Volume 6:2, July, 2007 Supreme Court Rules EPA’s Denial to

Massachusetts v. EPA, 127 S.Ct. 1438 (2007).

SSaarraahh SSppiiggeenneerr,, 33LL,, UUnniivveerrssiittyy ooff MMiissssiissssiippppiiSScchhooooll ooff LLaaww

In an opinion by Justice Stevens, the UnitedStates Supreme Court held that the Envi-ronmental Protection Agency (EPA) has thestatutory authority to regulate greenhouse gasemissions from new motor vehicles. The Courtalso ruled that Massachusetts had standing tochallenge the EPA, given that the state wouldsuffer direct harm from the further loss of itscoastal land due to climate change.

BBaacckkggrroouunnddBased on research that a rise in global tempera-tures and climate changes have resulted from asignificant increase of “greenhouse gases” in theatmosphere, private organizations petitionedthe EPA to begin regulating the emissions offour such gases, including carbon dioxide, fromnew motor vehicles under § 202(a)(1) of theClean Air Act. The organizations claimed thatthe EPA had authority to take this action,because the agency itself had already confirmedsuch authority in an earlier statement by theEPA’s general counsel. The EPA rejected thepetition and concluded that it did not havestatutory authority to regulate greenhouse gasemissions from motor vehicles and that, even ifit did, it would not currently exercise thatauthority.

The organizations, joined by twelve states,three cities, and an American territory, sought

review of the EPA’s decision in the UnitedStates Court of Appeals for the District ofColumbia. First, the EPA contended that thepetitioners lacked standing1 to bring this casebefore the court. The plaintiffs, in response,claimed that they did have standing and pre-sented numerous examples of future damagecaused by global warming that would occur as aresult of these emissions. The court of appealsdid not address the standing issue.

Second, the plaintiffs challenged the EPA’sdecision not to exercise its authority to composeregulations “until more is understood about thecauses, extent and significance of climate changeand the potential options for addressing it.”2 Theplaintiffs claimed that the EPA’s decision restedsolely on scientific uncertainty. The court ofappeals disagreed and stated that the EPA alsocorrectly based its decision on policy judgments.The court of appeals held that the EPAAdministrator properly exercised his discretionunder the Clean Air Act in denying the petition.

SSttaannddiinnggThe plaintiffs appealed to the Supreme Courtand contended that the EPA abdicated itsresponsibility under the Clean Air Act to regu-late emissions of greenhouse gases and askedthe Court to answer two questions concerningthe meaning of § 202(a)(1) of the Act: whetherthe EPA has the statutory authority to regulategreenhouse gas emissions from new motor vehi-cles; and, if so, whether its stated reasons forrefusing to do so are consistent with the statute.The EPA, now supported by ten states and six

Greenhouse Gases, page 2

Supreme Court Rules EPA’s Denial toRegulate Greenhouse Gases Arbitrary

Legal Reporter for the National Sea Grant College Program

TheVolume 6:2, July, 2007

trade associations, repeated its contention thatthe plaintiffs lacked standing to bring theseclaims before the Supreme Court.

The Supreme Court stated that only one ofthe plaintiffs must have standing for the Courtto consider a petition for review. To have stand-ing, a plaintiff must meet three elements: theplaintiff must have suffered a concrete and par-ticularized injury that is either actual or immi-nent; the injury must be fairly traceable to thedefendant; and, it must be likely that a favor-able decision will redress that injury.

The Court held that the state of Massa-chusetts meets the standing requirementsbecause Massachusetts owns a large portion ofthe territory that is to be affected by thesealleged climate changes. The Court reasonedthat the EPA’s refusal to regulate these emis-sions presents a risk of harm to Massachusettsthat is actual and imminent. The harmMassachusetts claimed is that its coastal landhad already succumbed to increased sea levelsas a result of global warming and that thisprocess will continue if sea levels continue torise. Though minimal, the EPA’s refusal to reg-ulate these emissions contributes toMassachusetts’ injuries. The Court further rec-ognized that even though regulating emissionswould not reverse global warming, that did notmean that the Court could not consider whetheror not EPA has a duty to act to slow or reduce it.

SSttaattuuttoorryy AAuutthhoorriittyy ttoo RReegguullaatteeThe Supreme Court considered whether theClean Air Act authorizes the EPA to regulategreenhouse gas emissions from new motor vehi-cles when the EPA determines that such emis-sions contribute to climate change. The Courtconcluded that it does. Section 202(a)(1) of theClean Air Act states that the EPA “shall by reg-ulation prescribe . . . standards applicable to theemission of any air pollutant from . . . new motorvehicles . . . which in the Administrator’s judg-ment cause, or contribute to, air pollution whichmay reasonably be anticipated to endanger pub-lic health or welfare.”3

Greenhouse Gases, from page 1

Page 2 Volume 6, No. 2 The SandBar

Supreme Court Rules EPA’s Denial to Regulate Greenhouse Gases Arbitrary

Sarah Spigener . . . . . . . . . . . . . . . . . . . . . . 1

District Courts May Take Quickest Path to Dismissal

Allyson L. Vaughn . . . . . . . . . . . . . . . . . . . . 4

Pennsylvania Trial Court Preserves Public Access

Stephanie Showalter . . . . . . . . . . . . . . . . . . 5

“Dolphin Safe” Tuna Retains Its MeaningTerra Bowling . . . . . . . . . . . . . . . . . . . . . . . . . .7

Ninth Circuit Rules for Environmental Groups in Salmon Case

Josh Clemons . . . . . . . . . . . . . . . . . . . . . . . . 9

Ninth Circuit Finalizes Punitive Damages in Exxon Valdez Spill

Sarah Spigener . . . . . . . . . . . . . . . . . . . . . 11

Texas Court Invalidates Gulf Red Snapper Plan

Josh Clemons . . . . . . . . . . . . . . . . . . . . . . . 13

Accidental Bomb Leads to Legal MalpracticeSuit

Terra Bowling . . . . . . . . . . . . . . . . . . . . . . 16

Courts Upholds Tax Deduction for LakeMichigan Conservation Easement

Terra Bowling . . . . . . . . . . . . . . . . . . . . . . 17

Project Jeopardizes South Carolina WetlandsApril S. Williams . . . . . . . . . . . . . . . . . . . . . 20

Coast to Coast . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Table of Contents

Volume 6, No. 2 The SandBar Page 3

The EPA contended that carbon dioxide,one of the greenhouse gases contested in thiscase, was not an “air pollutant” as defined inthe above provision. The Court disagreed andstated that the statute was unambiguous andthat the definition of “air pollutant” includesany air pollutant, including carbon dioxide.The EPA also argued that Congress enactedother legislation that amounted to a congres-sional command to refrain from regulatinggreenhouse gas emissions. However, the Courtpointed out that the EPA did not identify anyspecific congressional action in accordancewith its contention.

The EPA finally argued that it could not reg-ulate these emissions because doing so wouldrequire the EPA to tighten mileage standards, aduty within the scope of the Department ofTransportation (DOT). The Court disregardedthis argument and stated that though the twoobligations might overlap, the two agenciescould work together. Therefore, after consider-ing the various arguments of the EPA, the Courtconcluded that the EPA does have authority toregulate the emission of such gases from newmotor vehicles.

EExxeerrcciissee ooff AAuutthhoorriittyyThe EPA also contended that even if it did havethe authority to regulate, it would be unwise todo so at this time. The Court analyzed the CleanAir Act and determined that the EPA couldavoid taking further action on a petition only ifit determines that greenhouse gases do not con-tribute to climate change or if it provides somereasonable explanation as to why it cannot orwill not exercise its discretion to determinewhether they do. The Court invalidated the pol-icy judgments that the EPA relied on to form itsconclusion because policy had nothing to dowith whether greenhouse gas emissions con-tribute to climate change. The Court furtherstated that the EPA cannot rely on uncertaintysurrounding features of climate change to justi-fy its actions. The Court concluded that there isno reasonable explanation for the EPA’s refusalto decide the issue and that the EPA’s action wasarbitrary and capricious. The Court furthermandated that, on remand, the EPA must baseits reasons for action or inaction in the statute.

CCoonncclluussiioonnThe Supreme Court disagreed with the EPA andheld that the plaintiffs, particularly Mass-achusetts, did have standing to challenge the

EPA’s denial of their rulemakingpetition. The Court determined thatthe EPA has the authority, given byCongress, to regulate greenhouse gasemissions from new motor vehicles.The Court further held that the EPA,on remand, must state its grounds fordenying the petition.

