News 2002
December 10 : August 14 : May 29 : May 28 : May 21 : May 16 : May 9 : February 19

December 10, 2002

  • Supreme Court to Hear Arguments over Regulatory Reach of Clean Water Act

    In Borden Ranch Partnership v. United States Army Corps of Engineers, the Ninth Circuit Court of Appeals held that Angelo Tsakopoulos must seek federal approval under the Clean Water Act to "deep plow" his ranch land, a practice designed to convert hardpan ranch land into productive crop land suitable for vineyards and orchards.

    In the early 1990s, Tsakopoulos, a prominent northern California landowner, began to turn the pasture on his ranch near Sacramento into vineyards and orchards-land that has been in either agricultural or ranching use for a century.

    However, the Corps of Engineers asserts that the plowing is "dredging and filling" regulated by the Clean Water Act. Because Tsakopoulos failed to obtain a Section 404 permit, the Corps believes he should be fined at least $500,000 and perhaps up to $1.5 million.

    According to the Clean Water Act, the Corps has the power to regulate dredging and filling if such activities introduce pollutants into waters of the United States. Tsakopoulos used deep plowing to break the hard pan underneath his soil so that the roots of vineyards and fruit trees could penetrate deep into the soil rather than sitting on top of shallow impermeable hard pan that is often waterlogged during the winter and spring. Tsakopoulos' tractors pulled prongs that cut a several feet into the earth.

    The landowner maintains that no pollutant was introduced; nothing was added to the land. The deep plowing simply replaced hard-packed soil with loosened soil.

    The Clean Water Act allows the Corps to regulate a mechanical activity only if it is creates a "point source" of pollution. The landowner asserts that the idea that the plow is a point source is a rather generous and creative interpretation of the statute. In addition, the Section 404(f) of the Clean Water Act exempts "normal farming activities," an exception that Corps argues does not apply when wetlands are converted into more productive crop land.

    The Supreme Court is hearing arguments today.

August 14, 2002

  • On July 16, 2002, Bill Pryor, Attorney General, State of Alabama, testified at the Joint Hearing of the Senate Committee on Environment and Public Works and the Senate Committee on the Judiciary concerning new source review under the Clean Air Act ("CAA").

    Attorney General Pryor made two points. First, from the enactment of CAA in 1970 through two decades of judicial interpretations, "cooperative federalism" was the guiding principle for implementing new source review. Basically, while the federal government was responsible for establishing national air quality standards, each state was primarily responsible for specifying the manner in which such standards were implemented in its given region. Regarding new source review, the common understanding was that it applied only to major modification activities akin to new construction; not to routine maintenance and repair.

    Second, the delicate balance of cooperative federalism under CAA was upset in the late 1990's by the Clinton Administration. The Clinton EPA advanced a novel interpretation that required the adoption of state-of-the-art pollution at existing sources for activities that state regulators had considered routine maintenance, repair, and replacement. The Clinton EPA undertook this abrupt reversal without notice-and-comment rulemaking and without consulting the states- totally undercutting cooperative federalism.

    Attorney General Pryor urged the two committees to work with the current Administration to develop better defined standards of new source review, consistent with the original design of cooperative federalism under the enforcement of CAA.

    Please click HERE to read the full testimony.

May 29, 2002

  • IOLTA Update--In Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998), the United States Supreme Court held that interest on client funds held in IOLTA accounts is "private property" of the client for Takings Clause purposes. It left for consideration on remand whether IOLTA funds were "taken" by the State of Texas, as well as the amount of just compensation, if any, due. On remand, the district court found no taking because the client's funds would be unable to generate net interest with any economic value absent the IOLTA program, so the IOLTA program did not "take" anything. 86 F. Supp.2d 624 (W.D. Texas 2000). On appeal, the 5th circuit disagreed. The decision may is located at 270 F.3d 180 (5th Cir. 2001) and can be accessed by clicking HERE.

    In January 2001, the Ninth Circuit reached a similar conclusion in the case of Washington Legal Foundation v. Legal Foundation of Washington, which is located at 236 F.3d 1097 (9th Cir. 2001) and HERE.

