Indiana Real Property and Environmental Law Report - Commentary on State and Federal Environmental Issues Affecting Indiana

I wrote about this case in an earlier post.

Decker involves a challenge to a Ninth Circuit ruling that runoff from logging roads into ditches requires a stormwater permit. Petitioners argue that the Ninth Circuit should not have held that channeled forest road runoff is subject to NPDES permitting. Because the EPA interpreted the definition of point source, petitioners argue that the courts accord Chevron deference to the agency's interpretation.

According the NEDC, the EPA’s interpretation of its regulations is either (a) inconsistent with the text of the regulation, or (b) the regulation would be better read to require permits. Relying on §1365 of the CWA, the NEDC brought a citizen’s suit in an attempt to eliminate the exemption from the permiting process..

The EPA has previously interpreted the CWA as exempting certain logging activities that cause polluted water to run off of forest roads and into ditches, culverts, or pipes from the permitting process.  The Petitioners argue that a citizen's lawsuit was impermissible in this case because of §1369 of the CWA. The parties also do not agree on the level of deference that the EPA should have been given in interpreting its regulations. Furthermore, the NEDC takes issue with the way EPA interprets several key phrases in the CWA, which affects the substance of the EPA’s decision.

Since passage of the Clean Water Act, the EPA has considered runoff of rain from forest roads - whether channeled or not - to fall outside the scope of the NPDES process, and not to require a permit as a point source discharge of pollutants. Under a rule first promulgated in 1976, the EPA consistently has defined as non-point source activities forest road construction and maintenance from which natural runoff results. And in regulating stormwater discharges under 1987 amendments to the Act, the EPA again expressly excluded runoff from forest roads. In consequence, forest road runoff long has been regulated as a nonpoint source using best management practices, like those imposed by the State of Oregon on the roads at issue here.

The EPA’s consistent interpretation of more than 35 years has survived proposed regulatory revision and legal challenge, and repeatedly has been endorsed by the United States in briefs and agency publications. 

The Ninth Circuit rejected the EPA’s longstanding interpretation. This conflicts with other circuits and gives no deference to the EPA in interpreting the statute and regulations it has expertise in.

The Superme Court held. 

1. Challenges to EPA action under 33 U.S.C. §1369(b) are not a jurisdictional bar, and does not prevent the District Court from entertaining a citizen's suit under §1365. 

1. EPA's recent amendment to the Industrial Stormwater Rule did not moot the issue of the lawsuit. The controversy continues when respondent may face penalties for past activities under the old rule even if the new rule provides that a NPDES permit is not applicable. 

The Court found that the pre-amendment version of the Industrial Stormwater Rule, as construed by EPA, exempts discharges of channeled stormwater runoff from logging roads from the NPDES permitting scheme and that the regulation is a reasonable interpretation of the statutory term “associated with industrial activity,” §1342(p)(2)(B).

When an agency interprets its own regulation, the Court, as a general rule, defers to it unless that interpretation is plainly erroneous or inconsistent with the regulation. The Court also found that another reason to accord Auer deference (519 U.S. 452, 461) to the EPA’s interpretation is that there is no indication that EPA's current view is a change from prior practice or is a post hoc justification adopted in response to litigation. The conclusions of EPA as to logging roads has been consistent over time. 

The Court also noted that the CWA gives EPA discretion in the area of stormwater runoff, and EPA could have reasonably concluded that further federal regulation would be duplicative or counter-productive in light of Oregon’s extensive rules on the subject. 

To the Court, the key to the case appears to be the language of §1342(p)(2)(B), associated with industrial activity. It held that it was reasonable for EPA to conclude that the conveyances at issue are “directly related” only to the harvesting of raw materials, rather than to “manufacturing, processing, or raw materials storage areas at an industrial plant.” 40 C.F.R. §122.26(b)(14).

USEPA and the DOJ have entered into a consent decree with CountryMark Refining LLC to pay a $167,000 civil penalty, perform environmental projects totaling more than $180,000, and spend $18 million on new pollution controls to resolve Clean Air Act violations at its refinery, located in Mount Vernon. The consent decree is here.  CountryMark Consent Decree.pdf

The original complaint alleged that the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing required pollution control equipment. The CAA requires major sources of air pollution to obtain such permits before making changes that would result in a significant net emissions increase of any pollutant. The complaint also alleged CAA violations related to flare operation, the New Source Performance Standards, and applicable requirements for leak detection and repair (LDAR). 

The pollution controls required by the settlement are intended to reduce air emissions by an estimated 1,000 tons per year. 

The settlement requires new and upgraded pollution controls, more stringent emission limits, and aggressive LDAR practices to reduce emissions from refinery equipment and processing units. The settlement also requires new controls on the refinery’s flaring devices, which are used to burn-off waste gases. The amount of pollution that flares emit depends on the total amount of waste gases sent to a flare and the efficiency at which the flare is operated when burning those gases. The settlement will ensure proper combustion efficiency for any gases that are sent to a flare and will also cap the total amount of waste gases that can be sent to a flare at the refinery. The flares requirements are part of EPA’s national effort to reduce emissions from flares at refineries, petrochemical, and chemical plants. 

The flaring efficiency requirements are part of EPA’s national enforcement initiative to improve compliance among petroleum refiners and to reduce significant amounts of air pollution from refineries nationwide.

This consent decree, and others, are available for review at  www.justice.gov/enrd/Consent_Decrees.html

This is a subject matter jurisdiction case.

