If “Winter comes, can Spring be far behind?” It's been a quiet term thus far for the Supreme Court, due in part to the hearing of oral arguments in many contentious cases. Below is a brief summary of some of the recent significant matters decided by the Federal Courts.
THE U.S. SUPREME COURT
As of this date, the Supreme Court has issued the only decision this term. Arellano v. McDonough, Secretary of Veterans Affairs, decided on January 23, 2023, was a case involving Veterans' Law and Benefits. The controversy involves the effective date of an award for disability compensation.
Many cases have been argued this term which await a decision, including an important Clean Water Act case, Sackett v. Environmental Protection Agency, argued on October 3, 2022.
THE FEDERAL COURTS OF APPEAL
The U.S. Court of Appeals for the Third Circuit
LTL Management, LLC v. Official Committee of Talc
Claimants, et al.
On January 30, 2023, the court decided an important
toxic tort bankruptcy case. Johnson & Johnson, which
manufactures and sells Johnson's Baby Powder, has faced a
tidal wave of talc toxic tort litigation; there are allegations
that the talc contains asbestos which could cause cancer. A wholly
owned subsidiary of Johnson & Johnson was split into two new
entities with LTL Management LLC, being given principally the talc
litigation liabilities. The New Jersey Bankruptcy Court held that
LTL was authorized to seek the bankruptcy protections of Chapter 11
of the Bankruptcy Code. On appeal, however, the Third Circuit
dismissed the bankruptcy filing by a company “created to file
for bankruptcy.” A resort to the protections of the
Bankruptcy Code is reserved for entities facing financial distress,
which, the court concluded, did not apply to Johnson & Johnson.
This ruling may have an impact on other entities considering the
use of Chapter 11 to quash hundreds or thousands of personal injury
claims.
The U.S. Court of Appeals for the Fourth Circuit
West Virginia Wilderness Committee, at al. v.
Council of Environmental Quality, et al.
On December 22, 2022, the court affirmed the lower
court's dismissal of the claims of several environmental
organizations that the Trump Administration's 2020 revisions
of the long-standing National Environmental Policy Act (NEPA) rules
were arbitrary and capricious. These rules, adopted by all federal
agencies having permitting authority, regulate the process by which
the NEPA environmental assessments were made. The 2020 rules were
jettisoned soon after the Biden Administration took office and new
rules were issued in 2022. For that reason, the court held that the
2020 rules were no longer ripe for review.
The U.S. Court of Appeals for the Fifth Circuit
In re: Louisiana Public Service Commission
On January 18, 2023, the court granted a petition for
a writ of mandamus to the Federal Energy Regulatory Commission
(FERC) filed by the Louisiana Public Service Commission. FERC
regulates the transmission and sale of electricity in interstate
commerce under the Federal Power Act. Section 206 of the Act allows
retail regulators to request FERC to determine whether a regulated
electricity rate is unjust and unreasonable. However, FERC's
action on many 206 petitions has been very slow, and now the Fifth
Circuit ordered FERC to respond within 21 days as to why it is
taking so long to resolve these complaints. The court was
especially moved by the argument that “the unrecoverable cost
to consumers grows every day FERC delays in taking final
action.”
Calumet Shreveport Refining, LLC, et al. v.
EPA
On January 27, 2023, the court granted the motions of
two small refineries to stay their compliance obligations under the
Renewable Fuels program administered by the Environmental
Protection Agency (EPA) under the Clean Air Act. For several years,
small refineries were granted a blanket exemption from complying
with their RFS obligations until 2011. Thereafter, the EPA employed
a system of case-by-case review of “hardship
exemptions” which considered the special economic factors
facing small refineries. However, in late 2021, EPA changed its
methodology for determining “disproportionate economic
hardship,” and then denied 69 petitions for relief filed by
small refineries. The Fifth Circuit was concerned by the
retrospective application of this new policy and stayed their RFS
compliance obligations pending trial on the merits.
Fort Bend County, et al. v. U.S. Army Corps of
Engineers
On February 2, 2023, the Fifth Circuit revived a
lawsuit filed by local Southeast Texas political subdivisions which
asserted that the lower court erred in dismissing their lawsuit
against the U.S. Army Corps of Engineers, which operates the
Addicks and Barker Dams flood control program. Major local floods
in 2016 and 2017 resulted in disastrous flooding of properties
owned by the plaintiff political subdivisions located near the
Addicks and Barker Dams. The plaintiffs argued that the Corps was
obliged by law to take actions to confront the threats posed by
heavy rains which quickly filled the reservoirs behind the dams,
and the Corps failed to do so. They argued that this lawsuit was
not subject to the exclusive jurisdiction of the Federal Court of
Claims. The lower court disagreed, holding that it had no
judication to hear this case, and dismissed the lawsuit. The Fifth
Circuit reversed the lower court, holding that the plaintiffs
avoided pleading a “Tucker Act” claim, and, moreover,
does not provide an adequate remedy to the plaintiff's claims
within the meaning of Section 704 of the Administrative Procedure
Act.
