May 01, 2015

In Brief

Theodore L. Garrett

U.S. Supreme Court

Kansas v. Nebraska, 135 S. Ct. 1042 (2015).
In an original jurisdiction case, the U.S. Supreme Court resolved a dispute between the states of Kansas and Nebraska over implementation of an interstate compact for Republican River Basin water rights. The High Court agreed with the special master that Nebraska had knowingly failed to comply with its obligations under the terms of the existing settlement and upheld the special master’s $1.8 million award to Kansas for disgorgement damages. The Supreme Court also adopted the special master’s recommendation to amend the Accounting Procedures so that Kansas may no longer charge Nebraska for imported water.


CERCLA

Pakootas v. Teck Cominco Metals, Ltd., 2014 WL 7408399 (E.D. Wash. Dec. 31, 2014).
A trial court held that a Canadian company might be liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for the company’s air pollutant emissions and river discharges that contaminated a site in the United States. Defendant conceded that its smelter emissions had settled into the Columbia River, but moved to dismiss the air emission claims because CERCLA’s definition of “disposal” does not include “emitting.” The trial court held that the “CERCLA disposal” alleged by plaintiffs occurred when hazardous substances from Teck’s aerial emissions and its river discharges were deposited “into or on any land or water” of the site. Defendant requested reconsideration based on a recent Ninth Circuit decision under RCRA stating that disposal does not extend to emissions of waste directly to the air. Center for Community Action and Environmental Justice v. BNSF Railway Company, 764 F.3d 1019 (2014). The trial court distinguished the BNSF case and denied reconsideration. However, because this is a previously undecided issue under CERCLA, the district court certified its order for immediate interlocutory appeal to the Ninth Circuit.

Cyprus Amax Minerals Co. v. TCI Pacific Communications Inc., No. 4:11-cv-00252, 2015 WL 427807 (N.D. Okla. Feb. 2, 2015).
Cyprus Amax Minerals Co. (Cypress) entered into a consent decree with the U.S. Environmental Protection Agency (EPA) and the state of Oklahoma for remediation of a contaminated site. Cyrus filed suit for contribution under CERCLA against New Jersey Zinc (N.J. Zinc) as the parent of Tulsa Fuel and Management Company (Tulsa Fuel) and against TCI Pacific Communications (Pacific) as the successor in interest to N.J. Zinc and Tulsa Fuel. Cyprus alleged that Pacific was liable for environmental harms caused by a Tulsa Fuel smelting operation located near Cyprus’ contaminated site. The parties filed cross-motions for summary judgment on the issue of whether Tulsa Fuel was the alter ego of N.J. Zinc and whether Pacific is liable because it directly managed the operations at the site. The court held that Tulsa was the alter ego of N.J. Zinc because N.J. Zinc represented to the Interstate Commerce Commission that it controlled or dominated the operations of Tulsa Fuel and there is evidence that N.J. Zinc treated Tulsa Fuel as a division of N.J. Zinc. Because there is no dispute that Pacific is the successor to N.J. Zinc, the court ruled that Cyprus may recover contribution from Pacific under CERCLA. The court rejected Pacific’s argument that Oklahoma law required a showing that N.J. Zinc abused the corporate form to commit fraud against Cyprus as a pre-condition to any piercing of the corporate veil based on a finding of alter ego.

Coppela v. Smith, No. 11-cv-01257-AWI-BAM, 2015 U.S. Dist. LEXIS 5127, 2015 WL 224730 (E.D. Calif. Jan. 15, 2015).
The Coppelas, owners of a dry cleaning business, brought a suit against prior owners of the property, Martin and Martin Properties, seeking contribution for cleanup costs relating to tetrachloroethylene (PCE) contamination of soil and groundwater (commonly associated with dry cleaning operations). Defendant moved for summary judgment, alleging that it had never operated a dry cleaning business on the property and it was an “innocent landowner” because its pre-purchase investigation in 1995 did not identify any PCE contamination or any past operation of a dry cleaning business at the property. The court granted summary judgment for defendant, finding that defendant (1) did not cause a release, (2) exercised due care before purchasing the property, (3) fully cooperated with EPA and the state, and (4) had neither knowledge nor reason to know of any PCE contamination. The court held that defendant’s failure to comply with the current requirement to use ATSM standard E 1527-93 as part of a due diligence effort was not fatal because an “appropriate inquiry” is one that complies with the accepted commercial standards applicable when the property in question was purchased (in this case, in 1995).

Air quality

Natural Resources Defense Council v. EPA, 777 F.3d 456 (D.C. Cir. 2014).
A divided D.C. Circuit panel vacated EPA’s extension of deadlines for states to comply with the 2008 National Ambient Air Quality Standard (NAAQS) for ozone and EPA’s revocation of State Implementation Plan (SIP) requirements for transportation planning. Following a nonattainment designation, the Clean Air Act requires a state to demonstrate that the area will come into compliance with a National Ambient Air Quality Standard (NAAQS) within three years of the designation. EPA’s rules for the 2008 ozone standard allowed a state’s demonstration to focus on reaching compliance by the end of the third calendar year. The court held that this extension, from three years after designation to the end of the third calendar year after designation, was contrary to the Clean Air Act because it would extend the deadline to more than three years after the nonattainment designation. EPA explained that the rule allowed states to obtain ozone data for three full summer seasons in order to establish compliance. The majority held that EPA’s ozone-season explanation lacks any grounding in the statute, and that: “Even if EPA could adequately justify choosing a trigger date other than the designation date, it has failed to do so here.” Judge Randolph’s dissent concludes that the “Clean Air Act says nothing about when EPA should start the clock after the agency has issued new, stricter [NAAQS] for ozone,” and warns that the majority’s ruling could cause “disarray” in the SIP process, in particular for states whose compliance deadlines have passed. On the second issue addressed by EPA’s rule, the majority held that EPA had no authority to revoke the ozone standard for SIP transportation conformity planning purposes, which obligates noncompliance areas to assure that new transportation infrastructure projects meet EPA-approved air quality plans.

