On May 14, 2013, the 5th Circuit dismissed a suit filed by Mississippi Gulf Coast residents and property owners against more than 30 companies and the Tennessee Valley Authority alleging defendants’ greenhouse gas emissions intensified the wrath and resulting property damage of Hurricane Katrina. The 5th Circuit dismissed the claims as barred by res judicata. Plaintiffs first filed such claims in 2005, which the district court dismissed with prejudice (“Comer I”). The 5th Circuit reversed that decision in part, then sought to rehear the claims en banc. After many judges’ recusal, the 5th Circuit held it did not have a quorum and dismissed the appeal. The Supreme Court denied reviewing the case.
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It looks like Governor Jerry Brown is taking on Prop 65 in an effort to make California more business friendly, and put a limit on frivolous “shake-down” lawsuits. For decades, manufacturers from all over the globe have had the unpleasant problem of having to pay legal fees to the bounty-hunting plaintiff’s attorneys just to avoid the defensive costs of litigation even when the lawsuit has no merit. Thanks to the excess of one such bounty-hunting plaintiff’s attorney recently skewered in a Sacramento Bee op-ed, Assemblyman Gatto has introduced a bill (AB 227) that looks like it will now get serious traction.
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A bill has been introduced in the New York legislature that would prohibit nondisclosure agreements in settlements relating to hydraulic fracturing where aspects of the case relate to public health or safety. S. 4630 was introduced last week in the legislature by Senator Mark Grisanti (R-Buffalo), who has pitched several bills in the legislature concerning hydraulic fracturing. Hydraulic fracturing is defined in the bill as “the use of chemicals, water and other substances injected or pumped into a natural gas well to stimulate the extraction of natural gas.” The bill states, “When the parties to an action, which in any manner relates to hydraulic fracturing, agree to settle such action, the term of such settlement shall not include or be subject to any non-disclosure agreement when any facts disclosed in such action relate to a threat to the public health or safety.” To implement this prohibition, before approving a settlement the judge must review the case to determine whether there is evidence of a threat to public health or safety. If there is such a threat, the court cannot approve a settlement that includes a non-disclosure agreement. Last year the same bill was introduced in the state Assembly where it eventually died in the Judiciary Committee. Grisanti hopes by introducing the bill in the Senate that it has more of a chance to move forward.
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Pacific Legal Foundation filed a lawsuit today in the Superior Court of California County of Sacramento challenging California’s cap-and-trade auction. The suit was filed on behalf of a broad group of California businesses, trade associations and individuals, who believe the auction process acts as an unconstitutional tax because it was not enacted by two-thirds majorities in both chambers of the California Legislature, which is required by the California Constitution. The lawsuit states that the California Air Resources Board (CARB) instituted the auction as a plan to raise billions of dollars in revenue without direction from the Legislature. They argue, if citizens and corporations must obey the state Constitution, shouldn’t an agency of the California government?
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A superior court in Alameda County invalidated a streamlining provision of the California Environmental Quality Act (CEQA), holding the provision is unconstitutional for requiring that a petition for writ relief be filed in a court of appeal. The court held the provision impermissibly restricts the original jurisdiction of the superior courts and the Supreme Court. In 2011, Public Resources Code section 21185 was enacted to provide streamlined CEQA review for qualifying “environmental leadership” projects. These projects include clean renewable energy projects, clean energy manufacturing projects, and residential, retail, commercial, sports, cultural, entertainment, or recreational use projects located on infill sites that are certified as LEED silver or better. Two projects have already been approved under Section 21185 - an Apple campus in Cupertino and the McCoy Solar Energy Project in Riverside. Specifically, Judge Frank Roesch held that “[t]he California Constitution does not grant the legislature any authority over CEQA or environmental reviews that would support a departure from the general rule that the legislature cannot either limit or extend the constitutional jurisdiction of the courts.” The court further ordered that the State Controller be enjoined from spending funds to implement the jurisdictional restrictions. The court gave its ruling from the bench in Planning and Conservation League v. State of California on March 29, 2013, and issued its Statement of Decision on April 9, 2013.
