November 01, 2014

In Brief

Theodore L. Garrett

CERCLA

A divided Ninth Circuit panel reversed the approval of a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) de minimis consent decree, finding that the district court gave undue deference to the Arizona Department of Environmental Quality and did not independently scrutinize the terms of the consent decree. State of Arizona v. Raytheon Co., No. 12-15691, 2014 WL 3765569 (9th Cir. Aug. 1, 2014). The state accepted less than 1 percent of cleanup costs estimated at $75 million from 22 settling parties, but the Ninth Circuit agreed with the non-settling intervenors that the district court had a responsibility to independently determine that the settlements were fair, reasonable, and consistent with CERCLA’s objectives by, among other things, comparing the proportion of total projected costs to be paid by the settling parties with the proportion of liability attributable to them. The dissent expressed concern that the majority view would greatly expand judicial scrutiny and hinder the ability of states and federal entities to enter into such settlements.

A consent decree with the United States requiring the settling party to “conduct a wide range of [remedial] activities” triggered CERCLA’s three-year statute of limitations for contribution actions, a district court held. ASARCO v. Atl. Richfield Co., No. 6:12-cv-00053, __F. Supp.__ (D. Mont. Aug. 26, 2014). ASARCO and the U.S. Environmental Protection Agency (EPA) entered into a 1998 consent decree that resolved EPA’s claims for violations of the Resource Conservation and Recovery Act (RCRA) and the Clean Water Act as to the East Helena, Montana site. A separate June 2009 consent decree with EPA resolved ASARCO’s environmental liabilities to the federal and state governments at several Superfund sites, including East Helena, and required ASARCO to pay $99 million to a trust for that site. ASARCO sought CERCLA contribution against Atlantic Richfield for the $99 million it paid under the 2009 decree. The court granted summary judgment in favor of Atlantic Richfield, holding that the 1998 consent decree triggered the statute of limitations even though it was not a CERCLA decree and did not expressly cover CERCLA claims. The district court held that the 2009 decree did not create any specific or new obligations as to the East Helena site that were not covered in the 1998 decree, but simply required the $99 million payment to fund pre-existing obligations under the 1998 decree.

Air quality

The Ninth Circuit vacated EPA’s decision to issue a Prevention of Significant Deterioration permit, which would have allowed Avenal Power Center LLC to build and operate a 600-megawatt natural gas-fired power plant. Sierra Club v. EPA, No. 11-73342, 2014 WL 3906509 (9th Cir. Aug. 12, 2014). Although EPA had a statutory duty under the Clean Air Act to either grant or deny the permit application within one year, 42 U.S.C. § 7475(c), it failed to do so. After the deadline passed but before taking any final action, EPA tightened the applicable air quality standards. EPA granted Avenal Power the permit without regard to the new regulations, which by then had gone into effect, stating that under certain circumstances it has the authority to grandfather permit applications and that its decision is entitled to deference. The court of appeals held that the Clean Air Act unambiguously requires Avenal Power to demonstrate that the particular power plant complies with the regulations in effect at the time the permit is issued and thus EPA’s waiver was invalid.

Water quality

The U.S. Court of Appeals for the Ninth Circuit held that a district court erred in concluding that the Multi-Sector General Permit for Stormwater Discharges Associated with Industrial Activity (General Permit) shielded the defendants from liability under the Clean Water Act for their non-stormwater discharges from a coal loading facility. Alaska Community Action on Toxics v. Aurora Energy Services, LLC, No. 13-35709, 2014 WL 4339239 (9th Cir. Sept. 3, 2014). Although the defendants, owners and operators of a conveyor system designed to transfer coal from rails into waiting cargo ships, argued that the incidental discharge of some coal was covered by the General Permit, the court of appeals disagreed. The Ninth Circuit held that “The plain terms of the General Permit prohibit defendants’ non-stormwater discharge of coal” from the coal conveyor system that allegedly caused the discharge of some coal into Resurrection Bay.