Wabash is a power generation cooperative. Northeastern purchases electricity from Wabash and resells it. In 1977, they entered into a contract: Northeastern agreed to purchase electricity from Wabash for 40 years at rates to be set by the Wabash board of directors “[s]ubject to the approval of the Public Service Commission of Indiana.” The areement provided that the revised rates would not be effective unless approved by the “applicable regulatory authorities,” and the federal Rural Electrification Administration. 

In 2012, Northeastern sought a state court declaratory judgment that Wabash breached the contract by taking action in 2004 that had the effect of transferring regulation of its rates from the Indiana Commission to the Federal Energy Regulatory Commission. Wabash removed the case under 28 U.S.C. § 1441(a), arguing that the claim arises under the Federal Power Act, 16 U.S.C. 791a. The district court denied remand and granted a preliminary injunction. 

The Seventh Circuit vacated, holding that federal courts lack subject matter jurisdiction. Northeastern’s claim the court held, is limited to construction of the contract and does not necessarily raise a question of federal law. While Northeastern may eventually use a favorable state court judgment to seek permission to terminate its obligations under the tariff filed with FERC, that could not be accomplished in this lawsuit.

The decision is here. Northeastern Rural v. Wabash Valley.pdf 

US District Judge Larry McKinney granted summary judgment in favor of the Army Corps and INDOT on Tuesday, July 25, 2012.

Opponents of the $3 billion Interstate 69 extension between Indianapolis and Evansville, including Hoosier Environmental Council and Citizens for Appropriate Rural Roads, had argued that the Army Corps of Engineers violated federal law by granting permission to fill wetlands and reroute streams along part of the 142-mile roadway.

The Hoosier Environmental Council and Citizens for Appropriate Rural Roads filed their lawsuit in February 2011.  They claimed that the highway would cause "irreparable" environmental harm along a 26-mile section that would cross southern Indiana's Daviess and Greene counties.

The complaint also alleged that the Army Corps violated the Clean Water Act by issuing a permit that would allow INDOT to dump about 215,000 cubic yards of fill material into wetlands and streams to build the highway between Washington and Crane.  They maintained that the agency failed to consider other construction approaches that caused would inflict less serious damage to the area's environment, and that the Army Corps did not consider the project's full environmental impact.

Judge McKinney held that the Corps' decision to issue a permit was neither arbitrary nor capricious.

The 65 mile section of the I-69 extension between Evansville and Crane Naval Surface Warfare Center, southwest of Bloomington, is expected to open in the late fall or early winter.

Plaintiffs MSJ.pdf

Defendants MSJ.pdf

Order Summary Judgment.pdf

From the Supremes:

Southern Union Company is a natural gas distributor. Its subsidiary stored liquid mercury at a facility in Pawtucket, Rhode Island. In September 2004, youths from a nearby apartment complex broke into the facility, played with the mercury, and spread it around the facility and complex. The complex's residents were temporarily displaced during the cleanup and most underwent testing for mercury poisoning.

The company was convicted of violating the Resource Conservation and Recovery Act for knowingly storing liquid mercury without a permit "on or about September 19, 2002 to October 19, 2004." Violations are punishable by a fine of not more than $50,000 per day, 42 U.S.C. 6928(d). The probation office calculated a maximum fine of $38.1 million, based on 762 days.

The company argued that any fine greater than $50,000 would be unconstitutional under Apprendi v. New Jersey, which held that the Sixth Amendment requires that any fact (other than prior conviction) that increases maximum punishment be proved to a jury beyond a reasonable doubt.

The district court held that Apprendi applies to criminal fines, but concluded that the jury found a 762-day violation and imposed a fine of $6 million and a community service obligation of $12 million. The First Circuit affirmed on the ground that Apprendi does not apply to criminal fines.

Southern Union objected that this calculation violated Apprendi because the jury was not asked to determine the precise duration of the violation. The company noted that the verdict form listed only the violation's approximate start date (i.e., "on or about"), and argued that the court's instructions permitted conviction if the jury found even a 1-day violation. Therefore, Southern Union maintained, the only violation the jury necessarily found was for one day, and imposing any fine greater than the single-day penalty of $50,000 would require fact-finding by the court, in contravention of Apprendi.

The Government acknowledged the jury was not asked to specify the duration of the violation, but argued that Apprendi does not apply to criminal fines.

The court therefore set a maximum potential fine of $38.1 million, from which it imposed a fine of $6 million and a "community service obligatio[n]" of $12 million. On appeal, the United States Court of Appeals for the First Circuit rejected the District Court's conclusion that the jury necessarily found a violation of 762 days. But the Court of Appeals affirmed the sentence because it also held, again in contrast to the District Court, that Apprendi does not apply to criminal fines. Other Circuits have reached the opposite conclusion.

The Supreme Court reversed. Justices Sotomayor, Roberts, Scalia, Thomas, Ginsburg and Kagan were in the majority.  The case raises the important question of whether a criminal fine must be vacated under Apprendi, 530 U.S. 466 (2000), where a judge, and not a jury, determined the facts as to the number of days of violation under a schedule of fines.

"We granted certiorari to resolve the conflict. . . and now reverse. . . We hold that the rule of Apprendi applies to the imposition of criminal fines. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion." . . . .

"The Sixth Amendment reserves to juries the determination of any fact, other than the fact of a prior conviction, that increases a criminal defendant’s maximum potential sentence. Apprendi v. New Jersey, 530 U. S. 466 (2000); Blakely v. Washington, 542 U. S. 296 (2004). We have applied this principle in numerous cases where the sentence was imprisonment or death. The question here is whether the same rule applies to sentences of criminal fines. We hold that it does. . . .

