May 01, 2017

In Brief

Theodore L. Garrett

Preemption

Virginia Uranium, Inc. v. Warren, 848 F.3d 590 (4th Cir. 2017).
The Fourth Circuit affirmed the dismissal of a lawsuit by a mining company, Virginia Uranium, which challenged a state moratorium (“ban”) on uranium mining until a program for permitting uranium mining is established by statute. In a split decision, the majority rejected the company’s argument that the ban was preempted by the federal Atomic Energy Act. Although the act occupies the field regarding nuclear safety concerns, the majority holds that conventional mining is not an activity regulated by the act. The majority also rejected the mining company’s argument that uranium milling and tailings storage activities are regulated by the Atomic Energy Act, noting that the state’s ban does not mention those activities and the court would not attempt to discern whether the state had an improper, unstated motive to ban such activities. The dissent argues that the state enacted the ban because of radiological safety concerns regarding uranium milling and tailings management, activities governed and preempted by the Atomic Energy Act. The dissent also concludes that the ban would thwart the act’s objectives by attempting to prevent the very activities that Congress was attempting to support.

CERCLA

Asarco LLC v. Union Pacific Railroad Co., No. 2:12-cv-00283, 2017 WL 639628 (D. Idaho Feb. 16, 2017).
A federal district court granted in part defendant’s motion for summary judgment in a lawsuit by Asarco seeking contribution from Union Pacific for cleanup costs at the Coeur d’Alene Superfund site in Idaho. After being sued by the United States for cleanup and natural resource damages, Asarco filed for relief under Chapter 11 of the Bankruptcy Code. Asarco subsequently agreed to pay the United States $482 million to resolve its liability at the site, and, in 2009, the Bankruptcy Court approved the settlement. In 2012, Asarco filed a complaint seeking contribution from Union Pacific, alleging that Asarco overpaid its share of costs. The court held that Union Pacific is entitled to contribution protection with respect to past releases from Union Pacific sites identified in consent decrees with the United States and to releases from those sites that migrated to other areas. However, the court held that contribution protection is not basin wide, and Asarco may seek contribution from other sites that Union Pacific owned or operated. Because there were disputed issues of fact, however, the district court denied Union Pacific’s motion for summary judgment, which had argued that the bankruptcy settlement was intended to be a global resolution of all claims and thus released Asarco’s contribution claim. “The language of the document itself is ambiguous in that regard, and the parties dispute the extrinsic evidence and evidence of post-settlement conduct,” the opinion states. Finally, the district court rejected Union Pacific’s argument that Asarco should be estopped because Asarco made representations to the Bankruptcy Court that it was settling for its allocated fair and divisible share of liability. The Bankruptcy Court was aware of and approved Asarco’s reservation of its right to bring contribution actions against other parties.

For further reading on the judicial estoppel argument, see:

USA v. Land O’Lakes Inc., No. 5:16-cv-00170, 2017 WL 706346 (W.D. Okla. Feb. 22, 2017).
A district court granted the government’s motion to dismiss counterclaims and strike eight affirmative defenses alleged by Land O’Lakes in response to the government’s lawsuit seeking recovery of its response costs. The current owner of the site, Hudson Refining, entered into a 1987 consent decree with the government requiring RCRA corrective action. The government subsequently sued Land O’Lakes, which owned the site prior to Hudson Refining, seeking $23 million in unreimbursed response costs. The court dismissed certain affirmative defenses because it found that the 1987 Consent Decree did not provide the current defendant with any release of liability for potential CERCLA claims. The court also dismissed defenses contending that orders entered in Hudson’s bankruptcy proceedings precluded the CERCLA lawsuit, since the bankruptcy decree only protects the debtor, Hudson Refining, whereas the government is asserting a claim against Land O’Lakes. The district court for similar reasons dismissed defendant’s counterclaim seeking to prevent the government from re-litigating issues resolved in the bankruptcy proceedings.

