Seventh Circuit Ruling Exposes Federal Regulators to Public Nuisance Claims

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP with Katharine Falahee Newman, Sidley Austin LLP

In recent years, plaintiffs have increasingly asserted public and private nuisance theories in cases seeking damages and remedies to address alleged environmental harms, despite the fact that the defendant was in compliance with relevant federal law—and in particular, the Clean Air Act (CAA). Defendants have opposed these suits on multiple grounds, including arguing the CAA preempts these common law claims. Most prominently, in American Elec. Power Co., Inc. v. Connecticut, 131 S. Ct. 2527 (2011), the Supreme Court held the CAA displaced public nuisance claims under federal common law, but left open the question whether the Act would similarly limit state common law tort claims. Last year, in Bell v. Cheswick Generating Station, 734 F. 3d 188 (3rd Cir. 2013), the U.S. Court of Appeals for the Third Circuit addressed the issue, holding the CAA did not preempt state common law claims of the source state. It now appears that the Sixth Circuit will get into the act, as the district court certified an interlocutory appeal in Merrick v. Diageo Americas Supply, (W.D. Ky. June 12, 2014), where, like Cheswick, the court had held the CAA does not preempt source state common law tort claims.

Recently, a unanimous panel of the Seventh Circuit weighed in on a similar but somewhat different variation on the theme of claims for public and private nuisance in Michigan, et al. v. United States Army Corps of Engineers, et al. (No. 12-3800). There, the court determined that governmental agencies may be subject to public nuisance suits despite maintaining a waterway as authorized by federal statute, but ultimately dismissed the suit after finding that Asian Carp are not an imminent threat to the Great Lakes. Continue reading

EPA’s “Waters of the U.S.” Proposal: Coming Soon to a Back Yard Near You?

 wetlandGuest Commentary

by Scott McFadin, a 2014 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech School of Law.

On April 21, the Environmental Protection Agency (EPA) and the United States Army Corps of Engineers issued proposed regulations that would increase their regulatory jurisdiction under the Clean Water Act (CWA). The Act gives EPA authority to regulate “waters of the United States.” Over the past two decades, federal courts have (pardon the pun) muddied the waters on agencies’ authority. The most recent Supreme Court pronouncement on federal regulators’ jurisdiction, Rapanos v. U.S., held that the agencies only have jurisdiction over waters or wetlands with a “significant nexus” to traditional navigable waters. EPA has taken advantage of this unclear legal guidance, proposing a stunningly broad definition of “waters of the United States.” EPA claims its definition merely clarifies existing guidance on “waters,” and will in fact reduce the scope of its jurisdictions. When one considers EPA’s own proposed definitional language, testimony from respected trade groups, and social scientists, however, the truly expansive reach of the new rule becomes quite clear. In classic bureaucratic fashion, EPA has proposed a regulation that is long enough to deter it being read and far-reaching enough to arguably provide jurisdiction over a dry ditch in your backyard.

Much like Humpty Dumpty in Through the Looking Glass, EPA is quite masterful at using words in just the way they choose them to mean.1 Continue reading

New York Court of Appeals Upholds Local Ordinances Restricting Hydraulic Fracturing

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP with Joel F. Visser, Sidley Austin LLP

*Editor’s note: Washington Legal Foundation filed an amicus brief in support of the Petitioners in the case discussed below.

Across the country, companies are using hydraulic fracturing techniques to develop shale oil and gas resources that create jobs and provide for economic growth. However, developers face a determined opposition that is using referenda, court challenges, and municipal ordinances in an effort to stymie development. In a long-awaited ruling issued today in In re: Mark S. Wallach, as Chapter 7 Trustee for Norse Energy Corp. USA v. Town of Dryden, Case No. 130, and Cooperstown Holstein Corp. v. Town of Middlefield, Case No. 131, the New York Court of Appeals gave this round to the opponents of development, finding the towns’ home rule authority gave it the power to ban development unless explicitly preempted by state statute.

