Valpo Law Blog

Analysis of current legal issues and cases in the Seventh Circuit Court of Appeals

Category: Environmental Law (page 1 of 2)

Cleanup Case Takes Linguistic Turn: What Happens to a Cost Incurred?


Definition of “incur” from the Concise Oxford Dictionary, 1919.

On September 30, the Indiana Court of Appeals issued what may be its final decision in the decade-long case of Travelers Insurance v. Maplehurst Farms, ruling in favor of the insurance company for the second time. Judge Michael Barnes wrote for the three-judge panel.

 Like another Court of Appeals case we covered recently, this case involved a leaking underground storage tank. But unlike that case, this one turned on the liability of the former owner’s insurance company rather than the former owner itself.

From 1933 to 1997, Maplehurst Farms operated a dairy facility on Holt Road in Indianapolis. In the 1950s, it installed an underground storage tank for heating oil there. As so often happens, the tank leaked and caused extensive ground contamination—but as so often happens, the leak was not discovered until decades later.

Dean Foods bought up Maplehurst in 1997 and closed the Indianapolis facility two years later. But Maplehurst retained just enough of a distinct corporate identity that when the contamination was discovered in 2000, Dean could conveniently demand that “Maplehurst” clean it up.

But since Maplehurst wasn’t really Maplehurst anymore, it took some time for the new Maplehurst to figure out that the old Maplehurst actually had liability insurance back when the leak occurred. And by that time—in 2003—Maplehurst had already entered into a cleanup agreement with the Indiana Department of Environmental Management (IDEM). By a stroke of luck, however, Maplehurst didn’t actually spend anything on the cleanup until after it had notified its long-ago insurer.

Would Travelers have to pay for costs arising from an IDEM cleanup agreement that Maplehurst entered into before giving Travelers notice, but did not actually spend money on until after giving notice?

In the policy agreement, Travelers specified that “no insureds will, except at their own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.” The key word for this case was “incur.”

The trial court, relying in part on some confusing language in the previous Court of Appeals ruling in the case, held that Maplehurst’s costs were incurred after the notice—in other words, that a cost is not “incurred” until it is actually paid out. The Court of Appeals reversed, holding that Maplehurst “incurred” its costs when it initially entered into the cleanup agreement with IDEM, and therefore Travelers was not liable.

The case came before the Court of Appeals on an appeal of the trial court’s grant of summary judgment in favor of Maplehurst. Technically, the appellate panel only reversed that grant of summary judgment. But now that the Court of Appeals has drawn such tight boundaries around the meaning of “incur,” Maplehurst will surely find it difficult to prevail on the merits.

The case is currently awaiting a ruling on Maplehurst’s motion for rehearing before it returns to the trial court.

In its opinion, the Court of Appeals seemed to have laid down a rule that “incur” has only one legal meaning in Indiana: “bringing a liability or obligation on oneself.” That might prove problematic, since as the court noted, the word does in fact have two meanings, and in other contexts the meaning of “suffer” or “be imposed” could be closer to the mark.

It is not entirely clear why the court opted for this blanket rule rather than applying the presumption against surplusage, since the “incur” language occurs alongside “make a payment” in Maplehurst’s policy agreement.

What do you think? Do you “incur” a cost when you enter into a general agreement that will require you to pay something, or when you actually have to pay a specific amount?

By: Samuel Henderson
Valparaiso University Law School
Translator and J.D. Candidate, 2016

LUSTy Landowner Bears Heavy Burden, Indiana Appeals Court Rules

Photo via Wikimedia Commons and Humphrey Bolton.

An underground storage tank exposed. Photo via Wikimedia Commons and Humphrey Bolton.

Wherever you live, odds are you aren’t very far from an underground storage tank (“UST”) filled with a toxic substance like gasoline. That tank could be leaking right now and you wouldn’t know. The contamination is out of sight and out of mind—until it finally comes to light years or decades later. Then the question is: who foots the bill?

The recent Indiana Court of Appeals decision in JDN Properties v. Vanmeter Enterprises makes it harder for former landowners to skip out on liability for contamination that occurred while they owned the property.

