Posted on December 30, 2013
On the eve of the December 10, 2013 oral argument before the U.S. Supreme Court in the litigation involving the Cross State Air Pollution Rule, nine Northeast states – Connecticut Delaware, Maryland, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island and Vermont (Petitioners) – filed with EPA a petition under Section 176A of the Clean Air Act. Section 176A, a product of the 1990 Clean Air Act Amendments, allows EPA to establish, by rule, a transport region whenever the Administrator has reason to believe that the interstate transport of pollutants from one or more states contributes significantly to a violation of a NAAQS in another state or states.
Petitioners’ Section 176A petition seeks to expand the Northeast Ozone Transport Region (OTR) to include the states of Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, Virginia and West Virginia. To review a copy of the petition click here. It alleges that the targeted upwind states have failed to fulfill all Clean Air Act requirements because their air pollution control programs do not require the installation of controls as stringent as required by the OTR and because air pollution from the upwind states is transported into the OTR, thus contributing to violations of the 2008 National Ambient Air Quality Standard for ozone within the OTR states. The Petitioners hope that the petition, if granted, will subject the targeted states to more stringent requirements in the form of revised State Implementation Plans for VOC and NOx emissions, including but not limited to additional requirements for enhanced Inspection and Maintenance of mobile sources, nonattainment New Source Review, and Reasonably Available Control Technology. Those opposed to Petitioners’ action question the technical basis for the petition, noting that it relies so heavily on data published no more recently than 2005. The Administrator of USEPA has 18 months to approve or disapprove of the petition.
The December 2013 Section 176A petition is the latest in a series of actions under the Clean Air Act to address interstate transport issues related to ozone in the Northeast. Many will recall that similar petitions were filed under Section 126 of the Clean Air Act in the late 1990’s even as USEPA was developing the NOx SIP Call. That rulemaking was followed by the Clean Air Interstate Rule and then by the Cross State Air Pollution Rule.
The Cross State Air Pollution Rule, which was struck down by the Court of Appeals for the District of Columbia in August of 2012, sought to address transport concerns by imposing additional pollution control requirements on coal fired power plants in the eastern half of the country. The Court of Appeals held that USEPA didn’t give states enough time to devise their own emissions reduction plans and did not limit the fix to each state’s “significant contribution” to the overall problem. It is that rule that is currently before the U.S. Supreme Court and is the subject of a recent article written by Andrea Field. To review a copy of that article click here.
Posted on December 19, 2013
In Sackett v. EPA, the Supreme Court held that pre-enforcement review is available to challenge an order concluding that parties had violated the Clean Water Act by filling a wetland without a permit. Practitioners have wondered whether, in response to Sackett, EPA would take steps to avoid review, such as by issuing warning letters instead of orders. In a recent case, EPA employed another tactic. EPA withdrew an enforcement order, hoping thereby to avoid judicial review under Sackett by claiming that the case was now moot. Not so fast, a court in West Virginia concluded, EPA’s position is still reviewable. Alt v. EPA, 2013 WL 5744778 (N.D. W.Va. No. 2:12–CV–42, Oct. 23, 2013), available here.
In the Alt case, EPA issued an enforcement order against Lois Alt, the owner of a poultry farm, on the grounds that Alt failed to obtain a Clean Water permit for storm water discharges that allegedly contained manure. Alt filed suit in U.S. District Court in West Virginia challenging the EPA order based on the Supreme Court’s Sackett decision. The American Farm Bureau intervened because of concern over EPA’s position on agricultural storm water.
Subsequently, EPA withdrew the order against Alt, nominally because Alt had taken steps to remedy environmental harm -- or did EPA foresee an unhappy ending in court? In any event, EPA filed a motion to dismiss the lawsuit as moot. Alt opposed EPA’s motion to dismiss, arguing that EPA would likely resume its unlawful conduct after the case is dismissed. The district court denied the motion on the grounds that EPA had not changed its underlying position concerning whether the discharges were agricultural storm water exempt from permit requirements. The district court noted that EPA reserved the possibility of reissuing the order if there was a significant change in the poultry farm’s operations, and the intervenors showed that EPA’s alleged assertion of authority can be expected to continue. In short, EPA’s position was reviewable even though the order that provoked the lawsuit had been withdrawn by EPA. As Jimmy Reed said in his classic blues song, “You can run, but you can’t hide.”
