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Weekly Update Volume 30, Issue 2

01/10/2000

LITIGATION
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Note: The cases listed are available from the ELR Document Service.

red bar graphic CAA, REFORMULATED GASOLINE (RFG), NONATTAINMENT CLASSIFICATIONS:

The D.C. Circuit held that EPA exceeded its statutory authority in interpreting the CAA’s RFG opt-in provision as allowing the RFG program to apply to "submarginal" and "incomplete data" areas. The RFG opt-in provision allows states to choose to demand that EPA ban the sale of non-RFG in specified areas. In adopting the provision, Congress explicitly limited the RFG program to areas classified as marginal, moderate, serious, or severe. Thus, nonattainment areas that do not fall into one of these four classifications are not eligible for the program. American Petroleum Institute v. EPA, No. 98-1561 (D.C. Cir. Jan. 4, 2000) (7 pp.).

red bar graphic CAA §111, NEW SOURCE PERFORMANCE STANDARDS (NSPS), NITROGEN OXIDE (NOx) EMISSIONS, UTILITY AND INDUSTRIAL BOILERS:

The D.C. Circuit denied an energy council’s petition to challenge EPA’s NSPS for NOx emissions from utility and industrial boilers. EPA did not exceed its discretion under CAA §111 in deciding that selective catalytic reduction was the "best demonstrated system" of emissions reduction. Additionally, it is within EPA’s power to issue uniform standards for all utility boilers rather than setting a range of standards based on boiler and fuel type. Further, it was reasonable for EPA to extrapolate from its studies of utility boilers in setting a NSPS for coal-fired industrial boilers. Finally, EPA properly adopted a method for calculating the steam energy produced by cogeneration facilities. Lignite Energy Council v. EPA, No. 98-1525 (D.C. Cir. Dec. 21, 1999) (4 pp.).

red bar graphic CERCLA, CONSENT DECREE, UNILATERAL ADMINISTRATIVE ORDER (UAO):

The Third Circuit reversed a district court decision dismissing EPA’s complaint seeking to enforce its CERCLA §106 UAO against a potentially responsible party that arranged for the disposal of hazardous substances at the Centre County Kepone Superfund site in State College, Pennsylvania. EPA issued the UAO against the arranger after EPA and the owner of the site entered into a consent decree requiring the owner to perform remedial work and to pay past response costs. The district court concluded that EPA obtained "complete relief" in the consent decree it entered into with the owner, and, therefore, EPA was precluded from pursuing further relief from the arranger. Merely signing the consent decree, however, does not constitute satisfaction of EPA’s claim. Rather, complete relief is obtained when the endangerment has been abated. Here, although the owner agreed to perform all the work, it has not yet done so. Thus, CERCLA §§106 and 122 authorized EPA to issue the UAO. United States v. Occidental Chemical Corp., No. 99-3084 (3d Cir. Dec. 28, 1999) (18 pp.).

red bar graphic CERCLA, SALES AGREEMENTS, INDEMNITY:

The Fifth Circuit held that indemnity provisions contained in sales agreements between the original owner, intermediate owner, and current owner of an oil refinery are unenforceable with respect to the current owner’s CERCLA claims against the original and intermediate owners. To indemnify a party for prospective strict liability claims under Delaware law, which governs the sales agreement between the intermediate and current owners, an indemnity provision must "clearly and unequivocally" state that it covers such claims. Because the indemnity provision between the intermediate and current owners fails to satisfy this test, the indemnity provision does not bar the current owner’s CERCLA claims against the intermediate owner. Likewise, the current owner is not barred from pursuing its claims against the original owner. Similarly, the indemnity provision contained in the sales agreement between the original and intermediate owners, which is governed by Texas law under the "express negligence" test, is not enforceable as applied to claims based on strict liability. Consequently, the original owner may not seek indemnification from the intermediate owner for any amounts recovered against it by the current owner based on strict liability. Fina, Inc. v. Arco, No. 98-41021 (5th Cir. Jan. 4, 2000) (10 pp.).