The decision, issued on September 19 and authored by Judge Michael Barnes, interprets Indiana’s Environmental Legal Action (ELA) statute as imposing a heavy burden of proof on the defendant to prevail on summary judgment once the plaintiff has made out a prima facie case that the defendant knew about the contamination.

Here is the background of the case: The defendant is a company that once owned some land in Kosciusko County which was later bought by the plaintiff (the current owner). The land, which houses a light industrial facility, formerly had two underground storage tanks for heating oil. In the 1980s, the defendant’s CEO arranged for some water pipes that ran near the tanks to be moved. According to the contractor who moved them, the pipes needed to be moved because the high level of oil contamination was making the water from the pipes unusable.

The issue on appeal boiled down to this: was that circumstantial evidence of the defendant’s CEO’s knowledge of the contamination sufficient to allow the plaintiff’s ELA claim to survive a motion for summary judgment under Indiana Trial Rule 56?

As any survivor of the first year of law school can tell you, summary judgment requires that there be “no genuine issue of material fact,” thus allowing the court to rule in the movant’s favor as a matter of law. In this case, deeming the plaintiff’s evidence insufficient to establish a genuine issue of material fact, the trial court granted summary judgment for the former owner on the ELA claim.

The Court of Appeals was not so generous, and held that the evidence was sufficient to establish a genuine issue of material fact as to whether the defendant knew about the contamination (and was therefore liable for the cost of cleanup). That issue having been established, the burden shifts to the defendant to adduce evidence to disprove the issue. And the defendant in this case had not met that burden.

In coming to this conclusion, Judge Barnes leaned heavily on an Indiana Supreme Court decision on ELA summary judgment, Reed v. Reid. In that case, the Supreme Court rejected the argument that an ELA defendant should prevail on summary judgment unless the plaintiff had proven that contamination came from plaintiff’s facility. Instead, the Reed court ruled, to prevail on summary judgment the defendant needs to definitively prove that it was not the source of the contamination.

Judge Barnes did not go so far as to grant the plaintiff’s cross-appeal in favor of its own motion for summary judgment. Instead, the case now returns to the trial court for resolution of those pesky factual questions.

Although USTs seldom make it into reported appellate decisions, storage tank problems are all around us. My unscientific review of data from the Indiana Department of Environmental Management shows that Lake County alone has 586 sites with public records from IDEM’s Leaking Underground Storage Tank program (which goes by the charming acronym “LUST”). And that’s a conservative count. Many leaking tanks, including the one at issue in this case, haven’t generated any public LUST records at all.

Unlike some other environmental justice issues, this one isn’t entirely, or even mostly, an urban problem. Farms and rural factories all across Indiana have USTs in varying states of repair. And brownfield sites all across Indiana are held back from development because nobody wants to pay to clean up those old leaks.

Perhaps the Court of Appeals’ decision in this case will make it easier for people who want to fix up these sites to get compensation from the former owners on whose watch the contamination happened.

By: Samuel Henderson
Valparaiso University Law School
J.D. Candidate, 2016

Climate Necessity Defense May Go to Trial in Michigan

Enbridge storage tanks near the origin of Line 6B in Griffith, Indiana, as seen from the Hoosier Prairie Nature Preserve. Photo by author.

Enbridge storage tanks near the origin of Line 6B in Griffith, Indiana, as seen from the Hoosier Prairie Nature Preserve. Photo by author.

The stakes in the fight over climate change could not be higher, and a Michigan jury may soon have the chance to judge those stakes for themselves.

Here is the background: Early in the morning on June 24, 2013, local activist Chris Wahmhoff skateboarded deep into a pipeline segment on an Enbridge Line 6B construction site in Marshall, Michigan. When he emerged after successfully stopping the work being done on the site for a full day, Wahmhoff (known to fellow activists as “The Whammer”) was arrested and charged under the Michigan Penal Code with criminal trespass and resisting a police officer.

Enbridge Line 6B, which runs from Northwest Indiana to southern Ontario, is best known for causing the largest inland oil spill in the United States in 2010. Because the line was carrying diluted bitumen from the Canadian tar sands rather than conventional crude, it sank to the bottom of the river instead of floating. Even four years later, the spill has not been entirely cleaned up.

