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This is Part III of VII of a brief recap of some the significant environmental law and administrative cases decided in the past few months:

G. Sixth Circuit

Court of Appeals

On June 2, 2015, the U.S. Court of Appeals for the Sixth Circuit decided the case of Adkisson v. Jacobs Engineering Group, Inc. In December 2008, a coal ash containment dike operated by the Tennessee Valley Authority (TVA) at its Kingston Fossil Fuel Plant failed, spilling approximately 5.4 million cubic yards of coal ash sludge over 300 acres. TVA, an agency of the federal government, responded to this catastrophe in accordance with CERCLA and EPA’s National Contingency Plan. Jacobs Engineering was engaged to serve as the TVA’s prime contractor for remedial project planning, management and oversight. Jacobs Engineering prepared a comprehensive Site Wide safety and Health Plan which addressed such matters as health-hazard monitoring and training. In 2013, several personal injury lawsuits were filed against Jacobs Engineering by former employees who basically alleged that Jacobs Engineering’s negligence and careless conduct exposed them to injuries and emotional distress, for which they are seeking compensatory and punitive damages. The district court dismissed these lawsuits, agreeing with Jacobs Engineering that it was entitled to derivative governmental immunity based on its contractual relationship with a government entity protected by the Federal Tort Claims Act. However, the Court of Appeals disagreed with the reasoning of the district court, and reversed the dismissal and directed the district court to revisit 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 U.S. Supreme Court may want to take another look at some of its rulings in this area.

On May 21, 2015, the U.S. Court of Appeals for the Sixth Circuit reversed the district court’s grant of summary judgment to the State of Ohio and the Buckingham Coal Company in a dispute with the U.S. Army Corps of Engineers regarding the State of Ohio’s ability to lease to Buckingham Coal the right to mine coal lying beneath land acquired several years ago to develop a flood control project. In 1948, the State of Ohio and the U.S. Government entered into a cost-sharing agreement to construct and maintain a dam and reservoir to control flooding in Ohio’s Hocking River Basin. The project required to acquisition of property interests, including subsurface mineral interests. In 2010, Ohio issued mining leases to Buckingham Coal which would impact the lands acquired in 1948, but the Corps of Engineers objected, arguing that the issuance of these leases required the Corps of Engineers’ review and approval. When this objection was rejected, largely on the basis of a 1962 quitclaim deed provided to the State of Ohio by the U.S. Government, the U.S. Government sought a temporary restraining order which the district court denied. The Sixth Circuit, after reviewing these documents and relevant Ohio law, held that the State of Ohio did not have a unilateral right to issue these mining leases. The case is United States v. State of Ohio; Buckingham Coal Company.

The implementation of the U.S. Department of Agriculture’s (USDA) “Swampbuster” program, designed to protect wetlands located on farming property, was the focus of a ruling by the Court of Appeals for the Sixth Circuit. On April 1, 2015, the Court of Appeals decided the case of Maple Drive Farms Limited Partnership, et al., v. Tom Vilsack, Secretary, United States Department of Agriculture. The “Swampbuster” provisions are part of the Food Security Act of 1985, which denies agricultural benefits—which can be substantial—to farmers who convert wetlands or farm converted wetlands. There are exceptions to these restrictions which Nicholas Smith, the owner of Maple Drive Farms, has attempted to utilize by means of administrative appeals and finally a lawsuit challenging the USDA’s implementation of the law and its exceptions. The land in question is located in Michigan, and consists of 50 acres, and only 2.2 acres of this parcel is considered to be wetlands. With the assistance of the USDA, Smith began farming this plot more than fifty years ago, or well before the Food Security Act was enacted. This parcel was drained and successfully farmed until the early 1980’s when the drainage facilities began to deteriorate. After a few false starts, Smith again attempted to drain the land, and filed the appropriate forms with the USDA in 2008. At that time, the USDA’s representatives determined that the 2.2 acre parcel was a wetland, and eventually a “converted wetlands”. This administrative determination triggered the USDA’s complex administrative review procedures which are implemented by local state agricultural agencies with considerable federal oversight. At the end of the day, Smith was denied any relief, and was declared ineligible to receive the statutory benefits because he had farmed converted wetlands. His appeal to the district court was unsuccessful, but the Court of Appeals reversed and remanded the matter to the district court, holding that the proceedings conducted by the agencies of the USDA, described by the Court of Appeals as a “bureaucratic labyrinth” were inconsistent with the USDA’s own regulatory framework, and were arbitrary and capricious.