If that wasn’t enough to ruin EPA’s day, the court went on to reach the merits of EPA’s position concerning the need for a NPDES permit and granted summary judgment for Alt. The court held that no permit was required because the discharges were exempt as “agricultural storm water discharges.” The court rejected EPA’s argument that the discharges did not have an agricultural purpose, concluding that the poultry operation was agricultural, that the incidental manure was related to the raising of poultry, and that the runoff from the farm was storm water caused by precipitation.
The Alt decision is significant both for its review of an EPA position underlying an order that had been withdrawn and for its decision concerning the agricultural storm water exemption.
Posted on December 17, 2013
Purchasers and lessees of commercial or industrial properties know to obtain Phase I environmental site assessments to identify the presence of contamination - so-called recognized environmental conditions (RECs) - because of the very substantial liabilities these conditions may create. And their lenders generally require them. The industry standard for Phase I’s is based on EPA regulations that flesh out Superfund’s “all appropriate inquiry (AAI)” standard. In those regulations, EPA expressly approved use of a standard developed by ASTM, i.e., E1527-05. ASTM recently issued a new standard, E1527-13, that EPA initially approved in a final rule in August, but, as a result of unfavorable comment, withdrew in October. Pending the agency’s promulgation of that rule’s companion proposal, expected by the end of this year, the question is which standard purchasers and lessees should use - and which standard should their lenders require - in the meantime.
In addition to providing information pertinent to managing environmental risks associated with contamination, the performance of a Phase I that satisfies AAI also may help establish a defense for the purchaser/lessee under Superfund should contamination be found. Superfund provides three transaction-related defenses that each require AAI, the most pertinent of which is the so-called bona fide prospective purchaser defense. Congress required that EPA promulgate standards establishing AAI and it is those regulations - and the approved ASTM standard - that have become the industry standard for Phase I’s.
As EPA notes, the new ASTM standard includes a number of differences from the prior version, which arguably only makes the standard more rigorous. Among other things, the new standard distinguishes between historical RECS that have been regulatorily resolved or that allow for unrestricted residential use, which are no longer RECs, and those that though regulatorily resolved, require either institutional or engineering controls because contaminants remain in place and that are now referred to as “controlled” RECs. It also clarifies that vapor intrusion - the potential for vapors from contaminants in soils and groundwater to migrate into buildings where they may concentrate at levels that pose threats to human health - is to be considered a REC, like groundwater migration, and not excluded from consideration because it may affect indoor air quality, which itself is generally not within the scope of AAI. The fact the two standards are different creates some regulatory uncertainty.
The response to this temporary dilemma is that purchasers, lessees and lenders should be able to have their cake and eat it too by having environmental professionals indicate that they have satisfied both standards. Environmental professionals that perform Phase I’s and satisfy ASTM E1527-13 presumably will be satisfying ASTM E1527-05 as well. EPA informally has suggested that environmental professionals use the new standard and, in their reports, conclude that they have satisfied both. Presumably, the environmental professional’s certification should reference both as well.
Posted on December 13, 2013
December 10, 2013 was a banner day in Clean Air Act jurisprudence. On that date, the Supreme Court – which has heard only 19 environmental law cases in the past decade – set aside 90 minutes for argument concerning EPA’s Cross-State Air Pollution Rule (CSAPR). And at virtually the same time, just a short distance away, the D.C. Circuit was hearing challenges to major portions of EPA’s Mercury and Air Toxic Standards (MATS) Rule. If you were unable to attend either argument but want to know more about the arguments than you can learn from the press reports, then this “Advice from Air Act Andy” column is for you.
