It has not been a good run for plaintiffs in private climate change litigation.  As we noted last week, the 5^th Circuit Court of Appeals affirmed dismissal in Comer v. Murphy Oil.  Now, on Monday, the Supreme Court denied certiorari in Native Village of Kivalina v. Exxon Mobil.  Kivalina ended more with a whimper than a bang, since the simple denial of cert. carries no opinion or precedential weight.

Given the increasing number of expensive disasters, as well as the costs imposed by long-term sea level rise, I actually expect more and more private claims to be filed, in any jurisdiction or under any set of facts where the claims are not clearly precluded by a prior case.  Nonetheless, the near-term outlook for these cases is not bright.

It’s going to take a sea change – as it were – before plaintiffs win one of these cases.

The Fifth Circuit handed down an important decision last week, Louisiana Generating LLC v. Illinois Union Insurance Company, clarifying the scope of coverage under a Premises Pollution Liability Insurance Policy.  The policyholder sought coverage for a Clean Air Act suit by the United States alleging unpermitted major modifications that resulted in increased emissions of  sulfur dioxide and nitrogen oxide.  The insurer disputed coverage on the ground that the government under the Clean Air Act was seeking not remediation costs or compensatory damages but an injunction to repair emission control equipment to comply with regulatory standards.  According to the insurer, injunctions were excluded from coverage under the Fines and Penalties exclusion to the policy.

Applying New York law, consistent with the insurance policy’s choice of law provision, the Fifth Circuit affirmed the District Court’s summary judgment decision requiring the insurer to provide a duty to defend.  The Fifth Circuit noted that the complaint by the United States was not limited to an injunction requiring repairs to the emissions control equipment but also sought remedial costs to address the release into the atmosphere of unpermitted levels of certain pollutants.

While the possibility of remediation costs was sufficient to trigger the insurer’s duty to defend, the Fifth Circuit went on in perhaps its most significant holding to reject the insurer’s argument (which had been adopted by the lower court) that the policy excluded all injunctive relief  in its Fines and Penalties exclusion which precluded coverage for ”Payment of criminal fines, criminal penalties, punitive, exemplary or injunctive relief.”   The Fifth Circuit construed that exclusion narrowly limiting it only to injunctions that were part of a criminal or punitive fine or penalty.  As the Fifth Circuit explained, many environmental laws, like the Clean Air Act, are structured to obtain compliance through  either voluntary remediation work or court ordered injunctions, and it would make little sense if a Premises Pollution Liability Insurance Policy provided coverage for voluntary remediation work but did not cover the same work when done under a court order:

If the Fines and Penalties exclusion is a complete bar for coverage of costs associated with injunctive relief, the exception would potentially swallow the coverage afforded by the policy.  The policy would not cover claims under major federal environmental statues, such as the CAA and the Clean Water Act, when they are enforced by the EPA or state agencies seeking injunctive relief to mitigate and remediate past pollution.

Environmental litigation, particularly toxic tort litigation, inevitably turns on scientific evidence about causation.  Beginning with the Supreme Court’s Daubert decision in 1993, trial courts have repeatedly been admonished to take seriously their role as gatekeepers who are required to keep from juries and other fact-finders ”junk science” and other expert evidence that is not sufficiently reliable to be considered.

Although no one would disagree that one key responsibility of any judge is to protect against the admission of unreliable evidence,  a recent unpublished decision by the Ninth Circuit in Whitlock v. Pepsi Americas suggests the dilemma of trial courts in attempting to execute that responsibility in environmental cases.  There, the trial judge had granted summary judgment dismissing a toxic tort action which was based on what the judge found to be unreliable scientific evidence of causation.  For example, one of the plaintiffs’ experts relied upon occupational studies to buttress his causation opinion even though the exposure levels examined in the studies were considerably higher  than the ones to which plaintiffs had been exposed.  The Ninth Circuit, however, reversed, quoting an earlier 2010 decision by that court that held that “Shaky but admissible evidence is to be attacked by cross examination, contrary evidence, and attention to the burden of proof, not exclusion.”

The difference between “shaky but admissible” and unreliable and inadmissible evidence would seem to be entirely in the eye of the beholder.   As long as appellate courts, like the Ninth Circuit in Whitlock, are willing to second-guess Daubert decisions in close cases, we should not be surprised if trial courts do not want to take the risk that they will be reversed if they exclude scientific evidence.

Last week, in Styrene Information and Research Center v. Sebelius, Judge Reggie Walton of the District Court for the District of Columbia rejected challenges to the decision by HHS Secretary Kathleen Sebelius to list styrene as “reasonably anticipated” to be a carcinogen.  The case does not really break any new ground, but is a solidly written summary of several recurring issues in administrative law relating to review of agency decisions.

One important issue addressed by Judge Walton was how focused a comment on an agency decision must be to avoid arguments by the agency that the comment was waived by not being presented with sufficient particularity.  Here, the plaintiffs challenged in court the so-called “Listing Criteria” used to determine whether substances are known or reasonably anticipated to cause cancer.  However, while plaintiffs had commented on HHS’s application of the Listing Criteria, the Court concluded that they had not clearly commented on the Listing Criteria themselves.  Thus, the argument was waived.