red bar graphic RCRA, ABSTENTION, PREEMPTION:

The Eleventh Circuit held that a district court abused its discretion by abstaining from hearing property owners’ RCRA claims against two petroleum companies. Florida’s underground storage tank program has not been approved by EPA under RCRA; thus, the Florida program is preempted to the extent there is a conflict. Here, a conflict is present because the state provision at issue interferes with the purposes and objectives of RCRA by precluding the property owners from seeking remediation of the alleged contamination. Because abstention under the Buford and the primary jurisdiction doctrines is inappropriate when federal law preempts state law, the property owners are entitled to bring their RCRA claims in federal court. Boyes v. Shell Oil Products Co., No. 98-3692 (11th Cir. Jan. 4, 2000) (6 pp.).

red bar graphic FWPCA, FEDERAL JURISDICTION, NOTICE:

The Sixth Circuit dismissed a township’s and construction company’s lawsuit against a city for failing to extend wastewater treatment service outside the city’s boundary, even though the outlying area was included in the city’s plan for a federally funded waste treatment plant. The township’s and company’s claims regarding the city’s contractual obligations fell outside the scope of FWPCA §1365, which is the sole avenue of relief for private litigants seeking to enforce the statute. Moreover, even if the court had jurisdiction, the township and company failed to comply with the FWPCA’s notice requirement. Board of Trustees v. City of Painesville, No. 98-4004 (6th Cir. Dec. 29, 1999) (9 pp.).

red bar graphic FWPCA, SENTENCING:

The Ninth Circuit reversed and remanded a sentence imposed against the owner of a hazardous waste treatment, storage, and disposal plant who pled guilty to negligently discharging oil wastewater contaminated with benzene into the Los Angeles sanitary sewer system in violation of the FWPCA. The owner of the plant entered into an agreement with a liquid bulk terminal that allowed the plant to discharge wastewater at the terminal into the sanitary sewer system under the terminal’s sewer permit, but the plant failed to treat the wastewater before discharging it at the terminal. The district court declined to apply a six-level upward adjustment to the owner’s sentence because the wastewater ultimately discharged as effluent into the San Pedro Bay was rendered non-toxic after its subsequent treatment at the sewer system. The district court, however, should have assessed the toxicity of the wastewater at the time it was initially discharged to the sewer system. Because the record demonstrates that hazardous materials had been continuously discharged into the environment, the owner’s sentence should have been adjusted upwardly in accordance with the Sentencing Guidelines. United States v. Van Loben Sels, No. 98-10355 (9th Cir. Dec. 30, 1999) (11 pp.).

red bar graphic NATURAL GAS ACT (NGA), FED. R. CIV. P. 71A, CONDEMNATION, JUST COMPENSATION:

The Eleventh Circuit affirmed a district court decision to use a Fed. R. Civ. P. 71A authorized federal land commission instead of a jury trial to determine the amount of just compensation a property owner would receive for the condemnation of its property from a gas company’s construction of a gas line. The company filed its condemnation pursuant to the NGA, and the owner argued that the practice and procedure clause of the NGA requires a jury trial for a condemnation action. However, the passage of Fed. R. Civ. P. 71A in 1951 superseded the NGA’s practice and procedure clause enacted in 1938. Therefore, the practices and procedures of federal eminent domain actions, including those filed pursuant to the NGA, are governed by Fed. R. Civ. P. 71A, which allows the use of federal land commissions instead of jury trials. In addition, the district court properly refused the commission’s award for future improvements because the evidence indicated no plans for such improvements. The court, however, improperly reduced the commission’s award for cattle dislocation. Southern Natural Gas Co. v. Land, Cullman County, No. 99-6008 (11th Cir. Dec. 16, 1999) (7 pp.).

red bar graphic MIGRATORY BIRD TREATY ACT (MBTA), CONSTITUTIONAL LAW:

