts will continue to generate controversy in the LNG export issue and other environmental issues for quite some time.
Thursday, October 2, 2014
On Tuesday, Arizona federal district court judge David G. Campbell dismissed claims by several mining associations, Utah and Arizona counties, and the Nuclear Energy Institute, seeking to set aside the Obama Administration’s January 9, 2012 withdrawal of over one million acres of federal lands surrounding Grand Canyon National Park from uranium mining. This decision protects the Colorado River watershed and several Havasupai sacred sites from the direct and indirect impacts of uranium mining by preventing the development of thousands of claims that have been located on federal lands near the park since the latest spike in uranium prices in 2004. The Center for Biological Diversity, along with the Grand Canyon Trust, the Havasupai Tribe, the National Parks Conservation Association, and the Sierra Club all intervened in support of Interior’s withdrawal.
In their appeal to the district court, the plaintiffs, American Exploration & Mining Association, Gregory Yount, the Nuclear Energy Institute, the National Mining Association, the Arizona Utah Local Economic Coalition, and Quaterra Resources, Inc., raised claims under NEPA, FLPMA, and the Establishment Clause. First, they argued that BLM violated NEPA by failing to consult with local governments, and by failing to address “scientific controversies” in the final Environmental Impact Statement. Noting that the BLM had given two of the counties cooperating agency status during the EIS process, and that the agency gave ample opportunity for the plaintiffs to appear and consult at “two public scoping meetings, five meetings with cooperating agencies, and three meetings or hearings with the [counties] specifically,” the court ruled that BLM had provided more than adequate opportunity to consult. Moreover, BLM had included the results of several county studies on the proposed withdrawal in both the draft EIS and the final EIS, and had reconciled any scientific discrepancies regarding location and quantity of uranium reserves consistent with NEPA’s requirements.
Second, the plaintiffs argued that the BLM’s withdrawal was for an “invalid purpose” under FLPMA because the record did not support the BLM’s stated reasons for the withdrawal, which included uncertainty regarding the impacts of uranium mining on water resources. Also, they argued that BLM had unlawfully considered the impact of mining activity on cultural and tribal resources, the need for further study on wildlife impacts, and the existence of valid claims within the withdrawal area not affected by the action. The court disagreed, finding that although there was some uncertainty in the record about how mining might impact water, wildlife, and other resources, “DOI decided to err on the side of protecting the environment,” satisfied the requirements of FLPMA section 204. This precautionary approach was supported by the NEPA Record of Decision, which showed uranium and arsenic in soil and water samples taken in the vicinity of several active mining sites, as well as trace amounts of iron, lead, manganese, radium, sulfate and uranium.
The plaintiffs also argued that the final EIS undervalued the uranium deposits in the withdrawn sections because it included valuations based on a 1990 USGS study, which violated FLPMA’s requirement that a withdrawal “fully disclose the value of minerals to be closed to development.” The court disagreed, holding that it was acceptable for the agency to engage USGS experts to adjust the 1990 predictions, without conducting on-the-ground surveys of the million acres proposed to be withdrawn. Noting that “nothing in FLPMA or its implementing regulations requires that the estimate be exact,” the court deferred to the agency’s determination of the most accurate scientific estimates regarding in-ground uranium reserves.
Third, one of the plaintiffs argued that the cultural resource justification for the withdrawal violated the Establishment Clause of the First Amendment because it elevated Havasupai religious concerns above other, secular interests. Applying the test from Lemon v. Kurtzman, the court held that the purpose of the withdrawal was secular, and there was “no record evidence” demonstrating any religious purpose. In response to an argument that the withdrawal process gives Native American governments “veto power” to prohibit certain land uses and “creates a preference for American Indian religious activities” on federal lands, the court held that the withdrawal did not primarily affect Havasupai religious interests, but instead, primarily affected uranium mineral resources. Also, the court found that nothing in the withdrawal process elevated Native American influence over the federal government’s management of the area in question above other interests.
In sum, this decision supports a precautionary approach to mineral withdrawals. It affirms the agency’s choice, “when faced with uncertainty due to a lack of definitive information, and a low risk of significant environmental harm,” to temporarily withdraw land from mineral entry before conducting a NEPA review. Although this may run counter to the general policy underlying NEPA, in this instance, BLM’s action prevented the development of thousands of uranium claims until the agency could fully study the impacts of those claims and determine whether to make a full withdrawal. As the district court noted, if the BLM waited to act until after the NEPA review process was complete, the claims may have become vested and at that point, it would have been too late to protect the Colorado River watershed and the Havasupai sacred sites.