H.   Seventh Circuit

1.  District Courts

A significant CERCLA ruling was issued on March 18, 2015 by the U.S. District Court for the Western District of Wisconsin in Northern States Power Company v. The City of Ashland, Wisconsin, Ashland County, Wisconsin, and L. E. Myers Company. Northern States is cleaning up a CERCLA site located adjacent to Lake Superior in Ashland, Wisconsin pursuant to agreements it has entered into with EPA in 2003 and 2012, and it has filed cost recovery lawsuits against the defendants, including Ashland County. Northern States alleges that Ashland County was a former owner of the facility many years ago, and that it was vested with sufficient ownership and control as the result of a tax delinquency. Contemporary newspaper accounts confirmed, for the judge, that Ashland County appears to have played a direct role in the demolition of onsite facilities and the resulting historic releases of hazardous substances, and Ashland County’s request for summary judgment was denied.

I.  Eighth Circuit

1. Court of Appeals

In the case of McClung v. Paul, et al., decided June 8, 2015, the Court of Appeals for the Eighth Circuit affirmed the decision of the lower court that the Corps of Engineers’ district 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. The McClungs received a federal shoreline permit to maintain the boat dock and the concrete steps, which contained a number of permit conditions. One of the conditions, printed on the back of the permit, stated that no vegetation other than prescribed in the permit will be damaged, destroyed or removed”. They also received a mowing permit which indicated the limited area in which vegetation “modification” was permitted. The Corps of Engineers determined that 8400 square feet of federal land had been sprayed with an herbicide, and these actions were determined by the Corps of Engineers’ district commander to be a violation of the permit. Following an administrative appeal, the permit was revoked, and the McClungs challenged this action in federal court, alleging that the revocation was arbitrary and capricious, that the Corps of Engineers’ action ignored the National Environmental Policy Act, 42 U.S.C. § 4321 et seq. (NEPA), and their constitutional due process rights were violated. The Court of Appeals rejected these arguments, holding that the revocation of this permit was not a major federal action triggering NEPA, and since the McClungs had no property rights in the shoreline permits, there could be no due process violation.

In another case, the Missouri Department of Natural Resources (DNR) denied the 2012 application of the Trinity Lutheran Church to participate in a state program that makes state solid waste management funds available to qualifying organizations to purchase recycled tires to resurface playgrounds. This use of recycled tires is described as a “beneficial use of solid waste”. Trinity Lutheran’s application was rejected on the basis of a long- standing provision of the Missouri Constitution which specifically provides that “no money shall ever be taken from the public treasury, directly or indirectly, in aid of any church”. Trinity Lutheran filed a challenge to this decision in federal court, alleging that the rejection of its application, which the DNR ranked 5th of 44 applications received in 2012, violated its rights under both the federal and Missouri Constitutions. Noting that Missouri has a long history of maintaining a very high wall between church and state, the district court dismissed the lawsuit, which the Court of Appeals affirmed in an opinion released on May 29, 2015. The case is reported as Trinity Lutheran Church of Columbia, Inc. v. Pauley, et al. Circuit Judge Gruender filed a partial dissent arguing that Trinity Lutheran sufficiently pled a violation of the Free Exercise Clause and a derivative claim under the Equal Protection Clause. Judge Gruender also noted that “school children playing of a safer rubber surface made from environmentally-friendly recycled tires has nothing to do with religion”.