A jurisdictional determination (JD) by the U.S. Army Corps of Engineers (Corps) was held not renewable as a final agency action. Belle Co. v. US Army Corps of Eng’rs, No. 13-30262, 2014 WL 3746464 (5th Cir. July 30, 20140). The Corps issued a JD stating that the plaintiff’s property contains wetlands subject to regulation under the Clean Water Act, and plaintiffs sued, alleging that the JD is unlawful. The Fifth Circuit affirmed the district court’s dismissal for lack of subject-matter jurisdiction, concluding that the JD is not “final agency action” and therefore is not reviewable under the Administrative Procedure Act. The court applied the U.S. Supreme Court’s decision in Sackett v. EPA, 132 S. Ct. 1367 (2012), and held that although the JD was the “consummation of the Corps’s decisionmaking process,” the JD was “not an action by which rights or obligations have been determined, or from which legal consequences flow.”

The Eighth Circuit upheld an EPA veto of Arkansas’ site-specific water quality criteria for tributaries near a chemical manufacturing plant. El Dorado Chemical Co. v. EPA, No. 13-1936, 2014 WL 3971461 (8th Cir. Aug. 15, 2014). EPA rejected the criteria because increased dissolved mineral levels would adversely affect downstream water bodies. The court of appeals concluded that “EPA did not act arbitrarily or capriciously by denying Arkansas’ revised water quality standards based, in part, on possible downstream effects.”

In the Phase Two “Deepwater Horizon” trial, the district court held that BP Exploration & Production, Inc. (BP) is subject to enhanced civil penalties under the Clean Water Act, 33 U.S.C. § 1321(b)(7)(D), as the discharge of oil was the result of BP’s gross negligence and BP’s willful misconduct. In re Oil Spill by the Oil Rig “Deepwater Horizon,” 2014 WL 4375933 (Sept. 4, 2014). The court found that BP’s conduct was reckless and Transocean’s and Halliburton’s conduct was negligent. The trial judge apportioned fault to BP: 67 percent, Transocean: 30 percent, and Halliburton: 3 percent. The court also found that Transocean’s and Halliburton’s indemnity and release clauses in their respective contracts with BP are valid and enforceable against BP.

Endangered species

The Fifth Circuit reversed an injunction prohibiting the Texas Commission on Environmental Quality from issuing new permits to withdraw water from rivers feeding an estuary where whooping cranes make their winter home. The Aransas Project v. Shaw, 756 F.3d 801 (5th Cir. June 30, 2014). The court of appeals held that the district court misapplied its proximate cause analysis and that liability under the Endangered Species Act “may be based neither on the ‘butterfly effect’ nor on remote actors in a vast and complex ecosystem.” The court found that a number of contingencies affected the “long chain” of causation between water withdrawal permits to the deaths of whooping cranes, including contingencies which are “all outside the state’s control and often outside human control.”

RCRA

A stormwater permit incorporating a voluntary remediation plan was found to shield a defendant from RCRA liability. Sherrill v. Mayor of Baltimore, No. RDB-13-2768, 2014 WL 3555956 (D. Md. July 16, 2014). The RCRA suit challenged the siting and construction of the Horseshoe Casino in Baltimore, Maryland. The district court held that because the cleanup plan under the state’s Voluntary Remediation Program was incorporated into the site’s National Pollutant Discharge Elimination System (NPDES) permit, RCRA’s anti-duplication provision, 42 U.S.C. § 6905, barred any further liability to plaintiffs. The court concluded that “further remedial requirements imposed under RCRA would be inconsistent with the remedial activities already deemed appropriate for the Site as part of the obligations imposed by the Maryland Department of the Environment in connection to sediment control and stormwater management regulations.”

A court of appeals rejected a claim by environmental plaintiffs that air emissions from diesel locomotives at rail yards should be regulated under RCRA because the particulate exhaust emissions contain hazardous substances that fall on to the ground nearby. Center for Community Action v. BNSF Railway, No. 12-56086, 2014 WL 4085860 (9th Cir. Aug. 20, 2014). The court concluded that emitting diesel particulate matter into the air does not constitute “disposal” under RCRA, which includes “only conduct that results in the placement of solid waste ‘into or on any land or water.’” The opinion concludes that “‘disposal’ occurs where the solid waste is first placed ‘into or on any land or water’ and is thereafter ‘emitted into the air.’” The court also found persuasive the statutory and legislative histories, which “make clear that RCRA, in light of its purpose to reduce the volume of waste that ends up in our nation’s landfills, governs ‘land disposal,’” whereas the “Clean Air Act, by contrast, governs air pollutants.” 

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.