CERCLA Divisibility Defense Is Alive and Well

On May 15, 2015, the United States District Court for the Eastern District of Wisconsin held that a defendant successfully established a divisibility defense in a government enforcement action dealing with the cleanup of the Fox River Superfund Site in northeastern Wisconsin (the Site).  United States v. NCR Corp., No. 10-C-910 (E.D. Wis. May 15, 2015).  The ruling appears to be the first district court decision to uphold a divisibility defense under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) since the Supreme Court’s 2009 decision in Burlington Northern.  It remains to be seen whether this is an indication of how courts will address divisibility going forward. Continue Reading

CFTC Proposes to Reduce Reporting and Recordkeeping Obligations for Commercial End Users of Trade Options

On April 30, 2015, the U.S. Commodity Futures Trading Commission (CFTC) issued a Notice of Proposed Rulemaking that would have the effect of reducing reporting and recordkeeping requirements for trade option counterparties that are neither swap dealers nor major swap participants (Non-SD/MSPs), including energy companies, agricultural producers, and other commercial end users.

The proposals are part of an ongoing effort by CFTC Chairman Timothy Massad to reduce regulations on end users that rely on the derivatives market in order to hedge their business risks.  The proposed rulemaking, which will be open for public comment for 30 days after publication in the Federal Register, includes the following actions: Continue Reading

Litigating a CERCLA Allocation Case – Pre-Trial Strategies and Trial Techniques CLE Regional Workshop

May 13, 2015

1:00 – 6:00 p.m. CT

Schiff Hardin partner Gabriel Rodriguez will welcome attendants to the ABA Section of Litigation Regional Workshop entitled “Litigating a CERCLA Allocation Case – Pre-Trial Strategies and Trial Techniques.” The workshop panelists will include a Judge from the United States District Court for the Northern District of Illinois, two nationally recognized experts with significant experience in these matters, and several seasoned trial counsel. A networking reception for all speakers and attendees will follow the programs. Continue Reading

Natural Gas Act Does Not Pre-empt State Antitrust Laws

Last week, the U. S. Supreme Court handed down an important decision on the jurisdictional reach of the Natural Gas Act (NGA).  The Court concluded that the NGA does not pre-empt a long-running group of state-law antitrust suits aimed at alleged misconduct by natural gas pipelines.

In Oneok, Inc. et al. v. Learjet, Inc. et al., No. 13-271, the Court considered claims brought as class actions and consolidated in 2003 as the Western States Wholesale Natural Gas Antitrust Litigation in federal court in Nevada.  The plaintiffs are manufacturers, hospitals, and other institutions that buy natural gas directly from interstate pipelines.  These purchasers sued more than a dozen pipelines for reporting false information to natural gas price indexes, claiming injury because contract prices, based on the price indexes, were inflated by the allegedly false reports.

The pipelines sought summary judgment on the ground that the NGA pre-empted plaintiffs’ state-law antitrust claims. The District Court granted summary judgment in defendants’ favor, but the Ninth Circuit reversed. The Supreme Court granted certiorari to clarify the reach of the NGA and, in a 7-to-2 decision, affirmed the Ninth Circuit’s ruling, despite an amicus opinion, and argument, by the U.S. Solicitor General, that the NGA preempted plaintiffs’ claims.  The case now goes back to the trial court where the Plaintiffs may continue to prosecute their claims.

While the NGA  gives the Federal Energy Regulatory Commission (FERC) the authority to determine whether rates charged by natural-gas companies or practices affecting such rates are just and reasonable, 15 U. S. C. §717d(a),  it also limits FERC’s jurisdiction to the transportation of natural gas in interstate commerce;to wholesale sales for resale of natural gas; and to natural-gas companies engaged in such transportation or sale. §717(b). The States have jurisdiction over retail sales and distribution.

The Supreme Court majority held that, although the alleged manipulation of gas indexes may have affected prices used in interstate and retail transactions, state-law antitrust claims were not pre-empted because the suits were aimed at obtaining damages only for excessively high prices in retail transactions, to which the NGA does not apply.

Writing for the Court, Justice Stephen Breyer emphasized that the NGA “was drawn with meticulous regard for the continued exercise of state power.” Thus, where a practice affects non-jurisdictional as well as jurisdictional sales, preemption can be found only where the target at which the state-law claims aim falls within the pre-empted field.  Here, the majority said that respondents’ claims are aimed at practices affecting retail rates, a matter “firmly on the States’ side of [the] dividing line.”

The case is being returned to the District Court to resume proceedings on the merits of state-law antitrust claims, and potentially, damage claims, after a twelve-year detour through the thickets of federal preemption law.

Notably for the industry, Justice Scalia and Chief Justice Roberts expressed in dissent the concern that the Court’s decision may impair “uniformity of regulation” because now “pipelines will have to ensure that their behavior conforms to the discordant regulations of 50 States – or, more accurately, to the discordant verdicts of untold State antitrust juries.”

