Nearly thirty years ago, however, the United States Supreme Court decided that, notwithstanding the apparent authority conferred by the Act, a court could not award attorney fees to Sierra Club and Environmental Defense Fund in a case where they lost on all of their claims. Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983). In other words, absent some degree of success on the merits, it is not “appropriate” for a federal court to award attorney’s fees under Sections 304 and 307 of the Act.

But while a party must have some degree of success on the merits of its Clean Air Act case to obtain attorney fees, the Court did not explain how much success would be enough.

In a recent opinion called Southern Alliance v. Duke Energy Carolinas, the Fourth Circuit Court of Appeals addressed the question of “how much” success on the merits is “some.”

First, the court acknowledged two situations in which the amount of success triggered attorney fees:

1. A plaintiff will have sufficient success to support attorney fees where it persuades a court to order an agency, e.g., EPA, to carry out one of its regulatory duties. For example, in Nat’l Wildlife Fed’n v. Hanson, 859 F.2d 313 (4th Cir. 1988), environmental groups’ successful demonstration that the Army Corps of Engineers did not undertake necessary investigation to determine whether a tract of land was wetlands entitled them to attorney fees regardless whether the Corps ultimately determined that the tract of land was wetlands.  
2. A plaintiff also has sufficient success if it is the “catalyst” that, through settlement or otherwise, obtains substantial relief prior to adjudication on the merits. For example, in Ohio River Valley Envtl. Coal., Inc. v. Green Valley Coal Co., 511 F.3d 407 (4th Cir. 2007), an environmental group’s lawsuit caused the defendant to withdraw a permit application, so the plaintiff was entitled to attorney fees even though it voluntarily dismissed its claims after the defendant withdrew its application.

Then, the Fourth Circuit added a third basis for recovery of attorney fees in its Southern Alliance opinion. In that case, Duke Energy obtained a construction permit for a new EGU, but the plaintiffs sued for a declaration that construction of the new unit without a MACT determination violated the Clean Air Act. The district court agreed, and ordered Duke Energy to obtain a MACT applicability determination for the new unit from the state permitting authority. Then the plaintiffs dismissed the rest of their claims.

While Duke Energy went through the MACT applicability determination process at the state agency, the plaintiffs asked the district court for attorney fees. The district court awarded attorney fees to the plaintiffs on the grounds that they prevailed when the court held that the new unit was subject to the Clean Air Act and required Duke Energy to participate in a MACT proceeding, regardless the ultimate outcome of the applicability determination.

The Fourth Circuit affirmed the attorney fees award, holding that the district court’s order:

1. Included substantive determinations and imposed a real burden on Duke Energy, which had up till then denied that the MACT program applied to its new unit;  
2. Forced Duke Energy to participate in formal administrative evaluations pursuant to the Clean Air Act, and those evaluations were one of the plaintiffs’ goals; and
3. Ultimately resulted in emissions limits being placed on the new unit, as well as additional monitoring, testing, and record-keeping requirements.

According to the court, even though the plaintiffs’ victory merely required a new applicability determination for the new unit, that degree of success on the merits was enough under the Clean Air Act to obtain attorney fees.

The Fourth Circuit’s opinion in S. Alliance for Clean Energy v. Duke Energy Carolinas, LLC, 08-2370, 2011 WL 1421794 (4th Cir. Apr. 14, 2011), can be found here: http://pacer.ca4.uscourts.gov/opinion.pdf/082370.P.pdf.                          

In New Jersey Department of Environmental Protection v. Huber, the Hubers acquired a deed-restricted property burdened by a conservation easement. The title insurance report indicated that administratively recognized “wetlands” covered part of the Hubers’ new, manicured backyard.

At some point the Hubers placed soil to grade-out a steep slope behind their garage; and sometime later their neighbor called the State Department of Environmental Protection to complain about the Hubers’ yard and that the Hubers had placed fill in the wetlands.

In 2002, a state environmental official went into the Hubers’ backyard without a warrant to conduct an inspection, including soil borings. The state official observed that native vegetation had been removed from, and soil and sod – i.e., “fill” – had been placed in, the freshwater wetlands and the adjacent transition area on the site. As a result, the Department issued a Notice of Violation and ultimately assessed a $4500 fine against the Hubers.

The Hubers went to the courts to throw out the evidence collected by the state offical because he did not possess an administrative search warrant to search their property. But the New Jersey courts ultimately sided with the Department, and both the New Jersey Supreme Court and U.S. Supreme Court refused to review the decision.

While the New Jersey Supreme Court denied review without further comment, the U.S. Supreme Court Justices had this to say:

Our cases recognize a limited exception to the Fourth Amendment's warrant requirement for searches of businesses in “closely regulated industries.” The thinking is that, other things being equal, the “expectation of privacy in commercial premises” is significantly less than the “expectation in an individual's home.” And where a business operates in an industry with a “long tradition of close government supervision”-liquor dealers and pawnbrokers are classic examples-the expectation of privacy becomes “particularly attenuated.”

In this case, a New Jersey appellate court applied this doctrine to uphold a warrantless search by a state environmental official of Robert and Michelle Huber's backyard. The Hubers' residential property contains wetlands protected by a New Jersey environmental statute. According to the court below, the presence of these wetlands brought the Hubers' yard “directly under the regulatory arm” of the State “just as much” as if the yard had been involved in a “regulated industry.”

This Court has not suggested that a State, by imposing heavy regulations on the use of privately owned residential property, may escape the Fourth Amendment's warrant requirement. But because this case comes to us on review of a decision by a state intermediate appellate court, I agree that today's denial of certiorari is appropriate. It does bear mentioning, however, that “denial of certiorari does not constitute an expression of any opinion on the merits.”