On April 10, 2015, the Court of Appeals for the Eighth Circuit, in a very important ruling, held that the U.S. Army Corps of Engineers’ Jurisdictional Determination (“JD”) that the property under review was a wetland that constitutes “waters of the United States” and thereby subject to the permitting and enforcement authority of the Corps, can be reviewed by the federal courts on an immediate basis. The case is Hawkes Co., Inc. v. U.S. Army Corps of Engineers, et al. The Court of Appeals’ approach was influenced by the U.S. Supreme Court’s approach in Sackett v. EPA, 132 S. Ct. 1367 (2012), and the Court of Appeals held that this JD was indeed a final agency action subject to judicial review, particularly when the choices confronting a property owner who wishes to develop his property are so unappealing. The Court of Appeals reviewed a long list of federal administrative actions whose serious consequences triggered judicial review, and took issue with the Fifth Circuit’s recent decision in Belle Co., L.L.C. v. U.S. Army Corps of Engineers, 761 F. 3d 383 (2014). The Government’s request for en banc review has been denied.

There’s now a conflict in the circuits, and an appeal to the U.S. Supreme Court may be in the offing.

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In EME Homer City Generation, L.P., v. EPA, 696 F.3d 7 (2012), the U.S. Court of Appeals for the District of Columbia Circuit, in a 2 to 1 decision, vacated the 2011 Cross-State Air Pollution Rule (aka the Transport Rule).  The U.S. Supreme Court, on April 29, 2014, reversed the DC Circuit in EPA v. EME Homer City Generation, L.P., et al., 134 S. Ct. 1584 (2014), during the 2013-2014 Term, holding that the “over-control problem” identified by the DC Circuit did not require invalidation of the rule “on its face”.  However, the Supreme Court also agreed with the DC Circuit that certain “as-applied” challenges to the emissions reductions imposed by EPA on upwind states could be challenged.  Continue reading

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This is Part II of VII of a brief recap of some the significant environmental law and administrative cases decided in the past few months:

E. Fourth Circuit

1. Court of Appeals

On July 1, 2015, the U.S. Court of Appeals for the Fourth Circuit issued a decision in the case of Goldfarb, et al., v. Mayor and City Council of Baltimore, et. al., reversing the lower court’s dismissal of a RCRA Citizen Suit filed against these city officials, a casino developer, and a local chemical company. The lower court, sitting in Baltimore, held that the casino developer’s National Pollutant Discharge Elimination System (NPDES) permit shielded it from RCRA liability because of RCRA’s “anti-duplication provisions (42 USC Section 6905(a).

In 2012, the City entered into an agreement with CBAC Gaming, LLC (CBAC Gaming) to develop a tract of land, approximately 8.58 acres, for use as a casino and ancillary facilities. Historically, the property had been the site of a chemical manufacturing plant operated by Maryland Chemical Company. It was conceded that the property is contaminated, based on environmental assessments performed in the 1990s and the early 2000s. To comply with the requirements of the CWA, the State of Maryland issued a general construction stormwater permit which requires CBAC to comply with that permit while the casino is being constructed. The permit also mandated compliance with specific remediation activities set forth in a Response Action Plan. The plaintiffs filed a RCRA Citizen Suit alleging that the action, or inactions, of the City, Maryland Chemical, and CBAC violated RCRA permits or standards or contributed to an imminent or substantial endangerment to public health or the environment resulting from their handling of solid waste.

The lower court held that so long as CBAC complied with these provisions, it was shielded not only from liability under the CWA, but also from RCRA liability since “further remedial requirements imposed under RCRA would be inconsistent with the remedial activities already deemed appropriate under the NPDES permit”, citing RCRA Section 6905(a) as authority. However, the Court of Appeals disagreed with this reasoning, and reversed and remanded the matter to the lower court. While RCRA’s anti-duplication provisions “may ultimately bar a plaintiff from obtaining relief in a RCRA suit, that result does not mean the statutory limitation is jurisdictional barring recovery”. The lower court was directed to conduct additional hearings into the claims, and to determine whether the cleanup goals and provisions that are part of the NPDES permit are in fact inconsistent with RCRA.