The U.S. Court of Appeals for the Seventh Circuit
United States v. Doe Corporation
On February 3, 2023, the court decided this case
involving Doe Corporation, which is the target of a federal grand
jury investigation into suspected criminal violations of the Clean
Water Act. Search warrants were obtained, and state and federal
agents conducted a search of the premises. After the search, Doe
contacted the U.S. Attorney, accusing the agents of executing the
search in a dangerous and threatening manner—including the
pointing of guns at employees—in violation of Doe's
Fourth Amendment rights. The government then requested a copy of
the original video footage, which was denied. The government then
served Doe with a grand jury subpoena. The lower court quashed the
subpoena, holding that it was issued for an improper purpose. This
action was appealed to the Seventh Circuit. The appeals court
reversed the lower court, holding that the grand jury had a
legitimate interest in seeing a video of the search, and there was
no evidence presented that the subpoena was issued for an improper
motive.
The U.S. Court of Appeals for the Tenth Circuit
Dine Citizens Against Ruining Our Environment, et
al, v. Haaland, Secretary of the Interior, et
al.
The Tenth Circuit decided this important oil and gas case on
February 1, 2023. The plaintiff's environmental organizations
challenged the environmental assessments of the Bureau of Land
Management (BLM) analyzing the environmental impact of 370
applications for permits to drill (APD) for oil and gas in the San
Juan Basin of New Mexico. The lower court rejected the arguments
that the BLM failed to take a “hard look” at the
environmental impact of greenhouse gas emissions (GHG) and
hazardous air pollutant emissions. The Tenth Circuit reversed this
ruling, holding that BLM failed to take the requisite hard look at
GHG emissions, but upheld the Bureau's analysis of the
cumulative impacts to water resources because it was sufficient
under NEPA. Several parties intervened in this litigation,
including the American Petroleum Institute. The major issue was
whether the BLM took a “hard look” at the environmental
consequences of the APDs. Under the NEPA rules, BLM must consider
the direct, indirect and cumulative environmental impacts of a
proposed action; here the effect of GHG emissions must be assessed.
The court takes issue with the BLM's approach—using the
emissions calculated for one year to calculate the direct and
indirect emissions over a 20-year period (the probable lifespan of
a well). In addition, the BLM's justification for not
calculating direct GHG emissions over the lifetime of the wells
“is not constituent with the record.” Therefore, the
BLM's calculation of GHG emissions was arbitrary and
capricious. With respect to the cumulative impact of GHG emissions
from the APD approvals, the BLM defended its “general
analysis” because the global climate models are unable to
forecast local or regional effects on resources. The petitioners
argued that the BLM could have determined the environmental impact
of GHG emissions by comparing the emissions to a “carbon
budget.” While NEPA does not require the BLM to use any
particular methodology, the Tenth Circuit held that “Where
the BLM neither applied the carbon budget method nor explained why
it did not, BLM acted arbitrarily and capriciously by failing to
consider the impacts of the projected GHGs.” An issue was
also raised regarding the cumulative health impacts of HAP
emissions from APDs (i. e., hazardous air pollutants), and the
court held that the BLM failed to take a hard look at these
emissions, as well. The appropriate remedy for these defects is to
be determined by the lower court on remand, and whether injunctive
relief should be granted.
TEXAS COURTS
The Texas Fourth Court of Appeals
People for the Ethical Treatment of Animals, Inc.,
and Karla Waples v. Bandera Wranglers
On February 8, 2023, the court decided a “feral
hog” case. Feral hogs are a large and aggressive species that
have wrought considerable damages to property, livestock and crops
in many rural areas of Texas. The Texas Legislature and Texas
agencies have approved some drastic measures to deal with them.
People for the Ethical Treatment of Animals (PETA) is an
organization whose stated purpose is to ensure that animals are
treated in a humane way, and Karla Waples, a former member of PETA,
lives in Austin, and has expressed a present and genuine fear that
the defendants “hog catch” in Bandera, Texas,
desensitizes persons to violence by exposing them to acts of wanton
cruelty to animals. The object of the “hog catch,”
which has been held for two decades, is to catch and bag a hog in a
burlap sack and drag the bagged pig across a finish line. Juvenile
hogs are chased by adults and children in a fully enclosed pen.
Apparently, participants in the hog catch are not provided with any
written rules requiring the use of personal protective equipment,
and the hogs are not treated by veterinarians or even sanitized,
and “color commentators” “narrate for the
spectators” benefit. PETA seeks to have the hog catch
stopped, but the appeals court holds that it has no standing to
litigate this matter under Texas law, which does not recognize
“organizational standing”: Similarly, Ms. Staples lacks
standing because her alleged injuries are not
“concrete.” Accordingly, the appeals court sustained
the ruling of the lower court and the case was dismissed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.