Huber v. New Jersey Dept. of Envtl. Prot., 10-388, 2011 WL 940958 (U.S. Mar. 21, 2011).

So, for now, it will remain an open question whether a state environmental agency can regulate its way into your backyard without a warrant. Given the lingering uncertainty regarding exactly what a “wetland” actually is, Rapanos v. United States, 547 U.S. 715 (2006), this is certainly an issue that bears watching.

The underlying New Jersey court opinion can be found at the following citation: New Jersey Dept. of Envtl. Prot. v. Huber, A-5874-07T3, 2010 WL 173533 (N.J. Super. Ct. App. Div. Jan. 20, 2010).

In Oklahoma Gas & Electric Co. v. Beecher, et al., 2011 OK CIV APP 1, the project at issue was a 121-mile right of way for a new electrical transmission line from Woodward to Oklahoma City. The main purpose of the new line was to transmit large amounts of wind-generated electricity to OG&E customers. The landowner-opponents argued the project was not for a public purpose because most of the line’s capacity would be used by customers outside Oklahoma and the line would be controlled by the Southwest Power Pool, a regional transmission organization.

In Oklahoma, corporations that furnish electricity or gas are authorized to exercise the power of eminent domain by statute, subject to Sections 23 and 24 of Article II of the Oklahoma Constitution, which provide that private property may only be taken by condemnation for a public purpose or use. In general, Oklahoma requires that for a public purpose to exist, the primary intended beneficiary of the project must be the Oklahoma public. Board of County Commissioners v. Lowery, 2006 OK 31, 136 P.2d 639.

A key argument by the landowners was that only 22 percent of the project’s capacity would be needed to meet OG&E customer demands through 2012. From this, the landowners argued that 78 percent of the line’s capacity would be used to transmit electricity to out-of-state customers. However, the court found two problems with this reasoning. First, the court stated that the landowners did not present actual evidence regarding out-of-state usage; rather they only drew an inference. Nor did the landowners show that over the longer life of the project (50-60 years) OG&E customers would not use most of the line’s capacity.

Second, the court stated the key factor is not whether 51 percent or more of the “substance” being produced or transmitted by a project such as a transmission line will be used by Oklahomans, but whether the primary intended beneficiary, under all the circumstances, is the Oklahoma public, as opposed to private or out-of-state entities or persons.

Relying in part on a potent analogy, the court had little trouble finding that the primary intended beneficiaries of the transmission line were OG&E customers. The court stated that even though an interstate highway through Oklahoma would have to be built to federal standards and might be used by more out-of-state drivers than Oklahoma citizens, most would agree the Oklahoma public would be the highway’s primary beneficiary.

The court went on to find that Southwest Power Pool’s control over access to the transmission lines did not destroy the public purpose behind the project, especially considering the strong policy in favor of supplying reliable electric power and the fact that OG&E is expected to have the planned-for access.

An interesting procedural sidelight is that the landowners’ pending request for a jury trial on damages did not prevent an immediate appeal of the trial court’s ruling on the issue of the right to take the property. Upon final resolution of the appeal, the landowners may still contest the compensation to be paid for the taking.

RWCS is currently involved in a major condemnation action involving more than a hundred landowners – and is also very good at drawing an apt analogy to make a great point in litigation!

The main issue before the EPA was whether CDPHE should have aggregated the emissions from the Frederick Compressor Station and various oil and gas wells and other pollutant emitting activities in the Wattenburg Field and treated them all as a single “source” for permitting purposes. Although oil and natural gas facilities are typically regulated independently as “minor sources,” this is not the first time a regulatory agency has aggregated interrelated oil and natural gas facilities into a “major source” to require more rigorous permitting of these sources than would otherwise be required if they were treated individually.

Under the Prevention of Significant Deterioration (“PSD”) program, for example, a “major stationary source” is a “stationary source” that emits or has the potential to emit a certain quantity of pollutants. 42 U.S.C. §§ 7479(1), 7602(j). In turn, a “stationary source” is any building, structure, facility, or installation which emits or may emit a regulated pollutant. 40 C.F.R. § 51.166(b)(5). The federal regulations define “building, structure, facility, or installation” as all of the pollutant-emitting activities which: (1) belong to the same industrial grouping; (2) are located on one or more contiguous or adjacent properties; and (3) are under the control of the same person. Id. § 51.166(b)(6). From a legal perspective, the regulatory agencies must determine whether the oil and natural gas facilities meet the three factors listed above.

On January 12, 2007, the Acting Assistant Administrator of the EPA, William Wehrum, issued a memorandum entitled Source Determinations for Oil and Gas Industries, which indicated that proximity was the most informative factor in making source determinations for the oil and natural gas industries, suggesting that sites separated by more than a short distance (such as ¼ mile) are not “contiguous or adjacent” – and should generally not be treated as a single source. However, on September 22, 2009, Assistant Administrator Gina McCarthy issued a memorandum entitled Withdrawal of Source Determinations for Oil and Gas Industries. The McCarthy memorandum withdrew the Wehrum memorandum and specifically de-emphasized proximity as the determining factor in these determinations.

With regard to the Frederick Compressor Station, WildEarth Guardians twice petitioned the EPA to object to the permit renewal. Both times, the EPA objected and required the CDPHE to provide additional support for its permitting decision. On July 14, 2010, the CDPHE submitted a third and lengthy argument in favor of renewing the Title V permit for the compressor station. The environmental group subsequently petitioned the EPA to object for a third time. Finally, in the February 2, 2011 Order (set down more than four years after the initial Title V renewal was issued), the EPA denied the environmental group’s petition. The EPA conducted a thorough analysis of previous statements and determinations involving aggregation and determined that the CDPHE had properly determined the Frederick Compressor Station was a single source for purposes of PSD and Title V permitting. The EPA’s Order made two findings of particular interest relating to the issue: (1) despite the de-emphasis on proximity under the McCarthy memorandum, the CDPHE properly used distance as an important factor in the contiguous/adjacent analysis, when it was not “the determining factor” in its source determination; and (2) decisions regarding support facilities, while instructive in the aggregation analysis, are really significant only to determining whether two facilities should be treated as belonging to the same SIC code – and there is no reason to analyze them when the two facilities share the same SIC code.

