Gravel2Gavel Construction & Real Estate Law Blog
Some very interesting and fairly complex environmental law rulings have been released in the past few days.
U.S. Supreme Court—Trump, et al. v. Sierra Club, et al.
On July 31, 2020, in a 5-to-4 decision, the Supreme Court denied a motion to lift the stay entered by the Court a few days earlier. The earlier action stayed a preliminary injunction issued by the U.S. District Court for the Northern District of California, which had enjoined the construction of a wall along the Southern Border of the United States which was to be constructed with redirected Department of Defense funds. The merits will be addressed by the lower court and perhaps the U.S. Court of Appeals for the Ninth Circuit.
U.S. Court of Appeals for the District of Columbia Circuit—Meritor, Inc. v. EPA
In a case involving EPA’s administration of the Superfund National Priority List (NPL) of priority Superfund sites requiring expedited cleanup, the court held that EPA had acted in accordance with the law and its implementing rules, and denied relief. Meritor was spun off from Rockwell Corporation, and is responsible for Rockwell’s environmental liabilities, including sites Meritor never operated. In 2016, EPA added the Rockwell International Wheel & Trim facility in Grenada, Miss., to the NPL list. Meritor alleged that this listing was arbitrary and capricious, pointing to EPA’s failure to adequately consider the impact of a mitigation measure added to the facility to address vapor intrusion, a factor EPA must consider in its application of the agency’s hazard ranking system. However, the court was not impressed by these arguments, and denied relief. The court’s discussion of the nuances of the hazard ranking system is very instructive
The U.S. Court of Appeals for the Second Circuit—MPM Silicones, LLC v. Union Carbide Corporation (UCC) and Power Authority of the State of New York v. M/V Ellen S. Bouchard, et al.
MPM Silicones, LLC v. Union Carbide Corporation (UCC) was a private party Superfund (or CERCLA) cost recovery action. Union Carbide operated a manufacturing facility in Friendly, West Virginia, for many years, later known as the “Sistersville Site.” In the course of its operations, UCC generated thousands of tons of PCB waste, but the full extent of its on-site disposal actions were not known or publicized for many years, and substantial cleanup costs have already been borne by MPM, the most recent owner of the site. While reports of these activities by UCC have now been known by both state and federal and federal regulatory authorities (the West Virginia DNR and EPA), the court reports that these agencies have not released any cleanup orders, although UCC took some actions to redress some minor PCB issues. (Indeed, the UCC facility applied for and received a RCRA hazardous waste permit in the 1980s which triggered other RCRA compliance obligations.) MPM, through GE, became owner of the site, and soon discovered that substantial amounts of PCB waste were disposed of at the facility. To date, MPM has spent nearly $375,000 in cleanup activities, and sued UCC in December 2011 for reimbursement of its costs under CERCLA. In its defense, UCC argued that this lawsuit was barred by the relevant CERCLA six-year statute of limitations for remedial actions. The lower court agreed, and dismissed MPM’s cost recovery claims. However, it also held that UCC bears some responsibility for future removal cleanup costs. On appeal, the Second Circuit reversed the lower court’s dismissal on CERCLA statute of limitations because it relied on an incorrect reading of Second Circuit precedent. The actions UCC took in response to the information that it had acquired about PCB disposal practices may or may not be a “remedial action” subject to the statute of limitations. On remand, the lower court must sort this out. The appeals court also held that UCC was liable to MPM for 95% of future removal costs. The opinion is fairly long (81 pages) and detailed.
An Oil Pollution Act (OPA) cost recovery case, Power Authority of the State of New York v. M/V Ellen S. Bouchard, et al. was decided July 31, 2020. After the Power Authority’s submarine electric power transmission lines were damaged by vessels owned by the defendants dropping anchor, causing the release of thousands of gallons into the waters of Long Island Sound, the Power Authority cleaned up the spill, spending $10 million to do so. OPA provides a cause of action to seek recovery against any third party whose actions in fact were responsible for the spill. However, the lower court dismissed the Authority’s claims, ruling that the submarine cables were not a “facility” as defined by OPA. The Second Circuit reversed the lower court, holding that these cables were indeed facilities, from which thousands of gallons of an oil, dielectric fluid, were released, The court also noted that OPA is not exclusively concerned with oil and gas production facilities; by its terms it can apply to a wide range of businesses apart from traditional oil and gas entities.
The U.S. Court of Appeals for the Fifth Circuit—Environment Texas Citizen Lobby, et al. v. ExxonMobil Corporation, et al. and Shrimpers and Fishermen, et al. v. Texas Commission on Environmental Quality
On July 30, 2020, the court released its ruling in Environment Texas Citizen Lobby, et al. v. ExxonMobil Corporation, et al. This is the latest ruling in this long-running Clean Air Act Citizen Suit filed by Environment Texas against ExxonMobil’s operation of “the largest petroleum and petrochemical complex in the nation.” Emissions from the plant are regulated in part by permits issued by the TCEQ, as overseen by EPA. To date, this controversy has been the subject of four rulings by the U.S. District Court for the Southern District of Texas and the Fifth Circuit. This latest ruling remands the case back to the lower court for additional fact-finding on the vexed issue of standing. Indeed, the court states that the “principal issue in this second appeal of this case is whether the plaintiffs have standing to recover damages for more than 16,000 violations of emissions standards”—whose statutory cap is $600 million. Here the 16,000 violations refer to recorded and reportable infractions of emissions standards, both some very minor and some possibly very significant. The court holds that the first appellate ruling did review the standing issue, and it must be determined in accordance with established law to be consistent with the Constitution’s Article III provisions. The plaintiffs must show they have standing for each violation, which hasn’t yet been done. The court avers this may not be as formidable a task as it sounds. However, an important component of standing is whether an injury can be traceable to the defendant’s conduct. This may be difficult, and the court directs the lower court to determine the appropriate geographic nexus in a traceability fact-finding inquiry. In addition, the lower court must assess Exxon’s affirmative defenses, which has yet to be done. For one thing, Exxon may be able to assert an “Act of God” defense for violations occurring during a hurricane. The concurring judge, Judge Oldham, states that the Fifth Circuit’s standing precedents “are a mess,” and that only an en banc panel can sort this out.
Shrimpers and Fishermen, et al. v. Texas Commission on Environmental Quality, a ruling on a direct appeal to the Fifth Circuit, asked the court to vacate the air permitting action of the TCEQ and to order the Commission to conduct a contested case hearing into these permits by the Texas State Office of Administrative Hearings (SOAH). However, the court states that because it was unclear how the Fifth Circuit had the statutory authority to review these administrative actions, it asked for additional briefing. (Apparently, the response was not satisfactory as to whether a federal court has jurisdiction to hear this state-law created cause of action.) In its ruling, the court noted that requests for a contested case hearing can only be made by an “affected person,” as defined by the Texas Water Code. Here, the petitioners are membership groups that oppose the construction of an export LNG facility in Brownsville, Texas. As such, they had to show that their members would suffer injuries in fact, and that these injuries were actual or imminent. The court concluded that the petitioners did not satisfy their burden of proof to show any evidence of harm, requiring the dismissal of the petition for lack of standing.
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