Harris County Day at the Texas Supreme Court

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The Texas Supreme Court issued two significant rulings on June 12, 2015. In the case of Dacus, et al v. Annise Parker, et al., the Court reversed the judgment of the Court of Appeals of the Fourteenth Circuit, and held that the 2010 proposed amendment to the Houston City Charter, authorizing the imposition of maintenance fees directly on City residents to finance city street and drainage improvements, did not meet the common law standard "preserving the integrity of the ballot." The information on the ballot did not inform the voters that they would be subject to these fees; it simply identified the proposed amendment without describing how the funds would be raised. Since 1884, the Court has required that such propositions be submitted with such definitions and certainly that the voters are not misled. Today's ruling should provide more clarity and direction to the lower courts. The case has been returned to the district court.

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9th Cir. Affirms Dismissal of Challenges to Oil Spill Response Plans for Offshore Drilling Off the Coast of Alaska

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In a decision released on June 11, 2015, the U.S. Court of Appeals for the Ninth Circuit, by a 2 to 1 decision, affirmed the lower court's grant of summary judgments in favor of the Department of the Interior, the Bureau of Safety and Environmental Enforcement (the Bureau) and two Shell Oil entities, Shell Gulf of Mexico, Inc. and Shell Offshore, Inc. with respect to the Bureau's approval of Shell's oil spill response plans. These companies were awarded leases to explore for oil in the Beaufort and Chukchi Seas off Alaska's Arctic coast, and the court noted Shell's plans have been "waylaid by a variety of legal, logistical, and environmental problems, including multiple lawsuits, the wreck of one of its drilling rigs, and the temporary suspension of drilling activities in the Arctic after the Deepwater Horizon spill". At least eight separate challenges to the Shell leases have been heard by the Ninth Circuit to date. Several environmental organizations challenged the decision of the government to approve two of Shell's oil spill response plans, arguing that the approval was arbitrary and capricious in violation of the Administrative Procedure Act.

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California Department of Insurance and Other Agencies Continue Efforts to Crack Down on "Thriving Underground Economy"

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In late May, the California Department of Insurance (CDI) issued a press release announcing that it was involved in a multi-agency team that conducted a statewide outreach and enforcement effort targeting what it describes as a "thriving underground economy." The enforcements teams included the Department of Industrial Relations, Contractors State License Board, CDI, Franchise Tax Board and Employment Development Department and several district attorney investigators.

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8th Circ. Upholds Enforcement of Section 327.13 (Explosives, firearms, other weapons and fireworks)

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In the case of GeorgiaCarry.Org, Inc., et al., v. U.S. Army Corps of Engineers, decided June 9, 2015, the Eleventh Circuit Court of Appeals affirmed the decision of the lower court to deny a request for a preliminary injunction against the enforcement of the Corps' regulation that prohibits loaded firearms and ammunition form federal property managed by the Corps. The rule is located at 36 C.F.R. § 327.13.

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California Amended Heat Illness Regulations Effective May 1

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UPDATE: Cal/OSHA issued a high heat advisory today (June 16) advising employers to protect employees against the risks associated with heat illness. Temperatures are expected to be 15 to 25 degrees above normal in Southern California through Monday.

California's Heat Illness Prevention Regulation was amended effective May 1, 2015. This regulation applies to all "outdoor places of employment" and to five enumerated industries: (1) agriculture, (2) construction, (3) landscaping, (4) oil and gas extraction, and (5) transportation or delivery of agricultural products, construction materials or other heavy materials (e.g. furniture, lumber, freight, cargo, cabinets, industrial or commercial materials), except for employment that consists of operating an air-conditioned vehicle and does not include loading or unloading. On May 14, 2015, the Department of Industrial Relations (DIR) and Cal/OSHA published a Guidance for Employers and Employees on the New Requirements (May 14, 2015), which is designed to provide guidance to employers and employees on how to implement the new requirements. On the same day, the DIR published a Heat Illness Prevention Enforcement Q&A . The new regulation requires, among other things, pre-shift meetings to review the high heat procedures, encourage employees to drink plenty of water and remind employees of their right to take a cool-down rest when necessary, the implementation of effective emergency response procedures, and the establishment, implementation and maintenance of a Heat Illness Prevention Plan.