Question: Based on questions asked by the Justices in the CSAPR argument, the press is predicting that the Supreme Court is going to reverse the D.C. Circuit’s vacatur and remand of CSAPR. What do you think?
Air Act Andy: I learned years ago (in an earlier case involving interstate transport of pollution under the Clean Air Act) that it is unwise (and ultimately embarrassing) to predict what a court will do based on the questions asked at oral argument. That is particularly true of the December 10, 2013 CSAPR argument in the Supreme Court, where the vast majority of the Justices’ questions focused on what role costs should or may play in the drafting of a rule designed to address the interstate transport of air pollution. Admittedly, many of the Justices seemed to be on the same costs-can-play-a-role-in-this-kind-of-rulemaking band wagon; however, the cost issue was not a key part of the D.C. Circuit’s decision. (Indeed, some would say it wasn’t an issue at all in the D.C. Circuit.) Because the Court spent so much time on the cost issue and asked so few questions about the other bases for the D.C. Circuit’s vacatur of CSAPR, it would be foolhardy to predict what the Court will decide on those other crucial issues (including the so-called FIP/SIP issue and over-control issue).
Question: Was the CSAPR argument chocked full of analogies?
Air Act Andy: Indeed, it was. Malcolm Stewart (counsel for the government and apparently a basketball player) used a slew of basketball analogies to describe the concept of “significant contribution.” There were also charitable giving analogies, a pin-the-tail on the donkey analogy (from Justice Scalia), a shooting-and-stabbing the victim analogy (from Chief Justice Roberts), and an extended cow and sheep grazing analogy (from Justice Breyer).
Question: Did the Court take an exercise break in the midst of argument?
Air Act Andy: Yes. After Mr. Stewart’s argument, Chief Justice Roberts announced a “30 second break” during which several of the Justices stood up and did a limited round of Musical Chairs, but without removing any chairs.
Question: Did a lawyer from Texas admit to being an agnostic?
Air Act Andy: Kind of. On the issue of the role that costs should play in interstate transport rules, Texas’s Solicitor General said that the states “are remaining agnostic.”
Question: It has been my experience that the D.C. Circuit initially imposes strict time limits on oral advocates, but it then routinely lets those presenting argument take extra time to address issues of interest to the court. In the MATS case, the court gave the advocates much more time than usual to present their arguments. In exchange for giving advocates more time up front, did the court insist that advocates sit down when the red light went on?
Air Act Andy: That is not how it played out. Chief Judge Garland (who sat on the panel along with Judge Rogers and Judge Kavanaugh), told counsel at the outset that the court would keep to the pre-allotted two hours designated for all 12 arguing attorneys, but – in fact – the MATS argument lasted three hours. The panel peppered petitioners’ counsel and EPA’s counsel with questions, digging into several technical arguments with a fine-toothed comb of the record. Not one petitioners’ counsel had any time left for rebuttal.
Question: I heard that the courtroom had an explosive feel. Is that true?
Air Act Andy: Ah, perhaps you are referring to the moment when Judge Garland’s heavy binder of materials crashed to the floor near the beginning of EPA counsel’s remarks during the first of three phases of the argument. Unflappable as always, though, Judge Garland just told counsel to “Go ahead.” “Don’t mind us,” Judge Kavanaugh added.
Question: What is the appropriate dress for the Supreme Court?
Air Act Andy: I am so glad you asked this question. Based on what I saw people wearing on December 10, I would have said that “appropriate dress” is wearing anything that is black, charcoal gray, or navy blue. Having returned to the Court the next day to hear a colleague of mine argue a case, though, I must now amend my answer. When I arrived at the Court on December 11, wearing a long stylish gray cardigan sweater instead of a suit jacket, I was stopped by guards and politely told I would not be allowed to sit in the section reserved for members of the Supreme Court Bar unless I replaced my fashionable sweater with a suit jacket. Someone from the clerk’s office then graciously provided me with a nice-fitting ladies suit jacket with a label indicating that the jacket was from the “Lady Executive Signature Collection.” This is something Air Act Andy will keep in mind for the next visit to the Supreme Court – which will likely be in February 2014, when the Court is scheduled to hear argument on EPA’s greenhouse gas rules.