The Court affirmed the appellate court decision that the towns’ prohibitions on oil and gas development were valid zoning ordinances and not preempted by New York’s Oil, Gas and Solution Mining Law (“OGSML”). Two judges dissented from the opinion and would have held that the complete prohibitions on oil and gas activities essentially regulated how oil and gas development can occur and are preempted by the OGSML. The Court made clear, however, that its decision did not address the merits of hydraulic fracturing generally and asserted that such decisions involved policy questions that should be left to the coordinate branches of government.

The OGSML’s supersession clause at issue states: “The provisions of this article [i.e., the OGSML] shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries; but shall not supersede local government jurisdiction over local roads or the rights of local governments under the real property tax law.” ECL 23-0303(2)). Continue reading

Supreme Court Observations: Don’t Buy the Spin, EPA Lost the Utility Air Regulatory Group v. EPA Case

peterglaserGuest Commentary

by Peter S. Glaser, Troutman Sanders LLP

*Editor’s note: On June 23, the U.S. Supreme Court issued its opinion in Utility Air Regulatory Group v. Environmental Protection Agency. The author of this commentary represented Washington Legal Foundation pro bono in the case for our amicus briefs at both the petition for certiorari and merits stages.

EPA lost; it didn’t win 

Although you wouldn’t know it from the way EPA and environmental NGOs are portraying the decision.  Industry opposed EPA’s Tailoring Rule with essentially two alternative arguments.  Industry’s maximum position was that EPA could not regulate greenhouse gasses ( GHGs) at all under the Prevention of Significant Deterioration (PSD) or Title V permit programs.  Industry’s alternative position was essentially that if a source is subject to PSD because of its non-GHG emissions (with some caveats), it could be required to do best available control technology (BACT) for both its non-GHG and its GHG emissions.  The Court adopted a variant of industry’s alternative argument.  During briefing, EPA resisted both of industry’s positions.  So it’s a little much for EPA to be claiming victory.

We don’t need to relitigate whether industry should have presented alternative positions or whether industry should have presented the Court with an all-or-nothing position:  either uphold the Tailoring Rule, which we know you don’t want to do, or rule that GHGs cannot be regulated under PSD or Title V at all.  Certainly, a maximum victory would have been preferable to the victory we got, where large facilities triggering PSD for their non-GHG emissions must undertake GHG BACT—a result that is not too far off from at least steps one and two of the Tailoring Rule.  In the end, only two justices (Alito and Thomas) expressed a preference for industry’s maximum position even when presented with the alternative argument.  Whether the other three justices in the majority would have endorsed industry’s maximum position if there had been no alternative position—or whether not presenting an alternative would have resulted in losing the case—is something we will never know. Continue reading

WLF Webcast on Effective Advocacy at EPA, TODAY 1:00 p.m. EDT

PodiumPic1To effectively shape rulemaking at today’s Environmental Protection Agency, lawyers must go well beyond the filing of expertly crafted comments. It’s no surprise, then, that the Center for Responsive Politics recently found that the Environmental Protection Agency is the second most lobbied administrative body in the federal government.

Join us TODAY, 1:00-2:00 p.m. EDT for a free WLF Web Seminar program entitled Don’t Rest on Your Written Comments: Pursuit of Successful EPA Advocacy. Our presenter is Foley & Lardner LLP partner Richard Stoll

Viewers will benefit from Mr. Stoll’s three decades of EPA advocacy and learn how to adroitly advance their interests both before and after official comments have been filed.  He will also discuss “sub-regulatory” guidance from the agency, how to pursue it, and how to put it to good use.

Registration is required for the program. Please click HERE to register. Go to our home page, http://www.wlf.org, to view the program at 1:00.

