Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

Seven affiliated debtors are entities that conducted deep and strip coal mining and operated coal prep plants and loading facilities in three states. The bankruptcy court authorized joint procedural administration, but not substantive consolidation. The administrative expense claims at issue arise from environmental damage. The land and the coal were subject to leases that terminated before commencement of bankruptcy proceedings. The West Virginia Department of Environmental Protection (WVDEP) issued mining permits and National Pollutant Discharge Elimination System permits to the debtors and affiliated entities for the operations. The bankruptcy court denied WVDEP’s application for administrative expenses against two debtors. The Sixth Circuit Bankruptcy Appellate Panel held that the court failed to properly analyze the debtors’ potential liability for reclamation obligations associated with permits owned by their affiliate. WVDEP’s administrative expense claims were properly denied to the extent they were based on derivative liability for the debts of the affiliate, either based on veil piercing or substantive consolidation. The court abused its discretion in denying the claims that were based on direct liability for reclamation obligations associated with the permits owned by the affiliate and in denying claims that were independent of the threshold question of joint and several liability for reclamation obligations associated with the permits owned by an affiliate. View "In re: Appalachian Fuels, LLC" on Justia Law

In 1977, the Environmental Protection Agency sued Michigan, Detroit, and the Detroit Water and Sewerage Department for exceeding effluent limitations and failing to satisfy monitoring requirements under the Clean Water Act, 33 U.S.C. 1251. In 1977, the district court entered an initial Consent Judgment. Over the next 30 years, the DWSD fell in and out of compliance. In the most recent round of violations and court orders, the district judge gave a committee of local officials 60 days to fashion a final plan or face more intrusive court-ordered remedies. The judge adopted most of the committee’s recommendations but also directly abrogated some provisions in collective bargaining agreements of approximately 20 different bargaining units. None of the DWSD unions were parties. Unions sought to intervene. The district court denied the motions as untimely. The Sixth Circuit reversed. Although the unions were aware of the potential significance of the proceedings and failed to intervene before the court-approved committee returned its recommendations, total denial of intervention was an abuse of discretion. The unions have substantial interests at stake that “may as a practical matter” be impaired absent intervention. While concerns of delay and re-litigation are serious, they can be alleviated by limiting the scope of intervention. View "Unted States v. City of Detroit" on Justia Law

The Clean Air Act New Source Review program forbids construction of new pollution sources without a permit, 42 U.S.C. 7475. Operators of major pollutant-emitting sources who plan construction must make a preconstruction projection of the increase in emissions following construction, to determine whether the project constitutes a “major modification,” requiring a permit. DTE planned on replacing 2,000 square feet of tubing, the economizer, and large sections of reheater piping; installing a new nine-ton device that provides voltage that creates the electromagnetic field needed for the rotor to produce electricity; and refurbishing boiler feedwater pumps at its power plant. The project required 83 days and $65 million. DTE performed required calculations and projected an emissions increase of 3,701 tons per year of sulfur dioxide and 4,096 tons per year of nitrogen oxides. Under the regulations, an increase of 40 tons per year of either substance is significant. DTE determined that the increase fell under the demand growth exclusion. The Michigan Department of Environmental Quality took no action and construction began. The U.S. EPA filed notice of violation. The district court granted DTE summary judgment. The Sixth Circuit reversed. While the regulations allow operators to undertake projects without having EPA second-guess their projections, EPA is not categorically prevented from challenging blatant violations until after modifications are made. View "United States v. DTE Energy Co." on Justia Law

GenCorp owned a vinyl-manufacturing facility, including hazardous waste management units (RCRA units), which reclaimed solvent waste. Under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6901, GenCorp was obligated to obtain permits for the units. GenCorp had not received all of the required permits when it agreed to sell the facility. The agreement specified GenCorp’s retained liabilities, and contained a provision requiring each party to indemnify and defend against their retained liabilities. Textileather became the owner in 1990 and decided to discontinue use of the RCRA units. Textileather began the closure process required by Ohio Administrative Code 3745-66; the Ohio Environmental Protection Agency (OEPA) issued several Notices of Deficiency. Textileather challenged the OEPA’s 2001 closure plan and asserted that GenCorp was obligated to indemnify and defend. The district court ruled in favor of GenCorp, holding that, under the agreement, OEPA did not constitute a “third party” and Textileather’s RCRA closure proceedings did not constitute a “claim or action.” The Sixth Circuit reversed in part and directed the district court to enter judgment for Textileather on the legal question of whether the retained liabilities section of the agreement applies. The court affirmed that GenCorp retained only CERCLA claims covered by certain sections. View "Textileather Corp. v. GenCorp Inc." on Justia Law

