March 01, 2015

In Brief

Theodore L. Garrett

This term’s Supreme Court cases of interest

The U.S. Supreme Court will hear this term the following cases of interest to environmental, energy, and natural resources lawyers. This summary gives the date of oral argument, if known, and indicates if the Court’s ruling has already been issued.

Michigan v. Environmental Protection Agency, No. 14-46 (consolidated with related cases, Utility Air Regulatory Group v. EPA, No. 14-47, and National Mining Assoc. v. EPA, No. 14-49).
Issue: Whether the Environmental Protection Agency (EPA) unreasonably refused to consider costs in determining whether it is appropriate to regulate mercury and other hazardous air pollutants emitted by electric utilities.

Dart Cherokee Basin Operating Co., LLC v. Owens, No. 13-719. Decided Dec. 15, 2014.
Issue: Whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or whether it is enough to allege the required “short and plain statement of the grounds for removal.” Held: A majority of the Court rejected a Tenth Circuit pleading requirement, and concluded that the statutory requirement allowing removal to federal court need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold; the notice need not contain evidentiary submissions.

Kansas v. Nebraska and Colorado, No. 126 Original (argued Oct. 14, 2014).
Issues: Whether Nebraska violated a compact apportioning the waters of the Republican River between Kansas, Nebraska, and Colorado; if so, what relief is appropriate to remedy the violation?

Oneok Inc. v. Learjet, No. 13-271 (argued Jan. 12, 2015).
Issue: Whether the Natural Gas Act, which occupies the field as to matters within its scope, preempts state-law claims challenging industry practices that directly affect the wholesale natural gas market when those claims are asserted by litigants who purchased gas in retail transactions.

Perez v. Mortgage Bankers Ass’n, No. 13-1041 (consolidated with Nickols v. Mortgage Bankers Assoc., No. 13-1052) (argued Dec. 1, 2014).
Issue: Whether a federal agency must engage in notice-and-comment rulemaking pursuant to the Administrative Procedure Act before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation.

U.S. v. Wong, No. 13-1074 (consolidated for hearing with U.S. v. June, No. 13-1075) (argued Dec. 10, 2014).
Issue: Whether the six-month time bar for filing suit in federal court under the Federal Tort Claims Act, 28 U.S.C. § 2401(b), is subject to equitable tolling.

Yates v. U.S., No. 13-7451 (argued Nov. 5, 2014).
Issue: Whether Mr. Yates was deprived of fair notice that destruction of fish would fall within the purview of 18 U.S.C. § 1519, which makes it a crime for anyone who “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object” with the intent to impede or obstruct an investigation, where the term “tangible object” is ambiguous and undefined in the statute, and unlike the nouns accompanying “tangible object” in section 1519, possesses no record-keeping, documentary, or informational content or purpose.

Recent lower federal court decisions of interest


Constitutional law

People for the Ethical Treatment of Property Owners v. U.S. Fish & Wildlife Services, No. 2:13-cv-00278-DB (D. Utah. Nov. 5, 2014).
A district court struck down Endangered Species Act regulations that forbid, without a permit, any activity on private land that injures, kills, or significantly impairs the habitat of a prairie dog that the government conceded was found only in Utah. The court concluded the Commerce Clause does not authorize regulation of actions that would injure or impair the habitat of Utah prairie dogs on non-federal land because the Utah prairie dog has no substantial effect on interstate commerce. The court rejected the government’s argument that the prairie dog has biological value and removing the prairie dog from the ecosystem would have effects on commerce, stating: “If Congress could use the Commerce Clause to regulate anything that might affect the ecosystem (to say nothing about its effect on commerce), there would be no logical stopping point to congressional power under the Commerce Clause.”

Shell Gulf of Mex. v. Ctr. for Biological Div., 771 F.3d 632 (9th Cir. 2014).
The Ninth Circuit held that an energy company’s suit seeking a declaratory judgment against environmental groups was not justiciable under Article III of the Constitution. Shell Oil sued various environmental groups who had opposed the government’s approval of two oil spill response plans under the Oil Pollution Act. The federal Bureau of Safety and Environmental Enforcement (Bureau) approved Shell’s oil spill response plans for leasing and drilling in the Beaufort Sea and the Chukchi Sea. Thereafter, Shell filed a declaratory judgment suit against environmental groups that had submitted comments to the Bureau opposing the oil spill response plan. Shell argued that it was entitled to a determination that the Bureau did not violate the Administrative Procedure Act in approving the contested oil spill response plans and that it needed a speedy determination to provide certainty before proceeding. The Ninth Circuit concluded that Shell was not entitled to seek a determination of who would prevail if the environmental groups asserted a hypothetical claim under the Administrative Procedure Act against the Bureau. The case is not justiciable under Article III, the court held, because Shell was not aggrieved by the Bureau’s actions and the Bureau is not a party to the suit and would thus not be bound by any judgment.