Read a copy of the EPA Order here.

Our Firm continues to monitor the latest developments in the area of source aggregation in the oil and natural gas industry. Two other important cases are presently pending: In re BP America Production Company, Florida River Compression Facility, which is an appeal before the Environmental Appeals Board, and Summit Petroleum v. U.S. E.P.A., which is currently before the Sixth Circuit Court of Appeals. If you are interested in following any of these significant cases, check back often, as we will keep you apprised of the latest developments.

We’ll tell you about those changes, but first, let’s quickly review how expert discovery has evolved in the federal courts. Way back in 1993, Federal Rule of Civil Procedure 26 was amended to establish the current system of expert reports and depositions. Following the 1993 amendments, case law developed that, in general, further liberalized expert discovery. It got to the point where many courts basically required disclosure of a testifying expert’s entire file including draft reports and correspondence with attorneys. (And boy, were there some surprises in some of those e-mails!)

In response, attorneys became much more careful about working with retained or candidate experts. For example, some attorneys instructed designated experts to not send them any e-mails, a pretty drastic limitation in today's world. Other strategies were used to avoid preparation of or disclosure of draft expert reports.

After a while, a consensus grew that the pendulum had swung so far in favor of disclosure that it restricted candid attorney-expert communication or led to wasteful game-playing. Many commentators began to advocate more balance in expert discovery.

On December 1, Rule 26 was finally amended to revise certain key provisions affecting the scope of expert discovery. Here’s a brief, simple list of the most important changes:

• The following are now protected from discovery as work product:  Drafts of any expert report or disclosure, including preliminary opinions.
• Also now protected from discovery as work product:  Communications in whatever form between an attorney and an expert UNLESS they relate to one of the following three exceptions: (1) compensation for the expert’s study or testimony; (2) facts or data the attorney provided AND that the expert considered, or (3) assumptions the attorney provided AND the expert relied upon. [This one’s a mouthful – work through it several times because the exceptions are really important.]
• Final expert reports must disclose only the “facts or data” – NOT the “facts or other information” – considered by the expert in forming his or her opinions. [Note: the broad “other information” clause was one of the key provisions in the previous version of the rule that had been used by courts to require disclosure of draft expert reports and communications between attorney and expert.]

From the Advisory Committee Notes to amended Rule 26, here’s a brief list of the main purposes and policies behind these rule changes:

• Retain broad disclosure obligation for any material considered by the expert, from whatever source, that contains factual ingredients. [Note: the operative word is “considered,” not “relied upon.
• Allow continued discovery into development, foundation, or basis of expert’s opinions. [In other words, no change to court’s Daubert gatekeeping function.
• Exclude disclosure of theories or mental impressions of counsel.
• Allow attorneys and experts to interact without fear of exposing communications to searching discovery.

As with any rule, there are going to be many unique situations not directly addressed by the amendments. Those will have to be fleshed out by case law or dealt with by agreement of the parties.

How much will really change as a result of these amendments? Here are some comments on the likely practical effect of the Rule 26 changes to expert discovery:

• Attorneys and experts may feel more free to communicate by e-mail (isn’t just about all written communication by e-mail these days?)
• Attorneys may allow experts more freedom to create and save iterations of draft reports and preliminary opinions.
• However, attorneys are inherently cautious and some may be reluctant to deviate much from how they have become used to dealing with experts in recent years.
• There would seem to be less need for stipulations between opposing parties regarding expert discovery (it had become common for parties to agree that draft expert reports were not required to be disclosed, for example).
• Instead of just producing an expert’s entire file (frequently done under the previous version of Rule 26 where there was no agreement), attorney-expert communications and draft reports will now have to be identified on a privilege log (which entails its own separate burden). [Note: neither the Rule 26 amendments nor the Advisory Committee Notes address privilege logs in connection with the new protections for expert discovery. However, Rule 26(b)(5) contains a general provision requiring that if privilege or work product is claimed, then the party must prepare what is generally referred to as a privilege log. The Rule 26 expert discovery amendments do not change this long-standing practice.]
• Attorneys and experts will have to be especially careful about the exceptions that apply to attorney-expert communications. One recommendation is that if any portion of a communication falls under an exception, no protected information should be included in that communication. Example: attorney sends e-mail to expert forwarding an attachment containing raw data (e.g., lab results). The attorney should simply forward the attachment without any comment other than something like “please review.” Why? Because if the attorney comments on the relevance of the data, that discussion would be protected as work product under the new Rule 26 amendments. Then, in discovery, the e-mail would have to be redacted. The redacted portion would be identified on the privilege log and the unredacted portion would be disclosed. Redacting stuff is a lot more work than keeping it separate.
• Because communications that fall under an exception must be disclosed, attorneys and experts who start engaging in more frequent written communication such as e-mail must be highly sensitive to how easy it is for hasty comments, personal information, or other inappropriate material to creep into those e-mails – and they must resolve and work constantly to simply leave that stuff out.
• The “privilege” now afforded to certain types of expert discovery by the Rule 26 changes is the “attorney work product doctrine” (frequently referred to as a privilege but really a doctrine). Attorneys and experts should keep in the back of their minds that work product protection is typically very solid but is not absolute. In rare circumstances, an opposing party can overcome work product by showing a substantial need for the discovery and an inability to obtain the substantial equivalent without undue hardship, although the Advisory Committee notes indicate this should be unusual given the broad expert discovery still allowed. (Note: even if disclosure were to be ordered in a rare case, the attorney’s legal theories, mental impressions, opinions, and conclusions are still protected.)

