Toxic Tort Litigation Blog : Toxic Tort Lawyer & Attorney : Epstein Becker Green Law Firm : Product Liability, Contamination, Pollution

Judge Harold Baer, Jr., who sits on the SDNY bench, has the courage of his convictions to do right even when others disagree.  In October 2010, Judge Baer issued an order in a class action litigation In Re: Gildan Activewear, Inc., Securities Litigation 08-cv-5048 directing two of the largest plaintiff class action law firms to “make every effort” to put at least one woman and one minority lawyer on the case. Although Judge Baer advised counsel that his order was not intended to be critical of lead counsel or their firms, he considered diversity considerations  goals that he would urge be met in similar cases that would come before him in the future.  Over his years of judicial service, Judge Baer was impressed that so many of the law firm litigation teams in his courtroom lacked diversity.  Judge Baer expressed concern over the lack of minority and female lawyers in law firms generally and saw the counsel approval process as a tool at his disposal to address what he considered a persistent problem.  Complaints by members of the bar that Judge Baer’s directive was an abuse of his counsel approval powers under thePrivate Securities Litigation Reform Act of 1995 miss the point entirely.  Judge Baer’s intention was not to impact stare decisis under the act.  Rather, it was a courageous effort by a federal district judge to call attention to a serious problem in our profession.  We applaud Judge Baer.

On November 6, 2009, we reported here concernining a case of first impression brought by the Ecological Rights Foundation ("ERF") in federal court in California.  In her decision, dated March 31, 2011, the Hon. Saundra Brown Armstrong, sitting in the United States District Court for the Northern District of California (Oakland Division), dismissed ERF's  environmental claims brought  against Pacific Gas & Electric (“PG&E”) and Pacific Bell Telephone (“Pacific Bell”).  The Ecological Rights Foundation alleged that the Defendants’ wooden utility and telephone poles were pressure treated with an oil-based pentachlorophenol preservative which was “oozing” to the surface and being washed off of the Poles, thereby contaminating San Francisco Bay and adjacent waterways.  As a result of the migration of this material over time from the Poles into the soils, ERF alleged that “dioxin-like” compounds were released into the environment placing surrounding homeowners, commercial fisherman and the general public at significant risk.  As a practical matter, if ERF had prevailed, PG&E and Pacific Bell may have had to replace tens of thousands of Poles throughout California. 

In dismissing the case, which was brought pursuant to the Clean Water Act (“CWA”) and the Resource Conservation and Recovery Act (“RCRA”), the Court examined the required showings under each statute.  The CWA distinguishes between point and nonpoint sources.  A point source is defined in the statute as “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.”  All other sources of pollution are characterized as “nonpoint sources.”  To succeed, ERF had to demonstrate that the Defendants’ discharges were point source discharges. 

In dismissing the CWA claim, the Court held that “point and nonpoint sources are not distinguished by the kind of pollution they create or by activity causing the pollution, but rather by whether the pollution reaches the water through a confined, discrete conveyance.”

The key issue in the analysis of ERF’s RCRA claim was whether the chemical preservatives used on the Poles qualified as a “solid waste” within the meaning of RCRA.  The term “solid waste” is statutorily defined as “discarded material.”  Although not defined by statute, EPA regulations specify that “discarded material” includes any material that is “abandoned.”  ERF alleged that solid waste was disposed of into the environment when the chemical preservative leaked, spilled or dripped from the Poles due to rain, and when dust impregnated with the chemical is blown into the air during dry seasons.  In dismissing the RCRA claim, the Court held that the “flaw in plaintiff’s theory of disposal is that in this case, there is no allegation that Defendants engaged in any conduct that resulted in the discharge of the chemical preservative. To the contrary, Plaintiff merely alleges that the purported contamination is the result of natural forces – mainly, rain and wind… Such allegations, on their face, are insufficient to establish that Defendants engaged in the ‘disposal’ of hazardous waste under § 6972(a)(1)(B).”  The Court rejected Plaintiff’s theory that the “passive” spilling or leaking of materials from a place of containment into the environment constitutes “disposal” of solid waste.  In so holding, the Court distinguished prior cases that found that leakage fromgasoline USTs may be actionable under RCRA.  The UST holdings are only applicable to situations where the discharge of hazardous waste leaked or spilled from a container intended to hold the waste.  In contrast, the Court found that “the Poles are not containers; but rather, they were used to suspend wires for the transmission of electricity for PG&E and data for Pacific Bell.”  Thus, liability under RCRA ¶ 7002 did not attach based on the “discharge” of chemical preservatives from the Poles attributable to natural forces, such as rain and wind.

For those of you for whom reading the news and tabloid reports about the oral argument before the US Supreme Court in AEP et al v. Connecticut et al on April 19, 2011, was not enough, we attach the full unofficial transcript here. 

Eileen Millett is  Counsel to the law firm of Epstein Becker & Green, P.C. where she represents clients on environmental matters, including solid and hazardous waste and the Clean Water Act,  and counsels clients on general regulatory compliance questions, including issues related to toxic waste and water quality, permitting, emerging obligations under impending climate regulations and other federal, state, and local environmental statutes and regulations.  Ms. Millett previously served as Assistant Counsel with the Hazardous Waste Task Force at NYDEC and as General Counsel to the Interstate Environmental Commission, a tri-state water and air quality enforcement authority, where she conducted and managed litigation to control and abate water pollution and ensure adequate water and sewer infrastructure.  She teaches environmental law at the Syracuse University College of Law. 

