Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

In 1987, Central purchased certain Soo assets, including LST rail lines. Soo agreed to retain liability and indemnify Central for “all claims for environmental matters relating to ownership of the Assets or the operation of LST that are asserted” within 10 years of closing, after which Central would assume all liability and indemnify Soo. Years later, contamination was discovered in a former Ashland industrial area, now Kreher Park, which contains a railroad right-of-way purchased by Central under the Agreement. The Wisconsin Department of Natural Resources (WDNR) identified an old factory as the likely source; its owner, Northern, named as a potentially responsible party (PRP), undertook to shift responsibility to the railroads. Central kept Soo apprised of the situation. Central sent notification to Soo in 1997 that it was seeking indemnification for environmental matters, including at Kreher Park. Soo did not agree to indemnify or defend.In 2002, the EPA designated the area as a Superfund site (CERCLA, 42 U.S.C. 9601). In 2011, the EPA issued PRP notices to Central, Soo, Northern, and others. Northern sued Central, Soo, and the city for its cleanup expenses. The EPA cited evidence that the railroads engaged in activities contributing to the contamination. The railroads settled the EPA and Northern claims for $10.5 million.In breach of contract litigation between the railroads, the district court granted Soo summary judgment, finding that no claim had been asserted during the claim period. Central then argued that it should not be responsible for the portion of the environmental claims attributable to operations and land not purchased by Central. The court rejected the argument and awarded Soo $10,799,427, prejudgment interest, and $1,776,764 for attorneys’ fees. The Seventh Circuit affirmed. No “claim” was asserted against the railroads during the Agreement’s claim period; Northern never threatened litigation and the WDNR did not take any action that imposed any legal duties or impending legal peril on either railroad. The operation of the railroad business, not just the ownership of the assets, was identified by the EPA as contributing to the contamination; the claims are within the scope of the indemnification clause. View "Wisconsin Central LTD v. Soo Line Railroad Co." on Justia Law

The Network filed suit under the Clean Water Act against Dynegy, the owner of an Illinois power station, claiming that Dynegy’s station was releasing contaminants into groundwater. The district court dismissed the suit concluding that the Act does not regulate groundwater. An appeal focused on whether and how the Act applies to the alleged groundwater contamination after the Supreme Court’s 2020 “County of Maui” decision. Three organizations sought permission to file amicus briefs in support of Dynegy’s position. The Network argued that each brief only parrots Dynegy’s arguments, wasting the court’s time. The Federal Rules of Appellate Procedure state that a prospective amicus must explain why its brief is desirable and why the matters asserted are relevant. The Seventh Circuit Practitioner’s Handbook adds that the court looks at whether the submission will assist the judges by presenting ideas, arguments, theories, insights, facts, or data that are not found in the parties' briefs.The Seventh Circuit granted the motion, stating that amicus briefs should not serve only to count which interest groups are promoting which outcome. In this case: the Illinois Environmental Regulatory Group briefly presents the history of Illinois groundwater regulation from before the Clean Water Act, lending context to the cited cases; the U.S. Chamber of Commerce provides insight into how an alternative federal scheme would apply, absent Clean Water Act regulation; and the Washington Legal Foundation’s brief offers its own theory for how to best fit "Maui" into the existing federal scheme regulating the pollutants at issue. View "Prairie Rivers Network v. Dynegy Midwest Generation, LLC" on Justia Law

VIM opened its Elkhart wood recycling facility around 2000. By 2009 1,025 neighbors filed a class-action lawsuit, describing VIM’s site as littered with massive, unbounded outdoor waste piles and alleging that VIM processed old, dry wood outside, which violated environmental regulations; constituted an eyesore; attracted mosquitos, termites, and rodents; posed a fire hazard; and emitted dust and other pollution. Many neighbors alleged health problems. In the meantime, VIM acquired general commercial liability policies, running from 2004-2008, that obligated Westfield to pay up to $2 million of any judgments against VIM for “property damage” or “bodily injury.” Each policy required VIM “as soon as practicable” to notify Westfield of any occurrence or offense that “may result in” a claim. Upon the filing of a claim, the policies required that VIM to provide written notice. There were three separate lawsuits over the course of 10 years. VIM sometimes successfully fended off the claims but sometimes did nothing, resulting in a $50.56 million default judgment. In a garnishment action, the Seventh Circuit affirmed summary judgment for Westfield. The neighbors cannot credibly claim that VIM was unaware of the injuries before 2004 or that they would not reasonably have expected them to continue through 2008, so the notice requirements applied. Westfield only found out about the case from its own lawyer in 2010, while it was on appeal. View "Greene v. Westfield Insurance Co." on Justia Law

