Articles Posted in Environmental

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A U.S. District Court  for the District of Columbia has joined the debate regarding whether the U.S. Fish and Wildlife Service is required to comply with the National Environmental Policy Act, 42 U.S.C. §§ 4321–4347 (NEPA), when designating critical habitat based upon the requirements of the Endangered Species Act (ESA). A geographically based distinction in agency policy has resulted from a split in the U.S. Courts of Appeals on the question of whether an environmental impact statement (EIS) is required for critical habitat designations. The Tenth Circuit Court of Appeals, in Catron County Board of Commissioners, New Mexico, v. United States Fish and Wildlife Service, et al., 75 F.3d 1429, 1436 (10th Cir. 1996), held that the Fish and Wildlife Service must comply with NEPA when designating critical habitat under the ESA. 75 F.3d at 1436. By contrast, the Ninth Circuit, in Douglas County v. Babbitt, et al., 48 F.3d 1495, 1502-07 (9th Cir. 1999), held that the Fish and Wildlife Service does not have to comply with NEPA when designating critical habitat. NEPA is generally understood to be a “procedural statute” that is designed to ensure that federal agencies make fully informed and well-considered decisions. While the U.S. Court of Appeals for the District of Columbia circuit has not had an occasion to rule on this NEPA issue, on November 13, 2015, the U.S. District Court for the District of Columbia issued a Memorandum Opinion agreeing with the Ninth Circuit that NEPA is not applicable to critical habitat determinations. The case is Otay Mesa Property, L.P., v. United States Department of the Interior.  Continue Reading ›

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In Sixth Circuit Rejects Clean Air Act Preemption of State Common Law Claims: Four Things to Know, Pillsbury attorneys Matt Morrison and Bryan Stockton explore the Six Circuit Court of Appeals recent rejection of Clean Air Act, 42 U.S.C. §§ 7401 et seq. (CAA), preemption of state common law claims in Merrick, et al. v. Diageo Americas Supply, Inc. and Little et al. v. Louisville Gas & Electric Company; PPL Corporation. The takeaway is that a facility that is otherwise in compliance with CAA emission requirements can still face lawsuits by neighboring landowners for traditional torts such as nuisance and trespass. Merrick and Little add to the foundation of precedent across the Second, Third, and Sixth Circuits, and Iowa Supreme Court.

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The “Conflicts Minerals” rule  was enacted, with very little debate, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  This rule places new regulatory requirements on the nation’s financial system in the wake of the 2008 economic emergency.  To many observers, the most troublesome aspect of the rule involves the federal government’s authority to compel the regulated community—in this instance, companies that may have some connection to the civil wars in the Congo—to label what they do in censorious terms as part of public SEC filings.  In particular, the SEC’s conflict minerals  rule purports to compel certain disclosures affecting the acquisition of certain minerals produced in the Democratic Republic of the Congo. How far can the government go, consistent with the First Amendment, to require companies and corporations to say what the government rules that that must say?

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Recently the Third Circuit delivered an important message: Exploiting the permitting process to obstruct competitor growth will not shield one from antitrust claims. In mid-November, the Third Circuit considered whether a party can suffer an antitrust injury when a competitor uses the governmental permitting process to “frustrate the entry” of the competitor into the marketplace.  Hanover 3201 Realty, LLC, v. Village Supermarkets, Inc., et al. is a case involving a developer’s antitrust claims premised on numerous administrative and court challenges to its permit applications. Vacating the lower court’s ruling, in part, the Court of Appeals concluded that the District Court’s view of antitrust injury was too narrow and that Hanover “can establish that its injury was ‘inextricably intertwined’ with Defendants’ anticompetitive conduct.” The Court of Appeals also held that Hanover sufficiently alleged that the defendants activity “was undertaken without regard to the merits of the claims and for the purpose of using the governmental process to restrain trade.” Accordingly to the Court of Appeals, Hanover can demonstrate that the defendants are not protected by Noerr-Pennington immunity because their conduct falls within the exception for sham litigation. See E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965).

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Contractors should beware that the Sixth Circuit’s guidance on CERCLA-related topics continues to be murky, including, in particular, what constitutes a CERCLA settlement triggering the running of the 3-year limitations period for contribution claims. On November 5, 2015, the U.S. Court of Appeals for the Sixth Circuit issued a ruling in the case of Florida Power Corp., dba Progress Energy Florida, Inc., v. FirstEnergy Corp., interpreting two Administrative Orders by Consent for Remedial Investigation/ Feasibility Study (AOCs). The Court of Appeals held that the AOCs were not CERCLA settlements and, as a result, Florida Power’s contribution claims were not untimely. There is a significant dissent in this case, and all of the judges appear to agree that the Sixth Circuit’s decisions in this area have not provided adequate guidance to the regulated community.

