May 01, 2018

In Brief

John Jacus

Clean Water Act, indirect discharges to jurisdictional waters


Hawai’i Wildlife Fund v. County of Maui, 881 F.3d 754 (9th Cir. 2018), amended in part and rehearing en banc denied, Hawai’i Wildlife Fund v. County of Maui, 2018 WL 1569313 (Mar. 30, 2018).

The U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s summary judgment rulings finding Maui County (County) violated the Clean Water Act (CWA) by discharging pollutants from four wells into the groundwater and then into the Pacific Ocean without a National Pollutant Discharge Elimination System (NPDES) permit. The court of appeals also found no due process violation because the County had “fair notice” of what was prohibited. The County conceded that treated wastewater effluent injected in wells 1 and 2 ran downstream into the ocean and a Tracer Dye Study demonstrated that effluent from wells 3 and 4 are hydrologically-connected to coastal waters. Ultimately, the County was liable under the CWA because (1) it discharged pollutants from a point source, (2) the pollutants were fairly traceable from the point source to the navigable water such that the discharge is the “functional equivalent” of a discharge in the navigable water, and (3) the pollutant levels reaching the navigable water are more than de minimis.

Upstate Forever, et al. v. Kinder Morgan Energy Partners, LP, No. 17-1640 (4th Cir. Apr. 12, 2018).
The U.S. Court of Appeals for the Fourth Circuit overturned a district court’s dismissal of environmental groups’ CWA claims concerning pollutants reaching waters of the United States via a hydrologically connected groundwater. Plaintiffs had alleged that in late 2014, over 369,000 gallons of gasoline spilled from Defendant’s underground pipeline, which extends over 1100 miles through parts of the eastern United States. The plaintiffs maintained that gasoline and gasoline toxins seeped into ground water and two nearby tributaries of the Savannah River, Browns Creek and Cupboard Creek, and their adjacent wetlands. The plaintiffs further alleged that a plume of petroleum contaminants continued to migrate into these waterways years later through groundwater and various natural formations at the spill site. The Fourth Circuit found that a plaintiff must allege a direct hydrological connection to jurisdictional waters of the United States in order to state such a CWA claim, and Plaintiffs had done so. See Opinion at 19-26. The Court based its ruling in part on the reasoning in Waterkeeper Alliance v. EPA, 399 F.3d 486 (2nd Cir. 2005) and Hawai’i Wildlife Fund v. Cty. of Maui, No. 15-17447, 2018 WL 1569313, at *7–*8 (9th Cir. Feb. 1, 2018), supra.

Compare these decisions to the contrary holding regarding non-point discharges of selenium and other pollutants from a coal ash impoundment in Kentucky Waterways Alliance v. Kentucky Utilities Co., No. 5: 17-292-DCR, 2017 WL 6628917 (E.D. Ky. Dec. 28, 2017) summarized in In Brief in the March/April 2018 issue of Trends.

Safe Drinking Water Act, § 1983 constitutional claims, statutory preemption

Boler v. Earley, 865 F.3d 391 (6th Cir. 2017), cert. denied, Nos. 17-666; 17-901; 17-989 (2018).
In an order released March 19, the U.S. Supreme Court without comment declined to review a set of three cases from the U.S. Court of Appeals for the Sixth Circuit that allowed Flint, Michigan, residents to proceed with 42 U.S.C. § 1983 constitutional claims against state and local officials for exposing residents to lead-contaminated drinking water. The Sixth Circuit did not address the merits of plaintiffs’ § 1983 claims alleging violations of several constitutional provisions, including the Contract Clause, Due Process Clause, and the Equal Protection Clause, but instead issued a limited holding that the § 1983 claims were not preempted by the Safe Drinking Water Act (SDWA) and thus could proceed beyond the pleading stage. The court relied on governing Supreme Court precedent to find that the SDWA text and remedial scheme do not demonstrate a congressional intent to preempt § 1983 claims and that the rights and protections of the constitutional claims diverge from those provided by the SDWA. The court also held that Eleventh Amendment sovereign immunity doctrine applies to the State of Michigan, Governor Snyder, and the named state agencies.