EEnnddnnootteess1. Standing is a party’s right to

make a legal claim or seek judi-cial enforcement of a duty orright. Black’s Law Dictionary 661(8th ed. 2004).

2. Massachusetts v. EPA, 415 F.3d 50,57 (D.C. Cir. 2005).

3. 42 U.S.C.S. § 7521(a)(1).

Photograph courtesy of ©Nova Development Corp.


Sinochem International Co. v. Malaysia Inter-national Shipping Corp., 127 S.Ct. 1184 (2007).

AAllllyyssoonn LL.. VVaauugghhnn,, 33LL,, UUnniivveerrssiittyy ooff MMiissssiissssiippppiiSScchhooooll ooff LLaaww

The United States Supreme Court has ruledthat a district court does not have to consider athreshold objection, such as subject matterjurisdiction or personal jurisdiction, beforeresponding to a defendant’s forum non conve-niens plea.

BBaacckkggrroouunnddSinochem, a Chinese state-owned importer,entered into a contract with Triorient for the pur-chase of steel coils. Under the contract, Triorientwould be paid under a letter of credit whenSinochem received a bill of lading certifying thatthe coils had been loaded for shipment to Chinaon or before April 30, 2003. Triorient subcharteda vessel owned by Malaysia International totransport the coils to China. A bill of ladingdated April 30, 2003 prompted payment; howev-er, Sinochem believed that MalaysiaInternational fraudulently backdated the bill oflading and petitioned a Chinese admiralty courtfor preservation of a maritime claim and arrest ofthe vessel. The Chinese court ordered the vesseldetained.

Malaysia International filed the presentaction in United States district court, claim-ing that Sincohem’s preservation petitioncontained misrepresentations and that theywere entitled to compensation for lossesincurred during the detainment of the vessel.Sinochem sought dismissal based on lack ofsubject-matter jurisdiction and personal juris-diction and forum non conveniens.

Under the doctrine of forum non conveniens, afederal district court may dismiss an action if analternative jurisdiction exists that would be

more convenient and appropriate for adjudicat-ing the dispute. Additionally, the court can dis-miss based on forum non conveniens if the chosenforum is inappropriate based on the court’s ownadministrative and legal problems. A dismissalon these grounds reflects the court’s assessmentof a “range of considerations, most notably theconvenience to the parties and the practical dif-ficulties that can attend the adjudication of adispute in a certain locality.”1

The district court agreed with Sinochem andfound that the case should be adjudicated inChinese courts and dismissed the case based onforum non conveniens. However, the appellatecourt did not agree with the lower court. TheThird Circuit Court of Appeals held that the dis-trict court could not dismiss the case based onthe doctrine of forum non conveniens until itdetermined that it had personal jurisdiction andsubject matter jurisdiction over the defendant.

TThhee DDooccttrriinnee ooff FFoorruumm NNoonn CCoonnvveenniieennssIn a unanimous opinion authored by JusticeGinsburg, the Supreme Court recognized thatthere is no mandatory sequence in which those“nonmerit issues” must be resolved; therefore, ifforum non conveniens qualified as one of the non-merit issues, it could be decided before consider-ing personal or subject matter jurisdiction. TheCourt noted that a federal court generally mustestablish its jurisdiction over the cause and theparties prior to ruling on the merits of the case.While an inquiry into a forum non conveniensdetermination may involve the examination ofsome factual elements of the controversy, JusticeGinsburg explained that the critical element ren-dering this doctrine a nonmerits issue is that toresolve such a motion the court does not have toexercise any substantive law-declaring power.

A district court may disregard questions ofsubject-matter and personal jurisdiction anddismiss based on forum non conveniens when

See Sinochem, page 18

District Courts May Take Quickest Pathto Dismissal


Pennsylvania v. Espy, No. 03-781 (Pa. Ct.Common Pleas filed Jan. 29, 2007).

SStteepphhaanniiee SShhoowwaalltteerr,, JJ..DD..,, MM..SS..EE..LL..

A pristine river stocked with trout is silent on abeautiful summer morning. One fishermanstands in the middle of the river about to casthis first line. His guide his only company. Nocars, no music, just the sounds of nature. Everyfly fisherman’s dream, right? A few fishermenhave been living that dream in Pennsylvania asmembers of the exclusive fishing club, theSpring Ridge Club (Club). The controversialClub owns or leases almost ten miles alongsome of the best trout streams in Pennsylvaniafor the exclusive use of its members. The dreamcomes with a hefty price tag, however. It cur-rently costs $95,000 to join the club and mem-bers are required to pay annual dues (approxi-mately $4,500) and incur fees for staying or eat-ing at the Club’s lodges. But for some wealthyfly fishermen, the cost is worth it for the bene-fit of an empty stream.

Although local fly fishermen grumbledabout the Club’s existence and what such opera-tions mean for the future of the sport, the wrathof state regulatory agencies was not raised until2003 when the Club installed two cables, spaced1.3 miles apart, across the Little Juniata Riverand posted them with “No Trespassing” and“Private Property” signs. The Little JuniataRiver, a branch of the Juniata River, flowsthrough Huntingdon County in centralPennsylvania. The Club’s intent to limit publicaccess was undeniably clear. The fact that thetrout its members were catching are stockedannually by the Pennsylvania Fish and BoatCommission made little difference to the Club.The Club’s position was that their lease of .60acres of land along the River included thestreambed and they had a right to restrict access.

The Pennsylvania Department of Environ-mental Protection, Department of Conservationand Natural Resources, and the Fish and BoatCommission (Commonwealth) disagreed. In2006, the Commonwealth sued the Club andits owner, Donald Beaver, alleging interfer-ence with the public’s right to access the 1.3mile section of the Little Juniata River. TheCommonwealth claimed ownership based “onhistorical evidence of navigation and trade onthe Little Juniata River dating from the 1700s,and statutory designations of the river as apublic highway dating to 1794, 1808 and1822.”1

PPuubblliicc’’ss RRiigghhtt ttoo FFiisshh aanndd NNaavviiggaabbiilliittyy“Navigable waterways located in Pennsylvaniaare owned by the Commonwealth and are heldin trust for public use, while the beds of non-navigable waterways are owned by the propertyowners of the land along the waterways.”2

Riparian owners of land along the banks of nav-igable rivers “do not have the exclusive right tofish in those rivers; that right is vested in theCommonwealth and open to the public.”3

During the early years of the Common-wealth, extremely poor road conditions and thebulky nature of most goods produced by ruralcommunities (grain, flour, lumber) made over-

Pennsylvania Trial CourtPreserves Public Access

See Public Access, page 6

Historic watercolor courtesy of University of Pennsylvania Library.

land transport difficult and expensive.Pennsylvania’s abundant rivers andstreams provided an alterna-tive transportation network.Many waterways, includingthe Little Juniata, were usedby inland communities totransport goods to the largercities of Philadelphia andPittsburgh. Since many ofthe streams were shallow,arks were often the vessel ofchoice. Arks “could operate inwater as shallow as twenty totwenty-four inches and were able tocarry about fifty tons of goods.”4

Navigability is a loose term that variesdepending on which state the waterway is locat-ed in and which level of government is calledupon to make the determination. There is nosingle published listing of all navigable water-ways in Pennsylvania. Except for a few “princi-pal rivers,” such as the Susquehanna, most nav-igability determinations are made on a case-by-case basis by the Pennsylvania courts. The testfor navigability in Pennsylvania is whether ariver is navigable in fact.5

NNaavviiggaabbiilliittyy ooff tthhee LLiittttllee JJuunniiaattaa RRiivveerrThe primary issue facing the trial court wasownership of the streambed along the disputedsection of the Little Juniata River. If the riverwas non-navigable, title to the streambed washeld by the riparian owner. If the river was cur-rently navigable, or had been in the past, theCommonwealth holds the title and the water-way is open to all.

The court determined that the Common-wealth submitted sufficient evidence to supportthe conclusion that the Little Juniata River wasonce a highway of commerce for surplus goods.Furthermore, the Pennsylvania Legislaturedeclared the Little Juniata River a public high-way in 1974.6

The Spring Ridge Club argued that itslease, which was based on the riparian owner’sdeed, granted title to the streambed regardless

of the navigability of the Little Juniata.The court disagreed. At the time

that the Little Juniata wasdeclared a public highway,

the Commonwealth heldtitle to the tract of land inquestion. The land passedinto private hands in 1803through a series of deedsfrom the Commonwealth.The court held that the

Commonwealth’s originalgrant of land, coming nine

years after the public highwaydesignation, was subject to public

highway declaration. Therefore, theproperty “extends only to the low watermarkand not the middle of the stream.”7

CCoonncclluussiioonnIn January, Pennsylvania won a significant bat-tle in the war to preserve public access to thestate’s waterways. There are many more battlesto fight, however. Donald Beaver is expected toappeal the court’s ruling to the PennsylvaniaSuperior Court and the popularity of privatefishing clubs is growing. Public acquisition ofland may be the only alternative to lengthycourt battles and unsatisfactory settlements.

