In the past month, state attorneys general and industry groups have brought two different legal challenges to federal regulation of hydraulic fracturing (“fracking”). The lawsuits stem from the Bureau of Land Management’s (BLM) new rules to regulate fracking on federally owned lands.  The rules set specific standards for well construction and inspection, and require companies to disclose the chemicals they use on an industry-run database at FracFocus.com.  Additionally, the rules mandate that companies store wastewater in storage tanks rather than open pits.  The BLM has indicated that states can apply for an exemption if their regulations meet or exceed the federal rules, but has not yet provided further details on the exemption process.

Two industry groups, the Independent Petroleum Association of America and the Western Energy Alliance, immediately filed suit to block the implementation of these rules. In a short petition, the groups argue that the rule-making process was legally deficient, and that the final rules lack factual or scientific support.  Additionally, the groups emphasize that the rules are ultimately unnecessary because they duplicate state standards.

Wyoming and North Dakota took a different approach to challenging the rules in a separate suit at the end of March.  Instead of focusing on the rule-making process or the substance of the rules, the states argue that the BLM does not have the power to regulate water resources or underground injection.  In the complaint, Wyoming and North Dakota emphasize that Congress gave exclusive authority to regulate underground injections to the EPA and the states by creating the Underground Injection Control Program (UICP).  The states then note that in the Energy Policy Act of 2005, Congress expressly exempted fracking from the UICP. North Dakota and Wyoming therefore argue that the exemption from the UICP was an expression of Congressional intent to prohibit all federal regulation of fracking-related underground injection. If the states are successful under this theory, it may have sweeping implications for any other federal agencies’ future attempts to regulate fracking or wastewater disposal.

We continue to monitor developments in this evolving landscape.

 

 

Here at the Monitor, we keep a close eye on developments relating to the drilling technique known as hydraulic fracturing, or “fracking.” One such development relates to litigation in Colorado and, in particular, the trial court’s use of a “Lone Pine” case management order in Antero Resources v. Strudley. As my colleague, Emily Pincow, reported previously on our blog, Antero Resources asked the trial court to enter a modified case management (“Lone Pine”) order requiring the Strudleys to present prima facie evidence that they suffered injuries attributable to the defendants’ natural gas drilling operations. (While the complaint identified several chemicals that allegedly polluted the plaintiffs’ property, it did not causally connect specific chemicals to actual injuries.) The trial court granted the motion and issued a Lone Pine order directing the plaintiffs to provide prima facie evidence to support their allegations of exposure, injury, and causation prior to the commencement of full discovery. The trial court determined that the Strudleys failed to present sufficient evidence and dismissed their case with prejudice. The court of appeals reversed, concluding that, as a matter of first impression, Lone Pine orders were not permitted as a matter of Colorado law.  The Colorado Supreme Court granted certiorari to review the appellate decision and, in a highly anticipated opinion (available here), affirmed the appellate court, holding that “Colorado’s Rules of Civil Procedure do not allow a trial court to issue a modified case management order, such as a Lone Pine order, that requires a plaintiff to present prima facie evidence in support of a claim before a plaintiff can exercise its full rights of discovery under the Colorado Rules.” [click to continue…]

Just this morning, the Supreme Court issued a 5-4 decision in two consolidated cases that this blog has been watching, both involving the question of whether the limitations periods under the Federal Tort Claims Act (“FTCA”) are jurisdictional or subject to equitable tolling.  The first case, United States v. Wong, No. 13-1074, asked whether the six-month time bar for filing suit in federal court under the FTCA is subject to equitable tolling.  The second case, United States v. June, No. 13-1075, asked whether the two-year time limit for filing an administrative claim with the appropriate federal agency under the FTCA is subject to equitable tolling.

To review, the FTCA waives sovereign immunity and generally allows private plaintiffs to recover for personal injuries caused by the negligent act or omission of a United States government employee acting within the scope of his or her office or employment.  See 28 U.S.C. § 1346.  Before filing suit, however, a plaintiff is required to present the claim to the proper federal agency.  A FTCA claim is “forever barred” unless the plaintiff meets two deadlines.  First, the claim must be presented to the appropriate federal agency for administrative review within two years after the claim accrues.  28 U.S.C. § 2401(b).  Second, if the agency denies the claim, the plaintiff must file suit in federal court within six months of the denial.  Id.

In June, the plaintiff filed a claim against the Federal Highway Administration, which June alleged negligently allowed the state of Arizona to install cable media barriers on the highway, leading to a fatal accident.  Though June filed the claim approximately five years after the car accident instead of the required two years, June alleged that the Government had concealed facts about its approval of the barriers and that the FTCA limitations period should therefore be equitably tolled.  Involving another limitations period set by the FTCA, the case of Wong arose out of a challenge to Wong’s confinement and removal by the Immigration and Naturalization Service.  After the INS denied Wong’s FTCA claim, a magistrate judge recommended that leave to amend be granted.  However, the district judge only adopted the magistrate judge’s findings and recommendations three weeks after the six-month deadline expired.  As such, Wong filed an amended complaint adding the FTCA claim after the limitations period expired.

In a divided opinion, the Court decided that the FTCA’s time limitations are indeed subject to equitable tolling.  The opinion, written by Justice Kagan and joined by Justices Kennedy, Ginsburg, Breyer, and Sotomayor, explained that under the relevant case law, courts will not conclude that a time bar is jurisdictional—and thereby rebut the presumption that such a time bar may be equitably tolled—unless Congress provides a clear statement to that effect.  The Court did not find the needed “clear statement” in § 2401(b).  The Court found that the Government’s principal arguments for treating § 2401(b) as jurisdictional (first, that the section contains the same language as the statute of limitations for the Tucker Act, which has been held jurisdictional; and second, that it was a condition of the FTCA’s sovereign immunity waiver that the statute of limitations be jurisdictional) were not compelling.

The Court’s holding affirms that, under the FTCA, the United States government will be treated as a private individual.  Specifically, under this ruling, the FTCA will allow plaintiffs to file claims past the limitations periods when those plaintiffs, through no fault of their own, were unable to comply with the relevant statute of limitations.  Though the specific factual circumstances of Wong and June present key examples of arguments in favor of equitable tolling—concealment of facts and administrative delays—plaintiffs have now been given the stamp of approval to bring other assertions of good faith and dilatory tactics when bringing suit past the limitations period set by the FTCA.

Supreme Court Denies Cert In Case Dismissing ATS Claims Against Chiquita

April 20, 2015

Last year, my colleague, Melody Akhavan wrote about Chiquita Brands International’s big win in an Alien Tort Statute (ATS) case at the Eleventh Circuit.  Today the Supreme Court declined to grant review of that decision. At the time of the Eleventh Circuit’s decision, the reach of the ATS, which allows foreign plaintiffs to sue in United […]

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You Get What You Pay For

April 17, 2015

A California federal judge recently dismissed Plaintiff’s consumer fraud class action complaint against Johnson& Johnson (“J&J”), alleging injuries stemming from her purchase of J & J’s Baby Powder from 1950 to 2013.  Plaintiff Mona Estrada, on behalf of herself and others similarly situated, claimed that she had purchased Baby Powder for personal use after reading the […]

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