Recent Environmental and Administrative Law Decisions by Federal and State Courts

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The state and federal appellate courts have issued a surprising number of significant rulings in a variety of environmental and administrative law controversies in late July and early August:

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  • On August 8, the U.S. Court of Appeals for the Second Circuit issued a very long (127 pages) ruling  affirming in all respects the (400-page) opinion of the U.S. District Court for the Southern District of New York which found that a massive judgment obtained by the Ecuadorian plaintiffs against Chevron for alleged pollution in the Ecuadoran rain forest by Texaco many years ago was, in fact, procured by fraud. The case is Chevron Corporation v. Donzinger, et. al. The District Court enjoined Donzinger and his associates from seeking to enforce in the United States an $8.6 billion judgment; imposed a constructive trust for Chevron’s benefit on any property that Donzinger and his associates received that is traceable to this judgment or its enforcement; and held that the conduct of this litigation against Chevron violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 (RICO) and also warranted relief under the common law of New York. The defendants-appellants argued that Chevron had no Article III standing to pursue this action, and that to uphold the judgment for Chevron would violate principles of international comity and judicial estoppel. This result confirms again the inestimable value of an independent, fearless judiciary, which is so sadly wanting in many areas of the world.

  • On August 5, the U.S. Court of Appeals for the DC Circuit reviewed the complaints that the actions of the U.S. Fish and Wildlife Service to issue permits to build a wind farm in Ohio violated provisions of NEPA and the Endangered Species Act. The case is Union Neighbors United, Inc., v. Jewell. The Court of Appeals held that the Service failed to comply with the National Environmental Procedures Act (NEPA) because its environmental impact statement did not consider feasible alternatives that would have ensured that fewer numbers of the Indiana bat, an Endangered Species Act (ESA)-protected species, were taken in the course of operating the wind farm. On the other hand, the Service’s interpretation of the ESA, as found in its handbook and policy statements, was entitled to at least “Skidmore deference.” The case was returned to the District Court for additional proceedings.
  • On August 3, the U.S. District Court for the District of Columbia temporarily halted a light rail project that will serve the Maryland suburbs of Washington, DC because the environmental impact statement prepared by the Federal Transit Administration failed to discuss the alarming drop in light rail ridership in the District and its growing safety problems. Also concerning the court was the fact that at least $1 billion in federal funds would be spent on this project. The case is Friends of the Capital Crescent, et al., v. Federal Transit Administration, et al.
  • On August 4, 2015, the U.S. Court of Appeals for the Fifth Circuit reversed the District Court’s decision granting summary judgment to an insured electrical power generator that sought insurance coverage from its insurance companies to fund the remedial efforts the utility was obliged to perform as part of a Consent Decree the generator executed with EPA to resolve Clean Air Act violations. The case is Louisiana Generating L.L.C., et al., v. Illinois Union Insurance Company. The underlying policy was subject to the law of the State of New York. Briefly, Louisiana Generating argued that its remediation costs for installing new and expensive pollution control equipment and performing supplemental environment projects pursuant to the Consent Decree were remediation costs encompassed by the insurance policy. The insurer argued that remediation is typically viewed as being direct, physical remediation, and not these indirect remediation efforts. Because of these arguments, the Court of Appeals held that summary judgment was inappropriate at this time, and the case was returned to the District Court.
  • An earlier unpublished opinion by the U.S. Court of Appeals for the Ninth Circuit, in Ash Grove Cement Company v. Liberty Mutual Insurance Company, et al., decided May 11. 2016, is worth noting. The Court of Appeals held that, in Oregon, the receipt of an information request from the U.S. EPA pursuant to section 104(e) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9604(e), regarding contamination at a site (a 104(e) letter) triggers the insurance company’s duty to defend its insured. It was argued that this administrative notice and information request is not a “suit” which normally triggers such duties, but the Court of Appeals held this matter is now well settled.

State appeals courts have been busy as well:

  • On July 26, the Commonwealth Court of Pennsylvania reviewed and rejected a petition for mandamus filed against the Governor of Pennsylvania and various Pennsylvania executive agencies by the guardians of several minor children who argued the defendants had a duty to develop a comprehensive plan to regulate the state’s emissions of CO2 and other greenhouse gases that contribute to climate change. The Court held the petitioners had standing to bring this action, and the Court had jurisdiction to hear it. However, despite the approval of the Pennsylvania Environmental Rights amendment to the state Constitution, the Court observed that the petitioners could not point to any legislative actions that mandate the defendants to take the actions demanded of them. The case is Funk, et al. v. Tom Wolf, Governor of Pennsylvania.
  • On August 4, the Court of Appeals for the First District of Texas, sitting in Houston, issued an interesting ruling, in Manderscheid v. LAZ Parking of Texas, LLC, and Boot Man, Inc. dba Premier Parking Enforcement. Manderscheid’s car was booted, and learning that he had the right to a hearing to complain about the fairness of this action, he sought a hearing at the Justice of the Peace Court and the County Court of Law in Houston. While the Justice of the Peace Court provided him a hearing-and denied relief, the County Court at Law denied his appeal and also held he had no right to a jury to hear his case. The Court of Appeals reversed the County Court at Law, and now persons upset with having their cars “booted” and paying the fees to have the car returned to them have the right to a jury trial.
  • On August 4, the Fourteenth Court of Appeals, sitting in Houston, decided the case of Oiltanking Houston, L.P., et al., Delgado, et al., a personal injury action. Mr. Delgado was the employee of an independent contractor and died in an oil storage tank explosion on Oiltanking oil storage facility located adjacent to the Houston Ship Channel. A wrongful death claim was tried to the jury, and a $21 million judgment was entered against Oiltanking. On appeal, the jury verdict was reversed because the plaintiffs failed to comply with Chapter 95 of the Texas Civil Practice and Remedies Code, which limits the exposure of defendants like Oiltanking; this is a tort reform law which makes it more difficult to hold the facility owner liable in such litigation unless there’s a very strong case of negligence on the part of the facility owner.

Additional Source: SCOTUS Round-up For 2015-2016

Photo:  U.S. Fish and Wildlife Service, Indiana bats, Taken March 6, 2010 – Creative Commons