EEnnddnnootteess1. Public’s Right of Access to Little Juniata River

wins Critical Protection, January 31, 2007available at h t t p : / / w w w. f i s h . s t a t e . p a . u s / n e w s -releases/2007/out_dep_littlej.htm .

2. Lehigh Falls Fishing Club v. Andrejewski, 735A.2d 718, 719 (Pa. Super. Ct. July 26, 1999).

3. Id.4. Pennsylvania v. Espy, No. 03-781, slip op. at 21

(Pa. Ct. Common Pleas filed Jan. 29, 2007).5.See Pennsylvania Power & Light co. v.

Maritime Management, Inc., 693 A.2d 592 (Pa.Super. Ct. 1997).

6. Espy, slip op. at 23.7. Id. at 55.


Logo courtesy of Pennsylvania Fish and Boat Commission

Public Access, from page 5

Earth Island Inst. v. Hogarth, 2007 U.S. App.LEXIS 9572 (9th Cir. Apr. 27, 2007).

TTeerrrraa BBoowwlliinngg,, JJ..DD..

The Ninth Circuit has ruled that the NationalMarine Fisheries Service’s (NMFS) conclusionthat the yellowfin tuna fishery has no adverseimpact on a dolphin population was based oninconclusive evidence and is therefore arbitraryand capricious. The court also held that, absenta Congressional mandate, the “dolphin safe”label would continue to signify that the tunawas not harvested with purse-seine nets andthat no dolphins were killed or seriously injuredwhen the tuna were caught.

BBaacckkggrroouunnddOff the west coast of South America, yel-lowfin tuna, a prized commercialfish, are often found congregat-ing beneath pods of dolphins. Inthe 1950s, fishermen begancatching the tuna by encirclingthe dolphins with purse-seinenets to capture the tuna below.As a result, three species of dol-phin stocks were rapidly de-pleted. Congress responded by pass-ing the Dolphin Protec t ion Con-sumer Information Act (DPCIA), which pro-hibits manufacturers from labeling tuna as“dolphin safe” if the tuna was caught using thepurse-seine method.

As a result of the DPCIA, several commer-cial fishing groups were forced out of the mar-ket when they could not comply with the newstandards and consumers exceedingly chose“dolphin safe” products. Those groups pushedCongress to relax the “dolphin safe” labelingrequirements.

Seeking to determine whether the standardsshould be relaxed, Congress amended the

Marine Mammal Protection Act (MMPA) andpassed the International Dolphin ConservationProgram Act (IDCPA). The MMPA nowrequired NOAA to conduct three studies todetermine whether the tuna fishery was, in fact,harming the dolphin populations. The IDCPArequired the Secretary of Commerce, actingthrough NOAA, and essentially NMFS, to makean Initial Finding on the effects of the methodby March 31, 1999 and a Final Finding byDecember 31, 2002.

NNMMFFSS FFaacceess OOppppoossiittiioonnIn an Initial Finding released in 1999, the

Secretary determined that the fishery was nothaving an adverse impact on the dolphin pop-ulations. Several environmental groupsbrought suit against NMFS, and the district

court granted the groups summaryjudgment and vacated the Initial

Finding. On appeal, the NinthCircuit affirmed the districtcourt’s decision, holding thatthe agency was required toreach a definitive answer, not a“default finding” based on the

lack of evidence. The agencyproceeded to perform additional

studies and released a Final Findingin 2002 that concluded that the fishery

was not a threat to the dolphin populations.Several groups, including Earth Island, againfiled suit against the agency.

The district court granted summary judg-ment in favor of Earth Island, concluding thatthe Final Finding was arbitrary and capricious.The district court based its finding on threelegal grounds: 1) the agency did not conduct thestudies required by the MMPA and its findingwas therefore arbitrary and capricious; 2) inlight of the best available evidence, the agency’sno adverse impact finding was implausible; and3) the court found a “compelling portrait of


“Dolphin Safe” Tuna RetainsIts Meaning

See “Dolphin Safe,” page 8


“Dolphin Safe,” from page 7

political meddling,” indicating that the agencyconsidered factors outside of those mandated byCongress. The government appealed the districtcourt’s decision to the Ninth Circuit.

TThhee NNiinntthh CCiirrccuuiitt WWeeiigghhss IInnThe Ninth Circuit reviewed the three legalgrounds on which the district court based itsdecision. First, the court looked at whether theagency failed to conduct the appropriate studies.The court found that two of the studies requiredby the MMPA were inadequate. For instance, thefirst study required a review of relevant stress-related research and a 3-year series of necropsysamples from dolphins obtained by commercialvessels. NOAA concluded that it would need aminimum sample size of 600 dolphins to suffi-ciently perform the necropsy study; however, theagency only studied 56 dolphins. The next studyin question required an experiment involvingthe repeated chasing and capturing of dolphinsby means of intentional encirclement (theCHESS study). The court found that the samplesize in the CHESS study was also too small tosupport an adequate finding.

Due to the inadequacies of the studies, thecourt determined that the agency did not obtainthe scientifically meaningful results necessaryto make a decision of whether the fishery affectsthe dolphin population. The agency contendedthat it had completed both of those studies andthat the district court erred in its failure to deferto the agency’s expertise in the methodology ituses to conduct its studies. The Ninth Circuitrejected that argument and upheld the districtcourt’s ruling, finding that “no deference toagency discretion as to methodology is appro-priate when the agency ignores its own statisti-cal methodology.”1

Next, the court examined whether theagency used the best available evidence inmaking its decision. The court recognizedthat although usually it would defer to theagency’s analysis, it would not do so in thisinstance “because there [was] no rational con-nection between the Secretary’s Final Findingand the evidence outlined in the Final Science

Report …”2 For example, in its final report, theagency concluded that it did not have enoughevidence to support a finding of the indirecteffects on the dolphins, such as the effect of themother-calf separation during a high-speedchase and encirclement, yet the agency conclud-ed that the data supported a finding of noadverse impact.

Finally, the court determined that theagency’s finding was improperly influenced bypolitical concerns. The court held that it wasCongress’ intent that the agency should baseits decision on science alone; however, the evi-dence showed that the agency weighed interna-tional political concerns in making its deci-sion. The court cited internal memos thathighlighted the foreign policy considerationsat stake in the findings.

CCoonncclluussiioonnThe final issue facing the court was whether itshould remand the decision to the agency forfurther studies or vacate the Final Finding. Thecourt ruled that this was one of the “rare cir-cumstances” in which it would not remand thecase but would vacate the Final Finding, citingthe agency’s failure to conduct two of the threestudies mandated under MMPA.

Furthermore, the court noted that the label-ing requirements could only be changed if thestudies had found that the fishery was not affect-ing the dolphin population. Because the agencyhad not obtained the data to support that con-clusion, the labeling requirements could not bechanged. The district court had gone a stepbeyond vacating the Final Finding by orderingNOAA and its agencies to take enforcement mea-sures against those participating in impermissi-ble labeling. Although the Ninth Circuitaffirmed the district court’s ruling, it instructedthe district court to limit its mandate to directingthe Secretary to vacate NMFS’ Final Finding.

EEnnddnnootteess1. Earth Island Inst. v. Hogarth, 2007 U.S. App.

LEXIS 9572 at *12 (9th Cir. Apr. 27, 2007).2. Id. at *19.


National Wildlife Federation v. National MarineFisheries Service, 481 F.3d 1224 (9th Cir. 2007).

JJoosshh CClleemmoonnss,, MM..SS..,, JJ..DD..,, MMSS--AALL SSeeaa GGrraanntt LLeeggaallPPrrooggrraamm

On April 9, 2007, the U.S. Court of Appeals forthe Ninth Circuit issued another opinion in theseemingly endless litigation over salmon andthe Federal Columbia River Power System(FCRPS). This chapter of the saga finds the fed-eral government on the losing end, as theappeals court upheld the Oregon district court’srejection of the 2004 Biological Opinion for theoperation of the FCRPS.

BBaacckkggrroouunnddThe Columbia River and its tributaries, includ-ing the Snake and the Willamette, providePacific salmon with vital access to their spawn-ing grounds in the Columbia Basin. Thesemajestic fish, in addition to their financial andsymbolic value to the people of the region, areprotected by the Endangered Species Act (ESA)because of their declining numbers.