On November 17, 2010, the EPA officially made available a guidance document intended to assist both the permit applicants and the permit writers in establishing permit requirements for GHGs.  The document, titled “PSD and Title V Permitting Guidance for Greenhouse Gases,” can be found by clicking on this link: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480b8662b.  The guidance document discusses both applicability determinations – i.e., whether a permit applicant must address GHGs – and how to establish emissions limitations by determining the “best available control technology” (“BACT”) for GHG emissions.

Here are a few notes from the guidance document:

• EPA is not establishing a new across-the-board BACT determination for GHG emissions; those determinations will continue to be a state- and project-specific analysis using a “traditional” five-step, top-down process.   
• The guidance leans heavily on energy efficiency to reduce GHG emissions. On the other hand, energy efficiency options that might achieve reductions in a facility’s overall demand for energy from the grid but that cannot be tied to specific emissions from the stationary source should not be considered at step 1 of the BACT analysis.  Plant-wide efficiency considerations factor into step 4 of the analysis, regarding energy, economic, and environmental impacts.
• EPA recommends that carbon capture and storage should be considered by all stationary sources at least in step 1 of the BACT analysis as an add-on control – like selective catalytic reduction for NO_x emissions – even though it will likely be eliminated from consideration as cost-ineffective in step 2 of the BACT analysis.
• EPA is unclear on the role that fuel switching will play in the BACT analysis.  EPA generally rejects the idea that sources must consider fuel switching from one category of fuel to another, even beyond what some courts have suggested regarding the required consideration of “clean fuels” as BACT.  On the other hand, the guidance document promotes fuel switching from subcritical to supercritical coal combustion.
• Even though EPA appears to come down hard on fuel-switching as BACT, it admits that “redefining” the source is ultimately a question of degree that is within the discretion of the permitting authority.  It seems to indicate that any fuel-switching battle must be won or lost at the permitting-agency level. 

The EPA will be accepting comments on the guidance document until December 1, 2010.                                                             

RWCS is at the forefront of evolving shale gas issues at all levels – including public policy, legislative, regulatory, and litigation. For more information contact Don Shandy, Steve Gelnar, or Keith Klein at (405) 239-6040.

One new amendment focuses on providing courts more discretion regarding sentencing alternatives. The amendment states that courts may depart from the guidelines in situations where an offender’s criminal activities are related to drug or alcohol abuse or mental illness, and home or community confinement serve a specific treatment purpose. Further, the amendment expands Zones B and C of the guidelines’ sentencing table by one offense level, increasing the availability of alternative sentencing options. Offenders who fall under Zones B and C are eligible, subject to the court’s discretion and statutory limitations, for alternatives such as a split sentence, and home or community confinement.

Read a copy of the amendments here: www.ussc.gov/2010guid/finalamend10.pdf

Review the Sentencing Commission’s reader friendly version of the amendments here: www.ussc.gov/2010guid/20100121_Reader_Friendly_Proposed_Amendments.pdf

For more information on how the consideration of age in sentencing may affect white-collar criminals, see: www.bloomberg.com/news/2010-10-29/white-collar-criminals-in-u-s-may-invoke-age-to-seek-lighter-sentences.html

The 19th annual EFO meeting was held in Tulsa on Oct. 13-14. The meeting was attended by environmental managers, consultants, and attorneys from Oklahoma and several other states. The day and a half meeting was an excellent way to get up to date on a wide variety of environmental issues affecting Oklahoma, including recent EPA rulemaking and guidance.

Steve Thompson, Director of the Oklahoma Department of Environmental Quality, gave an insightful talk for the regulated community. Mr. Thompson discussed how difficult it is to achieve regulatory certainty, especially in light of all the new and proposed EPA rules. Mr. Thompson and other speakers emphasized how important it is for companies and other stakeholders to participate in rulemaking and to respond carefully to information requests - otherwise key data relating to your industry or facility may not be known or considered.

Mr. Thompson also stated his firm opinion that "rules matter," especially after the time for input, i.e., the rulemaking process, has been completed, and he discussed the advantages of working with DEQ to resolve environmental compliance problems.

J.D. Strong, Oklahoma Secretary of the Environment and new head of the Oklahoma Water Resources Board, examined current environmental policy and rulemaking developments, discussing such issues as EPA's increased level of activity and conflicts between interrelated energy and environmental policies.

Other sessions covered water, waste, and air issues.

In the water arena, speakers discussed new EPA regulation, including effluent limitation guidelines for stormwater and EPA concerns about using general permits, the increased stormwater enforcement initative, whole effluent toxicity testing, new federal drinking water requirements, EPA's advance notice of rulemaking for designated uses in water quality standards, proposals for more strict water quality standards for selenium, conductivity, sulfates, chlorides, and more. There was a very interesting discussion about EPA's recent Federal Register notice regarding "sufficiently sensitive" test methods, using mercury as an example. The observation was made that a lower water quality standard for mercury simply would not be achievable by any technology, and treatment that might be attempted could significantly raise salt levels.

In the waste session, there was an interesting presentation about coal ash, which EPA is proposing to regulate as a RCRA Subtitle C special waste (effectively making it a hazardous waste) or a Subtitle D solid waste (retaining the current non-hazardous designation). Several speakers commented that if coal ash is regulated as a hazardous waste there would not be sufficient capacity in existing permitted landfills.

