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Two recently issued decisions are important because they clarify how the formidably complex legal structure affecting a growing American business—the export of liquefied natural gas (LNG) –will be interpreted by the one federal Court of Appeals that has singular expertise in interpreting such requirements. On June 28, the U.S. Court of Appeals for the DC Circuit denied two petitions to review National Environmental Policy Act (NEPA) environmental issues affecting two separate FERC LNG export terminal facilities; the two cases are Sierra Club and Galveston Baykeeper v. FERC ( pertaining to the Freeport, Texas terminal ) and Sierra Club v. FERC (regarding the Sabine Pass Terminal). These cases were argued by and decided by the same attorneys and panel of judges. The Court of Appeals found that the petitioners had demonstrated sufficient standing, but the basic flaw in their argument seems to have been that FERC’s role is fairly circumscribed by law, and the major complaint was that the export of LNG would inevitable reduce the supply of natural gas for domestic purposes, thus increasing reliance on cheaper sources of energy such as coal.

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A recent decision by the U.S. Court of Appeals for the Fifth Circuit is a reminder to important federal agencies that they must take care to adhere to the requirements of the Administrative Procedure Act (APA) when they issue not only new rules, but also other regulatory documents as well, and that the federal courts can, in appropriate cases, step into a controversy at an early stage. On June 27, the Fifth Circuit ruled, in a 2 to 1 opinion, that a 2012 Equal Employment Opportunity Commission (EEOC) Enforcement Guidance, entitled “Enforcement Guidance on the Consideration of Arrest and Conviction Record in Employment Decisions Under Title VII of the Civil Rights Act of 1964” was a final action, and the lower court erred in dismissing a declaratory judgment action filed by the State of Texas. The case is State of Texas v. Equal Opportunity Commission.

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A very interesting unclaimed property memorandum opinion was recently issued by the U.S. District Court for the District of Delaware in Temple-Inland, Inc. v. Cook, et al. After the State of Delaware conducted an audit going back 22 years and assessed Temple-Inland a liability of $2,128,834.13, which was comprised of unclaimed accounts payable and payroll, Temple-Inland filed a complaint challenging that the State’s actions violate federal common law and several constitutional provisions, including substantive due process, the takings clause, and the ex post facto clause. The District Court considered the constitutional limits to Delaware’s enforcement of its unclaimed property laws. Upon review, the District Court concluded, in part, “[t]o put the matter gently, [the State] ha[s] engaged in a game of ‘gotcha’ that shocks the conscience.”

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Today, my colleague Norman Carlin published an interesting piece discussing a pair of recent decision issued by the Fourth District Court of Appeal upholding a public-private partnership (P3) water project against two California Environmental Quality Act (CEQA) challenges. The two decisions are Delaware Tetra Technologies, Inc. v. County of San Bernardino, 247 Cal. App. 4th 352.(2016) and Center for Biological Diversity v. County of San Bernardino, 247 Cal. App. 4th 326 (2016). Norman’s alert is Saving Private Partnerships: Court Upholds P3 Project against CEQA Challenge under Save Tara.

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Recently there have been some interesting developments in environmental and regulatory law, including litigation, administrative and regulatory actions, and legislation.  I’ve provided you with a little lite reading to ease into your week:roundup-300x227

Litigation

The Supreme Court will review a U.S. Court of Appeals for the D.C. Circuit decision, in NLRB v. Southwest General, Inc., regarding the Federal Vacancies Reform Act, which determines when nominees for agency positions can serve in those positions while their nominations are pending in the Senate. This case involves a controversy affecting that NLRB’s Acting General Counsel. Because of the lower court’s ruling, many administrative decisions were imperiled. It may also affect the actions of EPA’s Acting Deputy Administrator.

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In Supreme Court Validates “Implied Certification” Liability Under False Claims Act, sadwe and our colleague Danielle Vrabie discuss the U.S. Supreme Court’s June 16, 2016 decision in Universal Health Services, Inc. v. United States ex rel. Escobar, No. 15-7. The government contractor and health care communities had hoped the Court would use this case to narrow the scope of liability under the federal False Claims Act (FCA). That did not happen. Rather, a unanimous Court held that: (1) “implied certification” is a valid theory of liability under the FCA and (2) FCA liability for failing to disclose violations of legal requirements depends on the “materiality” of those requirements, not on whether those requirements were express conditions of payment. The Court’s holdings expand the scope of FCA liability previously recognized in several jurisdictions, resulting in a defeat for companies that sell to or seek reimbursement from the federal government.

Photo:  Pixel Addict, Depressed, May 21, 2007 – Creative Commons

 

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In Texas Extends ‘Accommodation Doctrine’ To Groundwater, I provide a broader analysis of the issue presented in my earlier blog When Contract is Silent, Accommodation Doctrine Applies to Water Rights Disputes. texaswater

Pillsbury summer associate Brittney Sandler made significant contributions to this article. Sandler is currently enrolled at Georgetown University Law Center where she serves as editor for the Georgetown Law Journal and as a legal research and writing fellow.

Photo: Greg Westfall, Just Another Day at the Park, Taken August 24, 2013 – Creative Commons

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On June 20, 2016, the U.S. District Court for the Northern District of California held, in Center for Environmental Health, et. al. v. Vilsack, that a United States Department of Agriculture (USDA) guidance document, intended to provide guidance with respect to the Organic Foods Act, was a legislative rule, not merely an interpretive statement of agency policy. The Act establishes the standards a product must satisfy to be labeled “organic.” The California Department of Food and Agriculture (CFDA) is certified by the USDA to administer the program in California, and in 2009, the California agency’s inspectors found detectable levels of bifenthrin in three compost products used in organic agricultural operations. Since the substance is not on a “National List” of approved synthetic substances, the USDA rules prohibit this use in compost products. In response to inquiries made by the manufacturer, the USDA issued the guidance document in question which allows the use of this substance under certain conditions.

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Pillsbury attorney Julia Judish provided commentary on the U.S. Supreme Court’s recent ruling in Encino Motorcars, LLC v. Navarro that vacated a Ninth Circuit ruling after holding that Department of Labor Fair Labor Standards Act regulations were not entitled to deference because they were issued without adequate explanation. In Attys React To High Court’s Auto Service Advisers OT Ruling, Judish stated:

“The Encino Motorcars decision will have little direct effect on the scope of FLSA overtime exemptions. The FLSA question presented in Encino — whether service advisers at auto dealerships are eligible for overtime — is unresolved. On remand, the Ninth Circuit will decide that question. The decision’s significance lies in its holding that an agency’s published regulations are not entitled to deference if the regulation departs from the agency’s long-standing prior interpretations, and if the agency has not published an explanation and analysis of its changed interpretation. Other published regulations may be subject to similar challenges.”

The Encino decision is but yet another recent decision calling into question whether deference is to be given to an agency’s rulemaking. The Chevron deference debate continues.

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In Supreme Court: the VA Must Apply the “Rule of Two” in all Contracting Decisions, VetAffairsPillsbury attorneys David Dixon and Dick Oliver discuss the U.S. Supreme Court’s June 16 unanimous ruling that the U.S. Department of Veterans Affairs (VA) must give preference to veteran-owned small businesses for all VA procurements as long as the requirements of the “Rule of Two” are met. This decision is expected to drastically alter the landscape for VA procurement. This ruling is Kingdomware Technologies, Inc. v. United States.

Photo:  JeffOnWire, Department of Veterans Affairs Motto, Taken November 16, 2014 – Creative Commons