Articles Posted in Environmental Law

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At its LASI site, Varlen plated locomotive engine parts in chrome. At its Silvis site, Varlen’s operations included refueling diesel engines. Varlen discovered groundwater contamination at both sites, spent millions of dollars in damages and remediation expenses, and sought indemnification from its insurer. Liberty Mutual denied coverage based on a policy exclusion for property damage arising out of chemical leaks or discharges. Varlen cited a policy provision stating that, despite the exclusion, Liberty would cover chemical leaks or discharges that were “sudden and accidental.” Varlen proffered the expert testimony of a geologist (Rogers) that the LASI contaminants were released because the concrete sump leaked and that the releases were “sudden and accidental” because they were not intended and occurred in sudden spurts when the sump failed. Rogers explained that he had experience working with sumps and had personal knowledge of these sumps in particular. Rogers testified that the Silvis releases were likely “sudden and accidental” because the contamination around the refueling area was too large to have occurred by minor leakage and was “consistent with overfills of diesel locomotives.” Rogers claimed that contamination at the chlorinated solvent storing area was “indicative of a drum overturning and suddenly leaking out.” The district court struck Rogers’s opinions as unreliable and speculative under Federal Rule of Evidence 702. The Seventh Circuit affirmed. To satisfy Daubert, Rogers needed to explain how the evidence led to his conclusions; Rogers failed to demonstrate that his conclusions were anything more than guesses. View "Varlen Corp. v. Liberty Mutual Insurance Co." on Justia Law

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The Liebharts own three houses on a block in Watertown, Wisconsin. Part of the block was previously occupied by a factory, built in 1920 and last owned by SPX. The factory manufactured power transformers containing polychlorinated biphenyls (PCBs), a carcinogenic chemical banned by the EPA in 1979. Studies revealed that the factory's concrete floor was generally contaminated. In 2014, SPX demolished the building with the assistance of the defendants. The Liebharts sued, alleging that dust and debris containing toxic chemicals migrated onto their properties, contaminating their yards and jeopardizing their health and the health of their tenants. Following discovery and the submission of expert witness reports, the district court granted the defendants summary judgment with costs. The Seventh Circuit vacated. Although the district court adequately evaluated the expert witnesses and did not abuse its discretion in its procedural decisions, the court set the bar unnecessarily high for the plaintiffs to show a violation of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6901, and the Toxic Substances Control Act (TSCA), 15 U.S.C. 2601. RCRA requires only that harm “may” be imminent; similarly, TSCA does not impose a heightened standard. The parties should have another opportunity to litigate whether a substantial and imminent endangerment to health exists. View "Liebhart v. SPX Corp." on Justia Law

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Plaintiffs purchased land near a former GE manufacturing plant that had operated in Morrison, Illinois for 60 years. The plant leached toxic chemicals that seeped into the groundwater. The Illinois Environmental Protection Agency filed suit under state law against GE in 2004 and has been working with the company since then to investigate and develop a plan to address the contamination. In 2013, plaintiffs filed suit under the citizen suit provision of the Resource Conservation and Recovery Act, 42 U.S.C. 6901, seeking a mandatory injunction ordering GE to conduct additional investigation into the scope of the contamination and ordering the company to remove the contamination. The district court found the company liable for the contamination on summary judgment but denied injunctive relief because, despite the many opportunities, plaintiffs did not offer evidence establishing a need for injunctive relief beyond what the company had already done in the state action. The Seventh Circuit affirmed. The district court had the discretion to award injunctive relief under the RCRA but was not required to order relief after a finding of liability. Plaintiffs did not carry their burden to establish mandatory injunctive relief was necessary under the RCRA. View "Conway v. General Electric Co." on Justia Law