Wahmhoff’s protest was less than half a mile from the site of that breach, and Wahmhoff hoped his action would stir broader resistance to the petroleum industry. As he wrote before entering the pipe, “I wish that as we are taken to jail, someone else will rise and proclaim, China’s oil will not pass through 6B any longer.”

In January 2014, Judge James Kingsley of the local circuit court dismissed the charges on the basis that the prosecutor had not presented sufficient evidence to show all the elements of trespass. But in April, the Michigan Supreme Court reversed that dismissal, and on September 29 it refused to hear Wahmhoff’s appeal.

As the two sides now prepare for trial, Wahmhoff’s attorney has announced that he will call expert witnesses to testify on the threats posed by climate change, in support of a “choice of evils” necessity defense. The judge has not yet ruled on the admissibility of this “climate necessity” evidence, but reports suggest that he may be sympathetic to this approach – and that he has even cited Henry David Thoreau from the bench in relation to the case.

The climate necessity defense most recently made news in September, when a Massachusetts prosecutor referenced the defense while dropping charges against “Lobster Boat Blockade” activists who had blocked a delivery of coal to a power plant. A few years earlier, however, a Utah court rejected the defense in the case of Tim DeChristopher, who had obstructed the auction of oil and gas leases on public lands. Wahmhoff’s case may be the first in which the defense actually gets its day in court.

Arguably, nothing is ever entirely new in the law, and the climate necessity defense is no exception: it is just the latest variation of the political necessity defense, which has had a checkered history in American courts.

Wahmhoff’s Detroit-based attorney, John Royal, is president of the Michigan chapter of the National Lawyers Guild.* The Guild specializes in the defense of progressive activists, and Guild attorneys have frequently pushed the envelope in bringing political necessity defenses to bear in their clients’ cases.

Numerous oil pipelines run through Wisconsin, Illinois, and Indiana (and in fact Indiana has also already seen charges against activists related to Line 6B). It is likely just a matter of time before courts in these states too find themselves confronting the climate necessity defense in some form: either as a formal defense, or by way of negating the mens rea of the alleged crime.

Given the rarity of such cases to date, the Wahmhoff trial will bear watching. Will climate change evidence be admitted in what is ostensibly a simple trespassing case? Will it be successful?

For now, at any rate, “the Whammer” isn’t letting this trial cramp his style. He is currently the Green Party candidate for US Senate in Michigan.

By: Samuel Henderson
Valparaiso University Law School
Translator and J.D. Candidate, 2016

* Disclaimer: I am an officer of the Valpo NLG chapter.

Equitable CERCLA resolution requires full record, 7th Circuit rules

Such an even-handed molecule. (Image: generic structure of polychlorinated biphenyls, from Wikimedia Commons.)


On September 25, the Seventh Circuit vacated a trial court judgment that had found paper manufacturer NCR 100% liable for the costs of cleaning up polychlorinated biphenyls (PCBs) in Wisconsin’s Lower Fox River. Chief Judge Diane Wood wrote for the three-judge panel.

Judge Wood is not known for prolixity. So when she writes a 31-page opinion, you know it’s going to cover a lot of ground. (Specifically, you know it’s going to cover a lot more ground than this blog post.)

If you’re a fan of complex environmental litigation—and who isn’t?—you’ll want to read the whole thing.

This case goes back to NCR’s invention of carbonless copy paper in 1953. In Judge Wood’s acid phrase, that invention “solved a small problem and created a large one.”

Anyone who remembers wrestling with carbon paper might challenge the first part of Judge Wood’s statement. But the second part is beyond dispute. In less than twenty years, this handy product transformed the Lower Fox (home to the world’s largest cluster of paper mills) into a 39-mile-long toxic waste dump.

That’s because until the 1970s, NCR coated its carbonless copy paper with Aroclor 1242, a PCB mixture sold by Monsanto. PCBs are toxic at very low concentrations, and not only cause cancer but also disrupt the immune, endocrine, nervous, and reproductive systems.

According to the EPA, mostof the 250,000 pounds of PCBs from this period still rest on the bottom of the Lower Fox. But more than half have already escaped into Lake Michigan. Every year, a few hundred more pounds follow suit.

The cleanup of these PCBs is ongoing. A massive dredging operation along the lower stretch of the river is now in its sixth year. The total cost of the project will likely top one billion dollars. NCR has borne most of that cost itself, but naturally would like someone else to help foot the bill.