. . . [W]e see no principled basis under Apprendi for treating criminal fines differently. Apprendi’s “core concern” is to reserve to the jury “the determination of facts that warrant punishment for a specific statutory offense.” Ice, 555 U. S., at 170. That concern applies whether the sentence is a criminal fine or imprisonment or death. Criminal fines, like these other forms of punishment, are penalties inflicted by the sovereign for the commission of offenses.  . . . .

Under Apprendi, '[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.' 530 U. S., at 490. The 'statutory maximum' for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant.' Blakely, 542 U. S., at 303 (emphasis deleted). Thus, while judges may exercise discretion in sentencing, they may not 'inflict[to] punishment that the jury's verdict alone does not allow.'"

Justice Breyer filed a dissenting opinion in which Kennedy and Alito joined.

Where a criminal fine is at issue, I believe the Sixth Amendment permits a sentencing judge to determine sentencing facts—facts that are not elements of the crime but are relevant only to the amount of the fine the judge will impose. Those who framed the Bill of Rights understood that “the finding of a particular fact” of this kind was ordinarily a matter for a judge and not necessarily “within ‘the domain of the jury.’” Oregon v. Ice, 555 U. S. 160, 168 (2009) (quoting Harris v. United States, 536 U. S. 545, 557 (2002) (plurality opinion)). The Court’s contrary conclusion, I believe, is ahistorical and will lead to increased problems of unfairness in the administration of our criminal justice system.

The complete opinion and dissent (here). The oral argument transcript (here). And the briefs filed in the case (here).

My wife's cousin - let's call him Dan - called me to discuss an environmental issue on his family's farm a few years ago. 

These are folks who farm several thousand acres in southern Indiana, so I was thinking it could be any number of things. But it wasn't anything I expected to hear.

As it turns out, one of Dan's farms lay adjacent to a conservation club.  The ground immediately adjacent to the club was far less productive than neighboring dirt. He attributed the lack of productivity to the club.

"What are we talking about here, Dan?"

"Well" he said, "you know how the club has its shooting range next to the farm - and you know all the outings, and the contests, and how the high school trap shooting team used the range for 50 years or more?. The buckshot lands in our field"

"Yea, I know that.  So what?"

"I think all that lead in the shot landing in our field has contaminated our ground. The crops won't grow."

Don't ever let it be said that farmers don't know their chemistry.  As it turns out, Dan was absolutley correct.  And we addressed the issue.  That's another insurance claim story for another post.

But I thought about that today as I read about a lawsuit filed yesterday in the DC District. My first thought was that we may have just another group of environmental organzations hugging a tree or two.  My second thought was my experience with Dan's case.

A group of conservationists sued the EPA on Thursday to force regulation of ammunition whcih indirectly kills endangered California condors.  The organizations assert that lead poisoning from ammunition kills not only condors but eagles, swans, loons and other birds that feed on dead animals in the wild. The lawsuit, filed in federal District Court in Washington, DC, asks the EPA to initiate a public process to determine whether that ammunition can be controlled. The complaint does not, however,  ask for a ban.

The Complaint is here.  Trumpeter Swan v. EPA.pdf

The same groups filed a petition with EPA and it responded in April - saying it does not have the authority under the Toxic Substances Control Act to regulate lead ammunition. Furthermore, the agency said the petition was similar to one filed by some of the groups in 2010 and declined to review the most recent one.

Lead poisoning has long been recognized as one of the leading causes of death of the condor. They once numbered in the thousands across North American but were nearly extinct in the early '80s.

So what have we learned?  We learned what we already knew.  Even indirectly, lead has consequences. No doubt this will become a political issue. It shouldn't - but it will.

Logging is a substantial industry in heavily forested southern Indiana. Imagine the surprise (read "anger") of most loggers when they discover that they have to obtain an NPDES permit as related to stormwater running off logging roads.

In 2010, the Ninth Circuit Court of Appeals held that logging-road operators should be required to apply for National Pollutant Discharge Elimination System (NPDES) permits. The case, Northwest Environmental Defense Center v. Brown, involved two Oregon logging roads where stormwater runoff is collected in systems of ditches, channels, and culverts, and then discharged into adjacent rivers. The court held that the stormwater collection systems constitute “point sources” under the Clean Water Act (CWA), and that the discharges therefore require permits under the CWA’s NPDES program. It also deemed the logging roads to be an “industrial activity". The court significantly limited a 35 year old regulation that historically interpreted logging road runoff as outside the NPDES program.  Northwest Environmental Defense Center v. Brown.pdf

The Obama Administration wants to change the rules applying to stormwater running off logging roads. The EPA filed its notice of intent this past week in the Federal Register proposing to revise stormwater regulations to avoid inclusion of logging roads on private and public lands.

EPA is planning to issue a rule stating that discharges from logging roads do not require NPDES permits because they are not included in the definition of "stormwater discharge associated with industrial activity." 

The EPA rulemaking occurs as the Supreme Court is considering whether to hear the case. The Supreme Court asked the Solicitor General to suggest whether the question needed higher review.

There are two related petitions before the high court: Decker v. Northwest Environmental Defense Center and Georgia-Pacific West Inc. v. Northwest Environmental Defense Center, in which the State of Oregon and the timber industry, respectively, are seeking review of the appeals court decision. Legislation has already been introduced in Congress that would reverse the ruling. Congress also voted in December to stay permitting of logging roads, a measure that will expire October 1, 2012.

