Articles Posted in Environmental

On January 7, 2015, the U.S. District Court for the Central District of California held that California’s ban on the sale in California of foie gras–a delicacy made from fattened and force-fed duck liver–was preempted by federal law, namely the Poultry Products Inspection Act (PPIA), 21 U.S.C. §§ 451-470. The case is Associations Des Eleveurs De Canards et D’Oies Du Quebec, et al., v. Kamala Harris, Attorney General of California. This is an example of the preemptive effect of federal legislation, which will often trump conflicting state law, especially in business matters.

The plaintiffs, a group of Canadian farmers, alleged that this ban has caused them to lose millions of dollars in sales in California, and the court held that they had standing to bring this lawsuit. The District Court then reviewed the California statute (enacted in 2012) and the provisions of the PPIA, and determined that the California law conflicts with and is preempted by the federal law, which regulates the distribution and sale of poultry products in interstate commerce.

Some of the issues in this case have already been reviewed by the Ninth Circuit, which held in 2013 that the California Attorney General was not entitled to Eleventh Amendment immunity (see 729 F. 3d 937), and it is likely that another appeal will be made to the Ninth Circuit. The Ninth Circuit has recently upheld several state laws against such challenges.

On December 29, 2014, the U.S. District Court for the Eastern District of North Carolina held that the plaintiffs in a Resource Conservation and Recovery Act (RCRA) and Clean Water Act (CWA) citizens-suit against the owners and operator of a swine farm had the right to have the case tried before a jury. The case is North Carolina Environmental Justice Network, et al , v. Taylor, et. al. It is alleged that the defendants illegally dumped swine waste into the waters and onto the lands surrounding the swine farm. The defendants challenged the demand for a jury trial, and both sides argued that a 1987 Supreme Court decision, Tull v. U.S., 481 U. S. 412 (1987), supported their positions. After reviewing the Tull case and other precedents, the District Court held that the Tull decision, which discussed the right to a jury trial when the federal government was seeking civil penalties, was a Seventh Amendment right available to either side in a citizens-suit case.

On January 9, 2015, the U.S. District Court for the District of Columbia approved a proposed consent decree that had been negotiated by EPA and the California Air Resources Board (CARB) that resolved the government’s claims that Hyundai Motor Company, Hyundai Motor America, Kia Motors Corporation, Kia Motors America, and Hyundai America Technical Center, Inc. violated the Clean Air Act and the California Health & Safety Code by falsifying fuel economy and greenhouse gas emissions claims that affected more than 1 million vehicles sold in the 2012 and 2013 model years.

It was alleged in the consent decree that there was a discrepancy in the information provided by the defendants in connection with the application for “Certificates of Conformity” and the actual specifications of the vehicles in that the vehicles provided lower fuel economy and emitted higher emissions than was stated in the applications. 126,000 vehicles were sold in California, and the $100,000,000 civil penalty–the largest yet recovered–was split between the U.S. Government ($93,700,000) and the State of California ($6,300,000). In addition, Hyundai agreed to forfeit 4.75 million greenhouse gas credits.

The proposed settlement was published in the Federal Register, and several comments were received. Some of the commenters requested that Hyundai also provide $25 million of Supplemental Environment Projects in some states, but the United States rejected this request, arguing that to do so would unravel the settlement that had been negotiated. The decision is reported as United States of America, et al. v. Hyundai Motor Company, et al.

In addition to the bread and butter federal agency appropriations language in the Consolidated and Further Continuing Appropriations Act, 2015 (the “Act”), enacted late last year, the Act includes a number of provisions affecting environmental regulation, including:

• The interpretive rule published by Environmental Protection Agency (EPA) and the Corps of Engineers regarding the applicability of Section 404(f)(I)(A) of the Clean Water Act (CWA), effective March 25, 2014, will be withdrawn;
• None of the funds made available by this Act may be used to require a permit for the discharge of dredged or fill materials for activities identified in Section 404(f)(1)(a), (c) of the CWA
• None of the funds made available by this Act may be used by the Department of the Interior to write or issue, pursuant to Section 4 of the Endangered Species Act, to proposes a listing for the greater sage-grouse;
• No funds may be used to promulgate or implement any rule requiring the issuance of permits under Title V of the Clean Air Act for emissions of greenhouse gases from biological products associated with livestock production;
• The President is directed to provide the Congress with a comprehensive report describing in detail all federal agency funding of domestic and foreign climate change programs for fiscal years 2014 and 2015;
• There will be no greenhouse gas reporting requirements for emissions from manure management programs;
• Any projects financed by grants for state projects financed by funds from the Safe Drinking Water Act will use American iron and steel products; and
• No funds may be used to regulate the lead content of ammunition or fishing tackle under Toxic Substance Control Act or any other law.

