Articles Posted in Environmental

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On July 19, the U.S. Court of Appeals for the Third Circuit decided an important case involving oil and gas producers, intermediaries, and the ultimate purchasers of the oil and gas. The case, a bankruptcy matter, is In re: SemCrude, LP, et al.

The appellants, many oil and gas producers located in Texas, Oklahoma and Kansas, sold their product to SemCrude, L.P. (SemCrude), a “midstream” oil and gas service provider, who then sold oil to and traded oil futures with downstream oil purchasers. SemCrude’s unsuccessful futures trading activities cause the company to become insolvent and enter into bankruptcy. However, the producers had taken no steps to protect themselves in case SemCrude went bankrupt in contrast to the downstream purchasers. As a result, when SemCrude filed for bankruptcy, the downstream purchasers were paid in full, and more than a thousand producers were unpaid.

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In 1971, the citizens of Pennsylvania overwhelmingly approved a proposed amendment to the Commonwealth of Pennsylvania’s Constitution’s Declaration of Rights, now known as the “Environmental Rights Amendment” (ERA). The amendment provides:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic, and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.

On June 20, 2017, the Supreme Court of Pennsylvania, in Pennsylvania Environmental Defense Foundation v. Commonwealth of Pennsylvania and Governor Tom Wolf, held , in a 4 to 32 ruling, that two 2009 fiscal laws passed by the legislature were facially unconstitutional under the ERA because they did not provide that all funds generated by royalties from the leasing of state lands for the exploration and production of oil and gas were wholly directed to the protection and preservation of the Commonwealth’s public natural resources.
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The first Resource Conservation and Recovery Act ( RCRA) solid waste definitional decision, the celebrated American Mining Congress v. EPA case, was decided exactly 30 years ago, and it reverberates to this day.

In American Petroleum Institute v. EPA, decided by the U.S. Court of Appeals for the District of Columbia on July 7, 2017, the Court of Appeals reviews the Environmental Protection Agency’s (EPA) latest effort to regulate the recycling of hazardous secondary materials in a way that is consistent with the RCRA. RCRA provides that only truly discarded materials can be solid wastes and perhaps regulated hazardous wastes. The Court of Appeals has now handed down its opinion, which, as befits RCRA, is very complex.

This is another decision that illustrates the powerful role the federal courts play in the proper interpretation of the environmental laws that apply to many industries, including the real estate and construction industries.

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On July 6, the California Supreme Court issued its highly anticipated decision in Lynch v. California Coastal Commission (case no. S221980). In this case, coastal homeowners alleged that, in issuing a permit to construct a protective seawall, the California Coastal Commission imposed unconstitutional conditions. In particular, the plaintiffs objected to the permit being limited to a 20-year term, after which they could be required to remove the seawall. However, to the disappointment of many who closely watched the case (as well as the plaintiffs), the Court declined to reach constitutional issues. Instead, the Court ruled that the homeowners waived their objection to permit conditions by constructing the seawall prior to the resolution of litigation.

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On July 3, the U.S. Court of Appeals for the District of Columbia held, in a 2 to 1 decision, that the Environmental Protection Agency (EPA) lacked authority under the Clean Air Act (CAA) to issue a temporary stay of its new methane rule that had been promulgated in June 2016. This new rule, which affects many oil and gas producers, took effect on August 21, 2016. The case is Clean Air Act Council, et al. v. EPA.

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On June 30, the U.S. Court of Appeals for the District of Columbia issued an important ruing regarding the Environmental Protection Agency’s (EPA) regulation and registration of pesticides. The case is Center for Biological Diversity, et al. v. EPA, and it involves the intersection of the Endangered Species Act (ESA) and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The Court of Appeals granted the FIFRA petition, dismissed the ESA petition, and remanded the matter to EPA without vacatur for additional consideration by EPA. Remand “without vacatur” is a judicial remedy that permits the agency’s order or rule to remain in effect after they are remanded by the reviewing court for further agency proceedings. The dissenting judge argued that the plaintiffs had not satisfied their burden of proof to establish their right to maintain this lawsuit.