The Solicitor General filed a brief with the Supreme Court arguing that the Court need not hear the case because Congress and EPA are addressing the matter.  He also said thatthe Ninth Circuit had incorrectly decided the case by failing to give EPA the necessary deference over its application of the law.  Industry groups still want the justices to decide the issue despite the administration's efforts. Solicitor General Brief.pdf

EPA will propose that logging roads would be regulated under a less stringent system known as “Best Management Practices,” where authorities set up guidelines for the design and maintenance of logging roads to minimize erosion that sends mud into rivers. EPA is reviewing how states and tribes handle the issue, and plans to issue the new rules by September 30, when an exemption for the timber industry enacted by Congress expires.

The EPA and the Department of Justice announced that BP North America Inc. has agreed to pay an $8 million penalty and to invest more than $400 million to install state-of-the-art pollution controls and cut emissions from BP’s petroleum refinery in Whiting.  The Whiting facility has a refining capacity of approximately 400,000 barrels per day, and is the 6th largest refinery in the United States.

The DOJ said that BP North America had not lived up to all of its obligations under an earlier settlement agreement and committed new violations of the Clean Air Act at its Whiting refinery. The complaint alleged violations of Clean Air Act requirements at the Whiting refinery in connection with construction and expansion of the facility, as well as violations of a 2001 Consent Decree with the company that covered all of BP’s refineries and was entered into as part of EPA’s Petroleum Refinery Initiative.

The settlement will require the installation of pollution controls on the largest sources of emissions at the Whiting refinery, including extensive new controls on the refinery’s flaring devices. Under the settlement, BP will install new equipment that will limit the amount of waste gas sent to flaring devices in the first place, as well as implement controls to ensure proper combustion efficiency for any gases that are burned in a flaring device.

The requirements, similar to those included in a recent settlement with Marathon Petroleum, are part of EPA’s national effort to reduce emissions from flares at refineries, petrochemical and chemical plants.

In addition to the controls on the refinery’s flares, the settlement will also impose enhanced controls on wastewater containing benzene and providing for an enhanced leak detection and repair program. It settlement also requires the Whiting refinery to spend $9.5 million on projects at the refinery to reduce the emissions of greenhouse gases.

BP will perform a supplemental environmental project in which they will install, operate and maintain a $2 million fence line emission monitoring system at the Whiting refinery and will make the data collected available to the public by posting the information on a publicly-accessible website. Fenceline monitors will continuously monitor benzene, toluene, pentane, hexane, sulfur dioxide, hydrogen sulfide and all compounds containing reduced sulfur.

The State of Indiana, the Sierra Club, Save the Dunes, the Natural Resources Defense Council, the Hoosier Environmental Council, the Environmental Law and Policy Center, and the Environmental Integrity Project also joined in this settlement.

The line of Pakootas decisions just keeps growing, adding considerably to the body of CERCLA case law defining Superfund issues. 

In the most recent lawsuit, the Confederated Tribes of the Colville Reservation sued (in 2004) to recover costs associated with cleaning up environmental contamination in Washington allegedly caused by a Canadian mining company's disposal of slag and liquid effluent into the Columbia River from its mining facility in Canada. Pakootas v. Teck Cominco 2012.pdf

The State of Washington intervened as a plaintiff.  The complaint alleged that the river carried the slag and liquid waste downstream, resulting in disposal into waters of the United States.  The plaintiffs' evidence showed that before 1996, the facility  - from 1906 to 1996 - generated and discharged certain hazardous substances including slag, as a solid form and in liquid waste, arsenic, cadmium, copper, mercury, lead, and zinc into the Columbia River. The complaint also said that the river carried the slag and liquid waste downstream, resulting in disposal into waters of the United States.  Teck Cominco Metals argued that the harm caused is divisible and that it is liable only for the contamination proven to be traceable to it.

The court held that a CERCLA liability determination is based upon the language of the statute itself:

. . . [L]iability attaches when three conditions are satisfied: (1) the site at which there is an actual or threatened release of hazardous substances is a “facility” under 42 U.S.C. Section 9601(9); (2) a “release” or “threatened release” of a hazardous substance from the facility has occurred, 42 U.S.C. Section 9607(a)(4); and (3) the party is within one of the four classes of persons subject to liability under §9607(a).

The court rejected the company's argument.  It held that Teck Cominco had not proven that the environmental damage could be divided to allow for apportionment of liability.  The court also held that Teck Cominco, and not the tribes or the State, had the burden of proving divisibility.  The court also ruled that defendant's potential liability does not arise from its disposal of slag in the river, but from actual or threatened releases of hazardous substances from the slag or effluent after it came to rest in the “facility,” defined as the upper Columbia River site.  

Judge Suko wrote that “ . . . While it appears “divisibility” and “apportionment” are terms used interchangeably, what is potentially divisible is the harm, and if the harm is divisible, what is potentially apportioned is liability, assuming there is a reasonable factual basis for apportionment.”

This decision is also a good read for Judge Suko’s examination of some of the more recent contribution and apportionment appellate decisions from around the country.  A bench trial is now scheduled for September 2012 to determine whether Teck Cominco is responsible for the contamination.

The Seventh Circuit Court of Appeals has addressed the pollution exclusion clause yet again.  The Court's decision can be found here.  Village of Crestwood.pdf

In 1985 or 1986 Crestwood, Illinois' village officials learned from the state's environmental authorities that one of its wells was contaminated by perc (PCE-perchloroethylene, also known as tetrachloroethylene).

Village officials commited to state authorities that the well would be used only in emergencies. Instead, the well continued to be used as a source of the daily Village water supply without disclosure to the Village's residents, ostensibly for reasons of economy.