The Eighth Circuit reversed a district court order granting a Native American’s motion to dismiss the United State’s indictment against him for possessing hawk parts in violation of the MBTA. Because the Native American was not a member of a federally recognized tribe, the government charged the Native American for violating the MBTA. The Native American sought dismissal on the ground that he was selectively prosecuted based on his race. The district court granted the motion, concluding that the government’s policy of not enforcing the MBTA against members of federally recognized tribes was unconstitutional because it was not established by statute or regulation. The Eighth Circuit, however, reversed the order because the Native American failed to show how he was singled out for prosecution on account of his race. The policy rests on the non-racial basis of tribal membership, and the adoption of the policy informally rather than by statute or regulation is irrelevant to the policy’s constitutionality. United States v. Eagleboy, No. 99-2575 (8th Cir. Dec. 29, 1999) (6 pp.).

red bar graphic CLASS ACTION, SETTLEMENT:

The Eighth Circuit upheld a district court approval of a class action settlement between an oil company and land owners whose properties were contaminated as a result of underground oil seepage originating from the company’s petroleum refinery. Various class members objected to the settlement, which provided injunctive relief to the class as well as various levels of compensatory relief to certain members of the class. The district court’s failure to divide the class into subclasses based on the extent of pollution did not deprive the members of adequate representation because the interests of the various land owners were not at odds with one another. Moreover, the settlement was fair, adequate, and reasonable, and the notice of settlement complied with Fed. R. Civ. P. 23(d)(3) and 23(e). In addition, the district court properly dismissed the land owners’ CERCLA claim against the company because CERCLA excludes petroleum from the definition of "hazardous substance." Petrovic v. Amoco Oil Co., Nos. 98-3816, 99-1334 (8th Cir. Dec. 30, 1999) (28 pp.).

red bar graphic INSURANCE, POLLUTION EXCLUSION CLAUSE, LEAD POISONING:

A state court held that a pollution exclusion clause in rental property owners’ insurance policy bars coverage of claims based on the lead poisoning of a tenant’s child. The pollution exclusion’s definition of "pollutant" unambiguously applies to lead-based paint. Further, lead-based paint, not the lead in the paint, is a pollutant, and the change in the paint’s form from paint on the wall to paint dust does not change its chemical composition as a pollutant. In addition, the exfoliation, abrasion, flaking, and deterioration of the rental property’s paint so that paint dust moved off the wall constituted an actual discharge, dispersal, release, or escape of a pollutant under the pollution exclusion clause. Lititz Mutual Insurance, Co. v. Steely, No. 28 MDA 1999 (Pa. Super. Ct. Dec. 28, 1999) (6 pp.) (Amicus Curiae for the insurer included Laura A. Foggan of Wiley, Rein & Fielding in Washington DC).

red bar graphic MINING LAW, UNPATENTED MILL SITE CLAIMS:

The Ninth Circuit reversed a district court summary judgment against the owners of unpatented mill site claims in the Tonto National Forest in Arizona. The government sought to evict the owners because they failed to submit an approved operating plan for their mills. The plan was unapproved because the owners could not afford the government’s increased bond requirement for the sites. The owners, however, are presumed to be entitled to a patent, so long as they comply with mining law and U.S. Forest Service regulations, because they were issued the "First Half of the Final Certificate" for the mill sites. Thus, although their patents have not yet vested, the owners may be able to defeat the government’s motion for summary judgment if they demonstrate that the Forest Service raised the bond requirements arbitrarily and unreasonably circumscribed their milling operations. Here, the owners established genuine issues of fact with regard to these issues, and the district court erred in disregarding the owners’ evidence. Moreover, there is no basis for evicting the owners from their mill sites because they own the mill sites. United States v. Shumway, No. 96-16480 (9th Cir. Dec. 28, 1999) (28 pp.).