The Courts of Appeal are deciding Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9607(a)(3) (CERCLA) (or Superfund) “Arranger Liability” cases in the wake of the Supreme Court’s 2009 decision in the case of Burlington Northern and Santa Fe Railway Company v. United States, 556 U.S. 559 (2009). Earlier this year, the Fifth Circuit held, in the case of Vine Street LLC v. Borg Warner Corp., that CERCLA’s “Arranger Liability” for Superfund cleanup responsibility did not apply to most straightforward business transactions in which an intent to dispose of hazardous waste or hazardous substances in the guise of a business transaction could not be established. On March 20, 2015, a divided panel of the Fourth Circuit reached a similar conclusion in the case of Consolidation Coal Company v. Georgia Power Company, et al. The Courts of Appeal affirmed the lower court’s ruling that granted summary judgment to Georgia Power Company in a cost recovery case involving the ongoing cleanup of the Ward Transformer Site, located in Raleigh, North Carolina.

Georgia Power Company is a large utility, providing power to most of the State of Georgia. In the early 1980’s, Georgia Power Company sold, at auction, many of its used electric transformers to the Ward Transformer Company. These transformers, when sold, still contained insulating oil mixed with  polychlorinated biphenyls (PCBs), a toxic substance whose use had been banned since 1979. Ward Transformer Company repaired and reconstituted these transformers for re-sale as reconditioned units. Unfortunately, Ward Transformer Company’s Raleigh, North Carolina facility became contaminated with PCBs, and the site was placed on EPA’s National Priority List, requiring its cleanup under CERCLA.

The Courts of Appeal notes that more than 400,000 tons of contaminated soils have been removed from the site. Consolidated Coal Company (Consol) and PCS Phosphate Company, Inc. (PCS) have borne most of the cleanup costs as Potentially Responsible Parties (PRPs) under CERCLA—both companies have each spent more than $17 million so far, and they have sought contribution from other PRPs at the site. It was alleged that Georgia Power Company was also a PRP in that its sale of these used transformers containing PCBs to Ward Transformer Company thereby “arranged” for the disposal of hazardous substances, triggering CERCLA liability.

Reviewing the evidence presented and the U.S. Supreme Court’s decision in the Burlington Northern and Santa Fe Railway Company, 129 S. Ct. 1870 (2009) case, as well as a still pertinent Fourth Circuit precedent (Pnemo Abex Corporation, et al. v. High Point, Thomasville and Denton Railroad Company, 142 F. 3d 769 (1998)), the panel majority agreed that Consol failed to show that Georgia Power Company acted with the necessary intent to create “arranger” liability for itself.

Circuit Judge Wynn filed a vigorous dissent, in which he would have ruled that summary judgment was inappropriate at this stage of the proceedings, because “a reasonable factfinder could decide that Georgia Power intended, at least in part, to dispose of hazardous waste when it sold Ward Transformer its used, broken, and obsolete transformers laden with carcinogenic-ridden oil”.

On March 10, 2015, the U.S. Court of Appeals for the Fourth Circuit issued an unpublished opinion in Precon Development Corporation v. U.S. Army Corps of Engineers. For several years, Precon Development Corporation has been contesting the Corps of Engineers’ assertion of CWA jurisdiction over Precon’s planned commercial and residential development in Chesapeake, Virginia. At issue is the jurisdictional status of 4.8 acres of wetlands that Precon wants to fill in: is this land subject to the Corps of Engineers’ permitting authority under Section 404 of the CWA because the wetlands are “water of the United States” on the basis of Justice Kennedy’s “significant nexus” test as explicated in the 2006 Supreme Court case of Rapanos v. United States, 547 U.S. 715 (2006)?