The Village used the well until 2007. The well was not sealed until 2009.  Crestwood residents, having learned of the contamination of their water supply from a series of articles in the Chicago Tribune, sued the Village and past and present Village officials in an Illinois state court seeking damages for injury to health.

In a parallel suit the State of Illinois sought an injunction requiring the Village to finance "a site inspection to determine the nature and extent of contamination" and take "all necessary steps to remediate the contamination." All these actions remain pending.

Two insurance companies, Scottsdale Indemnity and National Casualty, sued for declaratory judgment: that they have no duty either to defend a series of tort suits brought against their insureds (the Village of Crestwood, Illinois, and past and present Village officials) or to indemnify the insureds should the plaintiffs in those suits prevail.

The district court held that the allegations in the tort complaints triggered the pollution exclusion, granted summary judgment for the insurance companies, precipitating the appeals, which are multiple because there are a number of different declaratory-judgment suits.

The Seventh Circuit Court of Appeals (Posner, Wood, and Hamilton) said, "The insureds might as well be arguing that because the Village has never manufactured perc it is responsible for none of the harms that dispersing perc might cause. That would be like a murderer arguing that his victim was killed not by him but by his gun. The Village "caused" the contamination of its water supply (it could have sealed the well a quarter of a century ago, when it discovered the well was contaminated) in a perfectly good sense of the word.

Finally, in affirming the district court the Court indicates, "The insurers conceded at oral argument that the duty to defend would be activated if so enigmatic a complaint were allowed. The complaints actually filed, however, describe in copious detail the conduct giving rise to the tort suits, and in doing so inadvertently but unmistakably acknowledge the applicability of the pollution exclusion."

On December 30 2011 the Court of Appeals for the DC Circuit stayed EPA's Cross-State Air Pollution Rule (Transport Rule).  The CSAPR issued the rule on July 6, 2011.  It became effective on October 7, 2011.  The CSAPR is now on hold pending judicial review until at least April 2012.

The rule requires a total of 28 Eastern states to reduce annual SO2 emissions, annual NOx emissions and/or ozone season NOx emissions to assist in attaining the 1997 ozone and fine particle and 2006 fine particle National Ambient Air Quality Standards (NAAQS). CSAPR replaced EPA's 2005 Clean Air Interstate Rule (CAIR).

A December 2008 court decision kept the requirements of CAIR in place temporarily but directed EPA to issue a new rule to implement Clean Air Act requirements concerning the transport of air pollution across state boundaries.

EME Homer City Generation, L.P. v. EPA was consolidated with 44 other petitions. The Court stated "The Environmental Protection Agency’s 'Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals; Final Rule,' 76 Fed. Reg. 48,208 (August 8, 2011) is stayed pending the court’s resolution of these petitions for review. Petitioners have satisfied the standards required for a stay pending court review . . . Respondent is expected to continue administering the Clean Air Interstate Rule pending the court’s resolution of these petitions for review."  EME Homer v. EPA.pdf

The Court further ordered "that the parties submit by January 17, 2012, proposed formats and schedules for the briefing of these cases that would allow the cases to be heard by April 2012. The parties are strongly urged to submit a joint proposal and are reminded that the court looks with extreme disfavor on repetitious submissions and will, where appropriate, require a joint brief of aligned parties with total words not to exceed the standard allotment for a single brief. The parties are directed to provide detailed justifications for any request to file separate briefs or to exceed in the aggregate the standard word allotment. Requests to exceed the standard word allotment must specify the word allotment necessary for each issue."

A couple of cases of note - worth reading when you have a few minutes.

State of New York v. Solvent Chemical

New York sought contribution under the Comprehensive Environmental Response and Compensation Act (CERCLA), 42 U.S.C. 9601-9675, for both past and future costs of cleanup. The district court awarded contribution for past cleanup costs but declined to issue a declaratory judgment as to future contribution. The Second Circuit Court of Appeals reversed the denial of a declaratory judgment and held that the judgment (1) would serve a useful purpose in settling the legal issues involved, (2) was not being used for procedural gamesmanship or a race to res judicata, (3) would not increase friction between sovereign legal systems, and (4) there was no better or effective remedy. The Second Circuit noted that it would not matter that a declaratory judgment of liability alone would not finalize the controversy and eliminate all uncertainty. Other issues raised on appeal were decided in a summary order issued simultaneously with this opinion.

State of New Jersey, et al. v. EPA

This case involved a motion for fees and costs under section 307(f) of the Clean Air Act, 42 U.S.C. 7607(f), which authorized courts to award costs of litigation whenever they determined that such award was appropriate. In the underlying litigation, a group of Native American tribes and tribal associations intervened on behalf of petitioners who were challenging EPA rules regulating mercury emissions from power plants. The DC Circuit Court of Appeals vacated the mercury rules and agreed with petitioners that the rules violated the Act.  The parties subsequently sought the court to order the EPA to pay their fees and costs. The court concluded that they merited a fee award because they contributed to the proper implementation and administration of the Act or otherwise served the public interest. The court declined, however, to determine the appropriate amount. Instead, the court directed the parties to its Appellate Mediation Program.