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red bar graphic OMNIBUS BUDGET RECONCILIATION ACT (OBRA) OF 1986, MISSOURI REVISED STATUTES §§247.160 AND 247.170, RURAL WATER DISTRICTS:

A Missouri appellate court affirmed a trial court’s holding that a city did not violate federal or state law when it annexed area within a rural water district. A federal act created the district and others like it through the use of federal loans. Such districts possessed territorial protection for their service area until repayment of the loans. The OBRA allowed districts a right of first refusal before the federal government sold a district’s debt to a private lender. However, when the district at issue purchased its debt and extinguished all obligations to the federal government, it lost all territorial protection. In addition, the city’s failure to comply with Missouri Revised Statutes §§247.160 and 247.170's detachment procedures before annexing the district area did not void the annexations. The trial court properly held that the city need only comply with §§247.160 and 247.170 before furnishing residents within the annexed areas with water. Public Water Supply District No. 1 of Butler County, Missouri v. City of Poplar Bluff, No. 22778 (Mo. Ct. App. Dec. 29, 1999) (6 pp.)..

red bar graphic CONTRACTS, PUBLIC POLICY, UTILITY SERVICE:

A Wisconsin appellate court held that a contract between a private natural gas company and a mobile home park owner that granted the company exclusive rights to provide gas service to the park did not violate public policy by interfering with a public utility’s obligation to provide service to the public. Although state statutes and case law provide that a public utility has a duty to provide services to those who do not have service, nothing imposes a duty on a public utility to provide service to customers, such as the mobile home tenants, who already have service and who are not claiming unsatisfactory service or unreasonable rates. In addition, a state statute allows mobile home park owners to restrict the tenants’ choice of utility service vendors so long as charges are based on utility service used, charges are periodically invoiced, and rates are competitive with public utility rates. Northern States Power Co. v. National Gas Co., No. 99-1486 (Wis. Ct. App. Dec. 30, 1999) (7 pp.).

red bar graphic PETITION TO REVIEW, STATUTORY INTERPRETATION:

An Indiana appellate court affirmed a state environmental law judge decision dismissing as untimely a metal finishing plant’s petition to review a state agency order that required the plant to pay a civil penalty and to cease discharging excessive levels of zinc into a local POTW. Pursuant to state statute, which the court determined to be unambiguous and straightforward, the agency order provided that the plant could seek review of the order before the 20th day after receiving the order. The plant, however, filed its petition on the 20th day rather than before the 20th day. The plant, therefore, waived its right to review. Wayne Metal Products Co. v. Indiana Department of Environmental Management, No. 90A02-9901-CV-71 (Ind. Ct. App. Dec. 28, 1999) (8 pp.).

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Copyright© 2000, Environmental Law Institute, Washington, D.C. All rights reserved.

THE FEDERAL AGENCIES
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Note: Citations below are to the Federal Register.

red bar graphic AIR:

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red bar graphic HAZARDOUS WASTES AND SUBSTANCES:

red bar graphic ENDANGERED SPECIES:

red bar graphic PROJECT XL:

red bar graphic SMCRA APPROVALS:

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red bar graphic TOXIC SUBSTANCES:

red bar graphic WATER QUALITY:

red bar graphic DOJ NOTICES OF SETTLEMENT:

  • U.S. v. St. Charles Riverfront Station, Inc., No. 4:99CV01978SNL (E.D. Mo. Dec. 16, 1999) (an FWPCA defendant that allegedly unlawfully discharged dredged material into the Missouri River in St. Charles County, Mo., must pay a $50,000 civil penalty and is enjoined from discharging pollutants into U.S. waters without authorization), 64 FR 73584 (12/30/99); http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=1999_register&docid=fr30de99_140
  • U.S. v. Titanium Metals Corp., No. CV-9-98-00682-HDM (RLH) (D. Nev. Dec. 17, 1999) (a CAA defendant that violated the Act at its titanium manufacturing plant in Henderson, Nevada, must install the best available control technology to control sulfur dioxide (SO2) emissions, has agreed to enforceable limits on carbon monoxide and SO2 emissions, and must pay a $430,000 civil penalty), 64 FR 73585 (12/30/99). http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=1999_register&docid=fr30de99_141