    However, after rehearing en banc, the Ninth Circuit reversed itself and found no taking. This decision is located at 271 F.3d 835 (9th Cir. 2001) and HERE.

    Recently, the Boston based organization, Citizens for the Preservation of Constitutional Rights, filed suit against the Massachusetts Supreme Judicial Court alleging that its IOLTA program constituted a taking of private property without just compensation in violation of the Fifth Amendment. Practice group members may view the complaint HERE. Additional information about the case is located HERE.

  • Environmental justice--On December 17, 2001, the U.S. Court of Appeals for the Third Circuit announced its decision in the case of South Camden Citizens in Action v. New Jersey Department of Environmental Protection. Citizens in a largely minority community of Camden, New Jersey had challenged the issuance of an air permit to the St. Lawrence Cement Company. NJDEP had issued the permit in October 2000, and the citizens' appealed charging discrimination. The Court of Appeals ruled that the plaintiffs did not have a private right of action to enforce EPA regulations adopted under Section 602 of the Civil Rights Act (designed to prevent a "disparate impact"). (The District Court had previously ruled, that in accordance with the recent U.S. Supreme Court decision in Alexander v. Sandoval (2001), the plaintiffs had no cause of action under Section 601 (to prevent "intentional discrimination").

    The Court of Appeals relied upon the fact that Congress had not explicitly created a right of action for claims which rely on a federal regulation alone. The Court stated that "if Title VI is to go so far as to have the application that plaintiffs wish, Congress should take it there. We emphasize that the implications of this case are enormous . . . ."

  • Expansion of personal liability for environmental violations--Indiana Department of Environmental Management v. RLG, Inc. 755 N.E. 2d 556 (2001) The Indiana Supreme Court recently expanded personal liability for corporate officers and directors for environmental violations. The Court held that Lawrence Roseman, the sole shareholder, president, secretary and treasurer of RLG, Inc. which operated a landfill, was personally liable for over $3 million in civil penalties for violations at the landfill. The Court held that there was no need to pierce the corporate veil to hold Roseman liable under the Indiana Environmental Management Act and the responsible corporate officer doctrine. This liability is in addition to any liability that the individual may have due to his or her own individual acts. This case is a significant expansion of corporate officers, directors and shareholders, as well as for managers and employees. To read the decision, click HERE.

    BEC Corp. v. Connecticut Deparment of Environmental Protection, (Connecticut Supreme Court, 2001) Officers of BEC Corporation, Irvin and Michael Skinner, were held personally liable for violations of an administrative order issued by the State of Connecticut. BEC had operated an oil storage and distribution business from 1944 to 1995, and the Skinners were held personally responsible for investigation and remediation of oil contamination at the property. The Court held that under the Connecticut statute and the responsible corporate officer doctrine, there was no need to pierce the corporate veil. The Skinners were found to have been personally involved in acts or omissions which created or maintained a condition that could give rise to pollution of waters of the state and they were properly ordered to take remedial action.

  • Recycling Case interprets new Superfund Recycling Equity Act--Gould Inc. v. A&M Battery & Tire Service (U.S. District Court, Middle District of Pennsylvania), December 27, 2001

    The issue in the case was liable for lead contamination from crushing and recycling of lead-acid batteries. The owner of the site (Gould) was seeking to have former recycling customers share in the cost of cleanup at the site. During the litigation, the Superfund Recycling Equity Act (SREA) was signed, which provides significant protection to persons engaged in recycling. In a prior court decision, it was held that SREA could be applied retroactively.

    In this case, the court held that the recycling customers had shown that they had entered into a bona fide recycling transaction, and therefore the burden was on the recycler, Gould, to show that the customers were not protected by the law's exclusions. This shifting of the burden to the party seeking contribution makes it much more difficult to find the customers liable. Gould was not able to hold its customers liable for the batteries they had sent to the site.