Yesterday, Pillsbury attorneys Matt Morrison and Bryan Stockton published their advisory Three Obstacles to EPA’s O3 Rule: Industry Opposition, Implementation, and Congressional Oversight. The Advisory discusses the EPA’s recent proposal to revise the national air quality standard for ozone, the key pollutant in smog and regional haze, and the complex issues the EPA must navigate as it prepares to finalize the rule by October 1, 2015.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Matt Morrison or Bryan Stockton, the authors of this blog.

Last week, a divided panel of the DC Circuit Court of Appeals vacated two provisions of the 2008 ozone standards on the ground that they exceed the EPA’s authority under the Clean Air Act. The two provisions extended the deadlines for some air quality regions to attain the 2008 ozone standards and revoked what is known as the “transportation conformity requirements”. Judge Randolph, in dissent, argued that the majority was, in effect, substituting its policy judgment for that of the EPA, and failed to discuss exactly how EPA and the states are expected to implement this decision, which he considers to be “a mistake in judicial analysis”. The case is NRDC v. EPA, et al.

In May 2012, a catastrophic flood inundated large sections of Nashville, resulting in many lawsuits being filed against the U.S. Army Corps of Engineers with respect to the Corps’ operation of the Old Hickory Dam. The dam is located on the Cumberland River, and water that flows through this river and the Old Hickory Dam eventually reaches Nashville. The several lawsuits that followed were consolidated, and the plaintiffs included A.O. Smith Corporation, Gaylord Enterprises, the Opryland Hotel, the Grand Old Opry, the Gibson Guitar Corporation, other hotels, businesses and insurance companies.
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Wednesday, U.S. District Judge David Hittner issued a long (82 pages) and complex ruling rejecting all of the claims for relief requested by Environment Texas Citizen Lobby, Inc. and Sierra Club from ExxonMobil Corporation, ExxonMobil Chemical Company and ExxonMobil Refining and Supply Company. In reaching its decision, the Court conducted a 13-day, non-jury trial in which the plaintiffs requested a declaratory judgment, penalties of $643,000,000 and the appointment of a Special Master to oversee Exxon’s compliance with the injunction that was requested with respect to the huge petrochemical complex operated by Exxon in Baytown, Texas.
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On December 1, 2014, the U. S. District Court for the Eastern District of Louisiana (Judge Zainey presiding) issued a ruling in the case of The Parish of Plaquemines v. Total Petrochemical & Refining USA, Inc., et. al. The court granted the motion of the Parish to remand to state court a lawsuit filed by the Parish against several major oil companies who the Parish alleges have caused substantial environmental damages to the land and water bodies located within the Louisiana Coastal Zone boundaries of Plaquemines Parish. These companies, over the course of many years, have conducted their operations pursuant to more than 1000 state coastal zone permits, which they are alleged to have violated. The case was filed in state court, but the defendants attempted to remove it to federal court. They argued that removal was justified on the basis of diversity, the Outer Continental Shelf Lands Act (OCSLA), general maritime law, and federal enclave jurisdiction (some of the areas are also located in federal nature preserves). The District Court rejected all of these arguments in a careful and a lengthy opinion.

The ability of the Parish to pursue this litigation was challenged, but the District Court determined that the relevant Louisiana statutes authorized the Parish to bring this lawsuit, which pertains to activities conducted within the jurisdictional boundaries of the Parish. There is a suggestion that the Louisiana Attorney General does not concur with this legal action, but very little discussion is provided on this matter. The defendants also argued that a recent decision of the Fifth Circuit in In re Deepwater Horizon, 745 F.3d 157 (5th Cir. 2014), clarified the reach of federal jurisdiction embodied in the OCSLA, but the District Court pointed out that that case involved natural resource damage claims emanating from oil spills on the Outer Continental Shelf — and that is not the case here. Finally, the maritime and federal enclave arguments were unsuccessful. The matter will be returned to the state courts — unless there is an appeal to the Fifth Circuit. By state law, the Parish must expend any damages recovered to enhance coastal protection and recovery issues.