A major cause of that decline is the FCRPS,which, ironically, is also of enormous financialand symbolic value to Pacific Northwesterners.The mighty dams of the Columbia and Snakerivers, immortalized in song by Woody Guthrie,provide the region with irrigation water, floodcontrol, and cheap, clean, renewable energy, asthey are required to do by their authorizingstatutes. Unfortunately they are difficult formigrating salmon to bypass, even when thedams are equipped with fish ladders and otherstructural measures.

The conflicting imperatives that Congresshas issued – operate the FCRPS to “assure thePacific Northwest of an adequate, efficient,economical, and reliable power supply”1 andsimultaneously ensure the survival and recov-

ery of endangered fish that are inevitablyharmed by that operation – form the crux ofthis litigation.

The ESA obligates any federal agency that istaking an action that may affect ESA-listedsalmon to consult with the National MarineFisheries Service (NMFS, also known as NOAAFisheries) to ensure that the action is not likelyto jeopardize the species or its critical habitat.Because operation of the FCRPS is such anaction, the agencies who operate it (the U.S.Army Corps of Engineers and the Bureau ofReclamation, known as the “action agencies”)must consult with NMFS on their proposedoperating plan. After consultation NMFS issuesa Biological Opinion, or BiOp, on whether thespecies and habitat in question will be jeopar-dized by the action. A “jeopardy” opinionmeans the proposed action must be modified toavoid jeopardy.

TThhee 22000044 BBiiOOppThe 2004 BiOp was NMFS’ third attempt ataddressing the FCRPS’ effects on certainspecies of salmon. The first two, in 1993 and2000, failed to pass legal muster because theyrelied on unexplained assumptions and uncer-tain mitigation actions, respectively.

To circumvent the previous BiOps’ difficul-ties NMFS took three creative approaches to itsjeopardy analysis in the 2004 version. First, theagency deemed much of the operation of theFCRPS to be non-discretionary because of statu-tory directives for irrigation, flood control, andpower generation, and thus excluded from thejeopardy analysis, which addresses only discre-tionary actions. Second, NMFS used a “segre-gated” jeopardy analysis, in which the environ-mental baseline, cumulative effects, and currentspecies status were considered separately ratherthan in the aggregate, as is normally done.

Ninth Circuit Rules for EnvironmentalGroups in Salmon Case

See Salmon, page 10


Salmon, from page 9

Third, the 2004 BiOp did not contain analysis ofthe impact on the species’ chances of recovery (asopposed to mere survival), as earlier BiOps had.

A coalition of environmental groups led bythe National Wildlife Federation sued NMFSand the action agencies on the grounds thatthese creative approaches, as well as NMFS’allegedly inadequate consideration of effects oncritical habitat, violated the ESA. The districtcourt in Oregon ruled for the plaintiffs, and thefederal agencies appealed the decision to theNinth Circuit.

TThhee NNiinntthh CCiirrccuuiitt OOppiinniioonnThe appeals court agreed with the districtcourt’s conclusion that the 2004 BiOp did notsatisfy the ESA’s requirements. The court reject-ed NMFS’ “cramped view” of discretionaryactions, observing that no federal agency -NMFS included - had ever interpreted “discre-tionary” so narrowly, and that NMFS’ interpre-tation did not accord with regulations or caselaw.2 In reality, the court opined, “aspects ofFCRPS operations…are within the agencies’discretion.”3 The competing mandates imposedby Congress simply require the agencies to bal-ance their obligations.

The court also rejected NMFS’ segregatedjeopardy analysis because it failed to place thesalmon’s endangered status within a realisticcontext. Under NMFS’ scheme, too manypotentially jeopardizing factors were beingpushed below the environmental baseline,which could allow the species to “be graduallydestroyed, so long as each step on the path todestruction is sufficiently modest.”4 This, thecourt reasoned, was incompatible with the ESA.

The ESA regulations forbid agencies to takeactions that would “reduce appreciably the like-lihood of both the survival and recovery of a list-ed species in the wild.”5 NMFS interpreted theconjunctive “and” extremely literally, such thatan action that threatened a species’ recoverywould be permissible if it did not also threatenthe species’ survival. The court did not find thisinterpretation persuasive because it wouldessentially remove the word “recovery” from the

regulation. Furthermore, this interpretation wascontrary to NMFS’ own prior interpretations,which entailed a joint analysis of survival andrecovery impacts.

Lastly, the court found fault with NMFS’failure to ensure that FCRPS operations wouldnot adversely affect the salmon’s critical habitat.The agency gave inadequate weight to short-term adverse effects and relied too heavily onfuture mitigation measures that, in the court’sopinion, were not sufficiently likely to occur.NMFS also made decisions in the absence ofadequate information about the in-river sur-vival levels necessary to support recovery of theendangered fish.

CCoonncclluussiioonnBecause of these significant flaws in the 2004BiOp, the Ninth Circuit upheld the districtcourt’s remand of the document to NMFS sothat the agency could produce a BiOp that sat-isfies the requirements of the ESA.

EEnnddnnootteess1. Northwest Power Act, 16 U.S.C. § 839(2).2. National Wildlife Federation v. National

Marine Fisheries Service, 481 F.3d 1224, 1234(9th Cir. 2007).

3. Id.4. Id. at 1235.5. 50 C.F.R. § 402.02.

Photograph of Boulder Dam courtesy of the National Archives, photographer,Ansel Adams.


Ninth Circuit Finalizes PunitiveDamages in Exxon Valdez Spill

In re the Exxon Valdez,, 2007 WL 1490455 (9thCir. May 23, 2007).

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In the latest appeal of the punitive damagesaward for the Exxon Valdez oil spill, the NinthCircuit has reduced the district court’s awardfrom $4.5 billion to $2.5 billion.

BBaacckkggrroouunnddIn 1989, the Exxon Valdez ran aground in thePrince William Sound causing a massive oilspill in Alaskan waters. The district court foundthat the sole cause of the accident was Exxon’splacement of a relapsed alcoholic as captain ofthe supertanker Exxon Valdez.

The district court initially found the defen-dant, Exxon, liable for a $287 million verdict incompensatory damages, and the jury additional-ly assessed $5 billion in punitive damages.Exxon appealed. While the appeal was pending,the Supreme Court issued two relevant opinionsthat instructed the lower courts to consider,through a due process analysis, the ratio ofpunitive damages to compensatory harm whendeciding if the award was excessive.1 Pursuantto this new analysis, the Court of Appeals heldthat the $5 billion punitive damages award wasgrossly excessive and remanded the case to thedistrict court for a further analysis consistentwith the due process analysis handed down bythe Supreme Court.

Upon remand, the district court concludedthat the compensatory harm was just over $500million (this amount included prior settlementsbetween Exxon and other plaintiffs). The courtfurther concluded that a ratio of 10 to 1 of puni-tive damages to harm was warranted by the cir-cumstances of this case; nonetheless, the courtreduced the award from $5 billion to $4 billion.

Exxon again appealed. The Supreme Courtissued another opinion, State Farm v. Campbell,while this appeal was pending.2 In State Farm,the Supreme Court indicated that “ratios inexcess of single-digits would raise serious con-stitutional questions and that single-digitratios were more likely to comport with dueprocess.”3 As a result, the Ninth Circuit againremanded the case to the district court toreevaluate the punitive damages award consis-tent with State Farm.

On its third remand, the district court calcu-lated the harm at $513.1 million. Holding thatExxon’s conduct was highly reprehensible, thedistrict court increased the award from $4 bil-lion to $4.5 billion at a 9 to 1 ratio. Not surpris-ingly, Exxon appealed.

RReepprreehheennssiibbiilliittyy ooff CCoonndduuccttThe Court of Appeals decided this case basedupon the Supreme Court cases that shaped theinitial appeals: State Farm and BMW v. Gore.4

BMW v. Gore provided three guideposts forreviewing punitive damages: 1) the reprehensi-bility of the defendant’s misconduct; 2) the ratioof punitive damages to harm; and 3) comparablestatutory penalties.

State Farm stressed that of those factors, themost important is the reprehensibility of theconduct. This is because fair notice of the possi-ble legal consequences of one’s misconduct isrequired by due process. To evaluate the repre-hensibility of the harm, State Farm gave fivesub-factors: 1) the type of harm; 2) whetherthere was reckless disregard for the health andsafety of others; 3) whether there were finan-cially vulnerable targets; 4) whether there wasrepeated misconduct; and 5) whether it involvedintentional malice, trickery, or deceit, ratherthan mere accident. Mitigating factors mustalso be considered.