Approved Jurisdictional Determinations Ripe for Judicial Review

In a significant new decision, the Eighth Circuit Court of Appeals has held that a United States Army Corps of Engineers’ (Corps) Approved Jurisdictional Determination (JD) that a property constitutes “waters of the United States,” and thus requires a permit, is a final agency action under the Administrative Procedures Act (APA) and therefore is ripe for judicial review.  Hawkes Co., Inc., et al. v. United States Army Corps of Engineers, Case no. 13-3067 (8th Cir. Apr. 10, 2015).  This decision splits from a recent decision in the Fifth Circuit holding that a JD is not a final agency action and therefore not reviewable.  Belle Co., LLC v. U.S. Army Corps of Eng’rs, 761 F.3d 383 (5th Cir. 2014), cert denied, 83 U.S.L.W. 3291 (U.S. Mar. 23, 2015) (No. 14-493). Continue Reading

FERC Issues Final Order on Gas Day NOPR

The Federal Energy Regulatory Commission (FERC or Commission) last week released its final rule, Coordination of the Scheduling Processes of Interstate Natural Gas Pipelines and Public Utilities, 151 FERC ¶ 61,049 (2015) designated as Order No. 809, in docket RM14-2.  In Order No. 809, the Commission took action on the Notice of Proposed Rulemaking (NOPR) where it had proposed changing the start of the gas day and making scheduling and other changes to the natural gas industry.  The Commission in Order No. 809 (1) declined to adopt its NOPR proposal to move the 9 a.m. Central Clock Time (CCT) start of the gas day to 4 a.m. CCT; (2) adopted proposals submitted by the North American Energy Standards Board (NAESB) revising the interstate natural gas nomination timeline and adding an intraday nomination cycle; and (3) adopted a change in its regulations to allow contracting flexibility for natural gas customers through multi-party contracts. Continue Reading

The Wait is Over – EPA publishes the Disposal of Coal Combustion Residuals from Electric Utilities Rule

EPA today published in the Federal Register its Final Rule for Disposal of Coal Combustion Residuals from Electric Utilities (commonly known as the CCR Rule). The rule is now official and the clock starts for compliance deadlines and the filing of challenges.

The rule becomes effective on October 14, 2015, six months after publication. Parties wishing to challenge any aspect of the rule have 90 days to initiate their challenge. Continue Reading

Court Limits the GHG Permit Rule to Align with UARG v. EPA

In its recent decision in Coalition for Responsible Regulation, Inc. v. EPA, No. 09-1322 (D.C. Cir. Apr. 10, 2015), the D. C. Circuit Court of Appeals narrowed the United States Environmental Protection Agency’s greenhouse gas (GHG) permit rule (sometimes called the Tailoring Rule, 40 C.F.R. §§ 51.166(b)(48)(v) and 52.21 (b)(49)(v)) in accordance with the Supreme Court’s decision in Utility Air Regulatory Group (UARG) v. EPA, 134 S. Ct. 2427 (2014). Continue Reading

Ninth Circuit Holds District Courts Have Discretion in Accounting For CERCLA Private Party Settlement When Allocating to Non-Settling Parties

On April 2, 2015, the Ninth Circuit held that a district court has the discretion to determine the most equitable method of accounting for settlement between private parties when it allocates liability to a non-settling defendant in a CERCLA contribution action.  AmeriPride Serv. v. Texas Eastern Overseas, Case no. 12-17245 (9th Cir. Apr. 2, 2015).  The Ninth Circuit’s decision is consistent with previous case law from the First Circuit (Am. Cyanamid Co. v. Capuano, 381 F.3d 6, 20-21 (1st Cir. 2004)) but splits with case law from the Seventh Circuit (Akzo Nobel Coatings, Inc. v. Aigner Corp., 197 F.3d 302, 308 (7th Cir. 1999)), which has held that a court must use the pro tanto approach of the Uniform Contribution Among Tortfeasors Act when allocating liability to a non-settling defendant.

AmeriPride brought CERCLA § 107(a) and § 113(f) claims against Texas Eastern Overseas (TEO) related to a contaminated industrial site in Sacramento, California.  The district court granted a summary judgment motion filed by AmeriPride, holding that TEO was liable for AmeriPride’s response costs under CERCLA § 107(a) and that AmeriPride could recover amounts AmeriPride had paid in settlement to other parties from TEO under CERCLA § 113(f).  In an earlier order in the case, the court also said it would adopt the proportionate share approach of the Uniform Comparative Fault Act in allocating response costs.   Continue Reading

Aggregation Update: Oil & Gas Industry Permitting Under Heightened Scrutiny in 2015

Recent and anticipated litigation from the United States Environmental Protection Agency (EPA or the Agency) and environmentalists signals that permitting decisions involving whether to aggregate emissions from separate facilities will be at the forefront of environmental enforcement in 2015 and beyond. Schiff Hardin continues to closely follow these on-going developments, the results of which will likely have significant impact on the oil and gas industry. Continue Reading