- Hillary M. Hoffmann
Monday, September 29, 2014
On September 26, the D.C. Circuit (Brown, Wilkins, Silberman) issued a decision in Smith Lake Improvement District and Stakeholders Association v. FERC, No. 13-1074. When FERC renewed Alabama Power’s license for the Warrior hydropower project, an organization of lakefront property owners objected to FERC’s decision to maintain existing lake levels. The association filed a request for rehearing of FERC’s relicensing order, and FERC reaffirmed its order. The association then filed another rehearing request, which FERC summarily denied on the ground that it raised issues already addressed in the first rehearing order. The association then petitioned for review in the D.C. Circuit, within sixty days of the second rehearing order but 124 days after the first rehearing order. Thus, if the Federal Power Act’s sixty-day statute of limitations began running from the first rehearing order, the association’s petition was untimely. If the limitations period ran from the second rehearing order, the petition was timely. Alabama Power moved to dismiss the petition as untimely. FERC disagreed and sided with the petitioner on the issue, arguing that all subsequent rehearing petitions should toll the limitations period unless they are “vexatious.”
The D.C. Circuit granted Alabama Power’s motion to dismiss the petition for review, holding that a second request for rehearing tolls the statutory sixty-day period for judicial review only if the second request follows a first rehearing order that modifies the results of the original order. Here, because FERC’s first rehearing order did not modify its original order, the association’s second rehearing request did not toll the statutory limitations period, and accordingly the association’s petition for review was untimely. The court acknowledged that its rule places prospective petitioners in somewhat of a dilemma as to whether to file a successive rehearing request with FERC or a petition for review with the court. The D.C. Circuit opined that petitioners unsure of whether a FERC rehearing order has modified a previous order—and therefore tolled the limitations period—should file a petition for review. If the court then determines that the FERC rehearing order did modify the previous order, and a successive rehearing request is in order, then the court “would expect” FERC to allow the petitioner to file a late rehearing request.
Sunday, September 28, 2014
Third Circuit Holds that Natural Gas Act Broadly Authorizes Eminent Domain for Replacement Pipelines Located Outside of Original Right of Way
On September 26, the Third Circuit (Rendell, Chagares, Jordan (dissenting)) issued a decision in Columbia Gas Transmission v. 1.01 Acres, No. 13-4458. The Third Circuit held that, under the Natural Gas Act, the owner of a natural gas pipeline holding a blanket certificate of public convenience and necessity from FERC has a right of eminent domain to obtain easements outside of an existing right of way to replace deteriorating pipeline. Judge Jordan dissented, troubled by what he regarded as a “limitless” reading of the applicable FERC regulations generating a result he regarded as “deeply problematic” and “constitutionally suspect.” The primary point of disagreement amongst the members of the panel was whether FERC had consistently and unambiguously interpreted its regulations not to place any locational limitations on pipeline replacements outside of an original right of way. FERC regulations authorize holders of such certificates to “replace . . . any eligible facility.” 18 C.F.R. § 157.208(a). The panel majority held that “replace” unambiguously includes replacements that involve some relocation. Judge Jordan, on the other hand, regarded the term “replace” as ambiguous, and cited regulatory history that he believed placed limits on the extent to which a replacement facility could be located away from an original facility.
Seventh Circuit Issues Two Decisions Involving Cleanup of Wisconsin’s Lower Fox River and Green Bay Superfund Site
On September 25, the Seventh Circuit (Wood, Kanne, Tinder) issued decisions in two related cases—NCR Corp. v. George A. Whiting Paper Co., No. 13-2447, and United States v. P.H. Glatfelter Company, No. 13-2436—both arising out of the cleanup of the Lower Fox River and Green Bay Superfund Site in northeastern Wisconsin. These are both lengthy decisions raising numerous issues that are likely to be important precedent in other future CERCLA cases.
The Whiting Paper case involved a CERCLA contribution claim brought by NCR Corporation, one of the potentially responsible parties (PRPs) for the Site, against other PRPs. The other PRPs, in turn, brought contribution counterclaims against NCR. The district court held that NCR was not entitled to equitable contribution from the other PRPs, and that the other PRPs were entitled to equitable contribution from NCR. The court of appeals, in an opinion authored by Judge Wood, addressed at least seven significant issues, many of which were important questions of CERCLA law.