Posted on December 12, 2013
A “stigma” is a mark of shame. When applied to real estate, stigma refers to an unfavorable quality in a property that makes it less attractive. Whether a landowner may recover stigma damages for temporary contamination that has been remediated in accordance with state law is an issue the Texas Supreme Court will consider when it hears oral argument in early December in the case of Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch.
In that case, the lower appellate court had affirmed the decision of the trial court, following a jury trial, awarding the plaintiff almost $400,000 in damages attributable to an alleged diminution in value resulting from temporary contamination. In arguing for reversal, Houston Unlimited has asserted that this decision recognizes a new cause of action in Texas – for stigma damages absent permanent physical injury. Because of the ramifications of this holding, a number of Texas trade associations have filed amicus briefs in support of Houston Unlimited.1
Houston Unlimited operated a metal-processing facility that had failed to comply with various regulatory requirements relating to the management of solid waste and storm water. Its operations also had resulted in leaks to the adjoining Mel Acres Ranch. The Texas Commission on Environmental Quality (“TCEQ”) cited Houston Unlimited for these violations and required it to investigate the contamination on the ranch.
Houston Unlimited stopped the leaks and instituted steps to prevent future leaks. Its investigation showed that there was no ongoing contamination and that only one sample result – for copper in one pond – showed an excess of a TCEQ action level, which a month later had fallen below the action level. The ranch nonetheless sued for trespass, nuisance, and negligence, alleging that it had suffered permanent damage, measured by a loss in market value of the property.
The jury found that there had been no permanent nuisance or trespass, but nonetheless awarded the ranch stigma damages. Houston Unlimited asserts that a majority of jurisdictions reject this theory of recovery and that the decision of the lower court disregards the TCEQ’s regulatory determination as well as prior case law. The Court’s determination – whether temporary contamination ain’t a non-compensable shame – will have significant ramifications for other pollution damage cases in Texas and possibly elsewhere.
1 The blogger’s firm, Haynes and Boone, represents one of those associations – The Texas Oil & Gas Association – in this matter.
Posted on December 9, 2013
EPA is seeking stakeholder input on its draft Groundwater Remedy Completion Strategy. Released on October 29, 2013, the strategy is advertised as a guide for evaluating remedy performance and improving decision-making to more effectively and expeditiously move groundwater sites to completion. Having experienced the problems associated with the “set it and forget it” approach to groundwater remedial action, my interest was piqued by the prospect of a new EPA strategy incorporating more flexibility in evaluating remedial action objectives, remedy performance and systematic risk assessment.
The potential impact of EPA’s remedy completion strategy is arguably diminished, however, by a lack of clarity as to its scope and purpose. The stated objective of documenting a uniform approach to efficiently completing groundwater remedial actions is qualified by an ambiguous disclaimer that the strategy does not change other guidance or policy, is not intended to alter the way the agency develops remedial objectives and cleanup goals and is not intended to interfere with the federal or state site decision-making process. So, what exactly does EPA hope to accomplish in proposing this new strategy?
The elements of the strategy consist of understanding site conditions, designing a site-specific remedy evaluation process, developing performance metrics, conducting remedy evaluations and making appropriate site management decisions. The focus of EPA’s strategy as presented is largely procedural. The strategy does not address common site impediments to achieving an effective and expeditious groundwater exit strategy. To that extent, it is primarily a restatement of a remedy evaluation process that has been the subject of numerous articles and that, in fact, has historically been implemented at many sites.
But perhaps my initial reading is too narrow. The strategy hints at more substantive remedy completion issues, such as addressing site remedial action objectives that become impracticable and unnecessary for the protection of health and the environment, as well as the need to more consistently evaluate remedy change at mature groundwater sites.
