Articles Posted in Environmental

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Builders and contractors may be interested to learn that, in the past few days, the Supreme Courts of Texas capitoland Colorado, and the U.S. Court of Appeals for the DC Circuit have issued significant rulings addressing the separation of powers at the state and federal level.

An Ordinance’s Overreach
On April 29, the Supreme Court of Texas, in BCCA Appeal Group, Inc. v. City of Houston, Texas, held, in an 8 to 1 ruling, that the Texas Clean Air Act (TCAA) and the TCAA’s enforcement mechanisms imbedded in the Texas Water Code preempt a City of Houston ordinance that required emissions-emitting facilities located within the city limits to register their facilities with the City of Houston, and to pay registration fees. Although the TCAA expressly provides that municipalities like the City of Houston can pass air quality ordinances, the Court noted that they cannot pass local laws inconsistent with the TCAA and the Texas Commission on Environmental Quality’s (TCEQ) enforcement policy and procedures. Indeed, the City of Houston’s ordinance makes unlawful what the TCAA allows. While the ordinance expressly incorporated the air quality rules of the TCEQ, this was not enough to save the ordinance from being invalidated to the extent that registration was required that could result in criminal enforcement by the City of Houston. The consequences of this decision may result in a concentration of air quality enforcement authority in the TCEQ, and cities in Texas will need to exercise caution in promulgating local ordinance that could conflict with state policy.

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In New York High Court Gives the Bronx Cheer to Insurers’ Pro Rata Allocation and Exhaustion Arguments, Pillsbury attorney  discusses New York State Court of Appeals’ decision in In re Viking Pump, Inc. The Court of Appeals accepted two certified questions from the Delaware Supreme Court. As noted by Ben, “in a New York minute,” the Court of Appeals has “leveled the playing field by endorsing the ‘all sums’ and ‘vertical exhaustion’ approach to allocation advocated by a policyholder, at least as to policies containing ‘non-cumulation’ and ‘prior insurance’ provisions.” This ruling will be of interest to those who have encountered in New York barriers to insurance coverage where multiple policies over multiple policy terms are implicated, including, but not limited to, coverage for environmental or asbestos liabilities.

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In late April, U.S. District Court Judge Mark A. Goldsmith, in Concerned Pastors for Social Action, et al. v. Nick A. Kouri, et al., FlintRiverissued an interesting Order Regarding Disqualification. During an April 6, 2016 status conference in this matter, the Court to the parties “information regarding its consumption of water whose source was the Flint River, during the period of April 2014 to August 2014, a time period when its duty station was at the Flint Divisional courthouse.”  On the same day, the Court issued an order instructing “the parties to file any objections pertaining to the Court’s continued participation in the matter.” At issue was Title 28 U.S.C. § 455(a), which provides that any judge “of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.”

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UPDATE: When Attorneys General Attack II

In When Attorneys General Attack, Pillsbury attorneys Sheila McCafferty Harvey, Joseph Jean, Carolina Fornos and Benjamin Tievsky discuss the New York State Office of the Attorney General’s and other jurisdictions’ power to aggressively scrutinize energy companies’ public statements on the subject of climate change. In the alert, they provide strategies for managing and obtaining insurance coverage for these investigations.

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skialtaOn April 19, 2016, the U.S. Court of Appeals for the Tenth Circuit, in Wasatch Equality, et al., v. Alta Ski Lifts Company, et al., affirmed the lower court’s dismissal of a lawsuit claiming that the U.S. Forest Service, in routinely approving a permit to operate the Alta Ski area in Utah, unconstitutionally discriminated against a group of snowboarders who were banned from using these ski lift facilities by an edict of the ski resort’s operators. Ultimately, the Court of Appeals concluded that “[e]ven if we grant all reasonable inferences in Wasatch’s favor, the pleaded facts at best establish that each year the Forest Service—with knowledge of the snowboard ban—reviews and approves Alta’s site plan and receives from Alta a usage fee. This isn’t enough to establish state action for purposes of the Fourteenth Amendment.”

