Environmental Roundup: March – May 2020

Pillsbury - Gravel2Gavel Construction & Real Estate Law

This is a brief account of some of the significant environment law developments that have occurred since the President’s March 13 national emergency declaration that the spread of COVID-19 poses a threat to national security.

The Courts – SCOTUS
The U.S. Supreme Court has issued three important decisions affecting environmental law during this period.

CITGO Asphalt Refining Company v. Frescati Shipping Company (March 30, 2020)
The court reviewed the charter agreement between CITGO and Frescati, by which CITGO charted an oil tanker to bring Venezuelan crude to CITGO’s refinery in New Jersey, located along the Delaware River. A customary “safe berth” provision was part of the charter. As the tanker was nearing the refinery, it struck an abandoned anchor causing a large oil spill into the Delaware River. Cleaning up the spill has cost Frescati and the U.S. government millions of dollars under the Oil Pollution Act, and this litigation involves CITGO’s liability for the spill. The court determined that the “safe berth” provision of the charter was in effect CITGO’s warranty of safety, and despite there being no negligence on the part of CITGO, the company is now liable for millions of dollars in cleanup costs. The ruling serves to clarify the obligations of the parties in these charter agreements.

Atlantic Richfield Company (ARCO) v. Christian, et al. (April 20, 2020)
This is a Superfund case, which concerns the preemptive effect of an EPA-approved federal cleanup remedy when a state court civil action could impede the effectiveness of the federal cleanup. Here, several Montana residents filed a lawsuit in Montana state court based on common law claims of nuisance and trespass. These plaintiffs aver that the federal cleanup does not adequately protect their properties which have been contaminated by a historic copper smelting operation. ARCO argued that the federal cleanup plan preempts any state action like this. The Court held that the Superfund law does not strip the state of its jurisdiction over claims based on state law. However, since the plaintiff property owners are also potentially responsible parties under Superfund, any separate cleanup plans they develop must be approved in advance by EPA (a very Solomon-like ruling by the Court).

County of Maui v. Hawaii Wildlife Fund (April 23, 2020)
The question decided by the court was whether a discharge of pollutants to groundwater through a point source which eventually discharges into navigable waters requires an NPDES permit. The statute itself does not directly address this issue, so the court divined the Congressional intent and determined that if the discharge were the “functional equivalent of a direct discharge”, a Clean Water Act permit would be necessary. The Court, realizing that more guidance is needed, listed some factors the lower courts could use to decide these controversies.

The Courts – Other Federal Courts
Meanwhile, the lower federal courts continue to issue significant rulings.

Physicians for Social Responsibility v. Wheeler (April 21, 2020)
The U.S. Court of Appeals for the District of Columbia Circuit decided the case, which concerns EPA’s staffing of its many science advisory committees. EPA decided to change its long-standing policy because it believed that any person receiving a federal grant should not serve on these committees. Ordinarily, such agency personnel actions would be considered to be exempt from judicial review under an exception to the Administrative Procedure Act because these actions were thought to be committed to agency discretion. Recently, the courts have taken a harder look at these claims and have found that there is often a sufficient body of existing law to make these administrative actions reviewable. The lower court’s dismissal of the case was reversed, and EPA was directed to provide a fuller explanation for the policy choice it had made.

Imamura v. General Electric Company (April 24, 2020)
The U.S. Court of Appeals for the First Circuit used the “forum non conveniens” doctrine to affirm the dismissal of a class action that resulted from the devastating tsunami that battered a Japanese nuclear power plant in 2011. GE manufactured the nuclear reactors used at the plant, and the plaintiffs alleged that their deficiencies attributed to the damages they suffered. However, there was a forum in Japan where the case should be tried.

PPG Industries v. United States (May 4, 2020)
The U.S. Court of Appeals for the Third Circuit decided this Superfund case, a cost-recovery action with the plaintiff alleging that the U.S. Government’s control over the manufacturing activities of a Pennsylvania chromite ore processing plant in World War II was so comprehensive that the United States qualified as liable party under the law, i. e., an “operator” of the facility, which triggered Superfund liability. The Third Circuit held that the evidence did not show that the Government’s role was not so extreme as to make it a PRP under the law.

Northern Plains Resource Center v. U.S. Army Corps of Engineers (April 15, 2020)
The U.S. District Court for Montana held that the U.S. Army Corps of Engineers’ use of Clean Water Act general permit—Nationwide Permit 12—to authorize the construction of a pipeline segment in Montana was invalid because the Corps of Engineers’ use of this Nationwide Permit procedure did not comply with the consultation requirements of the Endangered Species Act. The court initially ordered the Corps to terminate the use of this general permit on a nationwide basis until the ESA issue is resolved. The Corps immediately complied. This particular Corps of Engineers permit procedure is very popular, and it is used in all kinds of construction projects thousands of times every year.

Administrative Actions.
On April 10, 2020, EPA released its “Enforcement Discretion” policy that affects ongoing cleanups at RCRA and Superfund sites in the wake of the coronavirus. The agency will review, on a case-by-case basis, requests to pause or delay on-site cleanup actions that are adversely affected by the spread of the virus. Concerns about on-site conditions dominated the agency’s policy, which, it hastens to add, will not affect the underlying legal basis for the work.

The latest revision of the definition of “waters of the United States” was promulgated by EPA and the Corps of Engineers on April21, 2020. The agencies clearly state that the latest revision, issued in 2015, so extended the jurisdictional powers of the agencies that is was unworkable. On May 15, 2020, the Pipeline and Hazardous Material Safety Administration (PHMSA) of the U.S. Department of Transportation published a Federal Register notice of its decision which largely rejected a petition for reconsideration filed by the New York City Fire Department. Earlier, the PHMSA determined that recent New York City inspection and permitting rules applicable to motor vehicles carrying hazardous materials in the city were preempted by federal law insofar as they affected motor vehicles not based in New York City, The city’s original petition was filed in 2017. Also, of note is a proposal by the U.S. Coast Guard to update and clarify its vessel financial responsibility rules. Comments are due on August 11, 2020.

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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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