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In the last few months, the federal government has ramped up criminal enforcement actions against oil and gas drilling companies for violations of the Clean Water Act, and other environmental statutes. Alleged violations occurred in Ohio, Louisiana, North Dakota, Oklahoma, Texas and West Virginia.
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Last week, the U.S. Court of Appeals for the District of Columbia declined to grant a rehearing of EME Homer City Generation LP v. EPA, a case that challenged EPA’s Cross-State Air Pollution Rule (CSAPR). The court, in a 2-1 ruling in August, vacated the CSAPR. The court stated that EPA was exceeding its statutory authority, as the agency should allow states to develop their own rules to address emissions and CSAPR could have required states to account for more emissions than necessary. EPA hoped to challenge the ruling of the court and asked for an en banc hearing, so that the case could be heard before all eight of the circuit’s judges. However, a majority of the judges voted against the request, so the court will not rehear the case. The question now is whether EPA will take its challenge to the Supreme Court.
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In a 9-0 decision in favor of the Los Angeles County Flood Control District (the District), the U.S. Supreme Court reversed an opinion from the 9th Circuit yesterday, holding water flowing from an improved segment of a navigable waterway into an unimproved segment of the same waterway does not constitute a “discharge of a pollutant” under the Clean Water Act.
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Illustrating a rare example of criminal enforcement under electronic waste (e-waste) regulations, the U.S. Attorney in the federal district of Colorado has successfully prosecuted a recycling business called Executive Recycling for allegedly exporting e-waste containing lead to foreign countries, including China. On December 21, 2012, a jury found Executive Recycling, its CEO, and Vice President of Operations guilty on several counts, including exporting glass video display components known as Cathode Ray Tubes (CRTs), often found in TV monitors and computers, in violation of the Resource Conservation and Recovery Act (RCRA) and Colorado’s authorized hazardous waste program. Defendants are scheduled to be sentenced in April, but plan to appeal the jury verdict.
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The California Chamber of Commerce filed suit against the California Air Resources Board (CARB) in a last minute effort to thwart the state's greenhouse gas auction. The Chamber says that the auction is essentially an “unconstitutional tax” on businesses that are impacted by AB32, the state’s global warming law. The Chamber says in their suit that AB32 “does not expressly authorize ARB to impose any fees/taxes other than a minor administrative fee.” They believe that if the state legislature wants to give CARB the power to enact such a tax they can do so through passing new legislation. The carbon emission credits auction will take place today.
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The U.S. Court of Appeals for the District of Columbia Circuit ruled today by a 2-1 margin that EPA’s Cross-State Air Pollution Rule (CSAPR) exceeded EPA’s statutory authority. CSAPR was to put a limit on sulfur dioxide emissions in 28 states, but the court issued a last minute stay at the end of 2011 before the rule went into effect.
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Today, the U.S. Court of Appeals for the District of Columbia Circuit Court issued its decision on industry petitions concerning the Environmental Protection Agency’s(EPA) rules limiting greenhouse gas emissions. The main focus of the suit was on EPA’s “tailoring” rule, which requires only major polluters to obtain permits for their greenhouse gas emissions. The three judge panel denied this challenge from industry groups. The judges also dismissed all petition for EPA’s “tailpipe” rule, which set standards for cars and light-duty trucks beginning in the 2012 model year; and the “timing” rule, which focused on limiting greenhouse gas emissions from stationary sources. The decision by the court resulted in a victory for the EPA and the Obama administration and is a big blow to a number of industry groups.
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On Thursday, the Supreme Court issued its decision in the case Southern Union Co. v. United States, 567 U.S. __ (2012), holding that the Sixth Amendment right to a jury trial requires juries — not judges — to decide the facts warranting a fine that exceeds a statutory maximum of any crime for which a defendant is convicted. This case has significant implications for corporations charged with white collar crimes, as many such crimes include statutory provisions similar to the one at issue in Southern Union that allowed for fines based “per day of violation.” The holding will also implicate fines imposed under the Alternative Fines Act (AFA), which allows fines above the statutory maximum in amounts equal to twice the economic gain or loss of the offense of conviction. 18 U.S.C. § 3571(d). Under either of these provisions, a corporation can be subject to millions — if not billions — of dollars in fines, even though the statute under which it was convicted may be capped at $1 million or less.