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In a “case of first impression,” U.S. Court of Appeals for the Third Circuit,texascapitol sitting in Austin, in TCEQ v. Exxon Mobil Corporation, et al., issued an important decision interpreting the scope of the Texas Solid Waste Disposal Act (TSWDA) as it pertains to judicial review of and the burden of proof for certain administrative cleanup orders issued by the Texas Commission on Environmental Quality (TCEQ). In general, relatively few opinions have been issued interpreting the TSWDA, and in particular, Subpart F, which is the Texas counterpart to CERCLA (or Superfund) entitled “Registry and Cleanup of Certain Hazardous Waste Facilities.” Given the significance of this decision, an appeal to the Texas Supreme Court seems  likely.

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The courts continue to be busy issuing significant Endangered Species Act (ESA) rulings. In the latest one, issued in early wolverineApril, the U.S. District Court for Montana, Missoula Division, in Defenders of Wildlife v. Jewell, et al., vacated the U.S. Fish and Wildlife Service’s withdrawal of its proposed listing of the North American Wolverine as an endangered species in its 85-page opinion. The opinion includes a very interesting account of the Service’s internal struggles to grapple with the import of this listing, and the reliance it placed on climate change modeling, which generated considerable criticism.These decisions are always noteworthy because of the implications on development projects. One such implication is a listed species must be considered in federal permitting matters.

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On April 1, 2016, the Texas Supreme Court, in Houston Belt & Terminal Railroad Co., et al.. v. City of Houston, et al., reviewed the implementation of the City of Houston’s 2011 drainage fee ordinance. The petitioner railroad companies were assessed substantial new annual city drainage fees of $3 million by the City’s Director of Public Works. The Director determined that all of the railroads’ properties within the City of Houston “benefitted” – a term in the city ordinance—from the City’s drainage system, and that 93 million square feet of railroad property was “impervious,” allowing storm water to runoff into the drainage system which collected and otherwise managed this runoff. The Director made his determination of assessable property on the basis of aerial images and not digital map data, as required by the ordinance.  For this reason, the railroads protested this new assessment and filed a lawsuit to challenge it. The City moved to dismiss the lawsuit on the basis of governmental immunity, but the Texas Supreme Court noted that the defense “does not bar a suit against a government officer for acting outside his authority—i.e.,  an ultra vires suit,” citing Tex. Parks & Wildlife Dep’t v. Sawyer Trust, 354 S.W.3d 384, 393 (Tex.  2011). It recognized that “[t]o fall within this ultra vires exception,” however, “a suit must not complain of a government officer’s exercise of discretion, but rather must allege, and ultimately prove, that the officer acted without legal authority or failed to perform a purely ministerial act,” citing City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009) and Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 404 (Tex. 1997). Reviewing its case law and the pleadings, the Court held that the railroads’ pleadings were sufficient to confer the trial court with jurisdiction over their claims that the Director acted in an ultra vires capacity when he determined the extent of the impervious surface area of their properties.

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The Texas Constitution provides that “[n]o person’s property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made.” Tex. Const.  art. I, § 17. The Texas Supreme Court has effectuated this constitutional imperative by requiring payment of the “market value” of condemned property, which it has determined is “the price which the property would bring when it is offered for sale by one who desires, but is not obligated to sell, and is bought by one who is under no necessity of buying.” The court has recognized that an impending condemnation project can distort the value of property.  The nflationary effects referred to as “project enhancement” in contrast to deflationary effects which are referred to as “condemnation blight” or “project diminishment.” Since neither reflects true “market value” of the property—”what a willing buyer would pay a willing seller under market conditions”—the project-influence rule evolved to ensure that such components are removed from a market-value determination. The project-influence rule is intended to ensure that the property owner is made whole—”not placed in either a better or worse position than he or she would have enjoyed had there been no condemnation.” Recently, the Texas Supreme Court was called upon to consider whether the State’s role in delaying the cleanup of contaminated property should be a factor considered when determining the market value of condemned property. Continue Reading ›

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Twice, courts have been called upon to interpret North Carolina’s 10-year statute of repose in connection with injuries allegedly stemming from the release of hazardous substances. CTS Corporation v. Waldburger involved CTS’s liability under CERCLA as the past owner of a manufacturing facility in North Carolina whose operations resulted in the release of hazardous substances which allegedly caused damage to Waldburger’s land. Stahle v. CTS Corporation involved CTS’s liability stemming from the discharge of toxic solvents into a nearby stream to which allegedly Stahle was exposed. CTS prevailed with its argument that the statute of repose barred claims against it in Waldburger (property damage) but it was not so fortunate in Stahle (personal injury).

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