See Exxon Valdez, page 12


In evaluating the sub-factors, the court heldthat Exxon’s misconduct fell in the middle of acontinuum between accidental and intentionalconduct. The first factor required the court toevaluate the type of harm, particularly whetherthe harm was economic or physical, noting thatphysical harm would result in a higher level ofreprehensibility. Though the court found noactual physical harm to people, the combinedeconomic and emotional harm was severe.Examining the second factor, the court deter-mined that Exxon entrusted an incompetentcaptain to command the Exxon Valdez and thatthe potential harm of placing all people andbusinesses in the vicinity of the Prince WilliamSound in harm’s way was entirely predictable.Therefore, this factor indicated high reprehen-sibility because Exxon had shown reckless dis-regard for the health and safety of others. Inexamining the third factor, the court found thatthough Exxon’s conduct harmed financially vul-nerable subsistence fishermen—arguably finan-cially vulnerable targets—this conduct was notintentional and did not affect its assessment ofreprehensibility. The court noted the fourth fac-

tor—whether there was repeated misconduct—pointed to higher reprehensibility, since forthree years, the defendant allowed the incompe-tent captain onboard the Exxon Valdez. In exam-ining the final factor, the court decided thatExxon’s misconduct was no mere accident, butneither was it intentional malice. The court stat-ed that Exxon’s misconduct was highly repre-hensible, but not in the highest realm. Here,Exxon’s response to the catastrophe, includingits immediate cleanup and compensatory pay-ments, was significant to mitigate the harm.Since Exxon’s efforts to mitigate the harm weresignificant, the court concluded that the repre-hensibility should be mid-range.

Turning to the ratio of harm to punitivedamages, the court held that the proper numer-ator is the harm likely to result from the defen-dant’s conduct. The district court set this as$513.1 million, but the court decreased thisamount by $9 million as a result of an overpay-ment by a liability fund, to $504.1 million. Thecourt noted that in cases with significant eco-nomic damages and more egregious behavior, asingle-digit ratio higher than 4 to 1 might be

ExxonValdez, from page 11

Photograph of tanker Exxon Valdez and response vessels, courtesy ofNOAA’s Office of Response and Restoration.

See ExxonValdez, page 18


Texas Court Invalidates Gulf RedSnapper Plan

Fisheries Service Given Nine Months to Fix ItCoastal Conservation Assn. v. Gutierrez, Civ.Action No. H-05-1214 (S.D. Tex. Mar. 12, 2007).

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Originally published in Water Log: The LegalReporter of the Mississippi-Alabama Sea GrantConsortium, Volume 27.1 (May 2007).

On March 12, 2007, U.S. District Judge MelindaHarmon of the U.S. District Court for theSouthern District of Texas, Houston Division,ruled that the National Marine FisheriesService (NMFS) violated the Magnuson-StevensFishery Conservation and Management Act(Magnuson Act) and the Administrative Pro-cedure Act when it promulgated Amendment 22to the Gulf of Mexico Reef Fishery ManagementPlan (management plan) because the plan didnot have at least a fifty percent likelihood ofrebuilding red snapper stocks within the man-dated time period. The court gave NMFS ninemonths to approve a satisfactory plan.

TThhee MMaaggnnuussoonn AAccttCongress passed the Magnuson Act11 in 1976 toprotect the nation’s fishery stocks from overex-ploitation. Towards this end the Magnuson Actprovides for Regional Fishery ManagementCouncils (Councils), which produce fisherymanagement plans for species in their jurisdic-tions. These plans are reviewed by NMFSbefore being promulgated through the formaladministrative rulemaking process.

Congress established ten national standardsto guide the management plans and their imple-menting regulations.2 Four of these standardswere relevant to this case. Standard one requiresconservation and management measures to

“prevent overfishing while achieving, on a con-tinuing basis, the optimum yield from each fish-ery for the United States fishing industry.”3

Standard two requires measures to be based onthe best available scientific information.Standard eight requires measures to utilize eco-nomic and social data to minimize adverseimpacts on fishing communities. Standard ninerequires measures to minimize bycatch andmortality from unavoidable bycatch.4 Thesestandards are put into effect by the managementplans and NMFS regulations.

The Magnuson Act requires the Councils togenerate a plan to end overfishing and rebuildthe stock within one year of a stock beingdeclared overfished. If a Council fails to com-plete an adequate plan on time, NMFS mustcreate one within nine months. Overfishedstocks are to be returned to full productivitywithin ten years, or if that is not possible, with-in the shortest possible time that does notexceed “the rebuilding period calculated in theabsence of fishing mortality, plus one mean gen-eration time or equivalent period based on thespecies’ life history characteristics.”5 For theGulf of Mexico red snapper, this period hasbeen calculated to be 31.6 years.

FFeeddeerraall EEffffoorrttss ttoo PPrrootteecctt RReedd SSnnaappppeerrRed snapper stocks, with a current populationlevel of approximately seven percent of histori-cal levels, have been officially declared over-fished since 1997. Human-induced red snappermortality is caused by three activities: commer-cial red snapper fishing, recreational red snap-per fishing, and shrimp fishing. Of these, theone that takes the greatest number of red snap-per is, ironically, shrimp fishing; juvenile redsnapper, which congregate near the ocean floor,

See Red Snapper, page 14


are often taken as bycatch by shrimp trawls. Itis generally acknowledged that the rebuildingof red snapper stocks will require reduction ofthis bycatch.

NMFS regulates the taking of red snapperunder the Gulf of Mexico Reef FisheryManagement Plan. In 1990 the managementplan was to rebuild red snapper stocks by2000. Since then the target date has been setfarther and farther into the future.Amendment 22 to the man-agement plan, adopt-ed by NMFS in2005, sets thedate at 2032.(Interest-i n g l y,NMFShas in-creasedthe totalallowablecatch of red snapper fromfour million pounds in 1991 to over nine mil-lion pounds today.) Amendment 22 respondsto NMFS’ demand, in response to a proposedred snapper rebuilding plan that the Councilsubmitted in 2001, that the Council “furtherexplore alternative rebuilding plans based onmore realistic expectations concerningbycatch in the shrimp fishery.”6

AAmmeennddmmeenntt 2222 CCoonnttrroovveerrssyyThe issue of bycatch in the shrimp fishery is atthe center of the Amendment 22 controversy. InAmendment 22 the Council declared that thered snapper stocks could be rebuilt by 2032without additional regulatory action withrespect to shrimp fishery bycatch. To reach thisconclusion, the Council relied on threeassumptions: that ninety percent of red snappermortality is caused by commercial shrimping;that bycatch reduction devices (BRDs) provideforty percent effectiveness in reducing that redsnapper mortality; and that shrimping effort inthe Gulf will be cut in half in every year of thered snapper rebuilding plan.

The Coastal Conservation Association(CCA), an advocacy group for recreational fish-ers, believed that Amendment 22 provided inad-equate protection for red snapper because itfailed to address shrimp trawl bycatch. InMarch 2005 the group filed with NMFS a“Petition for Emergency Action to StopOverfishing in the Gulf of Mexico Red SnapperFishery.” The agency denied the petition on thegrounds that “additional management measures

to end overfishing of red snapper wouldbetter be addressed through a

Gulf of Mexico Fishery Management Council(Council) regulatory amendment and develop-ment of a fishery management plan (FMP)amendment.”7 CCA then sued NMFS forapproving Amendment 22 without mandating areduction in bycatch, for violating the NationalEnvironmental Policy Act (NEPA), and fordenying the petition for emergency rulemaking.

TThhee CCoouurrtt’’ss OOppiinniioonnWhen a court reviews the action of an adminis-trative agency, it examines whether the agencyhas acted reasonably and rationally to carry outits statutory mandate from Congress. A courtusually will be very deferential to agency exper-tise but will also require that the agency ade-quately explain its action. Judge Harmon, fol-lowing the reasoning of the D.C. Circuit Courtof Appeals,8 declared that the stock rebuildingplan would have to have at least a fifty percentchance of succeeding to pass muster.

NMFS faced a difficult challenge in defend-ing its action here. In formulating the rebuild-ing plan the Council had considered economic

Red Snapper, from page 13

Photograph of red snapper courtesy of the USFDA.


studies that showed a reduction in shrimpingeffort of only thirty-four percent, culminatingin 2012. Yet in the plan the Council adhered tothe assumption of a fifty percent reduction ineffort beginning in 1999 and continuingthrough 2032.