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In 2007, the Illinois Environmental Protection Agency (IEPA) brought charges before the Pollution Control Board against EOR Energy and AET Environmental under the Illinois Environmental Protection Act, 415 ILCS 5/1–5/58, for transporting hazardous‐waste acid into Illinois, storing that waste, and then injecting it into EOR’s industrial wells. EOR unsuccessfully argued in state courts that the IEPA and the Board did not have jurisdiction over EOR’s acid dumping. EOR asserted that it was not injecting “waste” into its wells but was merely injecting an acid that was used to treat the wells and aid in petroleum extraction so that the Illinois Department of Natural Resources had exclusive jurisdiction under the Illinois Oil and Gas Act, 225 ILCS 725/1. EOR then sought a federal declaratory judgment. The district court dismissed the case, citing the Eleventh Amendment and issue preclusion. The Seventh Circuit affirmed, “emphatically” rejecting the “undisguised attempt to execute an end‐run around the state court’s decision.” View "EOR Energy, LLC v. Illinois Environmental Protection Agency" on Justia Law

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Mittelstadt’s Richland County, Wisconsin land was enrolled in the Conservation Reserve Program (CRP), administered by the Department of Agriculture (USDA), from 1987-2006. CRP participants agree to remove environmentally sensitive land from agricultural production in return for annual rental payments from the USDA. In 2006, the agency denied Mittelstadt’s application to re-enroll. After exhausting his administrative appeals, he sued under the Administrative Procedure Act, 5 U.S.C. 701, and asserting a breach of contract. The district court entered judgment in favor of the agency. The Seventh Circuit affirmed. Under the regulations governing the CRP, the USDA has broad discretion to evaluate offers of enrollment in the program on a competitive basis by considering the environmental benefits of a producer’s land relative to its costs. Given the agency’s wide latitude, the Farm Services Agency did not abuse its discretion when it denied re-enrollment of Mittelstadt’s land under a new definition of “mixed hardwoods.” Because he never entered a new contract with the agency, there was no breach of contract. View "Mittelstadt v. Perdue" on Justia Law

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Regional transmission organizations manage the interstate grid for electricity, conduct auctions through which many large generators of electricity sell most or all of their power, and are regulated by the Federal Energy Regulatory Commission (FERC) Illinois subsidizes nuclear generation facilities by granting “zero emission credits,” which generators that use coal or gas to produce power must purchase from the recipients at a price set by the state. Electricity producers and municipalities sued, contending that the price‐adjustment aspect of the system is preempted by the Federal Power Act because it impinges on the FERC’s regulatory authority. They acknowledge that a state may levy a tax on carbon emissions; tax the assets and incomes of power producers; tax revenues to subsidize generators; or create a cap‐and‐trade system requiring every firm that emits carbon to buy credits from firms that emit less carbon. They argued that the zero‐emission‐credit system indirectly regulates the auction by using average auction prices as a component in a formula that affects the credits' cost. The Seventh Circuit affirmed summary judgment for the defendants. Illinois has not engaged in discrimination beyond that required to regulate within its borders. All Illinois carbon‐emitting plants need to buy credits. The subsidy’s recipients are in Illinois. The price effect of the statute is felt wherever the power is used. All power (from inside and outside Illinois) goes for the same price in an interstate auction. The cross‐subsidy among producers may injure investors in carbon‐ releasing plants, but only plants in Illinois. View "Village of Old Mill Creek v. Star" on Justia Law

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In 1995, Orchard purchased the Warmke Parcel, 13 acres of wetlands, for residential development. Orchard requested a determination from the Army Corps of Engineers that the wetlands were not jurisdictional “waters of the United States” under the Clean Water Act, 33 U.S.C. 1251(a). Before 2015, the Corps defined waters of the United States to include waters “subject to the ebb and flow of the tide,” “rivers” that could be used for interstate recreation or commerce, “tributaries” of such waters, and “wetlands adjacent to” other waters of the United States, including tributaries. The Warmke wetlands are surrounded by residential development. The closest navigable water, Little Calumet River, is 11 miles away. In between the Warmke wetlands and Little Calumet River are man‐made ditches, sewer pipes, and Midlothian Creek—a tributary of the Little Calumet River. The Warmke wetlands drain, via sewer pipes, to Midlothian Creek. While the Warmke issue was pending, the Supreme Court decided that a wetland’s adjacency to a tributary of a navigable‐in‐fact water is alone insufficient to make the wetland a water of the United States, “the Corps’ jurisdiction over [such] wetlands depends upon the existence of a significant nexus between the wetlands in question and navigable waters in the traditional sense.” The Seventh Circuit reversed the Corps’ claim of jurisdiction, finding that the Corps has not provided substantial evidence of a significant nexus to navigable‐in‐fact waters. View "Orchard Hill Building Co. v. United States Army Corps of Engineers" on Justia Law