And as it happens, in addition to the PCBs that NCR released directly, some were also released by smaller mills that recycled NCR’s byproducts. The central question before the trial court was whether these recyclers should share in NCR’s liability under CERCLA.

The trial court ruled that they should not, chiefly because NCR knew about potential PCB risks long before the recyclers did. However, the Seventh Circuit found its reasoning unsatisfactory.

Liability for giant toxic cleanups like this is governed by CERCLA (the Comprehensive Environmental Response, Compensation, and Liability Act), which we last discussed here just two weeks ago.

This time around, CERCLA’s liability provision took center stage. 42 U.S.C.A §9613(f)(1) allows a trial court to apportion liability among potentially responsible parties “using such equitable factors as the court determines are appropriate.”

Leaning on an earlier Seventh Circuit ruling, Judge Wood noted that although CERCLA leaves the district court free to decide which equitable factors are important, the court must make that decision based on the totality of the circumstances. And to do so, the court must first have all the circumstances before it.

The problem was that the trial court couldn’t have had all the circumstances before it, because at the outset it limited discovery to just a subset of equitable factors. Under Kerr-McGee, Judge Wood wrote, that kind of pre-selection is unacceptable.

Judge Wood agreed with NCR’s contention that the trial court wrongly excluded three key factors: “the parties’ relative volumes of PCB discharges; sources of PCBs in the river other than carbonless copy paper; and the parties’ levels of voluntary cooperation with the government’s cleanup effort.”

Further, although Judge Wood accepted the trial court’s finding that NCR knew of the potential risks of PCBs earlier than the recyclers did, the court’s failure to explain why this factor outranked all others (such as the quantity of PCBs released before any of the parties knew of the risk) made it impossible to evaluate whether the trial court had abused its discretion or not.

The case now returns to the Eastern District of Wisconsin for further proceedings.

In complex and difficult cases like this, should a court be able to save time by pre-selecting the equitable factors it will consider? What do you think?

By: Samuel Henderson
Valparaiso University Law School
J.D. Candidate, 2016

Lead Weight to Lift from East Chicago


Where USS Lead once stood, this clay-capped landfill now holds the lead waste that didn’t blow into the surrounding neighborhood. Photo by author.

On September 3, the EPA entered into a consent decree with two major companies to clean up lead and arsenic contamination in a residential area near the USS Lead Superfund site in East Chicago, Indiana.

The consent decree was filed with the US District Court for the Northern District of Indiana in Hammond (less than three miles due west of USS Lead).

Under the decree’s terms, which are subject to public comment and court approval, DuPont and Atlantic Richfield will perform some $26 million worth of cleanup, removing up to two feet of contaminated soil from an area that includes hundreds of residences, numerous parks, an elementary school, and the Carmelite Home.

The contamination came from lead-rich baghouse dust that was piled in the open air at the smelter site and blown by the wind into the neighborhood. The smelter began operations in 1920, converted to lead battery recycling in 1973, and closed in 1985.

The settlement was reached under CERCLA (the Comprehensive Environmental Response, Compensation, and Liability Act), specifically 42 U.S.C. §§ 9606 and 9607(a).

Better known as the “Superfund law,” CERCLA draws one of the widest circles of liability anywhere in the law. Under CERCLA, any “potentially responsible party” can be held liable for the cost of cleaning up a designated Superfund site.

The sweeping scope of liability under CERCLA can seem unfair, especially when it’s your door that the EPA comes knocking on. But the rationale is straightforward.

Without such a rule, the EPA would have no one to pursue in cases like this: USS Lead itself went bankrupt decades ago.   Yet someone has to pay to clean up the mess, and someone made money from the practices that led to the mess. It’s only fair, the logic goes, that those two someones should be the same.

Northwest Indiana is no stranger to CERCLA cleanups, but this cleanup is unusual in covering such a large residential area. As one local reporter learned, many of those in the path of the contamination were entirely unaware of it. Many probably still are.

The complaint (filed on the same day as the settlement) contains the following map of the affected area:


That’s approximately half a square mile of densely populated land. (The current settlement covers only Zones 1 and 3; any relief for the hundreds of people living in Zone 2 remains under discussion.)