The court found that NMFS was not engag-ing in reasonable decision-making when it per-sisted in relying on an assumption that was con-tradicted by the evidence the agency consid-ered. Judge Harmon observed that the Council’sown graphs showed that red snapper stockswould not be rebuilt within the mandatory timeperiod. It would have been difficult for the courtto conclude that the agency had acted reason-ably, in light of this evidence to the contrary.

Judge Harmon also found that NMFS violat-ed the plain meaning of the Magnuson Act bynot taking steps to minimize bycatch and mor-tality from unavoidable bycatch in the fisherymanagement plan. The agency had attempted todefend itself by claiming that it would includebycatch reduction at a later date in the ShrimpFishery Management Plan. Unfortunately forthe agency, the Magnuson Act explicitly requiresfishery management plans to include measuresthat, to the extent practicable, minimize bycatchand mortality from unavoidable bycatch.

The court thus sided with CCA on its sub-stantive claim that NMFS, in approvingAmendment 22, violated the Magnuson Actand the APA. It was less receptive to CCA’sother two claims. Judge Harmon found thatCCA did not raise a valid NEPA question, andthat NMFS did not act inappropriately when itdenied the group’s petition for emergencyrulemaking.

CCoonncclluussiioonnJudge Harmon ordered NMFS to approve a redsnapper stock rebuilding plan that includesmeasures to reduce shrimp fishery bycatchwithin nine months of her decision. Rather thanvacating the entire plan, however, JudgeHarmon allowed for the status quo to be main-tained until the new plan is finalized.

On April 2 NMFS issued interim measuresto address red snapper overfishing while theCouncil prepares a new plan. The interim mea-sures, which include a reduction in the baglimit and the total allowable catch, becameeffective on May 2. The interim measures maybe viewed at the Council’s website, www.gulf-council.org .

EEnnddnnootteess1. 16 U.S.C. §§ 1801-83.2. Id. § 1851(a).3. Id. § 1851(a)(1).4. The Magnuson Act defines “bycatch” as “fish

which are harvested in a fishery, but whichare not sold or kept for personal use, andincludes economic discards and regulatorydiscards. Such term does not include fishreleased alive under a recreational catch andrelease fishery management program.” Id. §1802(2). Of most pertinence here are redsnapper caught by accident in shrimp trawls.

5. 50 C.F.R. 600.310(e)(4)(ii)(B).6. Coastal Conservation Assn. v. Gutierrez, Civ.

Action No. H-05-1214, at 5 (S.D. Tex. March12, 2007) (quoting Amendment 22).

7. 70 Fed. Reg. 53142 (Sept. 7, 2005).8. National Resources Defense Council v. Daley,

209 F.3d 747 (D.C. Cir. 2000).

Photograph of gillnet catch courtesy of NOAA.


ITT Federal Services Corp. v. Montano, 2007 U.S.App. LEXIS 1742 (1st Cir. Jan. 26, 2007).


The First Circuit Court of Appeals has ruledthat a company and its insurer did not have astatutory right to recover legal malpracticedamages from an injured employee’s attorneys.ITT Federal Services (ITT) and its insurer hadfiled the claim seeking relief under theLongshore and Harbor Workers’ CompensationAct (LHWCA).

BBaacckkggrroouunnddThe claim originated when a Navy pilot acci-dentally dropped two bombs near the controltower where Edgar Colon, an employee of ITT,was working. As a result of his injuries, Colonfiled an administrative claim seeking benefitsunder the LHWCA from ITT and its insurancecarrier, Pacific Employers Insurance Company

(PEI). ITT and PEI settled the claim with Colonfor $305,000.

While the administrative claim was pend-ing, Colon’s attorneys brought suit against ITTand the Navy in federal district court under theFederal Tort Claims Act (FTCA). The court dis-missed the suit against the Navy, noting that theUnited States may be sued under the FTCA, butindividual military departments may not. Thedistrict court also dismissed the suit againstITT, citing the fact that the LHWCA providedColon with an exclusive remedy.

Colon’s lawyers never refiled the federal suitor appealed the district court’s decision. Aftertwo years, the statute of limitations on theFTCA claim ran, and the district court’s judg-ment became final. ITT and the insurance car-rier then brought suit against Colon’s attorneys,claiming that they could have recovered pay-ments made to Colon under the LHWCA if theattorneys had refiled the lawsuit naming theUnited States as a defendant.1 The U.S. District

Accidental Bomb Leads toLegal Malpractice Suit

Photograph of Tomcat bomber courtesy of the U.S. Navy.See Bomb, page 19


Glass v. Commissioner, 471 F.3d 698 (6th Cir.2006).


The Sixth Circuit has concluded that a coupleproperly claimed a tax deduction for a conser-vation easement, despite claims from theInternal Revenue Service (IRS) that the conser-vation easements were not qualified deductions.

BBaacckkggrroouunnddIn 1988, Charles and Susan Glass purchased aten-acre parcel of land on the shores of LakeMichigan, which included a home and a guestcottage on a bluff. The heavily forested proper-ty was home to several threatened species, suchas bald eagles, piping plovers, Lake Hurontansy, and pitcher’s thistle.

In an effort to preserve the natural featuresof the property, the couple granted threeconservation easements to the LakeTraverse Conservancy (LTC), a Michigan non-profit agency that facilitates the creation of con-servation easements. As part of one of the ease-ments, the couple retained a limited right toconduct certain activities within the easement,such as maintaining foot paths to the shore andthe right to add to or replace an existing cottage.In another easement, the couple retained theright to replace or add to an existing guest cot-tage, so long as the cottage did not exceed a cer-tain size.

When the couple claimed charitable deduc-tions on their federal taxes for the conservationeasements, the Commissioner of the InternalRevenue Service (IRS) issued a notice of defi-ciency for two of the easements. The couplechallenged the decision in the United States TaxCourt, which concluded that the conservationeasements were qualified deductions. The IRSappealed the decision.

QQuuaalliiffiieedd CCoonnttrriibbuuttiioonnss??The United States Court of Appeals for theSixth Circuit first examined whether the con-servation easements were qualified conserva-tion contributions under I.R.C. § 170(h)(1).Section 170 requires the taxpayer to show thatthree requirements have been met: “1) the realproperty interest is a ‘real property interest;’ 2)the donee is a ‘qualified organization;’ and 3)the contribution is exclusively for ‘conservationpurposes.’” The IRS claimed that the couple’sconservation easement did not meet the thirdrequirement.

In order to show that a contribution is exclu-sively for conservation purposes, the conserva-tion must provide “… protection of a relativelynatural habitat of fish, wildlife, or plants, orsimilar ecosystems.”1 The treasury regulationimplementing this definition required that theeasement protect a significant habitat.

The Sixth Circuit agreed with the tax court’sdetermination that the easements were a signif-icant habitat for threatened species such as baldeagles, Lake Huron tansy, and pitcher’s thistle.The IRS attempted to argue that even if therewere protected species on the property, theterms of the conservation easements “under-mine their state purpose because the encum-bered property is too small, [t]axpayers’reserved rights are too great, and there is nolimit on building on neighboring proper-ties.”2 The court rejected these assertions.

The court held that the IRS did not provethat the preserved property was too small for theprotected species to exist. Furthermore, theeasements had been carefully drawn to prohibitany activity or use of the encumbered propertythat would undermine their stated conservationpurposes. For instance, the couple could prunevegetation to preserve the scenic view or forsafety purposes, but clear cutting was clearlyprohibited. The court found that LTC

Court Upholds Tax Deduction for LakeMichigan Conservation Easement

See Lake Michigan, page 19


constitutional. The court recognized that thiscase falls into that category, but because onlythe most egregious forms of intentional miscon-duct, such as threats of violence and intentionalracial discrimination, merit the highest ratios,the court set the ratio at 5 to 1.

Finally, the last factor to consider was com-parable penalties. This factor’s significance hasbeen greatly diminished by State Farm and other

Ninth Circuit cases. However, the fact that thisparticular factual situation–spilling oil in navi-gable waters–has been taken very seriously byCongress and the state legislature, further justi-fied the court’s conclusion that a substantialpunitive damage award should be assessed.

CCoonncclluussiioonnThe appellate court concluded that Exxon’sreckless conduct in placing an incompetentcaptain in command of the Exxon Valdez war-

ranted severe sanctions; however, the mostsevere sanctions were not necessary in lightof Exxon’s mitigating efforts and consider-ing that this misconduct was not intentional.Because the district court’s punitive dam-ages award of $4.5 billion was not consis-tent with the Supreme Court’s State Farmdecision, the Ninth Circuit reduced theaward to $2.5 billion consistent with a 5 to 1ratio.

EEnnddnnootteess1. Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S.