The panel in the air session covered a multitude of recent developments under the Clean Air Act, including new 1-hour NAAQS standards, new and proposed MACT standards, and EPA's efforts to begin regulating climate change through such initiatives as the new greenhouse gas reporting rule and the "tailoring rule" which is currently being challenged in court by 13 states including Arkansas and Texas.

One speaker explained in detail the greenhouse gas reporting rule for the oil and gas industry, including definitions of facility and methods for calculating emissions. That talk was followed by our own Don Shandy's presentation regarding important developments in how oil and gas facilities or sites may be affected by EPA's changing interpretation of "aggregation," or what constitutes a "facility" subject to PSD air regulation. You can see Don's slides by clicking the link at the bottom of this page.

Following Don, Phillip Fielder from DEQ discussed several air topics including startup, shutdown, and malfunction (SSM) emissions, and the likelihood that EPA will be looking more closely at these types of emissions as a result of new 1-hour standards.

Finally, Eddie Terrill, Director of DEQ's Air Division, talked about a variety of topics including the recent spate of federal regulatory activity, the pros and cons of those efforts, Oklahoma compliance with the current and potentially more strict ozone standard, problems with achieving MACT standards, the transport rule, and a new feature at Air Quality Council meetings - inviting more discussion by attendees in an off-the-record question and answer session.

In all, the latest EFO meeting was a great success.  In addition to Don Shandy's talk, RWCS had a booth at the meeting presenting some of the matters we have worked on lately.  Judging from comments, the booth was very well done. 

If you have any questions or concerns about topics addressed at the EFO meeting, feel free to give Keith Klein or Don Shandy a call at (405) 239-6040.

RWCS will be involved in two environmental meetings coming up.  The annual Environmental Federation of Oklahoma (EFO) meeting will be held in Tulsa October 13-14.  RWCS attorney Don Shandy will be making a presentation during the meeting regarding current air quality issues impacting mineral producers.  In addition, RWCS will sponsor one of the meeting segments and will have a display booth with handouts, a powerpoint presentation, and other information about the firm.  Stop by and see us.  Next, the Governor's Water Law Conference will be held Oct. 26-27 in Norman.  As last year, RWCS will continue to be a conference sponsor. 

On August 18, 2010, the last remaining mass tort litigation over air emissions in Ponca City concluded.  During 2004-2010, RWCS was counsel to one of the defendants in a string of cases alleging property damage caused by fine, dark particulate matter, including: a lawsuit filed in January 2005 by the City of Ponca City and approximately 270 local homeowners, a class action lawsuit filed in April 2005 on behalf of Ponca City area Native American landowners, a series of seven lawsuits filed during April - October 2007 by over 500 additional local homeowners (consolidated for case management and later for trial), and a follow-on class action filed in May 2009 encompassing any Ponca City property owners or residents who had not participated in one of the other lawsuits. All of the cases were eventually settled, but not until after extensive investigation and discovery including more than 500 depositions of both fact and expert witnesses. If you are interested in more information, contact Keith Klein at kklein@ryanwhaley.com.

For more information, please see: http://www.epa.gov/nsr/documents/20100413fs.pdf
For full text of the rule, please see: http://www.epa.gov/nsr/documents/20100413final.pdf

In addition to sponsoring the conference, several RWCS attorneys presented during the Conference’s second day. Specifically, RWCS attorneys Mark Coldiron and Stephen Jantzen, along with Byron Starns of the firm Leonard, Street & Deinard of Minneapolis, presented “Session 5B: Courtroom Classics: Preserving Cost Recovery Rights.” The presentation was accompanied by a paper co-authored by the Mark Coldiron, Stephen Jantzen, and Byron Starns along with RWCS associate Ivan London. The paper, titled “Preserving Claims to Recoup Response Costs during Brownfields Redevelopment,” and the PowerPoint presentation can be viewed by clicking the following links:

"Preserving Claims to Recoup Response Costs during Brownfields Redevelopment"

PowerPoint Presentation

In addition, Stephen Jantzen moderated “Session 3A: Sustainable Development: Non-Profits LEED by Example.” During that session, the panel discussed the legal and employment implications for “Green Building”, particularly as the topic relates to Oklahoma.

Brownfields are real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. These often include abandoned or unused commercial and industrial facilities. Redevelopment of Brownfields properties have become a focus for many municipalities, real estate developers and environmental groups due to their revitalization of blighted areas, reuse of strategically located property, and environmental protection.

The 2010 Oklahoma Brownfields Conference gave participants the opportunity to explore the environmental, economical and social benefits of Brownfields redevelopment. Key public and private sector leaders presented their experiences and shared resources regarding, among other things, technical and regulatory considerations, financial incentives, liability protection, and economic development tools.

For more information on the conference please visit: http://www.oklahomabrownfields.com

For more information on Oklahoma’s Brownfields program please visit: http://www.deq.state.ok.us/LPDnew/brownfindex.html

Pros for Africa will feed more than two thousand people (with support from Feed the Children), provide health care to as many as possible (thanks to Drs. Al Moorad, Suben Naidu, John Carey and Rob Tibbes) and dig water wells that will provide for the entire region for years to come (due to the efforts of the Water4 Foundation).  In addition, Pros for Africa will assist in the construction of a small school building and spend countless hours playing games and sports with hundreds of eager children.  Pros for Africa plans to provide the people of Uganda with a little hope, help and love – Oklahoma style.  NEWS 9 and The News On 6 will have live reports starting the week of March 15 and will air a Uganda Special on April 21.

Pros for Africa is a cooperative effort through the Whitten-Newman Foundation and several other organizations and generous individuals who have come together to join Sister Rosemary and the St. Monica Girls’ Tailoring Centre in support of this truly revolutionary initiative. 