CERCLA, liability offset by prior settlements

United States v. NCR Corp., No. 10-C-910, 2018 WL 708334 (E.D. Wis. Feb. 5, 2018).
In a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) enforcement action, the United States and the State of Wisconsin sought reimbursement from the last remaining “non-settling” defendant in a case involving polychlorinated biphenyl contamination. The district court denied cross motions for summary judgment regarding defendant’s liability for past response costs at the site because fact issues remained regarding the amounts, if any, by which prior settlements should offset the defendant’s joint and several liability. The United States argued settlement funds received were separately held as response costs and Natural Resource Damages (NRD) costs and the NRD funds could not offset the non-settling defendant’s liability. The court rejected this argument, citing CERCLA § 113(f)(2), which provides that when other parties settle with the government, it “reduces the potential liability of the others by the amount of the settlement.” The district court read this provision to mean the defendant was entitled to a “dollar for dollar” reduction of liability by the amount of settlement, not just that portion of settlement funds the United States allocated to response costs. Another reading would “insulate the government’s allocation and use of settlement proceeds from any form of judicial review.”

CERCLA, government contractor defense

New Mexico on behalf of New Mexico Env’t Dep’t v. United States EPA, No. 16-CV-465 MCA/LF and No. 16-CV-931 MCA/LF, 2018 WL 840007 (D.N.M. Feb. 12, 2018).
In a case involving excavation by a U.S. Environmental Protection Agency (EPA) contractor that resulted in the blowout of a closed mine portal that released significant acid mine drainage and heavy metals into the watershed, the U.S. District Court for the District of New Mexico denied the motion of an EPA contractor, Environmental Restoration, to dismiss the complaints of the State of New Mexico and the Navajo Nation. The trial court held that as pled, the plaintiff could establish a set of facts demonstrating that the contractor was liable as an operator, arranger, or transporter under CERCLA, despite the fact that the blowout was accidental. The contractor’s role in providing drainage control, by implementing a water management system and maintaining a retention pond, supported a claim for operator liability. The facts as plead also supported a claim for arranger liability because the contractor worked with a subcontractor to aid in the disposal of the hazardous waste to a settlement pond. Finally, the contractor’s role in drafting work plans and participating in the selection of water treatment sites supported a claim based on transporter liability. The court declined to apply the government contractor defense to shield the contractor from the plaintiff’s state tort claims at this stage of the litigation. While the court observed that EPA has a uniquely federal interest in the potential liability of its contractors, and EPA’s cleanup actions under CERCLA are largely discretionary, it was not clear the contractor followed EPA’s reasonably precise direction when the breach occurred.

Clean Air Act

S. Coast Air Quality Mgmt. Dist. v. United States EPA, 882 F.3d 1138 (D.C. Cir. (2018).
The D.C. Circuit Court of Appeals denied a petition from the South Coast Air Quality Management District seeking to invalidate EPA’s interpretation of Clean Air Act (CAA) non-attainment areas. Specifically, the air district asked the court to consider the CAA language “in the area” to include areas and sources outside of designated non-attainment area(s). Following the Chevron doctrine, the court stated that the plain language of “in the area” was clear and only includes non-attainment areas, not upwind or downwind sources. Concurrently, the court considered many requests to vacate National Ambient Air Quality Standards (NAAQS) regulations from a group of environmental petitioners. The court’s holdings on this petition were voluminous and included vacating a number of ozone NAAQS implementation rule provisions for failing to meet anti-backsliding requirements of the CAA.

