A Court-Side Seat: Guam’s CERCLA Claim Allowed, a “Roundup” Verdict Upheld, and Judicial Process Privilege Lost

Pillsbury - Gravel2Gavel Construction & Real Estate Law

This is a brief account of some of the important environmental and administrative law cases recently decided.

THE U.S. SUPREME COURT

BP PLC, et al. v Mayor and City of Baltimore
The issue the court confronted was a procedural matter: Can the defendant energy companies use the federal removal statutes (see 28 USC Section 1442) to remove a state law climate change lawsuit to federal court? Here, a group of energy companies were sued by the mayor and city council of Baltimore in state court, where they alleged that the defendants had concealed the adverse environmental effects of the fossil fuel products they promoted and sold in Baltimore City. Several similar lawsuits have been filed in many state courts, where typically it is alleged that the defendants can be sued on various common law theories. Rather than defend these cases in state court, the defendants have sought to remove these cases to federal court because climate change liability appears to be an issue that should be settled at the federal level. These efforts have been unsuccessful, with most federal trial and appellate courts holding that the reasons cited for removal (oftentimes the federal officer removal statute) have not been persuasive. In this case, both the Maryland federal district court and the U.S. Court of Appeals held they had no jurisdiction to authorize removal, and thus returned the case to the state court. Noting that the U.S. Court of Appeals for the Seventh Circuit ruled that a removal action could be countenanced under Section 1442, thus creating a circuit split, the Supreme Court held that a straightforward reading of the removal statute empowers the reviewing court to examine all theories for removal that a district court has rejected. Consequently, the Court remanded the case to the Fourth Circuit where it can decide, “in the first instance,” whether there actually exist grounds to remove this case to federal court.

Guam v. United States
On May 24, 2021, the Court, again speaking through Justice Thomas, clarified Superfund’s cost recovery actions—Sections 107 and 113. For many years, the U.S. Navy created and managed a very large solid waste disposal facility where all kinds of wastes generated by the Navy—including military wastes—were managed. When the Navy left Guam, EPA cited Guam for its violation of the management of the site under the Clean Water Act (CWA), and the parties entered into a settlement, approved by the federal courts, in 2004. Years later, EPA then listed the site on the CERCLA National Priorities List (NPL) and determined that Guam, as the owner of the site, was a potentially responsible party. Guam then filed actions under Section 107 and 113 to compel the United States to pay its fair share of the cleanup costs, which will be very expensive for Guam to pay by itself. The United States contested these claims, arguing that the 2004 settlement limited Guam to a contribution action under Section 113, but since the applicable three-year statute of limitations had expired, Guam was without a remedy. The lower courts agreed, including the U.S. Court of Appeals for the District of Columbia Circuit. Justice Thomas, who has written several opinions interpreting Sections 107 and 113, held, in a short and unanimous opinion, that the 2004 CWA settlement did not resolve Guam’s CERCLA liability claims and therefore its Section 107 claim was still alive. His opinion focused on an exacting review of the precise language the Congress employed in enacting these cost recovery provisions.

THE FEDERAL COURTS OF APPEAL

The U.S. Court of Appeals for the First Circuit – Sierra Club, et al. v. U.S. Army Corps of Engineers
On May 13, 2021, the court upheld the decision of the lower court to deny the petitioners’ request for a preliminary injunction that would have barred the construction of “Segment 1” of a five-segment electric transmission power corridor in Maine. At issue was the decision of the Corps of Engineers, after issuing an Environmental Assessment (EA)—and not a full Environmental Impact Statement—to authorize various dredge and fill actions and the construction of a tunnel beneath the Kennebec River. After reviewing the record, and the 164-page EA, the court held that the petitioners did not demonstrate a likelihood of success on the merits. The Corps’ review was quite limited as the jurisdictional waters comprised less than two percent of the total project. In addition, several state and federal agencies had already reviewed and approved the project.