For more information on Pros for Africa and its sponsors, or to make a donation, please visit:  http://prosforafrica.com

For more information on the Whitten-Newman Foundation and its other charitable programs, please visit:  http://www.whitten-newmanfoundation.org

The decision addresses Citizen United’s 2008 documentary entitled Hillary: The Movie, a critical documentary of Democratic Presidential Primary candidate Senator Hillary Clinton.  Citizen United wanted to release the documentary within 30 days of the election through video-on-demand, but feared recourse from the Federal Election Commission based on the BCRA.  Unable to “resolve the case on narrower ground without chilling political speech,” the Court held that the ban on campaign expenditures by corporations is unconstitutional. To read the full opinion, please visit http://www.supremecourtus.gov/opinions/09pdf/08-205.pdf.

The decision has received both praise and criticism.  While President Obama criticized the decision and promised a “forceful response” from Congress, Senate Minority Leader Mitch McConnell viewed the decision as a victory for free speech, “upon which our democracy depends.”  See Analysis: High court ruling a game-changer for campaign spending, link below. 

Justice Stevens delivered a ninety page dissenting opinion, part of which he read aloud from the bench, stating that this decision is a “radical change in the law.” 

For more information, please see:

Supreme Court reject limits on corporate spending in electoral campaigns, available at http://www.washingtonpost.com/wp-dyn/content/article/2010/01/21/AR2010012104866.html?hpid=topnews.

Analysis: High court ruling a game-changer for campaign spending, available at http://www.cnn.com/2010/POLITICS/01/21/supreme.court.analysis/index.html

Ryan Whaley Coldiron Shandy is a Platinum Sponsor for this year’s Oklahoma Brownfields Conference.  The Conference is set to take place April 28-29, 2010 at the Historic Skirvin Hilton Hotel in Downtown Oklahoma City.  This is the second consecutive year that RWCS has sponsored the Conference. 

Brownfields are real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.  These often include abandoned or unused commercial and industrial facilities.  Redevelopment of Brownfields properties have become a focus for many municipalities, real estate developers and environmental groups due to their revitalization of blighted areas, reuse of strategically located property, and environmental protection.

The 2010 Oklahoma Brownfields Conference is expected to give participants the opportunity to explore the environmental, economical and social benefits of Brownfields redevelopment.  Key public and private sector leaders will present their experiences and share resources regarding, among other things, technical and regulatory considerations, financial incentives, liability protection, and economic development tools.

For more information on the conference please visit: http://www.oklahomabrownfields.com

For more information on Oklahoma’s Brownfields program please visit: http://www.deq.state.ok.us/LPDnew/brownfindex.html

For more information on federal Brownfields programs please visit:  http://epa.gov/brownfields

The agency is proposing to replace the Bush-administration’s 2008 standard of 0.075 parts per million with a new “primary standard” between 0.060 and 0.070 parts per million measured over eight hours.

In EPA parlance a “primary standard” is a pollution limit designed to mitigate adverse health effects, while a “secondary standard” is a pollution limit designed to mitigate adverse environmental effects such as damage to property, plants, visibility, etc.

The proposed 0.060 – 0.070 ppm standard might have a devastating effect on Oklahoma industry. For example, according to the Oklahoma Department of Environmental Quality’s most recent “Air Quality Update,” while all of the Oklahoma ozone monitoring sites met the current 0.075 ppm standard in 2009, ozone monitoring sites in the Oklahoma City, Tulsa, and Lawton exceeded an ozone level of 0.065 ppm, and several exceeded 0.070 ppm. For more details on the 2009 ozone averages in Oklahoma, please visit:  http://www.deq.state.ok.us/AQDnew/newsletters/Dec09/Dec09.html#ozone

In addition to setting a new 8-hour ozone “primary standard”, EPA is also proposing to set a separate seasonal “secondary standard.” The seasonal standard is designed to protect plants and trees from damage occurring from repeated ozone exposure, which can reduce tree growth, damage leaves, and increase susceptibility to disease.

EPA estimates that the costs of implementing this proposal will range from $19 billion to $90 billion.

EPA will take public comment for 60 days after the proposed rule is published in the Federal Register. The agency will hold three public hearings on the proposal: Feb. 2, 2010, in Arlington, Va. and in Houston, TX; and Feb. 4, 2010, in Sacramento, CA.

More information: http://www.epa.gov/groundlevelozone and
http://yosemite.epa.gov/opa/admpress.nsf/0/D70B9C433C46FAA3852576A40058B1D4

A significant addition to the new rules is a method for calculating the “last day” of a time period.  The new Rule 6(a)(4) differentiates between electronic filing and other means of filing.  For electronic filing, the last day expires at midnight in the court’s time zone.  For all other means of filing, the last day expires when the clerk’s office is scheduled to close. Rule 6(a)(1)(C) still extends the time period for filing when the last day of the period is a weekend or legal holiday, and allows filing until the end of the next day that is not a weekend or a legal holiday.  Moreover, if the Clerk’s office is “inaccessible” on the last day for filing, the deadline is extended until the “first accessible day” that is not a Saturday, Sunday, or legal holiday under Rule 6(a)(3)(B).

The new Rule 6(a)(2) also provides a method of calculating time periods stated in hours.  The rule states that counting for a period stated in hours begins “immediately on the occurrence of the event that triggers the period.”  The rule further mandates that “every hour is counted, including hours during intermediate Saturdays, Sunday, or legal holidays.”  In the event that the last hour falls on a Saturday, Sunday, legal holiday, or on a day the Clerk’s office is inaccessible then the deadline is extended to the same time on the next day that is not a Saturday, Sunday, or legal holiday, or the court is accessible.

