Gravel2Gavel Construction & Real Estate Law Blog

Last year, the U.S. District Court for the District of Columbia denied a request for a preliminary injunction to stop the construction of a domestic oil pipeline known as the Flanagan South Pipeline that is to be constructed under the supervision of Enbridge Pipelines, LLC. In that decision, reported at 990 F. Supp. 2d 9 (D.D.C. 2013), the court determined that the environmental plaintiffs were unlikely to succeed on the merits of their argument that the federal defendants had violated their obligations under National Environmental Protection Act (NEPA), the Clean Water Act (CWA) or the Administrative Procedure Act (APA). On August 18, 2014, the court reviewed various pending motions for summary judgment, and again concluded that the plaintiffs’ case was without merit. The latest decision is Sierra Club, et. al. v. U.S. Army Corps of Engineers, et. al.

In the latest decision, the plaintiffs allege that the federal agencies that have approved isolated segments of the pipeline (which is being constructed almost wholly on private lands for the length of a nearly 600-mile pipeline that will transport tar sands crude oil from Pontiac, Illinois to Cushing, Oklahoma) violated their obligations under the law by not conducting a comprehensive NEPA review of the entire pipeline. The court again disagreed with this argument, noting that no federal agency has interpreted NEPA to be a mandate to conduct such a comprehensive environmental review on the basis of their authority to review the environmental impacts on only 28 miles of federal land when the vast majority of the pipeline will cross privately-held lands by virtue of agreements negotiated with the private land-owners. Accordingly, the court agreed that this is not a “major federal action” requiring a NEPA review: “neither the Corps’ [CWA] verifications nor the Fish and Wildlife Service’s Biological Opinion and Incidental Take Statement qualify as ‘major federal actions’ under the circumstances presented”.

The court also determined that its decision is consistent with the recent DC Circuit ruling in Delaware Riverkeeper Network v. FERC, No. 13-1015, 2014 WL 2535225, at *8 (D.C. Cir. June 6, 2014), where the court of appeals held that Federal Energy Regulatory Commission (FERC) could not segment its environmental reviews where FERC was the sole permitting authority.

In the future, the U.S. Department of Transportation may be asked to review an oil spill response plan for the pipeline as a whole, but that day has not yet arrived.

In the case of Sierra Club, et. al., v. EPA, the U.S. Court of Appeals for the Ninth Circuit held that EPA cannot rely on Chevron deference to authorize its grant of a Prevention of Significant Deterioration (PSD) permit to Avenal Power Center based on superseded National Ambient Air Quality Standards (NAAQS) and Best Available Control Technology (BACT) requirements. Avenal was an Intervenor in this case which was argued in October and decided August 12.

This unusual case was triggered by EPA’s failure to process Avenal’s application on a timely basis, and an order from the U.S. District Court in the District of Columbia to EPA to come to a decision. Holding that the Clean Air Act unambiguously requires Avenal to comply with the regulations in effect at the time the permit was issued, EPA’s action was vacated because it applied the superseded, less rigid and costly regulations. EPA argued that it had the authority to apply its inherent grandfathering authority to reach an equitable decision that was fair to the applicant, which was penalized by the slow pace of EPA permitting process despite the statutory mandate to process such applications in one year. The court disagreed with this argument, pointing to the clear language of the statute, although it expressed some sympathy for Avenal’s dilemma.

On August 8, 2014, the U.S. Court of Appeals for the Eighth Circuit issued a ruling affirming the lower court’s holding that Union Pacific (UP) did not breach the tolling agreement it entered into with ASARCO, LLC while a Freedom of Information Act (FOIA) dispute was being resolved with EPA. At the conclusion of the FOIA matter, UP settled its CERCLA liability for $25 million with EPA at the Omaha, Nebraska Lead CERCLA Site by means of a court-approved consent decree.

ASARCO, as owner and operator of this large lead smelting site, paid $214 million to settle its liability as it emerged from bankruptcy. ASARCO did not file any objections to UP’s separate settlement, but later argued that UP breached its tolling agreement with ASARCO by settling with EPA. However, the courts have now ruled that UP’s settlement with EPA provided UP with statutory protection under CERCLA against any further claims by ASARCO, with the courts noting that the tolling agreement, while it tolled the statutes of limitation, reserved to the parties all other rights and defenses. Accordingly, the separate CERCLA settlement essentially trumped the tolling agreement, which the courts narrowly construed according to Nebraska law.