Summit’s natural gas sweetening plant in Michigan makes gas usable by removing hydrogen sulfide. Summit owns all of the production wells and subsurface pipelines that connect wells to the plant. The wells are located over a 43-square-mile area, from 500 feet to eight miles from the plant. Summit does not own property between the wells or property between the wells and the plant. Flares burn off gas waste to relieve pressure on gas collection equipment. The closest flare is about one half-mile from the plant, others are over one mile away. The plant and most of the wells and flares are located on a tribal reservation. All emit sulfur dioxides and nitrous oxides, air pollutants regulated under the Clean Air Act, 42 U.S.C. 7401-7671q. The plant alone has potential to emit just under 100 tons of these pollutants per year. Each flare and well has potential to emit lower amounts. The EPA determined that the plant, flares, and wells constituted a single stationary source under the CAA. The Sixth Circuit vacated and remanded for determination of whether the plant and wells are sufficiently physically proximate to be considered “adjacent” within the ordinary meaning of that requirement. Interpreting the requirement in terms of mere functional relatedness was unreasonable. View "Summit Petroleum Corp. v. U.S. Envtl. Prot. Agency" on Justia Law

Ohio enacted legislation under which it no longer will apply the "best available technology" standard to small emitters as part of its state implementation plan (SIP) for National Ambient Air Quality Standards for certain types of air pollutants (Clean Air Act, 42 U.S.C. 7409). Act. The U.S. EPA did not approve a change to the SIP, but has taken no action to require the state to enforce the standard. Environmentalists sued under the Clean Air Act’s citizen-suit provision. The district court entered an injunction expressly ordering the state to administer the federal rule. The Sixth Circuit reversed and remanded for dismissal, concluding that intervening Supreme Court precedent and the text and structure of the Clean Air Act itself indicate that the citizen-suit provision does not authorize this lawsuit, but authorizes suit against the federal EPA.

In 2001, the Conservancy sold a 100.10 acre farm in Garrard County, Kentucky to the Sims for $60,084, in addition to a $244,939 charitable pledge from the Sims to the Conservancy. The property appraised at $260,400 without the easement at issue, which requires that the land "be retained forever substantially undisturbed in its natural condition and to prevent any use . . . that will significantly impair or interfere with the Conservation Values of the Protected Property." The Conservancy received an annual right to enter and inspect the property. In January 2005, the Conservancy inspected and documented several violations that concerned excavating and filling a sinkhole. The Sims corrected several other violations. The district court granted summary judgment to the Conservancy, concluding that, although the easement allowed some changes to the topography in conjunction with authorized activities, like plowing for commercial agriculture, the easement specifically prohibited the substantial alteration of filling in a sinkhole with an estimated 6,269 cubic yards of fill. The court awarded the Conservancy $99,796.41 in attorneys’ fees and expenses. The Sixth Circuit affirmed.

OneBeacon and AMICO were insurers of the B.F. Goodrich and, among others, were liable for environmental cleanup at the Goodrich plant in Calvert City, Kentucky. AMICO settled with Goodrich, but OneBeacon’s predecessor went to trial. A state court jury found for Goodrich, and OneBeacon was ordered to pay $42 million in compensatory damages and $12 million in attorney fees. The state court also denied OneBeacon's request for settlement credits to reflect amounts paid by other insurers, such as AMICO, through settlements with Goodrich. OneBeacon sought equitable contribution; AMICO removed to federal court. The district court granted AMICO summary judgment. The Sixth Circuit affirmed. Ohio policy favoring settlements provides that a settled policy is exhausted for purposes of equitable contribution; the court declined to address whether Ohio law permits interclass contribution actions or whether the jury finding of bad faith bars equitable relief.

In 1979, plaintiff bought land from the Michigan State Transportation Commission. A decade later, he sued the Department of Transportation under the federal Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601, claimed that there was contamination on the site. After discovery, the parties settled. The district court entered a consent decree in 1991 that required the Department to remediate the property by March 31, 1995. If by then the Department failed to make a good-faith effort to remediate, the decree required payment of $2,000 per month until remediation was complete. The Department failed to remediate or to pay the liquidated damages. On a 2009 motion to enforce the decree, the court held that the Department had waived its sovereign immunity and that a 10-year statute of limitations barred enforcement of the remediation obligation, but that each of the missed $2,000 payments triggered its own 10-year limitations period. The Sixth Circuit vacated, holding that the court should have relied on the doctrine of laches rather than the limitations period because the consent decree amounted to a remedy in equity. The waiver of immunity remained effective.

African-Americans residing near a contaminated landfill claim that municipalities knew that well water was contaminated, warned Caucasian families and provided alternate sources of water, but did not warn African-Americans. In their suit under the Equal Protection Clause, 42 U.S.C. 1983, Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, and state laws, a magistrate compelled testimony by plaintiffs' former counsel; the city asserted that, if plaintiffs consulted the attorney in 2000, the action is barred by the one-year statute of limitations. During a deposition, the attorney refused to answer some questions. The court granted a motion to compel. The Sixth Circuit dismissed an appeal for lack of jurisdiction. Plaintiffs were not appealing a final judgment and did not qualify for interlocutory review under the Perlman exception or the collateral order doctrine. Immediate review is appropriate if an order conclusively determines a disputed issue separate from the merits that is too important to be denied review and will be effectively unreviewable on appeal from a final judgment. Privilege is important and the attorney is a disinterested non-party, so the contempt-citation avenue of review is practically foreclosed, but plaintiffs, asserting the privilege, ultimately can avail themselves of a post-judgment appeal that suffices to protect the rights of the litigants and preserve the vitality of attorney-client privilege.