Bergman v. Michigan State Transportation Commission

In 1979, Bergmann bought land from the Michigan State Transportation Commission.  In 1989, he sued the Department of Transportation under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601-9675, claiming that there was contamination on the site. After conducting discovery, the parties settled. The district court entered a consent decree in 1991 that required the Department to remediate the property by March 31, 1995.  A consent decree contained a liquidated damages provision that provided that if the Department failed to make a good-faith effort to remediate by that date, the State had to pay Bergmann the amount of $2,000 per month until remediation was complete. The Department failed to remediate or to pay the liquidated damages. On July 31, 2009 — more than 14 years after those obligations came due — Bergmann filed a motion with the same district court to enforce the decree. The district court held that the Department had waived its sovereign immunity and that a 10-year statute of limitations barred enforcement of the remediation obligation, but that each of the missed $2,000 payments triggered its own 10-year limitations period. The Sixth Circuit Court of Appeals vacated, holding that the court should have relied on the doctrine of laches rather than the limitations period because the consent decree amounted to a remedy in equity. The waiver of immunity remained effective. As Judge Posner explained: "From the standpoint of interpretation a consent decree is a contract, but from the standpoint of remedy it is an equitable decree."

The US Supreme Court agreed to review whether some fines in environmental criminal cases must be approved by a jury rather than imposed by a judge.

On November 28, 2011, the Supreme Court granted a petition for review of the question of whether a criminal environmental fine must be approved by a jury.  The case, Southern Union Co. v. United States, concerns the illegal storage of mercury in violation of the Resource Conservation and Recovery Act.

Southern Union is a Texas-based natural gas distributor.  In October 2009, after a 12 day trial, a jury in the District Court for the District of Rhode Island found the company guilty of illegally storing mercury without a permit on property it owned in Pawtucket, R.I.  Judge William E. Smith imposed $18 million in penalties, which included a $6 million criminal fine and $12 million in payments to community interests.

Southern Union Co. argues that it should have faced a fine of $50,000 for a single incident of illegally storing mercury at its property in Pawtucket, R.I.  Any amount over $50,000 should have been presented to a jury, and the government should have had to prove beyond a reasonable doubt to the jury that the facts justified the higher penalty, according to the company.

Southern Union filed a petition for a writ of certiorari - arguing that Sixth Amendment principles as interpreted in Apprendi v. New Jersey, 530 U.S. 466 (2000) require “any fact” other than a prior conviction “that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury and proved beyond a reasonable doubt

The government argued that the First Circuit properly interpreted the Supreme Court's warning “against expanding the Apprendi doctrine far beyond its necessary boundaries.”  The government also argued that the Supreme Court has never taken up the question of whether the imposition of a fine falls under the Apprendi rule.  The government further maintained that the Sixth Amendment allows a trial court to make the findings needed to impose a criminal fine, rather than a jury.

Seymour Recycling Corporation was, in its day, one of the most seriously contaminated Superfund sites in the United States.  A pretty impressive success story now, but it was not easy getting here.  The facility was shut down in 1978 and we have been dealing with clean-up issues ever since.  The Consent Decree was lodged in 1988.  For the past 10 years, the site has been remediated through natural attenuation - because the benefits of pumping and treating had proven to be minimal.

A new issue has arisen recently - the need to remediate 1,4 dioxane - a compound that is the focus of increasingly intense EPA scrutiny.  It is not yet listed as a carcinogen, but it seems to be moving in that direction.  We have opted to place ourslves ahead of the EPA/IDEM curve by commissoning the installation of technology designed to address this potential contaminant.  Not an inexpensive proposition.

The SRC Consent Decree provided for varying levels of settlement status depending on amounts contributed to the clean-up trust fund.  The few PRP's who opted for premium settlor status have no further obligation for additional contributions.  But many others may one day be surprised.

Superfund Consent Decrees don't go away.  And the obligations don't evaporate.  At least not until the Department of Justice and EPA concur.  If the remediation requirements demand the infusion of additional capital from the non-premium PRP's, they must fulfill the obligations entered into by, in many cases, a previous generation of corporate leadership. 

Take a look at US v. Wauconda Sand & Gravel.  US v Wauconda Sand.pdf  In this case, Wells Manufacturing Company was one of the PRP's executing the Consent Decree (in 1994) - which implemented the remedy at this Illinois Superfund site.  In 2009, Wells received a demand from EPA for a contribution of an additional $364,000.  It refused to pay and EPA then moved to enforce the terms of the 1994 Consent Decree.

Wells believed it had extinguishing its liability by executing the Consent Decree in 1994.  It argued that it believed it had completed its obligations, new groundwater findings and additional work not withstanding. The District Court believed otherwise.  The Court said that the Consent Decree obligated potentially responsible parties to perform or pay for additional testing and remediation in the event that there was any exceedance of groundwater standards.  In this case, the exceedance involved the groundwater standard for vinyl chloride. 

Time may have passed, but alas, the obligation to pay did not fade into obscurity.

Tierra Environmental and Industrial Services, Inc., a centralized waste treatment facility in East Chicago, its owner and a manager were charged with conspiracy and felony violations of the Clean Water Act in a seven-count indictment returned by a federal grand jury, on Friday, November 4.  

Tierra Environmental, owner Ronald Holmes and manager Stewart J. Roth have been charged with illegally discharging wastewater into the sewers of the Hammond Sanitary District from a closed facility.

Tierra is a centralized waste treatment facility that charges customers to dispose of their polluted wastewater.   Tierra advertised itself as specializing in spill remediation; bio-waste cleanup; waste brokerage; hazardous and non-hazardous transportation services; industrial wastewater/sludge removal and disposal; grease trap cleaning and tank cleaning for hotels and restaurants; and liquid waste transportation and disposal from food processors, distributors and manufacturers in all industries.   Tierra collected both hazardous and non-hazardous liquid wastes from customers, using a number of vacuum trucks and tanker tractor-trailer trucks.   Tierra had facilities for limited storage, separation and solidification of non-hazardous wastes.  