These decision illustrates the powerful role the federal courts play in the proper interpretation of the environmental laws that apply to many industries and commercial and industrial activities.

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On June 29, the U.S. Court of Appeals for the Fourth Circuit issued an important ruling in the case of Murray Energy Corp., et al., v. EPA. At issue was the duty of the Environmental Protection Agency (EPA) under Section 321 of the Clean Air Act (CAA) to conduct “continuing evaluations of potential loss or shifts of employment” which may result from EPA’s regulatory actions. The Court of Appeals reversed the District Court, holding that, properly construed, Section 321’s provisions are open-ended, and establish no start-dates, deadlines or any other time-related instructions to guide EPA’s continuous evaluation efforts. It reasoned that EPA is therefore left with considerable discretion in managing its continuous evaluations, and thus it is not a non-discretionary obligation placed on EPA that is susceptible to a lawsuit under Section 304 of the CAA. It found that the U.S. District Court for the Northern District of West Virginia was therefore without jurisdiction to decide this case.

This is another case that illustrates the powerful role the federal courts play in the proper interpretation of the environmental laws that apply to many industries, including the real estate and construction industries, as well as to commercial and industrial activities.

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A little lite reading for Friday. In the Matter of Nonhuman Rights Project, Inc.,  v. Lavery, decided June 8, 2017 by the New York Supreme Court, First Judicial Department, the Court considered the lower court’s judgment declining to extend habeas corpus relief to two adult male chimpanzees, Tommy and Kiko. The gravamen of the petitioner’s argument was that “chimpanzees are entitled to habeas relief is that the human-like characteristics of chimpanzees render them ‘persons’ for purposes of [The New York Civil Practice Law and Rules (CPLR)] article 70. A number of amicus briefs were filed with the court, including one by Laurence Tribe providing some perspective on the “long history” (chiefly from medieval times) of animals being tried for offenses such as attacking human being and eating crops. The Court found the petitioner’s position is without legal support or legal precedent.

These concerns may have their origin in Justice Douglas’ famous dissent in the case of Sierra Club v. Morton. In this case, the U.S. Supreme Court held that the Sierra Club had no standing to seek an injunction to restrain federal officials from approving an expansion of a skiing development in the Sequoia National Forest. Justice Douglas observed that

[T]the critical question of standing would be simplified and put neatly into focus if we fashioned a federal rule that allowed environmental issues to be litigated before federal agencies or federal courts in the name of the inanimate object about to be despoiled, defaced, or invaded by roads and bulldozers and where the injury is the subject of public outrage.

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frog-300x225Our latest environmental case law update covers the first six months of 2017, and it briefly reviews what we believe are the most significant environmental and administrative law decisions issued by the federal courts and selected state appellate courts. Although the U.S. Supreme Court’s environmental law docket is unusually small in numbers, the Court continues to issue important rulings that will eventually have an impact on future environmental law disputes.

The first six months of 2017 have seen the federal courts issue important rulings in Clean Water Act, Clean Air Act and Superfund matters, with more Endangered Species Act decisions being made every year. The state appellate courts continue to grapple with fundamental state law questions, with significant climate change decisions being made with some frequency.

Photo:  U.S. Department of Agriculture – Dusky Gopher Frog-a  – Creative Commons

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Only a few existing federal environmental rules have been set aside or overturned by the new Administration, and these actions were taken by the Congress in accordance with the special procedures of the Congressional Review Act (CRA). The repeal, rescission, postponement, or modification of existing rules generally must be accomplished in accordance with the procedures of the Administrative Procedure Act (APA). However, some rules which were promulgated but not effective by January 20, 2017 were delayed, consistent with established policy, to give the Administration sufficient time to review the new rules they will be charged with implementing.

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