1. Cost recovery vs. contribution.
a. The court of appeals held that NCR was limited to a contribution (as opposed to cost recovery) claim, because NCR’s costs were incurred during or following government suits and administrative consent orders to enforce EPA administrative orders.
b. Another company, Appvion, presented a thornier issue, apparently an issue of first impression post-Atlantic Research. Appvion was initially identified as a PRP and paid response costs in that capacity, then later was determined not to be liable under CERCLA, but is liable as an indemnitor of NCR. Appvion sued to recover response costs it paid while it was regarded as a PRP. The court of appeals, citing Chubb Custom Insurance Co. v. Space Systems/Loral, Inc., 710 F.3d 946 (9th Cir. 2013), noted that normally indemnitors are limited to proceeding through their indemnitees. But that rule did not apply to Appvion, because it was seeking to recover for costs incurred as a PRP, not as an indemnitor.
2. Equitable allocation. As to the district court’s equitable allocation of costs amongst NCR and the other PRPs, the court of appeals held that the district court had abused its discretion in focusing entirely on one equitable factor—knowledge of the danger posed by PCBs—and in limiting discovery to that factor, in the process excluding other potentially relevant equitable factors such as relative volume of PCBs. The court distinguished the district court’s impermissible consideration of only certain factors from a situation in which a court may permissibly ultimately decide to allocate costs based on a single factor, after considering other factors as well.
3. Arranger liability. The court held that NCR’s predecessor, Appleton Coated, was not liable as an arranger for selling “broke” carbonless paper—essentially scrap paper—because its purpose was to sell a useful product at a market price, not just to get rid of it. The court contrasted United States v. General Electric Co., 670 F.3d 377 (1st Cir. 2012), in which GE nominally sold PCB-containing material but actually was simply trying to get rid of the material.
4. Insurance offsets. With respect to the issue whether Glatfelter’s (another PRP) contribution claims against NCR should be offset by insurance proceeds that Glatfelter obtained, the court held that the collateral source rule does not apply to CERCLA contribution actions and that the court could take the insurance proceeds into account. The court of appeals approved of the district court’s method for taking the proceeds into account, which allocated the payments between liability coverage (which should offset Glatfelter’s contribution claims against NCR) and defense costs (which should not).
5. Natural resource damages. As to liability for natural resource damages, the court held that CERCLA contribution claims can include natural resource damages.
6. Preemption of common-law counterclaims. The court of appeals held that CERCLA preempted state-law counterclaims of negligence, strict liability, and public nuisance against NCR, on the ground that allowing such claims would effectively reapportion costs among the PRPs in a manner contrary to CERCLA.
7. Other issues. The court of appeals also addressed two other case-specific issues, involving Glatfelter's claims based upon discharges at Portage, Wisconsin, and the potential preclusive effect of the district court’s holding that Appvion is not a PRP.
The issues in the Glatfelter case are considerably narrower. This case involved a claim brought by the United States against potentially responsible parties (PRPs), including Glatfelter and NCR Corporation, to enforce EPA’s 2007 administrative order. After the district court ruled in favor of the government and against the PRPs, Glatfelter and NCR appealed. The Seventh Circuit, in a decision authored by Judge Tinder, affirmed in part and reversed in part. Of the seven issues in the case, one is a significant legal issue. The district court had enjoined the defendants to comply with EPA’s administrative order. The Seventh Circuit held that this was in error, and that a permanent injunction is an inappropriate mechanism to enforce a CERCLA administrative order.
The remaining issues were more case-specific, although they may form important precedent for other cases raising similar facts. As to those issues, the court of appeals held (a) that EPA did not unlawfully delegate responsibility for the cleanup to the Wisconsin Department of Natural Resources, because the two agencies entered into a cooperative agreement under CERCLA § 104 (without deciding that such an agreement was required); (b) that the agencies reasonably decided to maintain a preference for dredging in the selected remedy; (c) that the agencies appropriately increased their estimates of the cost of the cleanup in 2010 based on new information by publishing an explanation of significant differences rather than amending the Record of Decision; (d) that the district court appropriately held Glatfelter liable for response costs based on its liability for the Site generally instead of proof that it had a causal connection to the specific operable unit in question; (e) that the district court incorrectly rejected NCR’s argument that the response costs could be apportioned based on the mass of hazardous substances attributable to each PRP; and (f) that the district court correctly rejected Glatfelter’s argument that it caused none of the contamination in the relevant operable unit.