The Court also reviewed the basic rules for determining whether agency action is arbitrary and capricious.  In this context, it’s worth noting that Judge Walton is not one to kow-tow to agency decision-making.  This makes him somewhat unusual in today’s polarized judiciary, in which all too often it seems that liberal judges interpret deference as abdication, while conservative judges simply honor the notion of deference in the breach, overturning agency actions which due deference would cause to be affirmed.

Judge Walton first noted that the standard is “highly deferential” and that the Court “must presume the validity of agency action.”  He then stated that

where, as here, a court is reviewing an agency’s evaluation of “‘scientific data within its technical expertise,’” the arbitrary and capricious standard of review is “‘extreme[ly] deferential.’” This is because courts “review scientific judgments of the agency ‘not as the chemist, biologist, or statistician that we are qualified neither by training nor experience to be, but as a reviewing court exercising our narrowly defined duty of holding agencies to certain minimal standards of rationality.’”

Reviewing HHS’s stated reasons for listing styrene, Judge Walton concluded that the evidence relied upon by HHS justified the listing on two, independent grounds: “’limited evidence’ of carcinogenicity in humans, and ‘sufficient evidence’ of carcinogenicity in animals.”  Case dismissed.

Readers of this blog will recall the bizarre history of Comer v. Murphy Oil.  In 2005, Plaintiffs brought tort claims against major GHG emitters, claiming that those emissions, by causing global warming, led to plaintiffs’ damages from Hurricane Katrina.  The District Court dismissed, ruling both that plaintiffs had no standing and that the claims were really non-justiciable political questions.  The Fifth Circuit Court of Appeals reversed and remanded.  However, before the mandate issued, six of the court’s nine active, unrecused judges voted to hear the case en banc.  That vote also vacated the panel decision, leaving the District Court judgment in place until the full en banc panel could hear the case.

This is when Comer took a left turn.  Before the en banc panel could hear the case, an additional judge was recused, leaving the court without a quorum to hear the case.  In a truly Dickensian move, the court concluded that, while it had no quorum to hear the case, it did not need a quorum to dismiss the appeal, leaving the plaintiffs with only a right to petition the Supreme Court to issue a writ of mandamus, an uphill battle if ever there were one.  The Supreme Court denied the writ in 2011, thus leaving the plaintiffs with no opportunity to have their appeal heard.  Sounds like a due process issue to me.  I do believe that most lawyers – and most non-lawyers – would have said that there is an automatic right to an appeal from the district courts of the United States.  Silly us.

Plaintiffs weren’t quite done, however.  They basically just refiled the same case, in 2011.  The District Court again dismissed, this time on res judicata grounds.  After all, as a result of the odd happenings before the 5^th Circuit Court of Appeals, the original final judgment from the District Court was never disturbed.

On Tuesday, the 5^th Circuit affirmed.  The critical issue was the third element of the res judicata demonstration:  that “the prior action was concluded by a final judgment on the merits.”  The Court concluded that it had been.  As a purely legal matter, the Court was probably correct, as the Supreme Court, in United States v. Munsingwear, Inc., had previously declined “to create an exception to res judicata for ‘those who have been prevented from obtaining the review to which they are entitled.’”

The bottom line, though, is that the Comer plaintiffs’ claims now have a second stake through their heart.  The claims are gone, with no opportunity for appellate review (notwithstanding that they actually had appellate review for a brief shining moment, and had prevailed).  If that’s what the law says, then, to borrow from a different Dickens work, the law is an ass.

As a footnote, literally, to this case, the Court noted that its local rule has been changed to provide that, in the future, if the full court loses its quorum after taking a case en banc, the panel decision will be reinstated.  Cold comfort to the plaintiffs here.

A few months ago, I blogged on the decision in Duke Energy Progress Inc. v. Alcan Aluminum Corporation where a court held that a company would not be held liable for selling used transformers to a recycling facility for refurbishing and eventual resale to a new user.   At the center of that holding was the notion that the transformers were not leaking PCB oils when delivered to the recycling center and could be refurbished in the exercise of due care without causing a release of  PCBs.

The court recently issued a follow up decision in which it declined to apply its ruling to a company which had sent its transformers for repair by the same recycling facility.  The company argued that its situation was no different form the company selling its used transformers — in both instances the recycling facility in the course of refurbishing  transformers — whether for resale or repair — had potentially spilled PCBs.  The court, however, did not agree, pointing out that the company sending its transformers for repair continued to own its transformers and directed the specific manner in which those transformers were to be fixed.   As the court explained, a company which sent its transformer for repair and retained control over the manner of the repair was not analogous to a party selling a used product; depending on the specific facts, it was potentially comparable  to the defendant in Aceto which directed the manufacture of a product with its own ingredients knowing that there would be hazardous wastes generated in that process.  Although unspoken, the court seemed to leave open the question whether a company which sends a product for repair would have Superfund liability if it did not specify and control  the manner in which its product was to be repaired.