The amendments to the current Federal Rules attempt to simplify the attorney’s life with regard to timing and deadlines.  Will the new rules have such an outcome? Only time will tell. 

For a full text of the amended rules, visit www.uscourts.gov/rules.
To view the Power Point Presentation, The Days of Our Circuit Court Lives, click here www.uscourts.gov/rules/presentation.html
To view Time Changes Coming to the Federal Rules, click here http://www.uscourts.gov/ttb/2009-06/article02.cfm. 
See Fed. R. Civ. P. 6 (2009).

RWCS directors Matt Kane and Dan Webber will receive the 2008 Maurice Merrill Golden Quill Award for their article “Federal Sentencing:  The New Frontier of Modern Legal Advocacy,” which appears in the October 10, 2009 issue of the Oklahoma Bar Journal.  See http://www.okbar.org/news/front/2009/10/07-awards-winners.htm.  The award is named after former University of Oklahoma College of Law professor Dr. Maurice Merrill, and is given annually to the authors of the best written article published in the Oklahoma Bar Journal, as determined by the Oklahoma Bar Association Board of Editors.  Both Kane and Webber have represented numerous clients in federal criminal and civil investigations dealing with allegations ranging from securities fraud to political corruption to health care overbilling.

RWCS is a sponsor of the 2009 Governor's Water Law Conference, to be held Nov. 3-5 at the Sheraton-Reed Conference Center in Midwest City.  The Governor's Water Law Conference is hosted each year by the Oklahoma Water Resources Board, and covers the latest issues and developments water policy, water quality, water management, and water supply.  For more information about the conference, see http://www.owrb.ok.gov/news/waterconference.php (and once there, see the link to RWCS at the bottom of the "2009 Sponsors" block).   For more information about RWCS experience and involvement in local, regional, and national water cases and issues, see various links on this web site, or contact Keith Klein, Steve Jantzen, or Mark Coldiron.

The plaintiffs in Connecticut v. American Electric Power Company seek to force the defendants to cap and reduce their carbon dioxide emissions in view of the “clear scientific consensus” on global warming. Rather than sue pursuant to the Clean Air Act, however, the plaintiffs have alleged claims under the federal common law nuisance for injuries attributable to global warming such as reduction in mountain snowpack and its concomitant flooding, increased illness from heat waves and smog, prolonged droughts, flooding, and wildfires, and beach erosion and sea level rise.

The Second Circuit’s opinion did not assert that the plaintiffs will succeed in imposing caps on carbon dioxide emissions, but is very important due to the likelihood that it will prompt a rush of litigation by states and municipalities as well as private interest groups against a broad array of companies.

The ruling – especially when combined with a recent opinion by a federal court that ordered the Tennessee Valley Authority utilize specific pollution controls based on a state nuisance law claim, North Carolina v. TVA, 593 F.Supp.2d 812 (W.D.N.C. 2009) – leaves open a nuisance cause of action against any industrial facility that emits significant quantities of greenhouse gases, and that risk will survive unless and until Congress or the Environmental Protection Agency more pervasively regulate carbon dioxide emissions. For our updates on recent developments in carbon dioxide regulation, please see http://www.ryanwhaley.com/epa-will-begin-monitoring-greenhouse-gas-emissions-in-20101 and http://www.ryanwhaley.com/epa-to-regulate-greenhouse-gasses.

Perhaps most important, the opinion will help future nuisance cases survive dismissal by imposing a low bar for proving the link between CO2 emissions and the claimed injuries: “[Causation] is an issue best left to the rigors of evidentiary proof at a future stage of the proceedings, rather than dispensed with as a threshold question of constitutional standing.”

The Connecticut opinion reveals that until there is a national carbon dioxide emissions policy public and private parties will be able to use the federal courts to seek incremental relief by imposing carbon dioxide caps on individual facilities. The Second Circuit stated:

Nowhere in their complaints do Plaintiffs ask the court to fashion a comprehensive and far-reaching solution to global climate change . . . . A decision by a single federal court concerning a common law of nuisance cause of action, brought by domestic plaintiffs against domestic companies for domestic conduct, does not establish a national or international emissions policy (assuming that emissions caps are even put into place).

The Connecticut opinion should be studied closely by plant managers, environmental managers, and counsel for any facility that produces significant quantities of greenhouse gases, so that going forward members of industry can (1) plan for potential litigation and (2) devise an approach for addressing whether comprehensive federal regulation of greenhouse gases will be preferred over piecemeal litigation.

The Second Circuit’s opinion in Connecticut v. American Electric Power Co., No. 05-5104 (2d Cir. Sept. 21, 2009) can be found here: http://www.ca2.uscourts.gov/decisions/isysquery/f7872f7d-579c-48ea-8483-e14964926376/28/doc/05-5104-cv_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/f7872f7d-579c-48ea-8483-e14964926376/28/hilite/.

Rationale:  In analyzing § 101(5)(B) of the Bankruptcy Code, the court stated that in situations where the equitable remedy is unobtainable, such an equitable claim can be reduced to a money judgment if the claim “gives rise to a right to payment.”  Thereafter, the claim can be discharged in bankruptcy.  Distinguishing between a mortgage, which gives rise to a right of payment in the event of default, and an injunction under RCRA, the court reasoned that because RCRA “does not authorize any form of monetary relief,” an injunction under RCRA does not give rise to a right to payment, and merely entitles the government to order clean up at the defendant’s expense.  Defendant argued that the court should distinguish between types of injunctions, such as those that can be complied with internally versus those that require an independent contractor for compliance, in determining whether or not the claim is dischargeable.  The court rejected this argument, holding that such distinctions are arbitrary and would encourage polluters to hire third parties to clean up, even if fully capable of doing so internally.

Case:  United States v. Apex Oil Co., Inc., 579 F.3d 734 (7th Cir. 2009).