The U.S. Court of Appeals for the Ninth Circuit

On May 14, 2021, this court released significant rulings in three cases.

A Community Voice, et al. v. EPA
The court held, in a 2-to-1 ruling, that the EPA’s 2019 rule implementing the laws of Congress to cope with the persistent problem of lead paint contamination must be remanded to the agency for additional work. The 2019 rule followed the issuance by the court of a writ of mandamus to the agency in 2017, yet this rule ignored the expressed will of the Congress in not developing stringent and defensible hazardous standards for various forms of lead paint contamination. The EPA, under different administrations, has argued that its rules must consider the cost of regulation, but the court disagreed. In dissent, Judge Smith argued that the panel majority had misconstrued the statutes before it.

Consumer Financial Protection Bureau v. Seila Law LLC
The enforcement authority of the U.S. Consumer Financial Protection Bureau was again before the court in a case returned to the Ninth Circuit after the Supreme Court decided in Seila Law v. CFPB, 140 S. Ct 2153 (2020) that the Congressional creation of the Bureau with only a single agency head with enormous enforcement authority and no significant Presidential oversight violated the constitution’s separation of powers. However, the case was remanded to the Ninth Circuit to determine whether, nonetheless, the pending civil investigative demand issued to the Seila Law firm should be vacated. The court held that the demand was still actionable, and rejected an en banc review request by several judges who believed this determination was unfair.

Hardeman v. Monsanto Corporation
This, and many other pending cases, was a personal injury lawsuit that alleged that Monsanto’s “Roundup” pesticide caused the plaintiff’s non-Hodgkin’s lymphoma. Roundup has been classified as a carcinogen in California pursuant to Proposition 65, and by an international agency, IARC . On the other hand, Roundup’s pesticide registration application was reviewed and approved by the EPA, and the Proposition 65 listing has been criticized by EPA officials. The jury held that Monsanto was responsible for the plaintiff’s injuries, and awarded him $5.3 million in compensatory damages and $75 million in punitive damages—reduced by the trial court to $20 million. The Ninth Circuit upheld the verdict, the award of damages, and agreed that the receipt of controverted expert testimony was consistent with the Supreme Court’s Daubert ruling. Judge Smith dissented on the punitive damages award, stating that the evidence before the jury did not demonstrate the degree of “reprehensibility” that any award of punitive damages requires.

TEXAS SUPREME COURT

Landry’s Inc. v Animal Legal Defense Fund (ALDF)
The Texas Supreme Court decided this case on May 21, 2021. One of the features of one of Landry’s downtown Houston restaurant (the Aquarium) is the display of wild animals at the restaurant, namely four Bengal tigers. Months after a visit to the restaurant, a complaint notice was filed against Landry’s by the ALDF under the Endangered Species Act (ESA) over the treatment of these tigers ; such complaints are in fact required by law if a citizen’s suit is to be prosecuted. Soon thereafter, the ALDF released a press release describing the complaint to the media as well as other social media posts, and some of its attorneys were involved. Believing these releases had defamed the company, Landry’s filed a lawsuit against the ALDF and others. The defendants filed a motion to dismiss under the Texas Citizens Participation Act, legislation which can result in damages to the defendant if the complaint cannot be proven. This occurred here, with sizable sanctions, attorneys fees and other damages being awarded to the defendant. Many of these rulings were overturned on appeal, but the decision to reject Landry’s claim for defamation was upheld because the appeals court agreed that the ALDF’s lawyers enjoyed an absolute privilege for the contents of the press releases despite their publicity motive. The Texas Supreme Court reversed that ruling, and held that the judicial process privilege “was lost when the press releases repeated the ESA notice letter’s allegations for publicity purposes outside the protected context within which the statement was originally made.” Accordingly, neither the judicial process immunity nor attorney immunity were applicable here. The appeals court was instructed to determine whether Landry’s is able to prove its claim for defamation per se.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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