1 (1993); TXO Prod. Corp. v. Alliance Res.Corp., 509 U.S. 443 (1993).

2. State Farm Mut. Auto Ins. Co. v. Campbell,538 U.S. 408 (2003).

3. Id. at 14.4. B.M.W. of N. Am., Inc. v. Gore, 517 U.S.

559 (1996).

Exxon Valdez, from page 12

Photograph of cargo ship courtesy of NOAA.

“considerations of convenience, fairness andjudicial economy so warrant.”2 JusticeGinsburg found this to be a “textbook casefor immediate forum non conveniens dis-missal.”3 For instance, establishing personaljurisdiction would burden Sinochem withgreat expense and delay during discoveryand would inevitably end with the districtcourt dismissing for forum non conveniens.The Supreme Court found that the grava-men of Malaysia International’s complaintis an issue best left for resolution by theChinese court.CCoonncclluussiioonn

The Court held that when a lengthy discoveryprocess is required to determine subject-matteror personal jurisdiction and forum non conve-niens considerations favor dismissal, the courtmay follow the least burdensome path and dis-miss based on forum non conveniens.

EEnnddnnootteess1. Sinochem International Co. v. Malaysia

International Shipping Corp., 127 S.Ct. 1184,1190 (2007).

2. Id. at 1192.3. Id. at 1194.

Sinochem, from page 4

appeared to be willing to monitor andenforce compliance and there was no evi-dence to the contrary. The Sixth Circuitnoted that the couple, in granting the ease-ments, was not required to consider theneighbors’ building rights. The appel-late court found that the couple met all ofthe statutory requirements for contributinga conservation easement and affirmed theTax Court’s decision.

EEnnddnnootteess1. I.R.C. § 170 (H)(4)(A)(ii). 2. Glass v. Commissioner, 471 F.3d 698, 709

(6th Cir. 2006).

Lake Michigan, from page 17


Bomb, from page 16

Court for the District of Puerto Rico dismissedthe claims and the companies appealed.

SSuubbrrooggaattiioonnSection 933 of the LHWCA provides that anemployee may bring suit against third partiesthat have injured him or her. When an injuredemployee is compensated by third parties insuch a suit, § 933 of the LHWCA gives theemployer a limited right of subrogation for pay-ments made to the employee by a third party.This means that if Colon had recovered moneyfrom the United States, ITT could have recov-ered the benefits it had paid Colon in the settle-ment. Furthermore, the LHWCA provides thatif the employee does not bring suit against athird party within six months, the right to bringan action reverts to the employer—or to theinsurer if it has paid the compensation underthe LHWCA—for 90 days. After the 90 day timeperiod, the right reverts back to the employee.

On appeal, ITT and PEI argued that Colonhad suffered an injury when his lawyers did notrefile the claim against the United States andtherefore they were entitled to a subrogationlien in a legal malpractice suit against Colon’sattorneys under § 933. The First Circuit notedthat although § 933(b) does provide a limitedsubrogation right for an employer when a thirdparty is liable for injury, “injury” is defined as“accidental injury … arising out of and in the

course of employment …” The court concludedthat the subrogation right was only available forthe injury that Colon sustained during thecourse of his employment, which would have

included the injury sustained as a result of theaccidental bombing but precluded the malprac-tice claim. Furthermore, the court acknowl-edged that legal malpractice is not the type ofinjury that entitles an employee to compensa-tion under the LHWCA. The court affirmed thedistrict court’s judgment, observing that bothITT and PEI could have pursued claims againstthe United States under the LHWCA.

EEnnddnnootteess1. The companies also argued that the lawyers

breached their duty of care to the compa-nies; however, the district court held thatthe lawyers only owe a duty of care toclients and non-clients if the lawyers rea-sonably foresee that the non-client will relyon his services.

Section 933 of the LHWCA provides that an employee

may bring suit against third parties that have injured him or her.

Photograph of Lake Michigan shoreline courtesy of NOAA’sGreat Lakes Environmental Research Laboratory.


AApprriill SS.. WWiilllliiaammss

April is a third-year law student at the Florida CoastalSchool of Law. The views expressed herein are those of theauthor and do not necessarily reflect the views of the SeaGrant Law Center, NOAA, or any of its sub agencies.

The United States is home to over 100 millionacres of wetlands, 4.6 million of which are iso-lated wetlands of South Carolina. Congress hasproposed a new interstate to run from Michiganto Myrtle Beach, South Carolina. The SouthCarolina Department of Transportation’s(DOT) chosen route will affect a minimum of384 acres of wetlands scattered up and down thepreferred alternative. Protection for these wet-lands that serve so many important functions isinsufficient, and it is time to enact real protec-tions.

Since the recent Rapanos v. United Statesdecision, and the further erosion of wetlandsregulations, section 404(b) of the Clean WaterAct (CWA) is not adequate with respect to pro-tection of isolated wetlands. Congress needs toenact a statute specifically tailored to protectsuch wetlands, South Carolina needs to imme-diately enact an isolated wetlands protectionstatute, and the U.S. Army Corps of Engineers(Corps) needs to work on a case by case basis,and, along with the EPA, promulgate new defi-nitions and regulations to protect wetlands.

SSoouutthh CCaarroolliinnaa’’ss WWeettllaannddssWetlands have been shown to slow watermomentum, reduce flood heights, and allow forground water recharge. This is especially impor-tant in hurricane-prone South Carolina, giventhe ability of wetlands to store floodwaters andreduce property damage and loss of life. Oneacre of wetland can store up to 1.5 million gal-lons of floodwater. One reason floods havebecome more costly is that over half of the wet-lands in the U.S. have been drained or filled.

Wetlands also serve as water filtration sys-tems by removing nutrients and pollutants from

water before it leaves the wetland. Storm waterand wastewater treatment facilities are some-times designed from wetlands due to the abilityof wetlands to filter water. Wetlands also serveas fisheries and wildlife habitats, and providerecreation. Having such an important role inthe environment, wetlands need protectionagainst those who want to build on and destroythem, specifically the isolated wetlands in thepath of 1-73.

South Carolina’s most comprehensive wet-lands statute to date is the “Coastal Tidelandsand Wetlands Act.”1 However, this statute onlyprotects “critical areas,” and leaves out manyacres of South Carolina wetlands. It defines“critical areas” as coastal waters, tidelands,beaches, or beach/dune systems. It also statesthat South Carolina may issue permits for “ero-sion and water drainage structure . . . as it maydeem most advantageous to the State for thepurpose of promoting the public health, safetyand welfare . . . ” This permit system leaves aloophole for the state to grant permits whenadvantageous to the public welfare. Also there isno protection for isolated wetlands or basicallyany inland wetlands. The Pollution ControlAct indirectly protects South Carolina wetlands.It gives the Department of Health andEnvironmental Control (DHEC) the power toregulate pollution and maintain water quality,but just refers to “waters,” not “wetlands,”“implying they are not covered by the act.”2

II--7733 PPrroojjeeccttInterstate 73 is a proposed road that will pro-vide a direct route for the northern states to thecoast of South Carolina. The primary goals ofthis project are system linkage and economicdevelopment. The DOT wants to provide a con-nection between Interstate 95 and the MyrtleBeach region, and “enhance economic opportu-nities and tourism in South Carolina.”3 TheDOT is currently sending out engineers andscientists to determine what wetlands could be

Project Jeopardizes South Carolina Wetlands


filled, and which should be preserved. TheDOT is not sure yet which wetlands will bebridged and which will be filled, but, if filled,they will have to obtain a permit first. A finalEnvironmental Impact Study is to be releasedin the summer of 2007.

In the meantime, the South Carolina wet-lands that are at stake on the proposed path forInterstate 73 must be protected. The momen-tum favors constructing this interstate ratherthan new legislation to protect wetlands.Therefore, the citizens of South Carolinaneed to oppose this new road’s interference withwetlands. Citizens need to demand that a moreextensive EIS be done, and that bridges takeprecedence over filling regardless of the addi-tional cost. Also a possible citizen suit under theCWA might be viable, and perhaps result in aninjunction, at least until further legislativeaction is taken.

South Carolina needs to enact a real isolat-ed wetlands protection statute. It needs towork with the federal government in enactingreal wetlands legislation by expanding theprotections to any water or wetland not cov-ered by federal law. The new statute shouldallow construction only in the direst circum-stances, mandating judicial approval for anysuch permit.