Additional Source: Department of Industrial Relations, Heat Illness Prevention (English and Spanish)

8th Cir. Upholds Revocation of Shoreline Use Permit

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In the case if McClung v. Paul, decided June 8, 2015, the Eighth Circuit Court of Appeals affirmed the decision of the lower court that the District Corps Commander's revocation of a federal permit to use the boat dock and concrete steps located on federal property adjacent to the McClungs' residence in the Greers Ferry Lake, Arkansas area, was not arbitrary and capricious.

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Texas State Appeals Court Reverses Grant of Summary Judgment to Energy Companies Sued for Alleged Nuisance and Trespass Claims

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On June 1, 2015, in a case about the interplay between the right of individual property owners to seek redress for the diminution in value of their properties caused by light, noise, and airborne chemical particulates originating from the operation of adjacent regulated energy production facilities and the right of the government to regulate emissions from those facilities, the Seventh Court of Appeals sitting in Amarillo issued a ruling reversing the grant of summary judgment to five energy production companies whose operations are located near DISH, Texas, and remanding the matter for further proceedings. The case is Sciscoe, et. al. v. Enbridge Gathering (North Texas), L.P., et. al.

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New Superfund Ruling: Texas Southern District Court Determines that Federal Government Shares Responsibility for Exxon's War Production Waste Cleanup Costs

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On June 4, 2015, U.S. District Judge Lee Rosenthal issued a long ruling, resolving a number of partial summary judgement motions filed in the case of Exxon Mobil Corporation v. United States.

Exxon's predecessors owned and operated large refineries located in Baytown, Texas and Baton Rouge, Louisiana (which are being operated by Exxon today), and they entered into extensive (and profitable) war production contracts with the United States Government to produce large quantities of high-octane aviation gas and synthetic rubber at these plants. These operations also generated large quantities of hazardous waste which were disposed of in the Houston Ship Channel and the Mississippi River, which was the practice during World War II and the Korean War. Exxon has entered into administrative settlements with the States of Texas and Louisiana, and has spent, to date, $71 million to clean up and remediate this waste disposal. In 2010, Exxon sued the United States in federal court under Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601, et seq. ("CERCLA"), arguing that the government should also be held accountable as a "covered person" under the law.

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Go Build Tennessee Act Signed by Governor

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Tennessee House Bill 24 was signed into law by Tennessee Governor Bill Haslam on May 20, enacting the Go Build Tennessee Act. The Act amend Title 4 and title 62, Chapter 6 of the Tennessee Code, and creates the "Go Build Tennessee Program". The Program will be administered by a 501(c)(3) nonprofit corporation whose duties will include "securing funding to promote and foster the development of a comprehensive statewide program designed to attract and increase career opportunities for secondary and postsecondary students in the construction industry."

California Bill Contemplates Tax Credit for Seismic Retrofit Construction on a Qualified Building

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California Assembly Bill 428 (Nazarian) proposes to allow, for taxable years beginning on and after January 1, 2016, and before January 1, 2021, a tax credit in an amount equal to 30% of the qualified costs paid or incurred by a qualified taxpayer for seismic retrofit construction on a qualified building. The tax credit could be claimed at the rate of 1/5th of the credit amount for the taxable year in which the credit is allowed and 1/5th of the credit amount for each of the subsequent 4 taxable years (reduced by any grant provided by a public entity for the seismic retrofit construction); as applicable, an excess credit may be carried over to the reduce the net tax in the following taxable year. Prior to seismic retrofit construction, the taxpayer would be required to obtain certification from the appropriate jurisdiction with local building code enforcement authority that the building has been certified as an at-risk property. The taxpayer would also be required to obtain a certification that the seismic retrofit construction had been completed, and to provide both certifications to the Franchise Tax Board upon request. The bill would take effect immediately as a tax levy.