Air quality

U.S. v. Ameren Missouri, No. 4:11-cv-00077, 2017 WL 325237 (E.D. Mo. Jan. 23, 2017).
A district court held that the United States established by a preponderance of evidence that an electric utility, Ameren, violated the Prevention of Significant Deterioration and Title V provisions of the Clean Air Act when it performed major modifications in 2007 and 2010 at two generating units and failed to obtain a preconstruction permit and to install best available pollution control technology. The court found that Ameren replaced failing components with new, redesigned components at a cost of $34 to $38 million for each unit, taking each unit offline for three to four months. Ameren should have expected, and did expect, the projects to allow each unit to improve unit availability and thus to operate hundreds of more hours per year, the court found, resulting in burning more coal and emitting hundreds of tons more SO2 per year. The court rejected Ameren’s routine maintenance and demand growth defenses. The projects were the most expensive boiler projects ever performed on an Ameren boiler, the court concluded, and the combination of boiler replacements has rarely, if ever, been done in the industry. The court also noted that demand growth was not projected to and did not cause the pollution increases at issue.

Tribal claims

Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, No. 1:16-cv-01534, 2017 WL 908538 (D.D.C. Mar. 7, 2017).
A district court denied a motion by the Cheyenne River Sioux Tribe for a preliminary injunction against operation of the nearly completed Dakota Access pipeline on federal land in North Dakota. Relying on the Religious Freedom Restoration Act (RFRA), the Tribe objected to a U.S. Army Corps of Engineers’ easement for the pipeline, arguing that the pipeline would desecrate waters used by members of the Tribe for religious sacraments. Although the tribe’s claim fell within the RFRA’s four-year statute of limitations, the court ruled that the Tribe’s claim for relief is barred by the doctrine of laches because the Tribe raised its claim more than two years after it first became aware of the pipeline project and thus “inexcusably delayed in voicing its RFRA objection.” The opinion concludes that defendants have suffered prejudice from the Tribe’s delay, because suspending the effect of the easement would undercut the purpose behind the consultation obligations in the Corps’ permit process, and suspending the easement would have an adverse economic impact on Dakota Access by delaying the flow of oil in the pipeline. Finally, the court ruled that the Tribe failed to demonstrate a likelihood of success on the merits because the Corps’ action in furtherance of management of government land caused only an incidental effect on religious exercise. The opinion states that the Corps’ easement “does not impose a sanction on the tribe’s members for exercising their religious beliefs, nor does it pressure them to choose between religious exercise and the receipt of government benefits.”

Endangered Species Act

Defenders of Wildlife v. Ryan Zinke, No. 14-5300, 2017 WL 836089 (D.C. Cir. Mar. 3, 2017).
The D.C. Circuit reversed a district court judgment that had vacated a decision of the U.S. Fish and Wildlife Service delisting the gray wolf in Wyoming as a protected species under the Endangered Species Act (ESA). The district court had agreed with environmental groups that the Service had arbitrarily determined that Wyoming had put into place adequate regulatory mechanisms to protect the species. On appeal, the D.C. Circuit agreed with defendants that the Service reasonably responded to concerns about the reliability of the state’s management plan for a wolf population buffer to protect the gray wolf population after delisting. The court’s opinion emphasizes that the Service’s determination “is a quintessential judgment call that Congress left to the Secretary [of Interior], and by delegation to the Service, which has years of experience in evaluating what is reasonably likely to be implemented and effective.” Although the management plan is nonbinding, the court of appeals concluded that the plan was sufficiently certain given that Wyoming has its own interest in keeping wolves at an above-minimum population range, including its own separate statutory and regulatory commitments. Finally, the D.C. Circuit rejected appellees’ argument that the Service arbitrarily concluded that genetic connectivity among grey wolves is currently sufficient.