Wednesday, September 24, 2014
Ninth Circuit Affirms Denial of Preliminary Injunction Against Logging Projects in Montana's Flathead National Forest
On September 24, the Ninth Circuit (Hawkins, Rawlinson, Bea) issued a decision in Friends of the Wild Swan v. Weber, Nos. 13-35817 & 13-35819. The plaintiff environmental organizations sued the Forest Service, alleging that two logging projects in Montana’s Flathead National Forest violated the National Environmental Policy Act (“NEPA”), the National Forest Management Act (“NFMA”) and the Endangered Species Act (“ESA”). The district court denied the plaintiffs’ motions for preliminary injunctions, and the plaintiffs appealed. The Ninth Circuit affirmed. With respect to the NEPA claims, the court held that the Forest Service adequately justified its reasons for limiting the geographic scope of its cumulative effects analysis. For similar reasons, the court held the plaintiffs are unlikely to succeed on their ESA claims. With respect to the NFMA claims, the court held (a) that the Forest Service adequately justified its methodology for assessing winter snowshoe hare habitat; and (b) that the Forest Service used the best available scientific data to define potential fisher habitat.
Tuesday, September 23, 2014
For the past few weeks, Todd Aagaard has been going a great job keeping us posted on important federal court decisions. In keeping with that theme, I thought I’d add an update on a state court non-decision. Last week, the town of Orrington, Maine settled its lawsuit against two landowners who, the town argued, had wrongly allowed beaver-attracting vegetation to grown on their properties, leading to major damage when the beavers’ dams later burst.
Don’t laugh. This is serious stuff, and not just at the edge of the Great North Woods. I learned this several years ago, when a few non-law professors approached me about participating in an interdisciplinary research project on the law, ecology, economics, and (human) sociological impacts of beavers. The subject initially struck me as pretty esoteric, at least on the legal side. But then I searched Westlaw for the term “beaver dam” and discovered that there were actually quite a few cases like the one that settled last week.
Why so many? The reason, I think, is that the boundaries between water and land are already fraught with legal peril. Consider Rapanos and SWANCC, for example, or accretion/avulsion dilemmas; we lawyers spend a lot of time thinking about the edges of aquatic habitat. An animal whose life’s mission is to tinker with those edges therefore can cause a lot of legal mischief.
We also might see more legal issues arising. Beavers once were everywhere in North America, and they played important roles in shaping both aquatic and terrestrial habitats. Years of trapping decimated their populations, but they’re coming back. And with more beavers populating the landscape, and more people moving into suburban-fringe habitats, the potential for trouble (and for a lot of ecological benefits) grows.
I never did pursue that research project. One of the would-be lead investigators moved to another country, preliminary signals about grant funding weren’t great, and the whole thing fizzled. And, to my knowledge, not much else has been written on the subject. But if you’re a student looking for an environmental law topic for a comment, I’d suggest looking into the law of beavers. You might find it surprisingly interesting.
On September 18, a divided panel of the Fifth Circuit (Reavley, Jones (dissenting), Graves) issued a decision in United States v. Transocean Deepwater Drilling, Inc., No. 13-20243, a case arising out of the Deepwater Horizon disaster in 2010. The Chemical Safety Board is an independent federal agency established by Clean Air Act § 112(r)(6), 42 U.S.C. § 7412(r)(6), to investigate accidental releases of hazardous substances into the ambient air from stationary sources that result in a fatality, serious injury, or substantial property damages. The Board initiated an investigation into the Deepwater Horizon disaster and in connection with that investigation issued administrative subpoenas to Transocean, which objected that the Deepwater Horizon incident was outside the Board’s jurisdiction. The United States filed a petition to enforce the subpoenas, the district court ordered enforcement of the subpoenas, and Transocean appealed. The Fifth Circuit affirmed, holding (a) that the Deepwater Horizon was a stationary source within the meaning of Clean Air Act § 112(r); and (b) that the Board had jurisdiction to investigate the release of gases and explosion at the Deepwater Horizon, separate from the marine oil spill that ensued (and was outside the Board’s jurisdiction).
Judge Jones dissented; she would have held that the Deepwater Horizon was a vessel and not a stationary source and that the incident was sufficiently connected to an offshore oil spill to preclude the Board from investigating.