The USS Lead case is something of a textbook case of environmental injustice, which is a national phenomenon but one that has special relevance* in Northwest Indiana.

Study after study has found that environmental contamination correlates more closely with the race of the people affected than with their income or other attributes. In essence, the darker your skin, the more likely your neighborhood is to be used as a dumping ground.

And it isn’t just contamination in general that correlates with race: lead contamination in particular disproportionately affects African-American communities. This is of particular significance as we learn more about the correlation between childhood lead exposure and violent crime.

In view of that pattern, even if there is no obvious arrow of racial causation here, it comes as no great surprise that the neighborhood downwind of USS Lead (unlike East Chicago as a whole) is overwhelmingly African-American.

Since this is after all a law school blog, let’s close with a hypothetical.  Imagine for a moment that USS Lead is still in business. And imagine that a close review of crime data for East Chicago shows sharply elevated levels of violent crime precisely within the boundaries of the lead contamination. In that case, would there be any way for crime victims to recover from the polluter?

Should there be?

By: Samuel Henderson
Valparaiso University Law School
J.D. Candidate, 2016

* The linked article is based on a needs assessment that I contributed to.

Everything New is Old Again: 7th Circuit Upholds EPA Stance on Emission Baselines for Overhauled Equipment


The Georgia-Pacific paper mill in Green Bay.  Photo by Wikimedia Commons user Dual Freq.

On August 29, the Seventh Circuit rejected a local environmental group’s effort to block the renewal of the Title V emissions permit for a large paper mill in Wisconsin.  The basic question might have arisen in almost any Rust Belt town: when a plant is overhauled to update its equipment, does it become a “new” plant (not counted in the state baseline) or is it still an “old” one?  The court sided with the EPA’s stance that overhauled equipment is still “old” for purposes of the Clean Air Act.

The plaintiffs were the Clean Water Action Council of Northeastern Wisconsin and the Sierra Club.  The defendants were the EPA and Georgia-Pacific (as defendant-intervenor).  Judge Frank Easterbrook authored the panel’s unanimous opinion.

The emissions at issue waft from the Georgia Pacific paper mill in Green Bay (built in 1919), and specifically from a set of coal-fired boilers that were originally built in the mid-20th century.  Because these boilers antedate the Clean Air Act, their emissions are counted in the “emissions baseline” for Wisconsin (and therefore don’t create a risk of nonattainment for the state, and can be regulated fairly lightly).  The plaintiffs argued that the overhaul of the boilers in 2002 turned them into “new” equipment that should count against the baseline.

Judge Easterbrook’s opinion leaned heavily on the Chevron doctrine of judicial deference to federal agencies’ interpretations of statutes.  The plaintiffs did not contest the doctrine, but argued that the statute was unambiguous and therefore the EPA’s decision was objectively unreasonable.  But that would be a difficult hill to climb even with a much clearer statute than the Clean Air Act.  It was perhaps unsurprising that the court was unpersuaded.  (Masochists among our readership are invited to peruse the provision at issue, 42 U.S.C. § 7479(4) , and assess its clarity for themselves.)

But Judge Easterbrook did not confine himself strictly to deference.  He also noted that the plaintiffs’ preferred interpretation (in which an overhauled facility would no longer be counted as part of the baseline) could be severely counterproductive.  Specifically, it would create a strong disincentive for the owners of pre-1975 facilities to ever update their equipment, which would lead to more emissions overall.

On its way to the Seventh Circuit, this case followed the byzantine administrative path typical of environmental litigation today: rather than suing the polluter, or even the state agency that granted the permit, the plaintiffs had to sue the federal EPA for failing to object to the state agency’s decision to grant the permit.  (And could do so only after the EPA rejected their petition.)  At that point, however, the suit got an express ticket to appellate courts: Under 42 U.S.C. § 4607(b), the EPA’s decisions on Title V permits must be appealed to the relevant Circuit Court of Appeals, without stopping at the trial court level.

The case docket, and many of the key briefs, can be viewed freely via the Internet Archive, thanks to the users of the RECAP plugin.

What do you think?  Given what we know about regulatory capture, is it wise to give so much deference to agencies’ interpretations of the statutes that govern them?  On the other hand, given the gaping ambiguities to be found in almost any modern statute, is there any real alternative to the Chevron doctrine?