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For contractors, keeping track of the various provisions and requirements of federal statutes such as the federal Clean Air Act (CAA) while also jumping through the many hoops of local permitting can be quite an achievement in and of itself. smellyBut as a recent case shows us, the “litigative shield” of full CAA compliance can mean little in the face of state common law.  In a noteworthy decision issued on November 2, 2015, the U.S. Court of Appeals for the Sixth Circuit ruled, in a federal class action complaint seeking compensatory and punitive damages from a local distillery for negligence, nuisance and trespass, that the “Federally Enforceable District Origin Operating Permit issued and overseen by the Louisville Metro Air Pollution Control District” under which the defendant is operating was not preempted by the CAA. Let Merrick, et al., v. Diageo Americas Supply, Inc. serves as a cautionary note to contractors, even full compliance with the federal CAA may not eliminate their exposure to claims under the states’ common laws.

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WaterThe U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers’ (Corps) have finalized their much-discussed joint “waters of the United States” definition and rule. This regulatory definition controls the scope and scale of these agencies’ regulatory authority under the federal Clean Water Act (CWA). It was slated to go into effect August 28, 2015. However, on August 27, 2015, the U.S. District Court for the District of North Dakota, in State of Ohio, et al., v. U.S. Army Corps of Engineers, issued a preliminary injunction staying implementation of the new rule in the States of North Dakota, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, South Dakota, Wyoming, and New Mexico pending further proceedings. The Court also decided that the stay is limited to these states. Then, on October 9, 2015 the U.S. Court of Appeal for the Sixth Circuit, in a separate proceeding, entered a nationwide stay of the rule to give the court additional time to determine if it, rather than the district courts, has jurisdiction to hear these appeals. Challenges to the rule are pending in other district courts as well. The litigation already engendered by this new rule indicates that the rule will be before the federal courts and there will be significant uncertainty for some time to come.

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Acquiring adequate insurance coverage against environmental risks, in particular the spill or release of pollutants or contaminants in day-to-day operations, is important to many construction businesses confronting the requirements of environmental regulation. For example, EPA’s hazardous waste rules require permittees (at both the state and federal level) to demonstrate financial responsibility for the operations of these facilities, including site closure and post-closure care, and coverage for sudden and accidental discharges. This requirement can be satisfied by proof of acceptable insurance coverage. In addition, having such insurance often assists companies facing the challenge of an extensive and prolonged Superfund cleanup. Many courts have ruled that the receipt of a Superfund Notice Letter from EPA triggers the responsibility of the insurer to provide the coverage in the policy.

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On October 9, 2015, the U.S. Court of Appeals for the Sixth Circuit, in a split decision, stayed the implementation of the new rule redefining the regulatory definition of “waters of the United States” (the Rule), which is the linchpin of much of the federal government’s jurisdiction under the Clean Water Act (CWA). The case is State of Ohio, et al., v. U.S. Army Corps of Engineers.

The Rule, promulgated by the Environmental Protection Agency (EPA) and Corps of Engineers, was published in the Federal Register on June 29, 2015, and was to be effective on August 28, 2015. The Rule has been challenged and defended in many federal district and appellate courts, and the four actions that were considered by the Sixth Circuit followed the decision of the Judicial Panel on Multi-District Litigation to consolidate these appeals in the Sixth Circuit. The petitioners in these four actions also requested that the Sixth Circuit stay the Rule while it determines whether it even has jurisdiction over this case, given the complexity of the CWA’s provisions regarding judicial review.

The Sixth Circuit agreed that it made sense to do so, to allow the parties to submit briefs on the Sixth Circuit’s jurisdiction, which the court will review carefully, and the Sixth Circuit also indicated that its decision should be made “in a matter of weeks.”

In issuing the stay, the Sixth Circuit noted that it had some misgivings about the Rule and the EPA’s and Corps of Engineers’ processes by which the Rule was promulgated. In any case, a stay will “temporarily silence the whirlwind of confusion that springs from uncertainly about the requirements of the new Rule,” honors the “policy of cooperative federalism,” and will restore “uniformity of regulation under the familiar, if imperfect, pre-Rule regime, pending judicial review.” As a result of this action, the status quo will be maintained pending further review.

Additional Source:  80 F.R. 37054 (Jun. 29, 2015)

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The U.S. Court of Appeals for the Second Circuit has issued a ruling that EPA’s Clean Water Act (CWA) Vessel General Permit (VGP), which regulates the discharge of ballast water from ships, was promulgated in violation of the Administrative Procedure Act (APA), and must be remanded to the agency.  The case is National Resources Defense Council, et al. v. EPA, which was decided on October 5, 2015.

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