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In 2007, Canadian National Railway (CN) sought approval from the Surface Transportation Board of its acquisition of the EJ & E rail line near Chicago. The Board considered the impact of the acquisition on 112 railroad crossings throughout the area, including the intersection at U.S. Highway 14 in Barrington. Crossings projected to be “substantially affected” were eligible for mitigation measures imposed by the Board as a condition to its approval, up to and including grade separation between the roadway and rail line. The Board approved CN’s acquisition, finding that U.S. 14 would neither be substantially affected nor warrant a grade separation. Barrington unsuccessfully petitioned the Board to reopen its decision three times. The Seventh Circuit denied a petition for review. Barrington did not present new evidence or substantially changed circumstances that mandate a different result, 49 U.S.C. 1322(c). The Board conducted an environmental review (National Environmental Policy Act, 42 U.S.C. 4321–4370m‐12) and concluded that U.S. 14 did not exceed any of the three congestion thresholds for substantially affected crossings because “the major source of congestion” at U.S. 14 is “excess vehicle demand at existing major thoroughfare intersections” and “existing traffic signals in proximity to one another,” not CN’s acquisition of the EJ & E line. View "Village of Barrington v. Surface Transportation Board" on Justia Law

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Wisconsin proposes to renovate 7.5 miles of Highway 164 (formerly Highway J), a two-lane Washington County road, with repaving, reconstruction near hill crests to improve visibility, widening lanes and shoulders, updating guardrails, and adding rumble strips, turn, and bypass lanes. A 141-page environmental report concluded that the renovation would not cause any significant environmental effects but would reduce the accident and injury rate. Accidents are 63% more likely, per mile traveled, on this stretch than on Wisconsin’s other rural highways. The Federal Highway Administration approved the report and federal funding, finding an environmental impact statement unnecessary. The Seventh Circuit affirmed the rejection of opponents’ challenges. The National Environmental Policy Act requires an environmental impact statement for “major Federal actions significantly affecting the quality of the human environment,” 42 U.S.C. 4332(2)(C). Renovating 7.5 miles of an existing road does not stand out as a major cause of a significant effect and qualifies for the “categorical exclusion” of projects that are not “major.” The Administration (23 C.F.R. 771.117) believes that renovating existing roads generally does “not individually or cumulatively have a significant effect on the human environment.” The years-long, 141-page study concluded that the project would not have a significant environmental effect; the state will create new wetlands at another site and no threatened or endangered species will be adversely affected. View "Highway J Citizens Group v. United States Department of Transportation" on Justia Law

Posted in: Environmental Law

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After the Garcias bought their Lake Station Property in 2004, it was used as an automobile repair shop and a day spa. It previously was used as a dry cleaning facility and contained six underground storage tanks: four were used for petroleum-based Stoddard solvent, one was used for gasoline, and the last for heating oil. In 1999, the dry cleaning company reported a leak from the Stoddard tanks to the Indiana Department of Environmental Management (IDEM). In 2000, a site investigation was conducted and five groundwater monitoring wells were installed. IDEM requested additional information and testing in 2001 and 2004. The Garcias claim they had no knowledge of the preexisting environmental contamination before insuring with Atlantic. A 2014 letter from Environmental Inc. brought the contamination to the Garcias’ attention. The Garcias hired Environmental to investigate and learned that Perchloroethylene solvent and heating oil still affected the property. Atlantic obtained a declaration that its Commercial General Liability Coverage (CGL) policies did not apply. The Seventh Circuit affirmed, reading a “Claims in Process” exclusion to preclude coverage for losses or claims for damages arising out of property damage—known or unknown—that occurred or was in the process of occurring before the policy’s inception. View "Atlantic Casualty Insurance Co v. Garcia" on Justia Law