In 2011, on its first trip to the Court of Appeals, the Court of Appeals held that the “significant nexus” test will be controlling in the Fourth Circuit, but that the administrative record assembled by the Corps of Engineers at that time did not support the agency’s finding of “significant nexus” See 633 F3d 278 (CA 4, 2011). The matter was returned to the Corps of Engineers, which supplemented the record with additional findings, again determining that there was a “significant nexus” between the wetlands and the nearest traditional body of water, the Northwest River. The river is located about seven miles distant from the wetlands, which are linked to the Northwest River through a series of drainage ditches.

Precon again contested this determination, and appealed the lower court’s grant of summary judgment to the Corps of Engineers. The Court of Appeals subjected Precon’s arguments to an exacting analysis, holding that the “significant nexus” test is, basically, a flexible ecological inquiry, and that either qualitative or quantitative evidence may support the Corps of Engineers’ jurisdiction. Also, because this is a permitting action and not an enforcement action, the Corps of Engineers is charged by the CWA with maintaining the integrity of the nation’s waters, and the agency cannot be expected at this time to present evidence of the actual ecological impact of the wetlands on downstream waters. In this case, the Court of Appeals also accorded substantial deference to the Corps of Engineers’ factual findings when they were challenged by Precon’s experts.  Finding that the Corps of Engineers had now amassed adequate evidence, it affirmed the lower court’s decision.

1. District Courts

On January 27, 2015, the U.S. District Court for the Southern District of West Virginia ruled that the wastewater discharge permit issued to the Fola Coal Company by the West Virginia Department of Environmental Protection incorporated the state’s narrative biological water quality conditions. As a consequence, the District Court determined that Fola’s discharge violated its NPDES permit. The case is Ohio Valley Environmental Coalition, et. al., v. Fola Coal Company, LLC. This ruling was consistent with the court’s earlier decision in Ohio Valley Environmental Coalition, et al., v. Elk Run Coal Company, Inc., 24 F. Supp. 3d 532 (2014).

F. Fifth Circuit

1. Court of Appeals

On June 30, 2015, the U.S. Court of Appeals for the Fifth Circuit affirmed the trial court’s decision to grant Kurt Mix, a former BP engineer, a new trial after it was learned that the jurors had been exposed to extrinsic evidence bearing on the general prosecution of BP employees in the wake of the Deepwater Horizon oil spill. Mix was involved in efforts to calculate the amount of oil flowing from the Macondo well and developing plans to staunch the flow of oil into the Gulf of Mexico. He was charged with obstruction of justice for deleting text messages between himself and his supervisor related to, the Government alleges, the flow rates. Mix was acquitted on one charge and convicted on the other charge. His counsel, without the permission of the court, contracted the jurors to “obtain feedback about the defense’s failed trial strategy”, and they learned that the forewoman of the jury reported to some of her fellow jurors that she overheard a conversation in a courthouse elevator that other BP employees were being prosecuted in the wake of the spill. After conducting a hearing, and examining the jurors, the trial court granted Mix’s request for a new trial. The Court of Appeals affirmed, holding that the introduction of this extrinsic evidence into the jury proceedings could have violated the defendant’s right to an impartial jury and his Sixth Amendment right to Confrontation. In response to the Government’s argument that the evidence against Mix was overwhelming anyway, and that this incident could not have affected the jury’s deliberations, the Court of Appeals noted that the evidence presented at trial was not all one-sided, suggesting that the exposure to the information could have tipped the balance. The case is United States v. Kurt Mix.

In December 2014, the U.S. District Court for the Southern District of Texas, in Environment Texas Citizen Lobby, Inc., and Sierra Club v. ExxonMobil Corporation, et al., issued a ruling rejecting the CAA Citizen Suit claims filed against ExxonMobil with respect to its operation of the large Baytown, Texas petrochemical complex. This is one of the few cases to be tried before a court, and now, on May 15, 2015, an appeal has been filed with the Fifth Circuit by Environment Texas Citizen Lobby and the Sierra Club. The case is Environment Texas Citizen Lobby Inc. et al. v. ExxonMobil Corp. et al., Case No. 15-20030, and, again, the brief is very long and comprehensive.