By: Samuel Henderson
J.D. Candidate, 2015

EPA v. EME Homer City Generation: What does it mean for Indiana?

Faith Alvarez
Valparaiso University Law School
J.D. Candidate, 2015

On April 29, the US Supreme Court handed down its decision in EPA v. EME Homer City Generation, in which the court held 6-2 that the Clean Air Act directs the Environmental Protection Agency (EPA) to establish national ambient air quality standards for pollutants at levels that will protect public health.  Essentially, this means that upwind states in the Midwest and South, whose polluted air flows north and east, will have to comply with the EPA’s air quality standard by reducing their ozone and fine particle emissions by varying amounts.

This ruling upholds a rule issued by the EPA in 2011 to reduce cross-state pollution, making it difficult for some states to meet clean air requirements. The ruling also touches a 2008 decision, which struck down the EPA’s ability to establish such standards.

As the Lafayette Journal & Courier points out, Indiana is among the upwind states that have to reduce power plant pollution contributing to smog and soot in downwind states.  Indiana, however, is both a contributor to other states’ pollution levels and a recipient of cross-state pollution.  In fact, Justice Ginsburg, who authored the opinion, noted this and used a passage from the Bible in her discussion of states like Indiana: “The wind bloweth where it listeth, and thou hearest the sound thereof, but canst not tell whence it cometh, and whither it goeth.”  John 3:8.

In 2008, former Gov. Mitch Daniels called the rejection of EPA’s ability to establish national ambient air quality standards “great news for Hoosier ratepayers and job seekers.”  Now, in 2014, the Environmental Defense Fund has determined that Indiana is actually benefited by this policy.

The EPA intends to determine which states are significant contributors to cross-state pollution and then assign reductions based on where the biggest changes could be made for the least cost.  Because Indiana is both a contributor and receiver, Indiana does not have to make as large a reduction as it would if the EPA only considered Indiana’s downwind contributions.  Furthermore, the EPA estimates that the rule could also prevent 1,400 premature deaths in Indiana each year and provide health benefits worth $4.5 to $11 billion per year by reducing smog and soot that cause heart attacks, bronchitis, and asthma attacks.

On the other hand, the Indianapolis Star reports that Indiana Attorney General Greg Zoeller criticized the decision, stating that “the opinion appears at first reading to be a setback for the relationship of cooperative federalism between the states and federal government.”

However, a spokesman for the Indiana Department of Environmental Management noted that the ruling gives the federal court of appeals the chance to address an argument made by Indiana and other states that they had been in compliance with the EPA under an earlier version of the rule.

Indiana’s central problem is more likely that coal-fired power plants provide most of its energy, which is used by its power-intensive manufacturing industry.   Nevertheless, the State Utility Forecasting Group at Purdue University reported in December that the cost of compliance is not expected to exceed what the state’s power plants already spend to meet another EPA rule that requires reduced toxic emissions.

It is still unclear when states will have to start reducing their emissions.  In the meantime, it appears that no immediate action from the state is required.

What do you think about the decision?  Will this be good for Hoosiers?

For a closer look at the case, check out SCOTUSblog.

“CERCLA” Controversy Before 7th Circuit for a Third Time


By:Thomas McNamee
J.D. Candidate, 2015
Valparaiso University Law School

On May 1st, 2014, the Seventh Circuit has made a ruling in Frey v. EPA for the third time. The Circuit Court affirmed a grant of summary judgment by the Southern District of Indiana, finding the plaintiffs’ claims, which challenged the adequacy of environmental cleanup at three landfills near Bloomington Indiana, weren’t ripe because the CERCLA cleanup is ongoing.

The Comprehensive Environmental Response Compensation Act (CERCLA) created a tax on the chemical and petroleum industry, which is placed in a trust to fund the cleanup of abandoned or uncontrolled waste sites. The case at issue involved a three stage remediation plan at the landfills near Bloomington. At these sites, CBS (formerly Westinghouse Electric Corp.) was to engage in a three step cleanup of polychlorinated biphenyls (PCBs) disposed of from the 1950’s to the 1970’s. PCBs are carcinogens that are toxic to both humans and wildlife, especially if placed into the environment where exposure is more likely.