From the perspective of focusing on site groundwater scenarios that often delay remedy completion, I suggest that the draft strategy falls short of the goal line. Rather than simply allude to the remedy completion obstacles that presumably inspired the agency’s effort, EPA might better achieve its stated purpose if it revises its strategy to include more discussion of how the strategy may apply to common groundwater completion impediments. For example, it would be useful for the strategy to address the cost and inefficiencies of continuing to operate and maintain asymptotic pump and treat systems at low-threat sites, how to better incorporate plume stability trend information in the evaluation of remedy change, changes in exposure pathway risks and the impact of natural attenuation mechanisms, institutional controls and land use on remedy modification and remedy completion decision-making.
What I had hoped to see in the draft strategy was EPA’s blessing of a more flexible and common sense approach to specific groundwater remedy completion obstacles. My first reading of the draft strategy suggested to me that it was essentially a redundant procedural roadmap for remedy evaluation. But upon reflection, I think it could be more. Indeed, it could also be – and I hope, after consideration of stakeholder comments, will be – a tool for encouraging more consistent regulatory acceptance of remedy change and evolving risk assessments to overcome the inertia of inflexible remedial action objectives and remedy selection impacting many groundwater sites.
Posted on December 6, 2013
The recent tornado in the Philippines and forecasts of severe weather events ranging from floods to fires and drought, not to mention the global loss of 50 soccer fields of forest every minute, have again focused attention on the Climate Change debate. However, there is little consensus on what to do about it, as evidenced at the recent Warsaw Climate Change Conference and by Japan’s decision to forego participation in the eight year second commitment period (from 2013) under the Kyoto Protocol. Indeed, one U.S. study indicates that even labeling an energy efficient product as promoting environmental protection can reduce its appeal among some U.S. citizens.
With little chance that Climate Change legislation will be adopted in the near term, the federal government will have to rely on existing laws and regulations when it seeks to address the issue. One law that may receive some attention is the Lacey Act, 16 U.S.C. §§ 3371-3378. First passed in 1900 to prevent poaching of game and wild birds, the Act was later expanded to encompass plants that are not common food crops. Since 2008, it has included wood products.
The Lacey Act prohibits the import, transport, sale, acquisition, or possession of illegally harvested timber. In addition, it requires the preparation of import declarations giving information about the species of wood and country of harvest. Noncompliance with its provisions is subject to administrative fines, as well as forfeiture of the timber, with forfeiture being enforced on a strict liability basis. In addition, both civil and criminal penalties can be imposed by a federal court for certain knowing violations or where there is a lack of “due care”.
The federal government has already used the newly expanded Act in an effort to address illegally harvested timber. In addition to a criminal enforcement settlement agreement between the Justice Department and Gibson Guitar involving the import of Madagascar ebony, there was a federal government investigation in September of two Lumber Liquidator facilities in Virginia concerning wood imported from eastern Russia.
In the latter case, this effort tapped into public concern about preserving the forest habitat of the Siberian Tiger, an endangered species, and it also had the secondary effect of addressing Climate Change. When the lack of enthusiasm for tackling Climate Change efforts is contrasted with the public sympathy and favorable publicity for protection of iconic endangered species like the tiger, the Lacey Act may be an interesting addition to the federal government’s Climate Change enforcement arsenal.
And so the real question is what endangered or threatened species in an illegally logged forest is waiting in the wings for face time in the next Lacey Act enforcement effort, and how many soccer fields of forest will that save?
Posted on December 5, 2013
For the first time, the Office of Management and Budget ("OMB") is soliciting public comment on the Social Cost of Carbon ("SCC"). The SCC is a series of published values that represent the monetary impacts of marginal reductions in carbon emissions reductions, which are to be used by federal agencies when conducting cost-benefit analysis for rulemaking activities.