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DC Court of Appeals (In Unpublished Opinion) Gives Deference to EPA Solid Waste Determination

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On June 3, the U.S. Court of Appeals for the District of Columbia issued another major Resource Conservation and Recovery Act (RCRA) decision, albeit in an unpublished opinion. The case is Solvay USA v. EPA. In 2011, EPA issued rules to classify non-hazardous secondary materials under RCRA as "solid waste" for the purpose of Clean Air Act emission standards applicable to sludge incinerators and other combustion units. The rule is codified at 40 C.F.R. Part 241. As noted by the Court of Appeals , whether a facility is regulated by Clean Air Act (CAA) Section 7429 or 7412 has significant practical consequences for the regulated facilities. The Court of Appeals rejected the arguments of both the environmental and industry petitioners, holding that EPA's interpretation of both RCRA and the CAA was entitled to considerable deference by the courts, and that the Administrative Procedure Act will only allow a court to set aside an action that arbitrary and capricious, and there is no evidence that it was. The Court of Appeals' opinion is very brief (four pages) and will not be published. However, the Court of Appeals directed the clerk not to issue the mandate for seven days to give the parties time to seek rehearing or rehearing en banc.

DC Cir. Dismisses Challenge to EPA "Solid Waste" Determination for Lack of Standing

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By Anthony B. Cavender

On June 2, the U.S. Court of Appeals for the District of Columbia Circuit decided the case of Carbon Sequestration Council and Southern Company Services, Inc., v. EPA on standing grounds. In 2010, EPA promulgated a rule establishing a new category of Safe Drinking Water Act injection wells, known as "Class VI" wells, to respond to the need to sequester large amounts of carbon dioxide necessitated by EPA's new carbon capture and storage program. In connection with this rulemaking, EPA also determined that "supercritical carbon dioxide streams" managed in Class VI wells were "solid waste" within the meaning of the Resource Conservation and Recovery Act (RCRA). Believing that EPA's action was inconsistent with RCRA and a number of DC Circuit precedents, this determination was challenged. However, the Court of Appeals held that none of the petitioners had standing to litigate this issue. Under circuit precedent, the Court of Appeals ruled that they could not show that they suffered any injuries attributable to this new rule although they were otherwise deeply engaged in the carbon capture and storage program.

6th Circuit Directs District Court to Revisit Derivative Governmental Immunity Decision

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On June 2, the U.S. Court of Appeals for the Sixth Circuit decided the case of Adkisson v. Jacobs Engineering Group, Inc.. The Court of Appeals reversed the federal district court's dismissal of lawsuits premised on the argument that Jacobs Engineering Group, Inc. was entitled to derivative governmental immunity based on its contractual relationship with a government entity protected by the Federal Tort Claims Act, directing the district court to its decision. The Court of Appeals noted that the extent of immunity for government contractors has been debated by the courts of appeals, suggesting that the Supreme Court may want to take another look at some of its rulings in this area.

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Utah Amends Law to Add Procedures to Address Excessive Precontruction and Constructions Liens

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Recently, Utah Governor Gary Herbert signed into law House Bill 46, new law that amends the provisions relating to unauthorized and excessive claims of preconstruction and construction liens. For those parties who agree to arbitrate claims for a residential project or for $50,000 or less, H.B. 46 amends Section 38-1a-308 of the Utah Code to add Subdivisions (b)(4) through (15), which create procedures to initiate, conduct, and appeal an arbitration proceeding to resolve a claim for an excessive notice of preconstruction or construction lien.

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SEC Proposes Pay-for-Performance Disclosure Rules

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By Pillsbury Winthrop Shaw Pittman

Today, Pillsbury attorneys Mark Jones and Kathleen Bardunias, and summer associate Kevin Lin, published their client alert SEC Proposes Pay-for-Performance Disclosure Rules. The Advisory discusses the SEC's recently proposed rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act that would require public companies to disclose the relationship between the compensation actually paid to certain key executives and the financial performance of the company, as measured by total shareholder return. If the proposed rule is finalized during 2015, affected companies may be required to make the "pay-for-performance" disclosures as early as the 2016 proxy season.