Recent Decisions of Interest to Corporate Counsel

Environmental Law - Land Use

National Parks & Conservation Ass'n v. Babbitt, No. 99-36065 (Feb. 23, 2001, 9th Cir.)

The US Park Service regulates the numbers of cruise ships visiting Glacier Bay National Park. The Service, after finding "no significant impact," relaxed previous restrictions, allowing more ship visits. The federal trial court ruled the Park Service's review was adequate, but the 9th Circuit enjoined the increase until an EIS is prepared.

Sac & Fox Nation of Missouri v. Norton, No. 00-3063 (10th Cir. Feb. 28, 2001).

DOI stated its intent to take a tract of land designated as a cemetery into trust for a tribe and to approve Indian gambling activities. Other tribes sued, claiming that the acquisition required an EIS and historical preservation analysis. The trial court dismissed, but the Circuit reversed, holding that although the environmental and historical preservation analysis was not required for a non-discretionary act, the cemetery is not a "reservation" under the Indian Gaming Regulatory Act.

Environmental Law - Pollution

Clean Water Issues

Headwaters, Inc. v. Talent Irrigation District, No. 99-35373 (March 12, 9th Cir.)

The defendant was using an aquatic herbicide in its canals, which was getting into waters of the U.S. The plaintiff groups claimed the defendant was required to obtain a NPDES permit for the discharge of the herbicide. The federal trial court found that the label on the herbicide, as approved by the USEPA, did not require a NPDES permit, and ruled for the defendant. The 9th Circuit reversed because USEPA's approval did not waive the NPDES permit requirement.

Solid Waste Agency of Northern Cook Co. ("SWANCC") v. U.S. Army Corps of Engineers, No. 99-1178 (U.S. Supreme Court, Jan. 9, 2001).

Rehnquist for a unanimous Court ruled that the Commerce Clause does not authorize Clean Water Act (CWA) regulation of non-navigable, isolated, instrastate waters which developed in an abandoned dump, despite the presence of otherwise protected migratory waterfowl.

National Wildlife Federation v. Browner, No. 00-1255 (D.C. Cir. Jan. 30, 2001). USEPA enacted new effluent control regulations for pulp and paper mills, and the companies and NWF petitioned for review by the D.C. Circuit. The industry plaintiffs then moved to dismiss NWF's petition for lack of subject matter jurisdiction because it did not "reside or transact business" in the federal judicial district where it originally sued. The D.C. Circuit denied the motion, ruling that the language in § 509, the judicial review provision of the CWA, is not jurisdictional but only determines venue.

Rice v. Harken Exploration Co., 2001 WL 422051 (5th Cir. April 25, 2001).

The Fifth Circuit issued the first federal appellate court "post- SWANNC" interpretation of the new definition of navigable waters. Interpreting SWANCC, the Fifth Circuit held that "it appears that a body of water is subject to regulation under the CWA if the body is actually navigable or is adjacent to an open body of navigable water." Applying that rule to a landowner's claim that discharges of oil into "intermittent streams which only infrequently contain running water" that ultimately discharged into a navigable river, the court held that "Big Creek and the other intermittent streams located on the ranch do not qualify as 'navigable waters.'"

Clean Air Issues

Whitman v. American Trucking Ass'n, No. 99-1257 (U.S. Supreme Court, Feb. 27, 2001)

Justice Scalia wrote the unanimous opinion of the Court that the Clean Air Act does not allow the EPA to consider implementing costs when setting air quality standards.

Property Cleanups

National Telephone Cooperative Ass'n. v. Exxon Mobil Corp., No. 99-7124 (D.C. Cir. April 3, 2001).

Jury verdict for negligent cleanup of gas station overturned. Plaintiff's expert witness testimony was insufficient under the District of Columbia's law. The expert testified as to his opinion that defendant performed an inadequate cleanup. However, the expert failed to identify departures from generally followed practices or nationally recognized standards. Also, the remedial action plan did not provide the "standard of care," nor did the expert find any deviation from the plan.

Energy Law

Geosouthern Energy Corp. v. Cheasapeake Operating, Inc., No. 99-20852 (5th Cir. Feb. 2001).

The two companies contracted for joint development of various oil prospects, but then disputed the percentage interests necessary to divide the revenue stream. The federal trial court entered a "final judgment" establishing the percentage interests. However, the court did not calculate and award damages. The Fifth Circuit reversed because for a judgment to be sufficiently final for appellate jurisdiction, the accounting must be no more than an ministerial act.

Wisconsin Valley Improvement Co. v. FERC, No. 97-1557 (D.C. Cir. Jan. 26, 2001).

FERC granted a hydropower license to plaintiff and then charged it a "use" fee for submerged Forest Service and USDOI lands. It also required the plaintiff to grow wild rice for wildlife habitat. The DC Circuit upheld the rice growing requirement and a requirement for minimum reservoir levels. However, the annual use fee was the result of an arbitrary and capricious decision and was set aside.

Resources Law

Pueblo of Santa Ana v. U.S., No. 99-5105 (Fed Cir. June 1, 2000).

In a decision reviewing the title history of one pueblo's lands in and out of the public domain, the Circuit ruled that the Corps could not take freely rock and gravel where mineral rights were not reserved to the U.S. in a grant.

Corporate Issues (Relating to Environment, Energy and Resources Counsel)

Tosco v. Communities for a Better Environment, No. 99-55400 (9th Cir. Jan. 2, 2001)

The plaintiff oil company sued the defendant environmental organization for slander, malicious prosecution and equitable relief. The plaintiff is a Nevada corporation, with its headquarters in Connecticut. The defendant organization had previously sued the oil company in one lawsuit alleging violations of the Clean Air Act at its Los Angeles area marine terminal, and claiming the company was improperly obtaining pollution "credits" by scrapping old cars. The organization allegedly conducted highly publicized media events with the filing of its complaint. The company claimed that the environmental organization wrongfully accused the company of scrapping old cars so it could increase air pollution in the low income and minority communities surrounding the marine terminal. The company asserted that it did not apply "car-scrapping credits" towards its terminal emissions. The environmental group voluntarily dismissed this lawsuit two weeks after filing it, without serving the oil company. The environmental organization filed a second lawsuit, in state court in San Francisco, claiming the defendant oil company, and others, were polluting the state's drinking water with MTBE. Again, the group conducted highly publicized media outreach activities. The oil company claimed the second lawsuit was particularly malicious, because the company had been a leader in eliminating MTBE as a fuel additive.

The federal trial court dismissed the suit for lack of diversity jurisdiction. The Circuit affirmed, applying the test of "substantial predominance" of business activities. The Circuit explained that the "substantial predominance" test measures business activities in the state in issue against the activities in other individual states - not against a combined percentage of the company's activities in all other states.

In re Maria Aguinda v. Texaco, No. 00-3066 (2d Cir. Feb. 23, 2001).

Plaintiff citizens of Ecuador and Peru sued Texaco alleging destruction of rain forests; but the SD NY dismissed their lawsuit. While the case was on appeal, the trial judge attended an expense-paid legal education program indirectly but partially funded by the oil company. After remand, the plaintiffs moved for recusal of the trial judge, alleging the seminar had a pro-development, anti-environmental slant and that privately funded judicial education should not be allowed. The Circuit denied the motion, because the plaintiffs had not proved the issues at the seminar were material to the pending litigation.

Note: The Circuit's decision includes a general review of the issue of judicial attendance and participation in a variety of activities by bar associations, law schools, academic institutions, private institutions, and the like. The decision's discussion is valuable reading for anyone involved with corporate - or non-corporate - support of judicial training activities.