First published in 2010, the SCC is prepared by an interagency working group and is based upon three different integrated assessment models that project the economic impacts of climate change. The 2010 document setting for the SCC called for periodic review and update of the SCC as the science and economic understanding of climate change improves over time. The SCC values were updated in November of 2013 and have been increased to reflect improvements in the underlying integrated assessment models, including incorporation of the projected costs of sea level rise. Although OMB guidance directs that regulatory cost-benefit analyses should normally focus upon domestic costs and benefits, the SCC is a measure of the global benefits that are projected to result from marginal reductions in GHG emissions. The interagency working group concluded that the use of a global measure for carbon was appropriate because greenhouse gas emissions create a global externality, and the United States cannot resolve the projected impacts of climate change acting alone.
OMB is seeking public comment on the technical support document that explains how the SCC is set and specifically requests comment on (i) the selection of the integrated assessment models, (ii) how the distribution of SCC estimates should be used in regulatory impact analyses, and (iii) the strengths and limitations of the overall approach. The SCC is likely to be increasingly important as EPA proceeds with rulemaking activities to regulate greenhouse gas emissions from various sources. In fact, EPA employs the SCC in the regulatory impact analysis for the currently-pending proposal for New Source Performance Standards for power plants. The public comment period on the SCC runs through January 27, 2014.
Posted on December 4, 2013
After more than a decade of laying a foundation for sustainability activities, the American Bar Association is poised to take its act to a higher level with a presidential level Task Force on Sustainable Development. The Task Force is intended, in no small part, to help mainstream sustainable development into the practice of law.
Within the practice of law, there is already a small group of lawyers whose work focuses intensively on sustainable development—including renewable energy and energy efficiency, biodiversity conservation, green building, climate change, and smart growth. They are doing so in response to growing demand from clients, government, and the private sector, as well as rising public expectations about environmental and social performance. Yet sustainable development remains something of a mystery to many environmental lawyers. And some environmental lawyers think they understand sustainability when they do not.
The critical task of sustainable development is to integrate environmental and social considerations and goals into otherwise conventional development decisions. Environmental goals include reduced greenhouse gas emissions, a smaller overall environmental footprint, climate change resilience, reduced toxicity or pollution, and conservation of species and ecosystems. Social goals include workforce diversity, employee safety and development, and contribution to charitable or community activities.
Over the past decade, the American Bar Association has developed two tools to enable lawyers to help lawyers move their offices in a sustainable direction and to recognize law organizations that use them. They are:
• The ABA-EPA Law Office Climate Challenge, a program to encourage law offices to conserve energy and resources, as well as reduce emissions of greenhouse gases and other pollutants.
• The ABA Section on Environment, Energy, and Resources (SEER) Sustainability Framework for Law Organizations, in which a law organization commits to take steps over time toward sustainability.
In August, the ABA House of Delegates, which has a significant policy-making role, adopted a resolution that builds on these and other steps toward sustainability. The resolution — the third major resolution on sustainability it has adopted since 1991--“urges all governments, lawyers, and ABA entities to act in ways that accelerate progress toward sustainability.” The resolution also “encourages law schools, legal education providers, and others concerned with professional development to foster sustainability in their facilities and operations and to help promote a better understanding of the principles of sustainable development in relevant fields of law.”
In conjunction with this resolution, ABA President James R. Silkenat appointed a Task Force on Sustainable Development to “focus on ways that the ABA can provide leadership on a national and international basis on sustainable development issues.” The Task Force is chaired by Lee A. DeHihns, a member of the Environmental & Land Development Group at Alston & Bird in Atlanta, Georgia and a former chair of SEER. The Task Force has 20 members (including me), representing government, the private sector, nongovernmental organizations, and academia.
The Task Force is planning to create a user-friendly website that contains a variety of sustainability resources for lawyers. It is also looking at a range of different kinds of educational materials and tools for lawyers and law students on sustainability issues.
