Articles Posted in Environmental

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 ›

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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In mid-March, the U.S. Court of Appeals for the Eighth Circuit, in National Parks Conservation Assoc.,  et al., v. McCarthy, approved the “Minnesota’s Regional Haze State Implementation Plan” (MRHSIP), rejecting the arguments opposing EPA’s approval filed by several environmental organizations. The conservation organizations challenged EPA’s approval of Minnesota’s decision to use the Transport Rule—also known as the Cross-State Air Pollution Rule (CSAPR)—in place of source-specific best available retrofit technology (BART), and Minnesota’s reasonable-progress goals. They unsuccessfully claimed that “the Transport Rule allowances in the Plan are not ‘better than BART.'”  Of note in this opinion is that, reviewing 42 U.S.C. § 7607(b), two of the three judges on the panel concluded that the Eighth Circuit has jurisdiction because the state implementation plans’ (SIP) reliance on the Transport Rule was based on local issues. If it was nationwide in scope and effect, this case would have to be heard by the DC Circuit Court of Appeals. With that, the Court of Appeals held that EPA’s approval of the Minnesota Plan based on the Transport Rule was not arbitrary and capricious and, similarly, EPA’s approval of the plan’s “reasonable-progress” goals was proper. The Court of Appeals noted, however, that other circuit courts have issued rulings that appear to conflict with its disposition.

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Earlier this week the U.S. Supreme Court, in Sturgeon v. Frost, Alaska Regional Director of the National Park Service, issued a unanimous ruling reversing  the U.S. Court of Appeals for the Ninth Circuit’s interpretation of the Alaska National Interest Lands Conservations Act (ANILCA) that had the effect of subjecting the use of hovercrafts on the Nation River in Alaska to criminal enforcement. The parties disputed whether Section 103(c) of ANILCA created an Alaska-specific exception to the National Park Service’s general authority over boating and related activities in federally managed preservation areas, each reaching different conclusions about the scope of the National Park Service’s  powers. The Court rejected the interpretation adopted by the Ninth Circuit, noting that “[u]nder the reading of the statute adopted below, the Park Service may apply nationally applicable regulations to ‘non-public’ lands within the boundaries of conservation system units in Alaska, but it may not apply Alaska-specific regulations to those lands.” This is the second recent decision by the Court reversing a lower court’s ruling involving environmental regulations that could have had serious criminal consequences. The earlier ruling was Yates v. United States.

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In early March, the U.S. Court of Appeals for the Tenth Circuit, in Sierra Club v. Oklahoma Gas and Electric Company, in a 2-to-1 decision, affirmed the district court’s dismissal of Sierra Club’s Clean Air Act (CAA) citizens suit against OG&E, concluding that their civil penalty and equitable relief claims are time-barred because Sierra Club’s claims first accrued when OG&E commenced modifications to the at-issue boiler without the required permit in March of 2008. Both parties agreed that civil penalties originating before April 1, 2008 were time-barred.  The Court of Appeals rejected Sierra Club’s arguments to extend the limitations period to after April 1 premised on there being repeated and continuing violations because of the lack of the required permit. Sierra Club’s claims for declaratory and injunctive relief were also time-barred because they were based on the same facts and timeline. What difference a few days make!

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Properly interpreting CERCLA’s statute of limitations often presents vexing problems, and never more so than when claims for natural resource damages (NRD) are filed. As explained several years ago by the Ninth Circuit Court of Appeals in United States v. Asarco, Inc., ordinarily a claim for NRD must be filed within three years of the discovery of the loss and its connection with the release in question. However, a special provision creates an exception to this timeframe when the site is placed on EPA’s National Priority List (NPL). Such NRD claims must then be filed within three years of the completion of a remedial action for the site, a process that can take years if not decades. A case in point is the recently decided case of State of New York, et al., v. Next Millennium Realty, LLC, focusing on whether NRD claims that are otherwise time-barred can be revived if the site is later placed on EPA’s NPL.

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The courts have been busy issuing significant Endangered Species Act rulings. In the latest decision, the U.S. Court of Appeals for the District of Columbia Circuit, in Defenders of Wildlife and Center for Biological Diversity v. Jewell, issued a unanimous ruling which affirmed the lower court’s decision that the U.S. Fish and Wildlife Service’s withdrawal of the proposed listing of the Dunes Sagebrush Lizard as an endangered species was consistent with the Endangered Species Act and the policies that the U.S. Fish and Wildlife Service has employed to administer the Act. This species is located in New Mexico and West Texas, where increasing oil and gas activity has threatened the habitat of the Lizard. The Court of Appeals held that a “voluntary state conservation agreement” can be considered by the U.S. Fish and Wildlife Service in deciding whether or not to list a species as endangered under the Act.

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Planning and constructing new power plants that will employ new technologies, especially those substantially funded by the federal government, can be a challenging business. Whenever a new law, regulation or agency process goes into effect, industry and legal observers await the often inevitable legal challenges that will arise. For obvious reasons, the exact parameters of any new regulatory program can be of material interest to anyone who makes a living in or near an affected industry. A case in point is the effort to build plants that will rely on carbon sequestration technology to reduce carbon dioxide emissions  generated by these facilities. Both the U.S. Department of Energy and EPA have developed plans and procedures to assist this development, which relies on environmental permits that often generate local opposition. And, thus, when the first Safe Drinking Water Act permits were issued in 2014, the legal challenge that followed was noteworthy. Unfortunately, observers will have to wait a while longer on that count, as this particular permit challenge has vanished in a puff of moot.

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