According to the indictment, Tierra’s East Chicago facility did not hold a permit to discharge industrial waste to the East Chicago Sanitary District’s sewer system and the facility’s connection to that sanitary sewer system had been sealed shut.   The company therefore had to transport wastewaters it collected from customers to other facilities for final treatment and/or disposal.     

The indictment alleges that the conspiracy was undertaken for the purpose of avoiding expenses associated with treating and/or paying other facilities to lawfully treat, store, or dispose of wastewaters collected from customers.   The indictment also alleges that the defendants conspired to achieve this objective by transporting wastewater to a shut-down, unpermitted facility located  in Hammond that was owned and/or controlled by Ronald Holmes.   There, the wastewater was discharged directly to the Hammond Sanitary District’s sewer system.

The Clean Water Act makes it a felony to knowingly discharge trucked or hauled pollutants into a publicly-owned treatment works (POTW) from a discharge point not designated by the POTW.

If convicted, Holmes and Roth face up to five years in prison on the conspiracy count and three years on each of the Clean Water Act counts, as well as a criminal fine of up to $250,000 for each count.   The company may also face fines and probation.

The case was investigated by the Northern District of Indiana Environmental Crimes Task Force, including agents from the U.S. Environmental Protection Agency’s Criminal Investigation Division, the Indiana Department of Environmental Management- Office of Criminal Investigations, the U.S. Department of Transportation, Office of Inspector General, and the U.S. Coast Guard Criminal Investigative Service.  

The U.S. Supreme Court ruled today that Federal common law nuisance claims cannot be brought against utilities for their greenhouse gas emissions in American Electric Power Co. v. Connecticut, U.S., No. 10-174, 6/20/11.  

It was an 8 – 0 decision. Justice Sonia Sotomayor recused herself and took no part in the Supreme Court decision. Sotomayor was a member of the Second Circuit when it heard oral arguments in Connecticut v. American Electric Power Co.

The lawsuits allege that under Federal common law, carbon dioxide emissions constitute a public nuisance - contributing to global warming.  The Court held that the Clean Air Act (and EPA regs authorized by the Act) displace the Federal common law cause of action.  The Clean Air Act “provides a means to seek limits on emissions of carbon dioxide from domestic power plants—the same relief the plaintiffs seek by invoking federal common law. There is no room for a parallel track,” the Court said in an opinion written by Justice Ruth Bader Ginsburg.

The U.S. District Court for the Southern District of New York had dismissed the complaints in 2005, holding that the claims represented a political question not under the jurisdiction of the courts (Connecticut v. American Electric Power Co., 406 F. Supp. 2d 265, 268 (S.D.N.Y. 2005)).

The U.S. Court of Appeals for the Second Circuit had ruled that eight states, New York City, and three environmental groups could proceed with lawsuits in Federal district court against American Electric Power Co. and other electric utilities (Connecticut v. American Electric Power Co., 582 F.3d 309, 69 ERC 1385 (2d Cir. 2009)).

The Supreme Court decision now overturns that ruling.

The U.S. Supreme Court decision in American Electric Power Co. v. Connecticut is at http://www.supremecourt.gov/opinions/10pdf/10-174.pdf.

On March 15, 2011, the Fifth Circuit Court of Appeals ruled that the Environmental Protection Agency cannot require livestock farmers to apply for Clean Water Act  permits unless their farms actually discharge manure into U.S. waters.

In the 2008 Clean Water Act CAFO regulations, the EPA mandated that CAFOs that discharge or propose to discharge pollutants to the waters of the U.S. obtain a Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit. 

The EPA stated that CAFOs “propose to discharge” if they are designed constructed, operated or maintained “such that a discharge would occur.”   The EPA also established a penalty for failure to apply for a NPDES permit for CAFOs that discharge without a permit.

The 2008 regulation also gave a CAFO operator the option to demonstrate to the EPA that the CAFO is designed, constructed, operated or maintained in a manner that the CAFO will not discharge. A CAFO that succeeded in making the showing could apply for a voluntary certification. If a certified CAFO subsequently discharged pollutants, the CAFO would not be subject to the penalty for the failure to apply for a NPDES permit.

The Fifth Circuit agreed with the American Farm Bureau Federation, National Pork Producers Council and several other agriculture groupsthat the Clean Water Act does not include a “duty to apply” for a NPDES permit before a discharge occurs. The Fifth Circuit Court of Appeals concluded, “The CWA provides a comprehensive liability scheme and the EPA’s attempt to supplement this scheme is in excess of its statutory authority.”

According to the ruling, non-discharging CAFOs do not need permit coverage.  In addition, CAFOs cannot face separate liability for “failure to apply” for permit coverage, as EPA’s rule provided. Instead, where a CAFO does not seek permit coverage, the Clean Water Act imposes liability only for discharges that occur from the unpermitted CAFO.

Salon has a January 23 article written by Michelle Fitzsimmons entitled “House GOP's next target: The Clean Air Act”.  The article begins … 

The chairman of a powerful committee vows to derail the EPA's "power grab" 

With the repeal of "ObamaCare" under their belts, House Republicans have their eye and axe set on another bastion of liberal policy-making: the Clean Air Act of 1970. 

The plan to kill Clean Air goes back to December, when the Environmental Protection Agency released plans to draw up new efficiency standards in order to cut greenhouse gases produced by refineries and coal-fired power plants. The EPA has yet to lay out any specifics, but opponents of the regulations -- which would only affect new or upgraded facilities -- haven't wasted any time attacking the standards that would reduce emissions by an estimated 3 percent. . . .