Monday, September 22, 2014
On September 17, the D.C. Circuit denied the petitions for rehearing en banc in Electric Power Supply Association v. FERC, 753 F.3d 216 (D.C. Cir. 2014). In a May 23, 2014, decision, a divided panel of the court of appeals had held that FERC Order 745, which regulated compensation for demand response, exceeded FERC's authority under the Federal Power Act. The decision induced considerable consternation among many proponents of the smart grid, as demand response has the potential to serve an important function in improving the reliability and environmental performance of the electric power grid. Among other critiques, Joel Eisen and I condemned the court's reasoning in an op-ed in the New York Law Journal, arguing that the majority decision "employ[ed] a crabbed reading of [FERC's] statutory authority that would unduly restrict the use of demand-side measures. The D.C. Circuit panel assumed that demand response is exclusively a retail market phenomenon, beyond the scope of FERC's authority over wholesale markets. The panel reached this conclusion even though FERC's Order 745 provided for compensating demand response services in wholesale—not retail—markets."
Although the denial of rehearing is disappointing, this is far from the death knell of demand response. There is still the possibility that FERC will file a petition for certiorari, and it remains to be seen how the loss of Order 745 will affect the development of demand response. At the very least, the decision leaves broad authority in the hands of states to give demand response services the incentives they merit.
Wednesday, September 17, 2014
Third Circuit Holds that Federal Suit Challenging Pennsylvania Public Utility Commission Decision Is Precluded by Prior Suit in State Court
On September 16, the Third Circuit (Ambro, Jordan, Roth)) issued a decision in Metropolitan Edison Company v. Pennsylvania Public Utility Commission, No. 13-4288. This case arises indirectly from FERC’s 2006 decision requiring PJM to switch from computing line losses using an average cost method to using a marginal cost method. FERC’s decision had the effect of increasing Metropolitan Edison Company’s and Pennsylvania Electric Company’s costs, and the Companies accordingly sought approval from the Pennsylvania Public Utility Commission to pass on these cost increases to their customers. The Commission rejected the Companies’ requests on the ground that the line-loss costs were a generation cost rather than a transmission cost and, as such, were subject to a generation rate cap in effect through 2010. The Commission’s decision effectively prevented the Companies from passing on the increased line loss costs to their customers. The Companies sued the Commission in Pennsylvania state court. The Companies lost, whereupon they sued the Commission and its commissioners in federal district court. The district court held that the earlier state suit precluded the Companies’ subsequent federal suit. The Third Circuit affirmed.
On September 16, the Ninth Circuit (Tashima, Murguia, Carney (by designation)) issued a decision in United States v. Coeur d’Alene Company, No. 12-36065. The United States negotiated a CERCLA settlement with the Coeur d’Alene Company regarding liability for the cleanup of the Conjecture Mine Site in Bonner County, Idaho. The settlement based Coeur d’Alene’s liability on its limited ability to pay rather than on its proportionate share of the cleanup costs. The district court entered the consent decree over the objections of Federal Resources Corporation, another potentially responsibility party. Federal Resources appealed. The court of appeals affirmed, noting that CERCLA § 122, 42 U.S.C. § 9622, which governs settlements, explicitly contemplates that ability to pay is a factor in CERCLA settlements and that courts have frequently recognized the legitimacy of “ability to pay” settlements. The court rejected Federal Resources’s contention that the district court should have conducted an analysis of the comparative fault of the potentially responsible parties, because the settlement was based on ability to pay rather than fault. The court also dismissed as speculative Federal Resources’s assertion that Coeur d’Alene might have insurance that could cover some of its liability, thereby increasing its ability to pay.
Saturday, September 13, 2014
Third Circuit Holds that Federal Power Act Preempts New Jersey’s Long-Term Capacity Agreement Pilot Program
On September 11, the Third Circuit (Fuentes, Shwartz, Rosenthal (by designation)) issued a decision in PPL EnergyPlus, LLC v. Solomon, No. 13-4330. Existing electric power generators and distribution companies sued the commissioners of the New Jersey Board of Public Utilities challenging New Jersey’s Long-term Capacity Agreement Pilot Program (LCAPP), enacted by the state legislature in 2011 to address a perceived deficit in electric power capacity, and resulting high electricity prices, in New Jersey. The LCAPP furnishes new generators with a guaranteed fifteen-year contract at a predetermined rate to provide capacity to electricity distribution companies in New Jersey. New generators are required to participate in PJM’s capacity auction markets, but the LCAPP contracts offset the difference between the PJM market price and the LCAPP contract price. That is, if the LCAPP contract price exceeds the market price, the distribution company must pay the difference so that the generator receives the contract price; if the market price exceeds the LCAPP contract price, the generator must pay the difference. The district court, following a bench trial, held that the Federal Power Act preempts the LCAPP.