Interestingly, the Court of Appeals noted that it had resolved an earlier business dispute between the parties regarding the smelter nearly 100 years ago. See American Smelter and Refining Company v. Union Pacific Railroad Company, 256 F.737 (8th Cir. 1919).

The case is ASARCO, LLC v. Union Pacific Railroad Company, No. 13-12830.

In the case of CEnergy-Glenmore Wind Farm #1, LLC, v. Town of Glenmore, decided on August 7, 2014, the U.S. Court of Appeals for the Seventh Circuit affirmed the lower court’s ruling that the Town of Glenmore, Wisconsin’s delay and final rejection of wind farm building permits did not violate CEnery’s constitutional substantive due process rights. The proposal became very controversial, prompting the Town’s Board to rescind its earlier approval of the building permits, and the applicant alleged that it consequently lost a potentially lucrative business opportunity if the wind farms were unable to deliver power to a local utility.

The Court of Appeals held that the Board’s actions “were not arbitrary in the constitutional sense”, and that “popular opposition to a proposed land development plan is a rational and legitimate reason to delay making a decision”. Moreover, the plaintiff had other state law remedies available which it chose not to use, which further weakened its case. Finally, the Court of Appeals noted that if the plaintiff was successful, its success would cost each resident of Glenmore roughly $6000.

Yesterday, Pillsbury attorneys Ken Taber, Paula Weber, Rebecca Carr Rizzo and Stephen Asay published their advisory titled “Ban the Box” Legislation Expands Across the Country Employers Need to Update Employment Applications and Policies. The Advisory discusses the growing national movement to “Ban the Box” – i.e., to prohibit questions about a job applicant’s criminal history on employment applications.

Currently, “Ban the Box” laws are primarily targeted at public employers; however, there are increasing efforts to impose these same restrictions on private employers. New Jersey, Washington, D.C., and San Francisco have become the latest jurisdictions to pass such legislation. Laws prohibiting private employers from seeking certain information regarding criminal convictions are already in place in Hawaii, Illinois, Massachusetts, Minnesota, and Rhode Island, as well as various cities and municipalities, including Baltimore, Philadelphia, and Seattle.

Employers would be well-advised to review and update their employment applications and policies based on these increasingly common restrictions.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Ken Tabor, Paula Weber, Rebecca Carr-Rizzo, or Stephen Asay, the authors of this blog.

In Columbia Riverkeeper, et al. v. U.S. Coast Guard, decided on August 5, 2014, the U.S. Court of Appeals for the Ninth Circuit held that a Coast Guard “Letter of Recommendation” provided to FERC in connection with FERC’s ongoing review of a proposed Oregon LNG terminal project was not a final agency action that was reviewable under the Natural Gas Act. The Letter was issued in 2009 and addressed the suitability of the Columbia River for vessel traffic associated with the facility; it was subjected to unsuccessful administrative appeals within the Coast Guard, after which this challenge was filed in the Ninth Circuit. After reviewing the regulatory apparatus that is used to determine whether a proposed LNG facility can be permitted by FERC, the Court of Appeals held that the Letter does not have any “conclusive legal effect”, and it is therefore not a final agency action triggering judicial review. However, the Court of Appeals noted that the Letter could be an issue when the FERC permit is itself litigated, or if the Coast Guard issues a final order pursuant to its independent legal authority.

The U.S. Court of Appeals for the Fourth Circuit recently reviewed the lower court’s rejection of a series of challenges to an important North Carolina highway transportation project that will repair and restore access to the North Carolina Outer Banks. The case is Defenders of Wildlife, et al., v. North Carolina Department of Transportation, et al., decided August 6, 2014.

Following its review of a long and complex administrative record, the Court of Appeals upheld the lower court’s dismissal of the plaintiffs’ National Environmental Policy Act (NEPA) challenge to the complicated project, but ordered to court to conduct additional inquiries into the defendants’ argument that the “joint planning exception” known as a “Section 4(f)” exception, was warranted. The “Section 4(f) exception” is a shorthand reference to a provision of the transportation laws administered by the Federal Highway Administration that affect the use of federal transportation funds in a designated wildlife area.

The Court of Appeals acknowledged that additional hearings may require the lower court to conduct “an odyssey into the facts of the condemnation proceedings [that preceded the refuge designation] and pertinent North Carolina property law”, and it provided a roadmap for this inquiry. The opinion of the Court of Appeals is a very useful explication of these complicated laws and policies.