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On September 13, the U.S. District Court for the District of North Dakota granted a Motion for a Temporary Restraining Order in the matter of Paradigm Energy Partners, LLC v. Fox, et al., prohibiting the defendants from interfering with the Paradigm’s construction of two pipelines (an oil and a natural gas pipeline) in McKenzie and Mountrail Counties, North Dakota.

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On September 9, the U.S. District Court for the District of Columbia denied a motion for a Preliminary Injunction against the U.S. Army Corps of Engineers to stop the construction of the Dakota Access Pipeline, a pipeline that will run within one-half mile of the Standing Rock Sioux Reservation, located in North and South Dakota. The case is Standing Rock Sioux Tribe, et al., v. U.S. Army Corps of Engineers, et al., and an emergency appeal has been filed with the U.S. Court of Appeals for the District of Columbia Circuit. The Plaintiffs allege that the Corps failed to engage in substantive consultations with the Tribe as required by the National Historic Preservation Act (NHPA). However, the District Court, in a long and comprehensive opinion, held that the Corps “has likely complied with the NHPA” and that the Tribe has not demonstrated that a preliminary injunction is warranted.

The Dakota Access Pipeline is a domestic oil pipeline that is designed to ship, on a daily basis, one half billions gallons of Bakken North Dakota crude oil to Patoka, Illinois, a distance on nearly 1200 miles. Almost all of the pipeline has been or will be constructed on private land, meaning that federal permitting requirements will be limited to those areas where the pipeline will cross federal waters subject to the Clean Water Act (CWA). The pipeline has entered into contracts which require it to deliver oil by January 2017, and it has been proceeding to plan and construct the pipeline on a timely basis. The water crossings have been permitted under Corps Nationwide Permit 12, a general permit promulgated by the Corps under Section 404 of the CWA to facilitate the review and authorization of these activities. According to the court, the pipeline operators have been cognizant of their obligations under the NHPA to safeguard any significant historic or religious sites, and have been careful to plan and re- route operations that take these considerations into account.

In this litigation, the Tribe asserts that the Corps has violated the consultation provisions of Section 106 of the NHPA, and not the CWA. Section 106 of the NHPA is implemented by the regulations of the Advisory Council on Historic Preservation, which are located at 36 C.F.R. Part 800. These rules regulate the consultative process that must be adhered to before the necessary federal permits can be issued. The Corps’ District Engineer must verify that the consultation process has been satisfactorily completed, and this was done here.

In late 2014, the Tribe learned that this pipeline was being planned and that it would cross the Missouri River under Lake Oahe, a large man-made lake that covers the confluence of the Missouri and Cannonball Rivers, an area that has profound significance to the tribe. The court states that Dakota Access Pipeline took great care to account for and protect historic sites that had already been identified under the NHPA, and conducted additional surveys that uncovered other sites and modified the pipeline route to accommodate them. In late 2014, the pipeline began meeting with the Tribe, and the District Court notes that the pipeline operators attempted to meet with the Tribe’s Historic Preservation Officer, but were unsuccessful in doing so. Indeed, the Corps itself was also largely unsuccessful in meeting with this officer, and the District Court states that the tribe has failed to explain this failure to the District Court. After many months, the Corps received a letter from this tribal officer expressing concerns about the project and advising the Corps that the Tribe “opposed any kind of oil pipeline construction through our ancestral lands.”

A draft Environmental Assessment was prepared by the Corps in December 2015, and the Tribe filed extensive comments stating that the Corps failed to consult with the Tribe on the identification of cultural sites, and that a full cultural inventory should be conducted for the entire pipeline, and not just for the segment of the pipeline that directly affected the Tribe. In April 2016, the Corps determined that that the Lake Oahe crossing site was not eligible for a NHPA Section 106 listing, and in July 2016, a final Environmental Assessment was issued finding that there would be no significant impact on the Tribe by the completion of the pipeline, and the Section 404 permitting actins were authorized. This litigation followed.

In its September 9, 2016 opinion, the District Court recounted at length the administrative history of this project. It dismissed most of the objections made against the consultative process and held that the Corps was not obliged to conduct a NEPA analysis of the entire pipeline project since most of the pipeline will be or has been constructed on private land; “the law does not require that the Corps consider the effects of actions over which it has no control and which are far removed from its permitting activity.” Moreover, the District Court concluded that the “the Tribe largely refused to engage in consultation,” and failed to satisfy its burden to obtain an injunction. There were demonstrations against the pipeline and the Government’s response was swift. On September 9, 2016, the Department of Justice, the Department of the Army and the Department of the Interior issued a statement that these agencies will not authorize the construction of the pipeline on Corps lands bordering or under Lake Oahe until it can determine whether it will need to “reconsider any of its previous actions regarding the Lake Oahe site under NEPA or other federal laws; “therefore construction of the pipeline on Army Corps land bordering or under Lake Oahe will not go forward at this time. The Government also requested the pipeline to pause all construction activity within 20 miles east or west of Lake Oahe.” On September 12, 2016, the Tribe filed an Emergency Motion for Injunctive Relief Pending Appeal, limited to an area of 20 miles around Lake Oahe.