Numerous amici participated to express either criticism or support for state policies that regulate power contracts that affect capacity markets. FERC, the Pennsylvania Public Utility Commission, the Electric Power Supply Association and Edison Electric Institute, and PJM Power Providers Group supported the plaintiffs-appellees and argued the LCAPP should be preempted. Several other state public utility commissions, New Jersey Division of Rate Counsel, American Wind Energy Association, American Public Power Association and National Rural Electric Cooperative Association, and NRG Energy supported the defendants-appellants and argued the LCAPP should not be preempted.
The Third Circuit affirmed. The court reasoned that the Federal Power Act gives FERC authority to regulate interstate sales of electric capacity and that the LCAPP impermissibly constitutes regulation of capacity rates because it essentially sets capacity prices. The court noted the concern of the pro-appellants amici that a ruling against the LCAPP “will hamstring state-led efforts to develop renewable and reliable electric energy resources” (p. 29), but opined that the concern is unwarranted because states are free to use other means, including direct subsidies to generators, as long as they only incidentally affect—rather than directly set—wholesale electricity rates (including capacity prices).
The case—the facts, the parties, the outcome, and the court’s reasoning—is very similar to the Fourth Circuit’s recent decision in PPL EnergyPlus, LLC v. Nazarian, No. 13-2419 (June 2, 2014).
Friday, September 12, 2014
Second Circuit Decides CERCLA Appeal Involving Cleanup of Manufactured Gas Plants in Upstate New York
On September 11, the Second Circuit (Raggi, Lynch, Chin) issued a decision in New York State Electric & Gas Corp. v. FirstEnergy Corp., No. 11-4143, a CERCLA cost recovery and contribution case. This case arises from the cleanup of contaminated former manufactured gas plants in upstate New York, currently or formerly owned by New York State Electric and Gas Corporation (NYSEG) or its predecessor companies. NYSEG filed a CERCLA § 107(a) cost recovery action against FirstEnergy Corporation, alleging that FirstEnergy is liable for a portion of the cleanup costs as a successor to NYSEG's former parent company, Associated Gas & Electric Company (AGECO). FirstEnergy, in turn, filed CERCLA § 113(f) contribution counterclaims against NYSEG and third-party claims against I.D. Booth, Inc. (“I.D .Booth”), the current owner of one of the sites. Following a bench trial, the district court held that NYSEG was entitled to recover certain cleanup costs from FirstEnergy based on a veil-piercing theory, and that I.D. Booth was liable for a portion of the cleanup costs at one site. Everybody appealed, raising numerous issues.
The Second Circuit, in a lengthy and fact-intensive opinion, held (1) that a 1945 covenant not to sue did not bar NYSEG's cost recovery claims against FirstEnergy, because the covenant never became operative due to an unfulfilled condition precedent; (2) that AGECO is not directly liable under CERCLA as an operator because it acted only as a parent company and did not sufficiently participate in the activities of the plants during the time it owned the plants; (3) that FirstEnergy is liable to NYSEG on a veil piercing theory for contamination created during a period when AGECO dominated NYSEG; (4) that NYSEG’s claims were untimely as to sites with remedial actions, which are subject to a six-year statute of limitations measured from initiation of on-site physical action, but timely as to a site subject to a removal action, which is subject to a three-year statute of limitations measured from the completion of the action; (5) that the district court, which used total gas production at the sites to allocate liability, did not err in calculating total gas production; (6) that the district court reasonably exercised its equitable powers in reducing NYSEG's recovery from FirstEnergy by a portion of $20 million NYSEG had received in a prior insurance settlement; (7) that the district court did not abuse its discretion in declining to reduce NYSEG's recovery, because FirstEnergy had not shown that the cleanup would increase the value of the remediated properties or that NYSEG had unreasonably delayed the cleanups; and (8) that I.D. Booth was not entitled to a third-party defense because its extensive delays during negotiations did not exercise due care with respect to the cleanup, and the district court reasonably apportioned liability to I.D. Booth.