It is increasingly important for lawyers to be able to communicate with clients about sustainability in general, the growing number of sustainability issues that are affecting law practice (including but certainly not limited to climate change), and the ways in which lawyers and others are creating tools and approaches for sustainability. Law firm innovations for sustainability include the combined use of low income housing tax credits and renewable energy tax credits to finance low income housing that uses solar energy, and legal and financing packages for municipalities that invest in green infrastructure.
The Task Force is also examining a wide variety of other ways that lawyers and the ABA can “accelerate progress toward sustainability.” Because the Task Force has one year to complete its work, it is also looking at projects and activities it can complete in that year and longer term projects and activities that can be started in that year but that would need a longer time to finish. If you have suggestions, contact Lee DeHihns or me. And stay tuned.
Posted on December 3, 2013
On November 21, 2013 the Delaware Supreme Court issued a final ruling on an appeal closing out a long saga of litigation over the scientific evidence proffered in support claims of birth defects among children born to workers in the semiconductor manufacturing industry. In Tumlinson v. Advanced Micro Devices, the Supreme Court affirmed the trial court’s decision to exclude the plaintiffs’ key medical causation expert on Daubert grounds and thus dismissed one of the lead cases advancing the theory that working in so-called “clean rooms,” used for semiconductor wafer manufacturing, is unhealthy and can lead to birth defects in the offspring of such workers.
Wendolyn Tumlinson, one of the two adult plaintiffs, had worked at an AMD manufacturing site in San Antonio, Texas and her son was born with several birth defects, including anal atresia and stenosis, neurogenic bladder, renal agenesis/hypoplasia, imperforate anus and colo-vesicular fistula. The other adult plaintiff was married to Anthony Ontiveros who had worked at an AMD semiconductor manufacturing site in Austin, Texas and her daughter was born with several birth defects, including pulmonic stenosis, congenital pulmonary valve atresia, ventricular septal defect, right pulmonary hypoplasia, lower limb reduction defects, and situs inversus with dextrocardia. Each mother claimed that the exposures to chemicals in clean rooms were the cause of their child’s birth defects.
Plaintiffs filed their complaint on July 11, 2008 and for the next two years the parties engaged in discovery and motion practice. In December 2010, AMD moved to exclude the expert opinion of the plaintiffs’ expert, Dr. Linda Frazier, claiming it was unreliable and not relevant under Delaware Rule of Evidence 702. In April 2011, the trial court held a four-day Daubert-type evidentiary hearing to evaluate the admissibility of Dr. Frazier’s testimony and concluded that because her methodology was inadequate to establish causation under Texas substantive law (including the Texas’ courts’ interpretation of Daubert), it accordingly failed to satisfy Delaware procedural law and was excluded. As a result of the exclusion, judgment was entered for defendant AMD.
On appeal, the Delaware Supreme Court (there is no intermediate appellate court in Delaware), first remanded the case to the trial court with direction to determine the reliability of Dr. Frazier’s opinion under Delaware (as opposed to Texas) law. This time the trial court evaluated the reliability of Dr. Frazier’s testimony under the US Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals case principles as interpreted under Delaware law, and found Dr. Frazier’s opinion failed to meet that standard.
The Delaware Supreme Court then evaluated the trial court’s second decision and affirmed its conclusion. It focused on, among other things, Dr. Frazier’s failure to base her opinion on studies that were specific to (1) the clean room chemicals the parents were exposed to, and (2) the specific birth defect outcomes the plaintiff children suffered from. It also found that neither Dr. Frazier’s methodology for evaluating the medical literature, nor her conclusions, were peer reviewed or had appeared in any peer reviewed journals. It rejected an argument by plaintiffs that an affidavit submitted by other experts retained by the plaintiffs that “endorsed” Dr. Frazier’s opinion sufficed as a peer review. Further, the Court was critical of the expert’s opinion because it was not consistent with her research and writing outside of the pure litigation context.
As a result of this decision, the Tumlinson case is likely over (the deadline for the plaintiffs to seek en banc review by the Delaware Supreme Court is December 2, 2013). The decision may have a significant impact on the multiple other, nearly identical cases pending in Delaware against most of the major semiconductor manufacturers, as well as similar cases pending in many other state court jurisdictions.