There have been no shortage of attacks on the EPA from Rep. Fred Upton (R-Mich.).  It remains to be seen whether he can get it done.

House Democrats, however, vow to stay strong on environmental issues.  So says an article in the New York Times written by Sarah Abruzzese of Greenwire.  

When asked if the Democrats would stay away from energy and environmental issues and if they proved too divisive in swing districts, Rep. Xavier Becerra of California said, "Environmental policy has been integral to a Democratic agenda and our policy. We also believe that is where job growth will occur in the environmental sector and in the new technologies that will create these jobs."

If you read the comments from the House Democrats' annual conference, it sounds as if they have already forgotten about the November election results. Go figure.

In Sierra Club v. Jackson, DDC, No. 01-15371 (January 20, 2011), the Federal District Court for the District of Columbia denied a request by the Environmental Protection Agency for a 15-month delay to issue air pollution rules for industrial boilers and incinerators.  The court ordered EPA to promulgate new emissions standards by February 21.  Judge Paul L. Friedman wrote the opinion for the Court. 

EPA had requested an extension to April 13, 2012.  EPA sought to reformulate rules for major-source boilers, certain smaller boilers, and commercial and institutional solid waste incineration units. 

The Sierra Club filed a memo opposing EPA's request to extend the deadline until 2012, arguing that the delay would cause an estimated 2,000 to 5,100 premature deaths. 

In a statement, a spokesman for is the EPA said, "The standards will be significantly different than what EPA proposed in April 2010. The agency believes these changes still deserve further public review and comment and expects to solicit further comment through a reconsideration of the rules.”

Indiana Attorney General Greg Zoeller announced that his office - along with the US Environmental Protection Agency, Department of Justice, and the Indiana Department of Environmental Management - has reached a proposed settlement with 13 potentially responsible parties who will pay for and complete the final phase of cleanup at the Cam-Or Superfund site in Westville.  The EPA press release provides details.

The 13 companies agreed to provide $12 million to complete an engineering design and the cleanup of contaminated groundwater, subsurface chemical breakdown products and heavy metals-contaminated soil at the waste oil recycling facility.

In addition, the companies will pay EPA $2.4 million to cover the cost of overseeing the work and other administrative costs, and also pay for oversight by the Indiana Department of Environmental Management.

Project design work is set to begin in 2011, with cleanup targeted for the 2012 and 2013 construction seasons.

Cam-Or re-refined waste oil from 1934 to 1987. This is the fourth cleanup action at the site since operations closed in 1987. It was named to EPA’s Superfund National Priorities List in 1998. To date, EPA has reached agreements with private parties to pay $28.4 million out of $31.4 million in total site costs.

Addtional site history can be found here.  The Post Tribune's Gitte Laasby's article also has a detailed account.

The 13 responsible parties are: Alcoa Aluminum, Inc.; ANR Pipeline Company; Clean Harbors Environmental Services, Inc.; Consolidated Rail Corporation; CSX Transportation, Inc.; Ford Motor Company; Imperial Oil Ltd.; Ingersoll-Rand Company; Northern Indiana Public Service Company; Rockwell Automation; C. Stoddard & Sons, Inc.; Tennessee Gas Pipeline Company; and United States Steel Corporation.

The consent decree was lodged with U.S. District Court on Dec. 22.  There is a 30-day public comment period.

Photo source: Center for Earth and Environmental Science, Indiana University.

The U.S. Supreme Court announced this past week that it will decide whether federal law allows states and private parties to sue utilities for contributing to global warming.

In American Electric Power v. Connecticut, the power company asked the court to rule on enforcement of emissions caps, seeking to overturn a ruling by the U.S. Court of Appeals for the Second Circuit.

American Electric Power is joined in the lawsuit by Duke Energy, Southern Company, Xcel Energy and the Tennessee Valley Authority.  The Supreme Court will rule on whether states and private parties may seek emissions caps on utilities for their alleged contribution to global climate change.  The justices may also decide whether a cause of action to cap carbon dioxide emissions can be implied under federal common law.

The Court is also invited decide whether claims seeking to cap carbon dioxide emissions based on a court's weighing of the potential risks of climate change against the socioeconomic utility of defendants' conduct would be governed by "judicially discoverable and manageable standards" or could be resolved without "initial policy determination[s] of a kind clearly for nonjudicial discretion."

This case arose when Connecticut, along with several other states and public interest organizations, brought a public nuisance action against the five largest U.S. electric utility companies. The plaintiffs sought injunctive relief in the form of emissions limits on the utilities' facilities.

In 2005, the district court held that applying public nuisance law to the problem of climate change presented a nonjusticiable political question, and dismissed the case. In 2009, the Second Circuit reversed.

This case is also important because the EPA is about to regulate greenhouse gases under the Clean Air Act's Prevention of Significant Deterioration, PSD.  The PSD regulation imposes federal emission control requirements only on new and modified sources of emissions, not on existing sources, unless those sources are modified.  American Electric Power v. Connecticut targets existing stationary sources of greenhouse gases.

The states of Indiana, Arkansas, Hawaii, Kansas, Kentucky, Nebraska, North Dakota, Ohio, Pennsylvania, South Carolina, Utah and Wyoming joined in asking the Supreme Court to rule in this case.

Justice Sonia Sotomayor recused herself from the Supreme Court's decision to hear the case, because she participated in the Second Circuit ruling before joining the Supreme Court earlier this year. Her absence could mean a split 4-4 ruling, which would leave the lower court decision in effect.