The suit challenged the second and third stages of the cleanup. The lower court ruled, and the circuit court affirmed, that it lacked jurisdiction over the claims because the stages of cleanup are currently in progress. The court relied on CERCLA §113(h)(4), which states:

(4) An action under section 9659 of this title (relating to citizens suits) alleging that the removal or remedial action taken under section 9604 of this title or secured under section 9606 of this title was in violation of any requirement of this chapter. Such an action may not be brought with regard to a removal where a remedial action is to be undertaken at the site.

Section 113(h)(4) requires the remedial action to be complete before the court can consider a citizens suit under CERCLA. Stage two and three were ongoing, and so the court could not hear the case due to lack of jurisdiction.

With regard to the first stage of the remedial plan, the plaintiffs alleged the EPA did not complete a remedial investigation and feasibility study (RI/FS) prior to selecting the stage one remediation and that stage one also violated CERCLA’s mandate that remedies protect human health and the environment. The court found that the EPA had completed the functional equivalent of an RI/FS prior to selecting the stage one plan. After examining the facts, the Circuit Court agreed with the lower court, stating:

“EPA did consider whether Stage 1, standing alone, would stop all PCB releases from the sites into the environment. It concluded that Stage 1 would significantly improve soil quality at the sites but that further remediation of the contaminated groundwater and sediment would be needed. In other words, the EPA considered Stage 1 to be a good first step toward preventing all PCB releases into the environment from the sites and explained that future steps would be needed to solve the problem fully. The RI/FS regulations did not require more.”

As this case illustrates, procedural issues are present in every form of law. The CERCLA itself provides for specific procedures, which in turn the courts must follow. Because the court has stated that stage two and three must first be completed before they can be challenged, and this case has already been before the 7th Circuit twice on different issues, we can assume that once the plan is completed, the court may get its fourth opportunity to examine the facts. As they say in athletics, practice makes perfect.

Federal Farm Service Agency Payments – Who Can Receive Payments as an Owner?

By: Thomas McNamee
J.D. Candidate, 2015
Valparaiso University Law School

The District Court of the Northern District of Illinois upheld a Farm Service Agency (FSA) decision not to pay benefits through the Direct and Counter Cyclical Payment Program (DCP), deciding that the definition of “owner” for purposes of the program does NOT include a beneficial owner of an Illinois land trust.

In Stable Investments Partnership v. Vilsack, two Chicago attorneys purchased farmland presumably for investment purposes. The attorneys created a general partnership, Stable Investments Partnership, and then purchased a farm through an Illinois land trust. The Illinois Department of Financial & Professional Regulation defines a land trust as “an arrangement by which the recorded title to the real estate is held by a trustee, but all the rights and conveniences of ownership are exercised by the beneficial owner (beneficiary) whose interest is not disclosed.” Following the purchase of the property, Stable entered into a crop share lease with farmer Stanley Blunier, in which Blunier agreed to farm the land and share the profits with Stable. Blunier applied for federal benefits on behalf of himself and the partnership under the DCP. Initially both were approved, and Stable received a check for $448 representing its share of the benefits under the program. Following the payout, the FSA concluded that Stable was not actually eligible for the benefits, and only the bank, who had legal title of the property as trustee, could be considered the owner for purposes of receiving benefits under DCP. The definition of owner under the DCP was the issue before the court. If Stable was determined to be an owner (as beneficial owner of an Illinois land trust), it would be eligible for federal benefits under the program. If Stable was found not to be an owner under the DCP, it would be found ineligible.

With no authority defining an “owner” for purposes of the DCP, the court turned to the definition under the federal farm regulations. 7 C.F.R. § 718.2. The court simplifies the definition, stating that an owner means one who has legal ownership, including:

(1) a federal agency,
(2) a purchaser under contract for deed,
(3) one who has a life estate,
(4) one who has purchased a farm in foreclosure, and
(5) an heir to property.