Posted on December 2, 2013
On June 13, I posted the first blog, in what has now become a series, initially called “Doin’ The Dunes: What Will They Cost?”, exploring the way in which New Jersey’s three branches of government intended to treat compensation for the easement agreements for the construction of dunes – New Jersey’s response to climate changes (e.g., Superstorm Sandy). At the time, the New Jersey courts had determined that the landowner would be compensated for a partial obstruction of the ocean view without any reduction for the benefit received from the dune’s protection (called a “general”, not “special” benefit).
On July 19, I posted the second blog, which described the New Jersey Supreme Court’s unanimous decision in Borough of Harvey Cedars v. Karan, 214 N.J. 384 (2013) to reverse the prior precedents and recognize that dunes did confer storm protection as a “special benefit” to the subject landowner which would reduce the otherwise compensable amount for that portion of the award for the partial loss of the ocean view. Since the lower courts had not calculated the amount of the special benefit, the Court remanded the case to the trial court for a determination of the amount of the “special benefit” and its resultant reduction of the amount of the takings claim. (The case was reported to have settled with the Karans’ receiving $1.00 for the partial loss of ocean view and the parties “acknowledgement that municipalities cannot enact or enforce laws or regulations that would interfere with the state’s plans to build dunes as part of flood mitigation effort.” (Phila Inquirer, PP A-1, A-9 (Nov 9, 2013)).
In the aftermath of Karan, the Appellate Division had an opportunity to revisit the issue (of the amount of compensation to be paid for the dune’s reduction of ocean view) in Petrozzi v. City of Ocean City, argued on September 9 and decided on October 28, 2013. Although the facts in the Petrozzi case are critical to the decision, the Court was asked to determine whether a municipality’s failure to maintain a 3 foot above sea level elevation of the dunes justified the payment of additional compensation. In this case, Ocean City had obtained easement agreements with a number of its residents in which the City obligated itself to maintain the 3 foot elevation. Subsequent legislation in New Jersey, administered by the New Jersey Department of Environmental Protection (NJDEP), required municipalities to obtain a Coastal Areas Facilities Review Act (CAFRA) permit for the maintenance of dunes. Several of the plaintiffs, who signed agreements with Ocean City before the law changed, asked the trial court to determine whether the impossibility of the City to perform the maintenance (NJDEP having denied the City’s permit application) constituted “reasonable unforeseen circumstances beyond its control”, such as to relieve it of its duty to maintain the 3 foot elevation level but make no further payments for the additional partial loss of ocean view (due to the dunes exceeding the 3 foot “cap”). (City of Ocean City v. New Jersey Department of Environmental Protection, A-5199-06 (App. Div. September 26, 2008). Ocean City argued that it was relieved of its maintenance obligation without having to make any further payment; the plaintiffs disagreed and filed suit.
The Court acknowledged the general rule that where one party was excused from performing a contract due to unforeseen circumstances that made performance impracticable, the other party would generally be excused from its performance. In this case, however, since the plaintiffs had given up their rights to additional compensation for partial loss of ocean view, in reliance upon the City’s promise to protect their ocean views above the 3 foot level, they argued that were it not for this reliance, Ocean City would have had to pay plaintiffs additional money for the additional partial loss of ocean view (i.e., above the 3 foot elevation).
The Court agreed with the plaintiffs and remanded the case to the trial court to determine the additional compensation to be paid; however, citing Karan as precedent, it acknowledged that any such amount needed to be reduced by the “special benefit” conferred by the additional storm protection provided by the increased elevation of the dune.
In its conclusion, the Court, referring to “the admonition in [Karan] that the quantifiable decrease in the value of their property – loss of view – should [be] set off by any quantifiable increase in its value – storm protection benefits.” The bottom line is that the special benefit principle upheld in Karan is now the “law” in New Jersey.