 

New Hampshire Union Leader Publishes WLF Op-Ed on State’s MTBE Lawsuit

scalesNew Hampshire likes to be first. It boasts America’s first modern state-run lottery, the first ski school, and even the world’s first paintball game.  And Dixville Notch, NH residents enter the first votes in each presidential election.

Thanks to a recent $236 million verdict in a state-sponsored lawsuit, New Hampshire may be gunning for first in the hearts and minds of America’s plaintiffs’ bar too—a distinction, Washington Legal Foundation’s General Counsel Mark Chenoweth argues in a June 11 New Hampshire Union Leader op-ed, that the state should not proudly embrace.

New Hampshire hired private, contingent-fee attorneys to sue oil companies for groundwater contamination. As Mark explains:

They alleged that leaking underground storage tanks contaminated local groundwater with the chemical MTBE. But rather than sue gas stations that owned the leaking tanks (and violated EPA rules), the state’s hired guns went after deep-pocketed oil companies (that were following EPA rules). The lawyers calculated that they could win a large payday, regardless of those companies’ actual responsibility, by putting deep pockets and pollution claims in front of a jury.

In compliance with a statutory mandate, EPA allowed the addition of MTBE to gasoline to improve air quality. Congress anticipated that leaks might occur, so it created a fund states could tap for clean-up. New Hampshire did not seek money from the fund, perhaps, the Union Leader op-ed notes, because the state would have to use those funds for groundwater clean-up. Not wanting to be limited, the state filed suit instead, even though it could not show physical harm to any person or destruction of any property.

New Hampshire now could have a $236 million slush fund courtesy of a jackpot justice verdict, and as Mark writes, “Attorney General Joseph Foster has staunchly opposed placing the money in a state-managed trust devoted to testing and clean-up.”

New Hampshire’s “success” has inspired neighboring Vermont to jump on the MTBE lawsuit bandwagon. Dallas law firm Baron & Budd and New York firm Weitz & Luxenberg will be joining up with New Hampshire’s local counsel, the Pawa Law Group, to represent Vermont and its litigious attorney-general, William Sorrell.

Supreme Court Observations: CTS Corp. v. Waldburger

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP with Kathareine Falahee Newman, Sidley Austin LLP

On Monday June 9, the U.S. Supreme Court ruled against a group of landowners, holding that Section 309 of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9658, does not preempt North Carolina’s ten-year statute of repose. See CTS Corporation v. Waldburger, et al., No. 13-339. In a 7-2 opinion authored by Justice Kennedy, the Court determined that while CERCLA preempts state statutes of limitations it does not prevent a state from barring a lawsuit via a statute of repose.

By reaching this result, the Court upholds a state’s right to provide a measure of finality to a potential tort defendant, who otherwise could face tort liability for contamination discovered decades after the defendant’s last contributing act. Of course, the ruling does not limit a defendant’s potential responsibility under CERCLA to perform or pay for a clean up to respond to the contamination—such CERCLA liability is not subject to a state statute of repose.

The case involved a group of property owners who purchased land on or near CTS Corporation’s former plant in Asheville, North Carolina. During plant operations between 1959 and 1989, CTS manufactured and disposed of electronics and stored various chemicals, including trichloroethylene (TCE) and cis-1,2-dichloroethane (DCE). In 1987, CTS sold the property, which was eventually divided by a subsequent owner and sold to various individuals. In 2009, the landowners discovered that their groundwater and land were contaminated and in 2011, they brought suit against CTS seeking damages, 24 years after CTS’s original property sale.

North Carolina’s statute of repose states that “no cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action.” N.C. Gen. Stat. Ann. § 1-52(16). Citing this law, CTS argued that because its last act occurred in 1987 when it sold the site, it could not be subject to the suit under state law and moved to dismiss. The District Court agreed and dismissed the case, but a divided panel of the U.S. Court of Appeals for the Fourth Circuit reversed, finding that Section 309, dealing with preemption of state law, was ambiguous and preempted the North Carolina statute of repose. Continue reading