Congratulations to RWCS client Goodyear (Lawton, Oklahoma tire plant) for winning the Frank Condon Award for Environmental Excellence.  The award was presented to Bryce Smith on Oct. 1 during the Environmental Federation of Oklahoma Annual Meeting for the Lawton plant's program "Solvent and Landfill Elimination." 

• ODEQ Director Steve Thompson first discussed this year's budget shortfall and the potential for increased fees in 2011, then addressed increased federal regulation, including reductions in the ozone standard, increased Clean Water Act enforcement, and other programs.
• Lt. Gov. Jari Askins reviewed stimulus programs with a green focus, especially the Oklahoma Water Resources Board's use of $62 million in funds to leverage almost $250 million for water and wastewater projects.
• Michael Mondshine, SAIC, provided estimates of the economic impacts of pending "cap and trade" greenhouse gas reduction legislation.  One observation: a gradual increase in the cost of natural gas until 2020, then a rapid increase in cost afterward.
• Derek Smithee, OWRB, explained the development of the Oklahoma Comprehensive Water Plan (OCWP), including a water quality chapter, and invited participation in the working group and public review process currently underway.

Starting January 1, 2010, EPA will require suppliers of fossil fuels or industrial greenhouse gases (“GHG”), manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions to submit annual reports to EPA.

The gases covered by the proposed rule are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).

EPA’s goal is to account for approximately 85 percent of the nation’s GHG emissions, and the new standard will apply to roughly 10,000 facilities. As a result, the new rule specifically covers many industries, including:

·    Portland cement manufacturing plants

·    Carbon black manufacturing facilities

·    Natural gas distribution facilities

·    Lime and nitric acid production facilities

·    Fossil-fuel fired electric generating units

·    Electroplating, plating, anodizing, and coloring facilities

·    Feedlots, hog and pig farms, and chicken and turkey production

·    Pulp and paper mills and manufacturers of lumber and wood products

·    Chemical manufacturers

·    Petroleum refineries and manufacturers of coal products

·    Manufacturers of motor vehicle parts

·    Lead smelting and refining facilities

·    Municipal solid waste landfills

The first annual reports for the largest emitting facilities, covering calendar year 2010, will be submitted to EPA in 2011.

According to EPA, the rule is intended to provide a better understanding of the sources of GHG emissions, so as to help EPA develop policies and programs to reduce emissions.  EPA provides more information and the text of the rule at its website: http://www.epa.gov/climatechange/emissions/ghgrulemaking.html.

Provocative questions like this make Heart of Dryness - a modern environmental case study - a worthwhile read for anyone interested or involved in water law and water rights issues.  As the Conrad-inspired title indicates, the action takes place in Africa - Botswana to be precise - a place which most Americans probably don't give much thought.  But the author, global water journalist James Workman, draws many interesting parallels to Western, Midwestern, and Southeastern U.S. water history including diminishing annual snowpack and the resultant effect on rivers such as the Colorado, drying forests, evaporation of Lake Mead and other reservoirs, water infrastructure aging (there is some amazing information about how much water can leak from old piping), and depletion of groundwater.  The author cites the Ogallala Aquifer as a prime example (some areas of the aquifer are estimated to have less than 25 years groundwater supply left).  For more on the Ogallala Aquifer's current condition see this link: http://www.scientificamerican.com/article.cfm?id=the-ogallala-aquifer&page=4 (Oklahoma appears to be in somewhat better shape vis-a-vis remaining aquifer groundwater supplies than other areas). 

Other fascinating points in Heart of Dryness include the criticism of biodiesel fuel policy.  Producing biodiesel fuel requires massive amounts of water, which the author argues makes little sense when surface and groundwater supplies are at risk, especially when clean natural gas is so abundant in the Midwest (and currently very low-priced)? 

The author argues that strategies of African Bushmen for coping with water scarcity can be adapted and applied in countries like the United States, and offers new perspectives on U.S. policy regarding water law, water rights, and water usage.  One need look no farther than the current lawsuits by Dallas's Tarrant County Water District and the City of Hugo - which seek to invalidate Oklahoma's legislative moratorium on sale of water out-of-state - to see the real-world manifestation of a key Workman thesis - "we do not govern water, it governs us."

Ryan Whaley Coldiron Shandy attorneys are very familiar with Oklahoma water law and water rights issues, similar issues in other states, have represented key clients in such matters, and have spoken at water law conferences and seminars.

• Retain only experts who are thoroughly screened and Daubert-knowledgeable because they will have to invest adequate time and effort to produce a report with sufficient detail and explanation and defend it against Daubert challenge while facing brutal scheduling issues. 
• Make sure experts are committed and have the capability (from a mental, physical, temperament, and scheduling standpoint) to engage in the arduous and lengthy expert process, which will likely include: helping formulate and guide discovery, reviewing documents, performing their work, preparing a report, undergoing tough depositions (and the extensive preparation needed to get ready for them), assisting with Daubert motions (both defending their work and advising on challenges to a counterpart expert's work), testifying at Daubert hearings, and preparing demonstrative exhibits.
• Do not underestimate the importance of expert involvement, time demands, and complexity in (a) selecting exhibits to be identified on the exhibit list at the time set in the scheduling order, and (b) preparing demonstrative exhibits, usually for exchange at some later point closer to trial.  In a complex case, experts tend to want later deadlines for demonstratives and  frequently come up with changes and refinements to demonstratives as the dealine approaches.  New technology and techniques for illustrating expert testimony encourage constant improvement of demonstratives - which can be draining on counsel and expensive.  Start working on demonstratives early!

For more on this issue, see: http://www.epa.gov/oecaerth/civil/cwa/cwaenfplan.html