CERCLA

Arizona v. City of Tucson, 761 F.3d 1005 (9th Cir. 2014).
The Ninth Circuit reversed a trial court’s approval of Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) consent decrees, holding that the trial court failed to independently evaluate whether the settlements represented the comparative fault of the settling and non-settling parties. The trial court had approved a de minimis settlement over the objection of non-settling parties who argued that the state of Arizona had provided insufficient information for the court to determine whether the settlement was fair and reasonable. The Ninth Circuit reversed, stating that the trial court accorded “undue deference” to the state. In approving a proposed consent decree, a district court must find that the proposal is based on “some acceptable measure of comparative fault” that rationally apportions liability among the settling parties. The Ninth Circuit found the district court’s action unsupportable, stating that “nowhere in the district court’s opinion is there an analysis comparing each party’s estimated liability with its settlement amount.”

United States v. Coeur d’Alenes Co., 767 F.3d 873 (9th Cir. 2014).
The Ninth Circuit affirmed an order granting the United States’ motion to enter a CERCLA consent decree for payment of the cleanup costs at a mine in Idaho. The consent decree was based on CERCLA provisions authorizing the government to settle for an amount less than a potentially responsible party’s proportionate share of the cleanup cost if the party has a limited ability to pay. The court of appeals rejected intervener Federal Resources Corporation’s argument that the district court abused its discretion by forgoing a comparative fault analysis that the district court found irrelevant. The Ninth Circuit found ample support in the record for the district court’s conclusion that the United States appropriately considered the financial health of the Coeur d’Alenes Company when concluding that the proposed settlement represented the maximum amount of money it could contribute to the cleanup costs.

Air quality

WildEarth Guardians, v. McCarthy, 772 F.3d 1179 (9th Cir. 2014).
The Ninth Circuit affirmed the dismissal of a suit by environmental groups seeking to compel EPA to revise the Clean Air Act prevention of significant deterioration (PSD) permit rules for ozone. The plaintiffs alleged that the 2008 EPA rule revising the national ambient air quality standard (NAAQS) for ozone created a mandatory duty under section 166(a) of the Clean Air Act to revise the PSD regulations for ozone. EPA argued that after 1977, the only nondiscretionary duty is to promulgate PSD regulations after NAAQS are established for a newly regulated pollutant, which does not apply here since EPA had already regulated ozone. The court also found that plaintiffs’ broader reading of section 166(a) as encompassing all pollutants was plausible, and thus concluded that the statute is ambiguous. The suit must be dismissed, the court held, because EPA’s duty to revise the PSD rules when NAAQS are revised was not clear cut or readily ascertainable from the statute, and therefore was not a mandatory duty which was judicially enforceable.

Water quality

Alaska Community Action on Toxics v. Aurora Energy Services, 765 F.3d 1169 (9th Cir. 2014).
The Ninth Circuit reversed a district court’s summary judgment entered in favor defendant companies in a Clean Water Act citizen suit that challenged the lawfulness of defendants’ discharges of coal into Resurrection Bay, Alaska. The district court erred in concluding that the “Multi-Sector General Permit for Stormwater Discharges Associated with Industrial Activity” shielded the defendants from liability under the Clean Water Act for their non-stormwater coal discharges. The Ninth Circuit concluded that the plain terms of the General Permit prohibit the discharges in question because the permit contained a list of the only non-stormwater discharges authorized by the permit and defendants’ coal discharges were not on this list.

U.S. v. Am. Commercial Lines, 759 F.3d 420 (5th Cir. 2014).
A company sued by the United States to recover cleanup costs under the Oil Pollution Act (OPA) may not bring a third-party complaint against companies that elected to submit claims to the OPA Trust Fund. American Commercial Lines (ACL), the owner of a barge carrying fuel oil, contracted with two environmental service companies to provide cleanup services for an oil spill from the barge. After ACL failed to pay the full outstanding amounts owed to the cleanup companies, the companies elected to submit a claim for uncompensated costs to the Oil Spill Liability Trust Fund, and the United States in turn sued ACL to recover its payment. ACL sought to join the cleanup companies as third-party defendants or, alternatively, to hold the companies liable to ACL to the extent ACL was found liable to the United States. The court of appeals held that ACL’s recourse was a defense against the OPA Trust Fund and that OPA displaces any federal common law and maritime law claims against the cleanup companies.

Theodore L. Garrett

Theodore L. Garrett is a partner of the law firm Covington & Burling LLP in Washington, D.C. He is a past chair of the Section and is a contributing editor of Trends .