Water quality

Hall & Assocs. v. EPA, No. 14-808, 2014 U.S. Dist. LEXIS 178571 (D.D.C. Dec. 31, 2014).
A federal district court dismissed a Freedom of Information Act (FOIA) suit requesting documents relating to EPA restrictions on blending partially and fully treated wastewater from wet weather events. Plaintiff sought information from EPA regarding whether EPA would give nationwide application to the decision in Iowa League of Cities v. EPA, 711 F.3d 844, 878 (8th Cir. 2013), which rejected EPA’s assertion of authority to ban blending. The district court concluded that the plaintiff failed to exhaust its administrative remedy to contest the completeness of EPA’s response, stating that “general complaints about the results of a search do not amount to a cognizable FOIA claim.” On the underlying issue, EPA’s position is that industry cannot challenge EPA’s policy on how it will exercise its veto power and may only sue to challenge EPA’s veto of a specific permit.

Sierra Club v. ICG Hazard, LLC, No. 13-5086, 2015 WL 543382 (6th Cir. Jan. 27, 2015).
A divided court of appeals affirmed a grant of summary judgment to a coal mining company that discharged selenium into surface waters in concentrations above state water quality standards. The court concluded that the company disclosed its selenium discharges to the permit authority, that selenium discharges were thus within the reasonable contemplation of the permit authority, that the company operated under a general permit, and, therefore, the permit shield in the Clean Water Act protected the company from liability even though the permit did not specifically limit selenium. The court held that the Sierra Club’s claims under the Surface Mining Act were barred because the state water quality standards were incorporated into the surface mining permit and the Clean Water Act regulatory framework controls over inconsistent regulation under the Surface Mining Act.

In re: Charles River Pollution Control Dist., NPDES Appeal No. 14-01, 2015 EPA App. LEXIS 3 (Feb. 4, 2015).
EPA’s Environmental Appeals Board (EAB) upheld EPA’s authority to require Clean Water Act discharge permits (National Pollutant Discharge Elimination System (NPDES) permits) for “satellite” sanitary sewer systems that collect wastewater from domestic sources owned by one entity and route the wastewater to municipal wastewater treatment plants owned by another. The EPA region explained that its practice is to regulate such regionally integrated POTWs with a co-permitting structure. On appeal, the owners of the satellite collection systems argued that they do not need a permit because they do not own the treatment plant outfall. The Clean Water Act requires NPDES permits for publicly owned wastewater “treatment works” that discharge to waters of the United States. The EAB held that the term “treatment works” includes sewage collection systems, and thus EPA properly included the satellite collection systems as part of a single NPDES permit with the towns operating those collection systems as co-permittees.

RCRA

Community Association for Restoration of the Environment (CARE) v. Cow Palace, LLC, 2015 WL 199345 (E.D. Wash. Jan. 14, 2015).
A federal court held that certain manure management practices of a dairy violated the Resource Conservation and Recovery Act’s (RCRA) solid waste requirements. In granting summary judgment, the court held that when groundwater contamination results from manure that is over-applied to crops or stored in poorly designed lagoons that leak, the manure is converted from a potentially beneficial product into a discard that is a solid waste under RCRA. The court further ruled that contamination of nearby groundwater sources presented an imminent and substantial endangerment to public health, thus triggering the corrective action provisions of RCRA.

TSCA

Trumpeter Swan Society v. EPA, 774 F.3d 1037 (D.C. Cir. Dec. 23, 2014).
The D.C. Circuit rejected a suit seeking to compel EPA to regulate lead bullets and shot under the Toxic Substances Control Act (TSCA). The panel held that TSCA “unambiguously exempts” items taxed as ammunition, including shells and cartridges. Plaintiffs attempted to avoid the exemption by arguing that EPA should regulate spent bullets and shot. The panel concluded, however, that since “bullets and shot can become ‘spent’ only if they are first contained in a cartridge or shell and then fired from a weapon, petitioners have identified no way in which EPA could regulate spent bullets and shot without also regulating cartridges and shells,” which is precisely what the exemption prohibits.

Energy

Thompson v. Heineman, 289 Neb. 798 (Neb. S. Ct. 2015).
In 2013, the governor of Nebraska approved TransCanada’s proposed route for the Keystone Pipeline pursuant to a law enacted by the Nebraska legislature in 2012 that granted the governor authority over pipeline routing decisions. A group of landowners successfully challenged the approval in state trial court, and an appeal to the state Supreme Court followed. Four of the seven justices on the Nebraska Supreme Court concluded that a state statute allowing the governor to exercise the power of eminent domain for building the Keystone Pipeline was inconsistent with the state constitution because the statute transferred the Public Service Commission’s powers over common carriers to the governor. Three other justices concluded that plaintiffs lacked standing and declined to address the constitutional issues. Because the Nebraska Constitution requires a super-majority of five judges to hold a legislative act unconstitutional, the legislation must stand by default.

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 .