On the same day the order was issued, a Joint Statement from the Department of Justice, the Department of the Army and the Department of the Interior Regarding Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers was issued.

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Check out my latest blog for Pillsbury’s Policyholder Pulse titled A Subcontractor’s Defective Work Is an Occurrence: Weedo Wobbles … and Falls Down. It discusses a recent ruling in New Jersey,  Cypress Point Condominium Assoc., Inc. v. Adria Towers, L.L.C., on the issue of whether damage caused by a subcontractor’s faulty workmanship constitutes “property damage” and an “occurrence” under a property developer’s commercial general liability insurance policy.

Additional Source: Weedo v. Stone-E-Brick, Inc.

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Two Court of Appeals, one in the District of Columbia and the other in Texas, issued opinions regarding the federal Highway Beautification Act, 23 U.S.C. § 131 (HBA) and its state counterpart, the Texas Highway Beautification Act, respectively. The first decision illustrates how the courts will apply the principles of administrative law in a wide variety of cases. The plaintiffs had to demonstrate they had standing to prosecute their claims, and if so, whether the Department of Transportation’s (DOT) interpretation of the HBA was reasonable. In addition, the decision gives the agencies the elbow room to make room for emerging technologies.

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The Equal Access to Justice Act (EAJA) directs a court to award fees and other expenses to prevailing party in a civil action against the United States unless the government’s position was substantially justified or special circumstances make an award unjust. The EAJA has been used to recover attorney’s fees from the United States in connection with challenges to federal administrative actions. In the case of SecurityPoint Holdings, Inc. v. TSA, decided on September 2, 2016, the U.S. Court of Appeals for the D.C. Circuit held that SecurityPoint was entitled to substantial attorney’s fees (in the amount of $86,714.78) under the EAJA when its successful litigation against the TSA was a remand to the agency that required some corrective action. In so ruling, the Court of Appeals overruled Waterman Steamship Corp. v. Maritime Subsidy Board, a decision that had the effect of making SecurityPoint ineligible for the award of attorney’s fees, and may expand the right to recover these fees in the future. Continue reading

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Our colleagues Jennifer Trock, Kenneth Quinn, Chris Leuchten and Graham Keithley recently published an interesting alert titled FAA Proposes Updated Rule for Airport Safety Management Systems. The Alert discusses the Federal Aviation Administration’s recent publication of a supplemental notice of proposed rulemaking on safety management systems (SMS) for airports. The revised proposal narrows the applicability of the SMS rule to far fewer  airports and also lessens certain training requirements on covered airports. Comments on the revised proposal are due before September 12, 2016.

Photo:  Rene Schwietzke, Airport, Taken October 16, 2006 – Creative Commons

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Our colleagues Dick Oliver, Selena Brady and Travis Mullaney, in SBA To Begin Accepting Online Applications for Small Business Mentor-Protégé Program, encourage everyone to check out the Small Business Administration’s (SBA) new government-wide mentor-protégé  program for all small businesses, covering Historically Underutilized Business Zone (HUBZone) businesses, Women-Owned Small Businesses (WOSB), Service-Disabled Veteran-Owned small  businesses (SDVOSB), and other small businesses generally. The new program expands mentor-protégé access to a wider community of federal contractors than the pre-existing SBA 8(a) Business Development program. The SBA will start accepting applications for the new Small Business Mentor-Protégé Program via the online portal on October 1, 2016.

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In the case of National Resources Defense Council , et al. , v. Illinois Power Resources, LLC and Illinois Power Resources Generating, LLC, decided August 23, 2016, the United States District Court for the Central of District of Illinois held that the defendants, who operate a coal-fired power plant in Bartonville, Illinois, failed to establish that they were entitled to various regulatory and statutory defenses in this Clean Air Act (CAA) citizen suit. The District Court found that the plaintiff environmental organizations had standing to file this lawsuit, observing that even an “identifiable trifle” can establish an injury-in fact.

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Recently, my colleagues Micah Miller, Melinda Barker, Jennifer Jordan McCall, Kim Schoknecht and Elizabeth Fry published an alert titled Proposed Section 2704 Regulations that discusses proposed regulations that, if adopted, would affect the valuation of family-owned businesses interests transferred among family members by eliminating certain discounts currently recognized under the law. The U.S. Treasury Department released the proposed regulations on August 2, 2016. They will be subject to public comment for the next 90 days and a public hearing will be held on December 1, 2016.