From 1906 -1970, the companies manufactured industrial materials at an East Chicago, Indiana Superfund Site. In the 1970s, the East Chicago Housing Authority constructed “West Calumet,” a low-income residential building, on that site. In 2017, former West Calumet tenants sued the companies based on the tenants’ exposure to hazardous substances. Defendant Atlantic Richfield removed the case to federal court, asserting a government contractor defense because its predecessor, ISR, operated during World War II. ISR sold lead and zinc to entities who were under contract with the government to produce the goods for the military. ISR itself held five Army contracts. The materials made by ISR were critical wartime commodities that had to be manufactured according to detailed federal specifications. Other regulations effectively prevented ISR from selling to distributors for civilian applications. Defendant DuPont asserted that the government directed it to build a facility for the government and then lease it from the government to produce Freon-12 and hydrochloric acid solely for the government. The district court remanded, finding that most of the Companies’ government business occurred outside the relevant time frame.The Seventh Circuit reversed. Atlantic Richfield worked "hand-in-hand with the federal government to achieve a task that furthers an end of the federal government.” The Companies’ wartime production was a small but significant portion of their relevant conduct; the federal interest in the matter supports removal. Atlantic Richfield set forth sufficient facts regarding its government contractor defense. View "Baker v. E.I. du Pont de Nemours & Co." on Justia Law

The Menominee River runs between Wisconsin and Michigan’s Upper Peninsula. According to its origin story, the Menominee Indian Tribe came into existence along the River's banks thousands of years ago. This birthplace contains artifacts and sacred sites of historic and cultural importance to the Tribe. The Tribe learned that Aquila planned a mining project alongside the River, close to Wisconsin’s northeast border. Aquila obtained Michigan permits. The Tribe contacted the Environmental Protection Agency and Army Corps of Engineers asking for reconsideration of a 1984 decision to allow Michigan, instead of the federal government, to issue permits under the Clean Water Act, 33 U.S.C. 1344. The agencies responded that Michigan would decide whether to issue a “dredge-and-fill” permit to authorize Aquila’s project. The Tribe commenced an administrative proceeding in Michigan and filed suit.The district court dismissed the complaint on the ground that it did not challenge any final action taken by the EPA or Army Corps. The Seventh Circuit affirmed while expressing “reservations about how the federal agencies responded to the Tribe’s concerns.” The court noted that the agency letters did not reflect any final agency decisions and that the Tribe can receive a full and fair review in a Michigan court. The Preservation Act does not require the agencies to consult with the Tribe about the project but applies only to undertakings that are “[f]ederal or federally assisted.” View "Menominee Indian Tribe of Wisconsin v. Environmental Protection Agency" on Justia Law

Years of heavy industrial use at Wisconsin's Badger Army Ammunition Plant contaminated the soil and groundwater with asbestos, lead paint, PCBs, and oil. Operations ceased in 1975. Remediation has yielded thousands of acres suitable for recreational use. The National Park Service donated 3,000 acres to the Wisconsin Department of Natural Resources. An environmental group sued to halt three activities at the Sauk Prairie Recreation Area: dog training for hunting, off-road motorcycle riding, and helicopter drills by the Wisconsin National Guard citing the Property and Administrative Services Act, which controls deeds issued through the Federal Land to Parks Program, 40 U.S.C. 550. The Act requires the government to enforce the terms of its deeds and that the land be used for recreational purposes. The relevant deeds require that Wisconsin use the park for its originally intended purposes. Dog training and motorcycle riding were not mentioned in Wisconsin’s initial application. The group also argued that the National Environmental Policy Act (NEPA), 42 U.S.C. 4321, required an environmental impact statement.The Seventh Circuit affirmed summary judgment. Dog training and off-road motorcycle riding were not mentioned in the application, but are recreational uses. While helicopter training is not recreational, the Service included an explicit deed provision reserving the right to continue the flights, as authorized by the Property Act. The Service reasonably concluded that its approval of dog training and motorcycle riding fell within a NEPA categorical exclusion for minor amendments to an existing plan. The Service was not required to prepare an environmental impact statement for helicopter training because it had no authority to discontinue the flights. View "Sauk Prairie Conservation Alliance v. United States Department of the Interior" on Justia Law

