The Deck is Still Stacked in the Government's Favor -- Is This A Good Thing?
Last week, in City of Pittsfield v. EPA, the First Circuit Court of Appeals affirmed denial of a petition by the City of Pittsfield seeking review of an NPDES permit issued by EPA. The case makes no new law and, by itself, is not particularly remarkable. Cases on NPDES permit appeals have held for some time that a permittee appealing an NPDES permit must set forth in detail in its petition basically every conceivable claim or argument that they might want to assert. Pretty much no detail is too small. The City of Pittsfield failed to do this, instead relying on their prior comments on the draft permit. Not good enough, said the Court.
For some reason, reading the decision brought to mind another recent appellate decision, General Electric v. Jackson, in which the D.C. Circuit laid to rest arguments that EPA’s unilateral order authority under § 106 of CERCLA is unconstitutional. As I noted in commenting on that decision, it too was unremarkable by itself and fully consistent with prior case law on the subject.
What do these two cases have in common? To me, they are evidence that, while the government can over-reach and does lose some cases, the deck remains stacked overwhelmingly in the government’s favor. The power of the government as regulator is awesome to behold. Looking at the GE case first, does anyone really deny that EPA’s § 106 order authority is extremely coercive? Looking at the Pittsfield case, doesn’t it seem odd that a party appealing a permit has to identify with particularity every single nit that they might want to pick with the permit? Even after the Supreme Court’s recent decisions tightening pleading standards, the pleading burden on a permit appellant remains much more substantial than on any other type of litigant.
Why should this be so? Why is it that the government doesn’t lose when it’s wrong, but only when it’s crazy wrong?
Just askin’.
A Combined Superfund and Stormwater Rant
Sometimes, the practice of environmental law just takes my breath away. A decision issued earlier last month in United States v. Washington DOT was about as stunning as it gets. Ruling on cross-motions for summary judgment, Judge Robert Bryan held that the Washington State Department of Transportation had “arranged” for the disposal of hazardous substances within the meaning of CERCLA by designing state highways with stormwater collection and drainage structures, where those drainage structures ultimately deposited stormwater containing hazardous substances into Commencement Bay -- now, a Superfund site -- in Tacoma, Washington. 
I’m sorry, but if that doesn’t make you sit up and take notice, then you’re just too jaded. Under this logic, isn’t everyone who constructs a parking lot potentially liable for the hazardous substances that run off in stormwater sheet flow?
For those who aren’t aware, phosphorus, the stormwater contaminant du jour, is a listed hazardous substance under Superfund. Maybe EPA doesn’t need to bother with new stormwater regulatory programs. Instead, it can just issue notices of responsibility to everyone whose discharge of phosphorus has contributed to contamination of a river or lake.
The Court denied both parties’ motions for summary judgment regarding whether the discharges of contaminated stormwater were federally permitted releases. Since the Washington DOT had an NPDES permit, it argued that it was not liable under § 107(j) of CERCLA. However, as the Court noted, even if the DOT might otherwise have a defense, if any of the releases occurred before the permit issued – almost certain, except in the case of newer roads – or if any discharges violated the permit, then the Washington DOT would still be liable and would have the burden of establishing a divisibility defense.
If one were a conspiracy theorist, one might wonder if EPA were using this case to gently encourage the regulated community to support its recent efforts to expand its stormwater regulatory program. Certainly, few members of the regulated community would rather defend Superfund litigation than comply with a stormwater permit.
You can’t make this stuff up.
Supreme Court Gets Back to Basics in Declining to Hear Three Environmental Cases
The United States Supreme Court recently declined to hear three relatively high-profile environmental cases: Croplife America v. Baykeeper (a permitting clash between FIFRA and CWA); Texas Water Development Board v. Department of Interior (weighing the designation of a nature refuge under NEPA versus economic development); and Rose Acre Farms Inc. v. United States (regulatory taking claim as a result of agency action). After a 2008-2009 term where the Court seemed to take aim at the environmentalist cause, the Court may have put some wind back in the environmentalist’s sails by declining to consider these three separate industry challenges to federal environmental regulations.
EPA Rulemaking for CWA & FIFRA Permitting
In Croplife America v. Baykeeper, the Court decided not to review the Sixth Circuit’s year-old ruling in National Cotton Council v. EPA requiring farmers to secure Clean Water Act permits for the use of pesticides already permitted under FIFRA. EPA had claimed that FIFRA approval incorporated compliance with the Clean Water Act, however, the Sixth Circuit ruled that the government was obligated to ensure that farmers using pesticides were subject to both regulations. The decision had been stayed until April 2011 while EPA reviews and revises its NPDES permitting process to comply with the ruling.
Two different groups—one representing environmental interest groups and the other representing industry interest groups—opposed the EPA’s new permitting rule as exceeding the EPA’s interpretive authority, and argued that it would create redundant bureaucracy and hamper agricultural production by forcing farmers to decide between not applying pesticides and risking legal and enforcement actions for discharging without a permit.
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Zubulake Revisited: Judge Scheindlin on Discovery Sanctions
Every environmental litigator understands the duty to preserve documents. Before a complaint is filed, a plaintiff must preserve documents relevant to the claims about to be advanced. If a defendant reasonably anticipates litigation, the defendant must undertake reasonable efforts to preserve documents that are relevant to the impending lawsuit. Once a complaint is served, a defendant must preserve documents relevant to the claims alleged.
In the electronic world, especially on a prelitigation basis, it is doubly important to identify custodians with relevant documents (“key players”) since with a keystroke, they have the ability to delete responsive electronically stored information. Aluminum Corp. v. Alcoa, Inc., 2006 U.S. Dist. LEXIS 66642 (M.D. La. July 19, 2006) illustrates the risk. Alcoa sent a cost-recovery demand to Consolidated Aluminum in 2002 and promptly put a litigation hold on the electronic documents of four Alcoa employees involved with a remedial investigation and cleanup. In 2003, Consolidated filed a declaratory judgment action seeking to be absolved of liability. In 2005, Consolidated propounded discovery that prompted Alcoa to expand its key player list by eleven more names. It was not until this expansion that Alcoa suspended its janitorial email deletion policy and backup tape maintenance policy which at Alcoa meant that email older than about seven months was no longer available unless it had been archived by the individual user. The magistrate judge imposed a monetary sanction on Alcoa—in effect determining that Alcoa should have identified these additional individuals as key players in 2002. 2006 U.S. Dist. LEXIS 66642, *36.
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