People for the Ethical Treatment of Property Owners v. U.S. Fish and Wildlife Service, 852 F.3d 990 (10th Cir. 2017).
The Tenth Circuit reversed a district court commerce clause decision, which had vacated the U.S. Fish and Wildlife Service’s amendment to an ESA section 4(d) rule regulating the take of the Utah prairie dog, the range of which does not extend beyond Utah’s borders. The court applied United States v. Lopez, 514 U.S. 549 (1995) and Gonzalez v. Raich, 545 U.S. 1 (2005)in finding that Congress had a rational basis for finding that the regulated activity—the take of the Utah prairie dog–is an essential part of the ESA’s broader regulatory scheme which, taken in the aggregate, substantially affects interstate commerce.

Center for Biological Diversity v. Jewell, No. 14-cv-02506 (D. Az. Mar. 29, 2017).
A district court overturned the U.S. Fish and Wildlife Service’s determination not to list the cactus ferruginous pygmy owl (“pygmy owl”) as threatened or endangered under the ESA. The court found that the Service had misinterpreted the phrase “significant portion of [the species’] range” when determining whether the pygmy owl was “in danger of extinction throughout all or a significant portion of its range” (endangered) or “likely to become an endangered species within the foreseeable future throughout all or in a significant portion of its range” (threatened). Specifically, the court found that the Service’s interpretation–that a portion of the owl’s range would be “significant” only “if its contribution to the viability of species is so important that, without that portion, the species would be in danger of extinction,” and the species is endangered or threatened in that portion, then the species is necessarily endangered or threatened overall—was arbitrary and capricious. The court concluded that the Service’s interpretation would render the statutory phrase “significant portion of range” superfluous by limiting its application to situations in which it is unnecessary.

Federal lands

Estate of E. Wayne Hage v. United States, No. 2:07-cv-01154-GMN-VCF, 2017 WL 752832 (D. Nev. Feb. 27, 2017).
A district court ordered a rancher, Wayne Hage, to pay a penalty of $587,294 for unauthorized grazing of cattle on federal land in Nevada. The court found that Hage has never held any federal grazing permits but placed livestock on federal lands from 2004 to 2011 despite U.S. Forest Service and Bureau of Land Management trespass notices and requests for removal of livestock. The court held that ownership of state-based stock watering rights does not confer a right to place livestock on federal lands, nor does past custom and use confer such a right. The court also ordered defendant to permanently remove any and all livestock from land owned by the United States in Nevada and enjoined him from placing any livestock on such public lands. The court’s judgment was rendered on remand from the Ninth Circuit’s decision (810 F.3d 712, 721), which reversed a prior district court ruling that Hage was not trespassing because he had retained water rights nearby.

For further background, see: United States v. Estate of Hage, 810 F.3d 712 (9th Cir. 2016) (reversing prior district court decision in favor of Hage and directing appointment of different district court judge to hear remanded proceedings).

Nuisance and federal court removal

Board of Commissioners of the Southeast Louisiana Flood Protection Authority-East, et al. v. Tennessee Gas Pipeline Co., LLC,2017 WL 874999 (5th Cir. Mar. 3, 2017).
The Fifth Circuit affirmed a district court decision dismissing, for failure to state a claim upon which relief can be granted, a lawsuit by the Southeast Louisiana Flood Protection Authority (Board) against companies exploring and producing oil reserves off the southern coast of the United States. The Board alleged that defendants’ actions, including dredging an extensive network of canals, caused infrastructure and ecological damage to coastal lands such as land loss and submergence of the buffer zone that increased the risk of flooding and necessitated costly flood protection measures. The lawsuit was filed in state court and removed by defendants to federal court. The Fifth Circuit upheld the district court’s order denying remand to state court on the grounds that the Board’s negligence and nuisance claims necessarily raised federal issues, including the “extensive regulatory framework” provided by the Rivers and Harbors Act of 1899, the Clean Water Act, and the Coastal Zone Management Act. The absence of any state law for the duty alleged by the Board “means that the duty would have to be drawn from federal law,” the court of appeals stated. The Fifth Circuit also held that the district court was correct “that neither federal law nor Louisiana law creates a duty that binds Defendants to protect the Board from increased flood protection costs that arise out of the coastal erosion allegedly caused by Defendant’s dredging activities.”

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.