Is the EPA over regulating and hurting business? Has EPA lagged behind in regulating Greenhouse Gases? The right answer depends on who you ask. But in deciding American Electric Power v. Connecticut the United States Supreme Court may indeed transform the way we produce and obtain energy. The case concerns the right of states and private parties to sue electric utilities under public nuisance theory for contributing to global warming. The United States Supreme Court will be asked to consider whether the plaintiffs have standing to bring the case, or whether the case presents a non-justiciable political question. In ordinary parlance, on standing — is there a connection between the utilities emissions’ and the injuries alleged, or does the causal chain depend on independent actions of others, and will the remedy sought, by itself, slow or reduce global warming; on political question —is the legislature and the Executive branches doing their jobs in a such a way that the Constitution envisions, making judicial intervention inappropriate. Said another way should we be about the business of sanctioning judicially engineered solutions to caps.

On April 19, 2011 in an expanded argument before only eight judges,with Justice Sotomayer recusing herself, six states, New York City and three private land trusts, sought an injunction in the form of an order to compel the reduction of carbon dioxide emissions and then to compel the reduction of those emissions from six major power producers, who they claimed, were the five largest emitters of carbon dioxide in the United States. 

By agreeing to take this case the U.S. Supreme Court is sending a strong signal that they will likely overrule this greenhouse gas public nuisance case, since they ignored the U.S. Solicitor General, who urged the Court to vacate the circuit decision, remand the case to the district court and to take note of the administration’s push to regulate. All this fuss, because states and private parties believe that power companies are creating a public nuisance by emitting greenhouse gases (GHGs) that contribute to global warming. Some states clearly feel that tracking and reporting requirements imposed by EPA do not go far enough, and what better time than now to place caps on emissions and reduce them. Proponents focused on reducing global warming mounted a multi-prong strategy to strike at the administration, Congress and the courts. The administration has indeed made efforts, but a change in the political climate, has diminished what was once a top priority. The House passed a bill that would have established a cap and trade program, but no law was enacted as the Senate could not agree on a proposal. EPA did enact some regulation, but obviously not enough to mollify the states; EPA’s regulation requires monitoring, reporting and registering, after which EPA will release that information to the public and enable us to see who indeed, are the largest emitters of carbon dioxide. These requirements will culminate in a national database and will enable EPA to establish a baseline. The question pending before the court is whether it is appropriate for the courts to step in. 

The District Court felt that the courts were not the appropriate forum. The Southern District Court of New York dismissed states and non-state plaintiffs (New York City and the private land trusts) complaint, holding that the plaintiffs’ claims would require the court to engage in the sort of balancing of competing public policy concerns that are the province of Congress and the President, and therefore presented a non-justiciable political question.  On appeal, a two-judge panel of the Second Circuit (the panel originally included Judge Sonia Sotomayor, who was elevated to the Supreme Court during the pendency of the case) vacated the district court’s dismissal and remanded the matter. The Second Circuit pointed to the lack of a detailed legislative or executive branch policy as evidence that courts could adjudicate such cases without interfering with the prerogatives of the political branches. Moreover, the court held that the obvious political ramifications of any decision that a court might render in the case did not necessarily transform the issue into a “political question.” The appellate court held that both the states and non-state plaintiffs could assert public nuisance. In particular, the non-state plaintiffs could assert such claims because of the widespread, interstate nature of the harm alleged. Finally, the Circuit held that the plaintiffs’ claims were not displaced by the Clean Air Act. Walking a fine land between the Supreme Court decision in Massachusetts v. Environmental Protection Agency, 549 U.S. 497(2007), which held that EPA has the authority under the Clean Air Act to regulate carbon dioxide as an air pollutant, and the principle that federal common law is displaced when Congress has spoken directly to a particular issue, the appellate court held that at least until EPA takes some specific regulatory action — beyond its proposed (but not final finding that GHGs endanger public health and welfare) —the statute does not regulate greenhouse gas emissions, or does not regulate such emissions from stationary sources. The day after the Second Circuit issued its opinion, EPA promulgated its Final Mandatory Reporting of Greenhouse Gas Rule. 

Before the Supreme Court ruling in Massachusetts v. Environmental Protection Agency, EPA had insisted that Congress had not given it the authority to deal with global warming, and EPA had cast doubt on the connection between GHGs and global warming, however, the Supreme Court ruling in case of Massachusetts v. Environmental Protection Agency, and granting certiorari in American Electric Power v. Connecticut demonstrates that the court is very willing to weigh in on climate change, or at a minimum provide some direction on the appropriate vehicle for such decision making.

The Supreme Court has for decades recognized a federal common law nuisance right, but has said that if Congress passes specific legislation that seeks to protect the public health and safety, the courts may and probably will have to allow those remedies to work in place of court crafted mandates. The states are seeking a policy outcome that the administration, Congress and EPA have not been willing to adopt. The outcome of American Electric Power v. Connecticut will have implications for two other common law public nuisance cases grounded in common law tort claims and alleging damage from climate change. Comer v. Murphy Oil, USA, 609 F.3d 1049 (5^th Cir. 2010), and Native Village of Kivalina v. ExxonMobil Corp. 663 F.Supp.2d 863 (N.D. Cal. 2009).

The tone and tenor of the questioning a couple of weeks ago suggests that the court may well rule that EPA’s regulations of GHGs leaves no room for federal common law nuisance, which would invalidate any attempts to use federal common law nuisance to challenge GHG emissions, which leaves state common law nuisance, the CAA, amending the CAA and EPA regulating. Given that regulations are subject to ongoing legal challenges, climate change law may be uncertain for some time to come. Some have gone so far as to say that the CAA was not designed for the complexities of climate change. If you agree that the current vehicles available to us are inadequate to the task, we could be looking toward new legislation that will require attorneys to gear up and become knowledgeable at this evolving area of law so critically important to our energy needs.