  • Indiana Court Says IDEM has no jurisdiction over Isolated Wetlands which are not subject to Federal Jurisdiction--Twin Eagle LLC v. IDEM (Marion County Superior Court, Indianapolis, Indiana), February 11, 2002 A residential developer challenged IDEM's authority to regulate so-called "isolated wetlands" and won. IDEM continued to assert that despite a federal court ruling last year that federal law does not allow coverage of isolated wetlands, that Indiana could still regulate these waters. The court disagreed and found that IDEM's "interim regulatory process" was illegal and void because IDEM didn't follow the proper rulemaking procedures. Further, the court said that even if IDEM had followed the rulemaking procedures, Indiana didn't have jurisdiction to regulate "isolated wetlands." IDEM has already filed an appeal of the court's ruling, and the decision is stayed pending the outcome of the appeal.

May 28, 2002

  • Defenders of Property Rights, led by practice group members Roger and Nancie Marzulla, recently intervened on behalf of the National Black Chamber of Commerce and the Small Business Survival Committee in a lawsuit brought by two environmental groups against the Small Business Association (SBA). The environmental groups claim that the SBA lending program contributes to "urban sprawl" and are trying to require the SBA to comply with NEPA and have applicants for loans prepare an Environmental Impact Statement. The National Association of Home Builders has also intervened in the case. For more information on this case, click HERE.

May 21, 2002

  • United States Supreme Court rules that moratoria on development are not per se takings of property requiring compensation under the Takings Clause. Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (No. 00-1167)

    On April 23, 2002, the Supreme Court rejected the application of a per se rule to temporary takings and, in effect, adopted the balancing test for temporary takings first advocated by Justice O'Connor in Palazzolo v. Rhode Island last year. Justice Stevens wrote for the court and was joined by Justices O'Connor, Kennedy, Souter, Breyer and Ginsburg. Chief Justice Rhenquist, and Justices Scalia and Thomas dissented. To read the decision, click HERE. To read more about the decision, click HERE.

  • The Washington Times recently published an article concerning the federal government's dumping of sludge into the Potomac River. It presents a great example of "do as I say not as I do" or "The rule of law ends where Army Corps and EPA say." Click HERE to read the article.

  • Federal Court Of Appeals Deems Passive Soil Migration "Disposal" On October 25, 2001, the Federal Court of Appeals for the Ninth Circuit issued an important ruling, en banc, that clarifies the parties liable under section 9607(a)(2) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund), 42 U.S.C. 9601 et seq. Practice group member Steven Stone authored a summary on the decision which can be viewed by clicking HERE.

    May 16, 2002

  • On Thursday, May 9, 2002, Deputy Solicitor General Paul Clement spoke on the Supreme Court's current term to roughly 60 attendees at a luncheon sponsored by the Federalist Society's Milwaukee Attorneys Chapter. Although many of the Court's decisions have not been issued yet, Clement still noted several interesting aspects of the current term.

    Clement stated that the Solicitor General's office weighs in on the vast majority of cases that come before the Supreme Court, and only declines to do so when no federal interest is implicated. He cited the Cleveland school voucher case, Zelman v. Simmon-Harris, as the case from the current term that will likely have the greatest impact. Clement declined to predict the outcome, but did indicate that those hoping for a "pro-voucher" decision should not expect more than a 5-4 majority. Regarding the decision in Tahoe-Sierra v. Tahoe Regional Planning Agency, Clement commented that those seeking to have local government's regulation considered a "taking" had aimed too high; he contrasted the more incremental approach taken by those defending statutes imposing drug tests on certain groups of high school students, which appeared to have more success. Clement also touched on the recent developments regarding Second Amendment jurisprudence, stating that the interpretation of the amendment as providing for the rights of the individual was not a novel or radical concept. Clement also discussed several Fourth Amendment cases before the Supreme Court.

May 9, 2002

  • On May 8, C. Boyden Gray delivered an address discussing U.S. energy security and its relationship to U.S. environmental policy. Please click HERE to read the text of his address (pdf format).

February 19, 2002

  • With the President's recent announcement regarding the administration's approach to both Kyoto and power plant emissions, it might be helpful to review an address delivered to the Federalist Society by leading environmental law scholar James Huffman, who serves as Dean of Lewis & Clark Law School. In early 2001, Dean Huffman suggested five organizing principles for an environmental policy, including the use of market incentives, a recognition of economically sustainable objectives, and the application of sound science. These were themes that President Bush has sounded in connection with his recent decisions on Kyoto and sulfur dioxide emissions. Click HERE to read the address.

2003 The Federalist Society