Refined has owned the contaminated Beech Grove, Indiana lead smelter site since 1980 when it acquired it from NL. After years of litigation, Refined entered into a settlement with the federal Environmental Protection Agency (EPA) and the Indiana Department of Environmental Management (IDEM) in 1998. The 1998 Decree required Refined to close the site, pay a $210,000 fine, and remedy the contamination. EPA and IDEM agreed not to bring suit against Refined on some of their potential claims, effective immediately upon the entry of the Decree. In 2017, Refined sued NL to recoup some of the cleanup costs. The district court found that Refined’s claim was a “contribution action” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9613(f)(3)(B), subject to a three-year statute of limitations and dismissed the suit. The Seventh Circuit affirmed, rejecting Refined’s argument that its suit was a “cost-recovery” action under CERCLA section 9607(a), and timely under that subsection’s limitations period. The 1998 Decree qualified under section 9613(f)(3)(B), which creates a right to contribution for a party that has “resolved its liability to the United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement” and triggers the limitations period. View "Refined Metals Corp. v. NL Industries Inc." on Justia Law

Valbruna purchased the steel mill at a 2004 bankruptcy auction and began cleanup efforts under the Resource Conservation and Recovery Act, 42 U.S.C. 6901. In 2000, Slater, the site’s then-owner, had unsuccessfully sued Joslyn, which had owned and operated the site from 1928-1981, in state court seeking indemnification under the parties’ contract and costs under Indiana’s Environmental Legal Actions (ELA) statute. In 2010, Valbruna sued Joslyn under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9613(b), and ELA. Joslyn’s fault is undisputed. Joslyn raised claim-preclusion, statute-of-limitations, and contribution defenses. The district court found that the CERCLA claim was not precluded, but the ELA claim was, and that the suit was timely. The court imposed equitable contribution on Valbruna, requiring it to pay for 25% of past and future cleanup costs. The Seventh Circuit affirmed, agreeing that the CERCLA claim was not precluded. If there is no state-court jurisdiction to hear an exclusively federal claim, there is no claim preclusion. The claim was not barred as being filed more than six years after the start of “remedial action.” Slater’s earlier cleanup was “removal.” While the 25% imposition on a no-fault owner "reached the limits" of the court's discretion, there was no abuse of that discretion. Valbruna understood the site’s pollution problems before purchasing it and apparently paid far less than the asking price; the court was rationally concerned about a windfall for Valbruna. View "Valbruna Slater Steel Corp. v. Joslyn Manufacturing Co." on Justia Law

In the 1990s, Boucher cut down nine trees on his family farm in Indiana. The U.S. Department of Agriculture (USDA) claimed that the tree removal converted several acres of wetlands into croplands, rendering the Bouchers’ entire farm ineligible for USDA benefits that would otherwise be available under the “Swampbuster” provisions in the Food Security Act of 1985, 16 U.S.C. 3801, 3821–24. The Seventh Circuit reversed the district court. The USDA repeatedly failed to follow applicable law and agency standards. It disregarded compelling evidence showing that the acreage in question never qualified as wetlands that could have been converted illegally into croplands and has shifted its explanations for treating the acreage as converted wetlands, so its actions qualify as arbitrary, capricious, and an abuse of discretion. The agency experts did not attribute the alteration of hydrology to the removal of the nine trees; the agency presented no evidence that the tree removal altered the wetland hydrology. The USDA failed to engage meaningfully with this point, ignoring a crucial factor under the agency’s interpretation of its regulation. View "Boucher v. United States Department of Agriculture" on Justia Law

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