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Last week, the United States Environmental Protection Agency released its draft Underground Injection Control (UIC) Program Guidance for Class II wells that utilize diesel fuel as a fracturing fluid or as a component of a fracturing fluid in hydraulic fracturing operations. The draft guidance provides recommendations for UIC permit writers related to permit duration and well closure, permit application and review, area of review, and well construction, including mechanical integrity testing, financial responsibility, and public notification. The draft guidance identifies the following six substances by their chemical abstract service (CAS) numbers, which would trigger Safe Drinking Water Act (SDWA) requirements if injected as a component of hydraulic fracturing fluid: 68334-30-5, 68476-34-6, 68476-30-2, 68476-31-3, 8008-20-6, and 68410-00-4. According to the fact sheet for the draft guidance, it is “intended to provide information for EPA permit writers issuing permits under the Safe Drinking Water Act (SDWA) to ensure protection of underground sources of drinking water (USDWs).” The draft guidance is open for 60 days for public comment. In the interim, while this guidance undergoes public notice and comment, EPA expects that permitting decisions concerning hydraulic fracturing operations that use diesel fuels will be made on a case-by-case basis. EPA further expects that the draft guidance will not be cited as a basis for such permitting decisions.
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In a unanimous per curiam decision issued on June 28, 2011, the U.S. Court of Appeals for the 11th Circuit reversed a controversial July 17, 2009 order by the multi-district litigation (MDL) court presiding over the tri-state water war between Alabama, Florida, and Georgia. That 2009 order imposed a July 2012 deadline for the states to arrive at a water-sharing agreement over the Appalachicola-Chattahoochee-Flint (ACF) River Basin or the Atlanta metropolitan area risked losing much of its primary water supply. The 11th Circuit’s opinion contains two key rulings:
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The Toxic Substance Control Act of 1976 (“TSCA”) imposes various data reporting obligations on manufacturers and importers of chemical substances. Under TSCA Section 4, for example, EPA may require manufacturers of existing chemicals to conduct tests “to develop data with respect to the health and environmental effects” of existing chemicals. Similarly, TSCA Section 8 may obligate manufacturers to notify EPA of new data suggesting that a chemical poses risks to human health or the environment. Thus, in many cases, TSCA submissions to EPA include health and safety data.
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Yesterday, in Monsanto Co. v. Geertson Seed Farms (No. 09-475), the U.S. Supreme Court held in a 7-1 decision that a San Francisco district court abused its discretion by enjoining the U.S. Department of Agriculture (USDA) from deregulating a genetically modified plant pending the completion of an environmental review required by the National Environmental Policy Act (NEPA).
The case involves Monsanto’s request for the USDA to deregulate Roundup Ready Alfalfa (RRA), and a district court’s decision to permanently enjoin virtually all planting of RRA until the agency prepared an environmental impact statement. In reaching its decision, the Court first reaffirmed that –- even in NEPA cases –- a court must apply the traditional four-factor test before entering a permanent injunction. Applying the four-factor test, the Court held that none of the factors supported the district court’s order. Further, the Court held that it was error for the district court to impose a broad injunction prohibiting virtually all planting of RRA until the agency assessed the effects of a complete deregulation of RRA because less drastic remedies were available and because the injunction effectively preempts the agency from determining whether a partial, limited deregulation could occur that would not pose any appreciable risk of environmental harm.
Democrats in Congress such as Patrick Leahy of Vermont have already condemned the decision as “the latest in a line of Supreme Court decisions reducing the effectiveness” of environmental protections. In contrast, Monsanto has already announced that it has RRA ready to deliver to farmers and awaits USDA guidance on release of RRA seed.
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In the cases Environment and Housing Coalition Los Angeles v. City of Los Angeles et al. and Sandy Hubbard v. City of Los Angeles, Alston & Bird LLP’s pro bono attorneys teamed with Public Counsel and Bet Tzedek Legal Services to represent the Southern California Association of Nonprofit Housing (SCANPH), an organization representing developers of affordable homes. In a judgment entered on September 2, 2009, the Court agreed with SCANPH and upheld the majority of the City of Los Angeles’s SB 1818 implementing ordinance, including key incentives for building homes within reach of the people who live and work in Los Angeles.
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