Stable argued that although the bank held title to the property as trustee, the partners controlled and received all the benefits. The court refused the argument, and did not expand the definition of “owner” to include Illinois land trust beneficiaries under the program. In the court’s reasoning, it noted that the FSA consistently stated that the reason it placed more importance on title rather than control was because the easiest way to verify ownership is to check public county records. Allowing Illinois land trust beneficiaries to qualify as legal owners would mean that the FSA would have to examine private documents, such a partnership agreements, which the FSA argued were ripe for fraud.

This decision can have a large impact on ownership of farms and even estate planning. It seems only reasonable to believe that being a beneficial owner of a land trust would afford one the benefits of that land trust. It should be interesting to see how this decision affects real estate owners in the future, or if it continues through the courts. Because agriculture and farming is a staple in the 7th Circuit states, any decision regarding the property on which it occurs garners attention. Do you actually “own” your land, at least for benefits sake?


Wisconsin Senate Bill Seeks to Protect Business of Frac and Sand Mining

Thomas McNamee
J.D. Candidate, 2015
Valparaiso University Law School

Wisconsin Senate Bill 632, introduced on February 26, 2014, by Senator Thomas Tiffany, seeks to address local regulation of nonmetallic mining and the preservation of marketable nonmetallic mineral deposits. The bill is currently still passing through legislative processes, but it has drawn considerable attention from both those supporting it and those opposing it.

At issue is the ability of local governments to adopt ordinances or regulations of nonmetallic mining and related activities. The bill places limitations on such regulations by local governments (to the extent they are not zoning ordinances), which would limit the applicability of regulations to land that such mining occurs on. A relevant portion of the proposed legislation states:

(2)(a) If a political subdivision enacts or amends an ordinance, other than a zoning ordinance, that applies to or affects nonmetallic mining, and that became effective after nonmetallic mineral extraction began at a nonmetallic mining location, and which is more restrictive than the requirements of any ordinance in effect at the time nonmetallic mineral extraction began, or that imposes a new restriction, the ordinance may not apply to or affect the continued extraction of a nonmetallic mineral from a nonmetallic mining location where extraction was occurring at any time during the 365 days before the effective date of the political subdivision’s ordinance. Such continued extraction from such a location shall be considered an existing use, and may not be considered an expansion of a nonconforming use.

According to the Wisconsin Counties Association, who has taken a neutral position on the bill, the proposed legislation seeks to codify the “diminishing asset rule” which has been adopted in a number of court decisions. “The ordinary concept of use, as applied in determining the existence of a nonconforming use, must yield to the realities of the business in question and the nature of its operations. We think that in cases of a diminishing asset the enterprise is ‘using’ all that land which contains the particular asset and which constitutes an integral part of the operation, notwithstanding the fact that a particular portion may not yet be under actual excavation. It is in the very nature of such business that reserve areas be maintained which are left vacant or devoted to incidental uses until they are needed. Obviously, it cannot operate over an entire tract at once.” Sturgis v. Winnebago County Board of Adjustment, 413 N.W.2d 642 (Ct. App. 1987). The Wisconsin Counties Association states that nonmetallic mining that was occurring before a non-zoning local ordinance was adopted would have legal nonconforming use rights on the parcel of land.

Rich Budinger, president of Wisconsin Industrial Sand Association states that his organization supports the legislation, and that the bill “prevents misuse of municipal police powers to change the rules for existing permitted operations and properties.”

Others disagree with the bill and argue that it removes the ability and powers of local governments to enforce ordinances and regulations in their own jurisdiction with regards to nonmetallic mining (frac and sand mines). According to the Sierra Club, who has stated they “strongly oppose” the bill, the legislation prevents local governments from changing rules regarding frac sand mines and also undermines a previous Wisconsin Supreme Court decision. The Sierra Club states “SB 632 prohibits local governments from changing or even enforcing rules for operating frac sand mines even if they’re found to be “non-conforming” or violating the rules, and by prohibiting them from doing anything to stop a frac sand operation on lands registered as having a sand deposit.”

As frac sand mining continues to be a hot topic issue, the status of Wisconsin SB 632 will continue to be followed, supported, and scrutinized. Nonmetallic mining has begun to occur in nearly every state, and those under 7th Circuit control are no different. It will be interesting to see where WI SB 632 goes and how Indiana and Illinois address frac sand mining in their own ways. One thing is for sure, pressure from both sides of the issue will continue to be applied, but in the end, one will be happier than the other.


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