On May 20, 2015, another important environmental appeal was filed with the Fifth Circuit Court of Appeals. The case is Board of Commissioners of the Southeast Louisiana Flood Control Authority – East, et al., v. Tennessee Gas Pipeline Company LLC, et al., Case No. 15-30162. In February 2015, the U.S. District Court for the Eastern District of Louisiana dismissed a major lawsuit that the Board of Commissioners filed against 88 oil and gas companies operating in South Louisiana for many years. The lawsuit, filed in state court and removed to federal court, alleges that the oil and gas operations of the defendants, in particular the construction and operation of canals located in the jurisdiction of the plaintiff levee boards, caused significant coastal erosion which in turn caused the destruction of thousands of acres of coastal lands.

On March 11, 2015, the Fifth Circuit Court of Appeals issued another Deepwater Horizon decision. The case is United States v. Kaluza and Vidrine. The Court of Appeals’ ruling affirmed the holding of the lower court that these two BP employees, working on the Deepwater Horizon drilling rig as “well site leaders” were not for that reason subject to the criminal provisions of the “seaman’s manslaughter” provisions of 18 U.S.C. § 1115. Their conduct of “negative pressure tests” immediately before the explosion and fire on the Deepwater Horizon was alleged to be a cause of the catastrophe. Felony criminal indictments against these individuals were handed down by the Grand Jury, which were later dismissed by the trial court, which held that the Section 1115 does not, by its terms, apply to these defendants. The Government appealed, arguing that the natural reading of the law and its history favored the Government’s interpretation. The Court of Appeals disagreed, noting that the statute was originally enacted in 1838, and was developed to prevent “steamboat explosions and collisions on inland waters”, which is a far cry from oil and gas operations conducted far offshore under the provisions of the Outer Continental Shelf Lands Act.

2. District Courts

On June 4, 2015, U.S. District Court for the Southern District of Texas Judge Lee Rosenthal, issued a long ruling, resolving a number of partial summary judgment 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, 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 CERCLA, arguing that the government should also be held accountable as a “covered person” under the law. The court ruled, in what it describes as “Phase I” of this litigation, that Exxon was unable to establish that the Government was an “operator” of the refineries; it exerted substantial control based on its contracts, but did not direct or participate in waste disposal decisions at the refineries. However, both Exxon and Mobil jointly operated the synthetic rubber and co-located chemical plants; the United States conceded as much. Exxon cannot maintain a CERCLA Section 107 cost recovery action against the United States, but it can pursue a Section 113 contribution claim against the Government. The District Court rejected the Government’s defense that Exxon’s lawsuit should be dismissed for being in violation of the appropriate CERCLA statute of limitations. The fact that Exxon entered into administrative settlements with the States of Texas and Louisiana did not trigger the statute of limitations. The District Court also entered a declaratory judgment that the United States is liable for its share of the past and future costs associated with the waste disposal operations of the synthetic rubber plants.

Phase II of this litigation will determine the scope of each party’s share of the cleanup costs.

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This is Part I of VII of a brief recap of some the significant environmental law and administrative cases decided in the past few months:

I.  FEDERAL COURTS

A.  Supreme Court

The U.S. Supreme Court, on June 29, 2015, in a 5 to 4 ruling, held in Michigan v. EPA, that EPA, when deciding whether it was appropriate and necessary to regulate Hazardous Air Pollutants (HAP) such as, for instance, mercury and other toxic pollutants emitted from electric utility power plants, must consider the costs of compliance at this stage of the rulemaking proceedings. Continue reading

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Today, Pillsbury attorneys Julia Judish and Erica Turcios published their client alert titled Department of Labor Says Most Workers Are Employees Under FLSA: Ultimate Test is Economic Dependence. The Alert discusses the recent Wage and Hour Division of the U.S. Department of Labor’s Administrator’s Interpretation No. 2015-1.  The Administrator’s Interpretation adopts a very expansive interpretation of the definition of “employees” under the Fair Labor Standards Act (FLSA).  Many workers currently treated as independent contractors will need to be reclassified as employees. The Administrator’s Interpretation identifies the issue of a worker’s economic dependence as the most important factor in distinguishing between employees and independent contractors. It puts employers on notice that “the FLSA covers workers of an employer even if the employer does not exercise the requisite control over the workers, assuming the workers are economically dependent on the employer.”