RCRA recycling exclusions

Am. Petroleum Inst. v. United States EPA, 883 F.3d 918 (D.C. Cir. 2018).
The D.C. Circuit Court of Appeals revised its 2017 decision regarding the Environmental Protection Agency’s (EPA) Resource Conservation and Recovery Act’s (RCRA) recycling exclusions from the RCRA regulation of hazardous wastes. The 2017 decision vacated EPA’s so-called “Verified Recycler Exclusion” and reinstated the “Transfer-Based Exclusion.” The 2017 decision had disqualified spent refinery catalysts from RCRA’s recycling exclusion. In simpler terms, spent refinery catalysts were held subject to RCRA regulation as hazardous waste and, therefore, could not be recycled. Following the petitioner’s requests and after reviewing the EPA record, the court’s revised decision reverses the spent refinery catalyst disqualification, and if the catalysts otherwise meet the exclusion requirements, held that such catalysts can be recycled and are not subject to RCRA Subtitle C regulation.

Climate change litigation

People v. BP P.L.C., No. C 17-06011 WHA, No. C 17-06012 WHA, 2018 WL 1064293 (N.D. Cal. Feb. 27, 2018).
The District Court for the Northern District of California denied the plaintiffs’ request to remand this case back to state court. The cities of Oakland and San Francisco, California, sued several fossil fuel producers in state court alleging violations of the California doctrine of nuisance. The fossil fuel producers then removed the action to federal court. The petitioners then requested a remand back to state court. Citing the necessarily interstate and national, i.e., federal, nature of the claim, the court denied the plaintiff’s request for remand.

In re United States of America, 884 F.3d 830 (9th Cir. 2018).
In a lawsuit brought by environmental groups alleging violations of due process and failure to hold United States natural resources in trust, the U.S. Court of Appeals for the Ninth Circuit denied a writ of mandamus request from several Executive Branch agencies and individuals. The Ninth Circuit panel explained that the case failed to meet the “Bauman Factors” necessary to consider an interlocutory appeal via a writ of mandamus. The court went on to explain that such a writ is an extraordinary measure and the executive branch parties failed to meet that standard. The court further explained that the executive branch concerns will be alleviated over the normal course of litigation.

Bureau of Land Management regulations

State of California v. Bureau of Land Mgmt., 2018 WL 1014644 (N.D. Cal. 2018).
The District Court for the Northern District of California granted a preliminary injunction prohibiting the Bureau of Land Management (BLM) from suspending a regulation that targeted natural gas waste on federal lands. The rule, referred to as the “Venting and Flaring Rule,” has been litigated since its original release in November 2016. The court’s opinion explained that: (1) the states have demonstrated the suspension was arbitrary and capricious and were likely to succeed on the merits, (2) the states would be irreparably harmed without the injunction, and (3) granting the injunction is in the interest of the public and the balance of equities weigh in granting the injunction. Ultimately, the district court concluded BLM did not have the legal authority nor did it provide the necessary evidence to support its suspension of the Venting and Flaring Rule.

Wyoming v. U.S. Dept. of Interior, Case No. 2:16-cv-0285-SWS, 2018 WL _____ (Apr. 4, 2018).
In this latest round of litigation over BLM’s “Waste Prevention, Production Subject to Royalties, and Resource Conservation: Final Rule,” 81 Fed. Reg. 83,008 (Waste Prevention Rule), the U.S. District Court for the District of Wyoming cited the doctrine of prudential mootness for not proceeding to address the merits of the parties’ challenges. Instead, the court stayed implementation of the Waste Prevention Rule’s phase-in provisions using its discretionary power under section 705 of the Administrative Procedure Act, 5 U.S.C. § 705, to “issue all necessary and appropriate process . . . to preserve status or rights pending conclusion of the review proceedings,” to prevent irreparable harm and allow BLM to complete rulemaking to revise the rule substantially, and to insulate the regulated community from significant compliance costs. The court also stayed the litigation pending the completion of such revision rulemaking.

John Jacus

John R. Jacus is a partner and the Environmental Practice Group Leader in the law firm of Davis Graham & Stubbs LLP in Denver. He is a past Section Council member and committee chair and a contributing editor of Trends.