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In Gunpowder Riverkeeper v. FERC (where Columbia Gas Transmission, LLC was an Intervenor), the U.S. Court of Appeals for the District of Columbia Circuit denied Gunpowder Riverkeeper’s petition seeking a review of FERC’s issuance of a conditional certificate for public convenience and necessity granted by FERC to Columbia Gas Transmission to extend a natural gas pipeline in Maryland pursuant to FERC’s s authority under the Natural Gas Act (NGA).  Gunpowder Riverkeeper is described by the Court of Appeals as an association of individuals who “work, live, and recreate along the Gunpowder River and its tributaries” who are concerned with the power of eminent domain conveyed to Columbia Gas under Section 7 of the NGA to secure rights-of-way.  Continue reading

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In National Association for Surface Finishing v. EPA, the U.S. Court of Appeals for the District of Columbia Circuit upheld EPA’s 2012 revision of its Clean Air Act (CAA) emissions standards for hexavalent chromium.  The new rule imposes more stringent emissions limitations than the former rule required, and mandates the phase-out of a category of fume suppressant containing a toxic compound.  These new emissions limits were a reversal of sorts for EPA, which in 2010 indicated that the data reviewed by it at that time did not warrant further tightening of the standard.  Various environmental organizations, opposing the new limitations, argued that the technology review required by the CAA compelled EPA to impose a new “maximum achievable control technology” (MACT) floor, but the Court of Appeals, deferring to EPA and its expertise, rejected this argument.  According to the Court of Appeals, EPA “provided a transparent, reasoned explanation of its decisions, considering all relevant information in the record”  Moreover, the “statute does not mandate a particular method of cost-benefit analysis”.  The industry association’s arguments were similarly found unpersuasive.  The Court of Appeals found that, when EPA shifted its position in 2010, it was reasonable because it had before it new data relevant to the decision at hand.

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The American Arbitration Association (AAA) recently revised its Construction Industry Arbitration Rules and Mediation Procedures, effective July 1, 2015. Some changes are relatively modest, but others expand the powers of the arbitrator and may alter traditional assumptions underlying the selection of arbitration as a dispute resolution process for construction projects.

Continue reading

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On July 20, 2015, the U.S. Court of Appeals for the Fifth Circuit again turned aside a challenge to the State of Texas’ “flexible permit” program, which is reserved for Clean Air Act permitting of minor sources of air pollution.  The program has been in effect since 1994, but a 2010 EPA disapproval of the Texas State Implementation Plan (SIP) was appealed to the Fifth Circuit, which reversed the EPA’s determination.  See Texas v. US EPA, 690 F. 3d 670 (5th Cir. 2012).  EPA thereafter conditionally approved the Texas State Implementation Plan (“SIP”) and the flexible permit program, but a group of citizen/environmental groups challenged the EPA’s approval.  Concluding that “our earlier opinion controls here”, the court held that the EPA’s action was not arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law; “to the contrary, it was explicitly in accordance with the law set out in our 2012 opinion”.  The case is Environmental Integrity Project, et. al. v. EPA.

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In the case of Energy Future Coalition, et al. v. EPA, decided July 14, 2015, the D.C. Circuit Court of Appelas rejected a challenge to 2014 EPA rules regulating emission testing requirements for new motor vehicles– 40 C.F.R. § 1065.701(a). The rule requires that a “test fuel” be used by the manufacturers that is “commercially available”. The petitioners, representatives of biofuel producers whose fuel contains 30% ethanol, complain that since their fuel is not designated as being “commercially available” by EPA, the rule adversely affects them and is arbitrary and capricious. The Court of Appeals rejected this challenge because EPA’s rules were simply reflecting the statutory scheme enacted by the Congress.

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