FFeeddeerraall PPrrootteeccttiioonnIn a culmination of wetlands jurisdictional cases,in 2006 the Supreme Court heard Rapanos v. U.S.Army Corps of Engineers.4 The issue was whetherthe Corps had jurisdiction over non-navigablewaters. The Corps’ jurisdiction rested on whetherthe waters were considered adjacent to navigablewaters and what kind of hydrological connectionmust be present for a water to be considered adja-cent. The case resulted in a plurality opinion thatleft many questioning how to apply the ruling.Many circuit courts have chosen to follow JusticeKennedy’s concurrence.

Justice Scalia held that the term navigablewaters included “only relatively permanent,standing or flowing bodies of water, not intermit-

tent or ephemeral flows of water,” and that adja-cent waters are only those in which “a continuoussurface connection exists between it and naviga-ble water.”5 He narrowed the definition of “navi-gable waters” to waters that are in fact navigable.Congress defined “navigable waters” as “waters ofthe U.S.” so that actual navigability would not bean issue.6 According to the legislative history, thephrase “waters of the U.S.” was to be given “thebroadest possible constitutional interpretation.”7

Ultimately, Justice Scalia set out a two-prong testto determine whether adjacent water is coveredby the CWA. First, the adjacent channel mustcontain waters of the United States (i.e., relative-ly permanent body of water connected to tradi-tional interstate navigable waters); and second,the wetland must have a continuous surface con-nection with that water. This is a very strict test.

Justice Kennedy’s concurrence advocatedfor a “significant nexus” test, which would beless narrow than the idea promoted by JusticeScalia. He held that the Corps should developguidelines to determine what kind of proximitywould satisfy the “significant nexus” test. Thisis the same interpretation most of the appellatecourts follow. Justice Kennedy would defer tothe Corps regulations, and rejected JusticeScalia’s claim that only “permanent, standing orflowing waters are federally protected.” He alsowrote the wetland in question need not have a“continuous surface connection” to navigablewater, because they can still have “significanteffects” on water quality, and the ecosystem,regardless of how strong or tenuous their con-nection.8 Justice Kennedy wrote that wetlandsare areas that are inundated or saturated withwater at a “frequency and duration sufficient tosupport, and that under normal circumstancesdo support, a prevalence of vegetation typicallyadapted for life in saturated soil conditions.”9

His opinion went on to attack the two limi-tations that the plurality opinion put on theCWA. First, he said that the “continuous flow”requirement does not make sense in a statute“concerned with downstream water quality,”because small continuous trickle would be cov-

See Federal, page 22


ered, but “torrents thundering at irregular inter-vals” would not. According to Justice Kennedythe second limitation Justice Scalia imposed isthe “exclusion of wetlands lacking a continuoussurface connection to other jurisdictionalwaters.”10 Justice Kennedy wrote that JusticeScalia’s opinion is “inconsistent with the[CWA’s] text, structure, and purpose.”11

SSoolluuttiioonnssCongress needs to enact real wetlands protec-tion legislation immediately. It needs to steeraway from this permit system under the CWA,and rather than creating legislation that allowsdestruction, create something that preventssuch. The permit system is not effective. TheCorps approves more than 90 percent of allapplications for permits.

A place to look for guidance would be theinternational treaty, Convention on Wetlands ofInternational Importance Especially as Water-fowl Habitat (Ramsar Convention.)12 The treatyattempts to “stem the progressive encroachmenton and loss of wetlands now and in the future.”The treaty states that the contracting partiesshould implement planning to promote conser-vation, and wise use of the wetlands is includedon the list. New federal legislation should takethis a step further by adding specific tools forpromoting conservation and wise use, such as ano-build, no-fill designation for all wetlands.The treaty requires “wise use” of any wetland acountry lists, but does not describe what “wiseuse” means, or entails. A federal statute shouldinclude this type of provision, but give a precisedefinition of wise use that would not allow anybuilding or filling that would damage a wetland.

In addition to federal legislation, states needto enact their own wetlands protection statutes.At the outset, there are several problems withstate legislation. First, states do not have thesame incentive to protect wetlands as does thefederal government. In fact, states are moreinclined not to have wetlands protection laws.When a neighboring state has provisions inplace that the other does not, the other state hasa crucial business advantage. States can use this

to attract a business to their state. A federalstatute would put each state on equal footing inattracting business.

Second, even if a state enacts legislation, thelegislation will not be the same across the board.If every state enacts legislation, it is quite possi-ble that there would be 50 different regimes.(even though it is unlikely all 50 states wouldenact the legislation). Some wetlands will bemore protected than others, when they all war-rant protection. Leaving this matter to state leg-islation suggests that the matter could be leftwithout legislation if the state finds that is in itsbest interest. This should not be an option.

The CWA is not sufficient to curtail the ero-sion of America’s wetlands. Congress needs tostep in and enact real wetlands protections,states need to enact wetlands protectionstatutes, and the Corps needs to work with theEPA to create new regulations that will best pro-vide protection for the wetlands.

EEnnddnnootteess1. S.C. Code Ann. § 48-39-10 – 48-39-360

(2005).2. Ross B. Plyer, Protecting South Carolina’s

Isolated Wetlands in the Wake of Solid WasteAgency, 53 S.C. L. REV. 757, 768 (2002).

3. Welcome to the I-73 project : http://www.i73inS.C.com/ (last visited Feb 12, 2006) .

4. 126 S. Ct. 2208 (2006).5. Id. at 2212-2213. 6. Robert Meltz and Claudia Copeland,

Congressional Research Service, TheWetlands Coverage of the CWA is revisited bythe Supreme Court: Rapanos and Carabell,Report RL 33263 (Feb. 2, 2006).

7. Id.8. Rapanos, 126 S. Ct. 2208 (2006). 9 Id. at 2237.10. Id. at 2244. 11. Id. at 2246.12. Convention on Wetlands of International

Importance Especially as WaterfowlHabitat, Dec. 21, 1975, T.I.A.S. No. 11084,996 U.N.T.S. 243.

Federal, from page 21


A colonial-era shipwreck has netted 17 tons of colonial-era gold and silver coins valued at an esti-mated half million dollars, which could make it the biggest find in shipwreck treasure history.Odyssey Marine Exploration, the company that excavated the treasure, has not released detailsabout the identity of the ship, but reported that the ship was located in a well-used sea lane in theAtlantic Ocean.

A research group has reported that China’s demand for shark fins may con-tribute to the threat of extinction of several shark species in Europeanwaters. The Lenfest Ocean Program, author of the report, claims that thegrowing middle class’s demand for the luxury item may be driving thedemand. When sharks are captured for their fins, fishermen catch thesharks, remove their fins, and toss the remains back into the ocean. Thepractice prevents researchers from getting an exact measure of how manysharks are being killed.

Two dogs displaced after Hurricane Katrina have returned to their original owners in Louisiana.The dogs, a St. Bernard and a shepherd mix, were dropped off by the Louisiana couple, Steve andDoreen Couture, at a temporary shelter before the storm hit. The couple did not immediatelyreturn for the dogs, and the pets were sent to a shelter in Pinellas County, Fla., where they wereadopted by two different owners. After the Louisiana couple located their pets, the new ownersoriginally refused to return the dogs and the Coutures brought suit. Although a trial date was setfor July, the new owners decided to return the dogs and the suit has been dropped.

A 6½-foot alligator named Reggie escaped authorities inLos Angeles for over two years before being caught recent-ly. Before his capture, Reggie provided an attraction forlocal residents who would watch for him to appear aroundthe lake. The alligator was captured while he was sunningon the banks of Lake Machado and was taken to the L.A.zoo where he will be quarantined before joining other alli-gators. Authorities believe that Reggie was an illegal petreleased into the lake.

An ancient fish has been caught off the coast of Indonesia. Thecaptured fish, a coelacanth, was at one time thought to have goneextinct 80 million years ago. The Indonesian fisherman thatcaught the fish first took it to his house, and then put it in quar-antine pool. The coelacanth only survived 17 hours in the quaran-tine pool, because the fish can not survive for very long outside ofits natural habitat, which is 200 feet below the sea.

Photograph of alligator courtesy of ©Nova DevelopmentCorp.

Photograph of coelacanth courtesy of NOAA’sAlaska Fisheries Science Center.

Photograph of shark fin courtesy ofUSF College of Marine Science.

Sea Grant Law CenterKinard Hall, Wing E, Room 262P.O. Box 1848University, MS 38677-1848

THE SANDBAR

THE SANDBAR is a result of research sponsored inp a r t b y t h e N a t i o n a l O c e a n i c a n dAtmospheric Administration, U.S. Department ofCommerce, under Grant Number NA16RG2258,the Sea Grant Law Center, Mississippi LawResearch Institute, and University of MississippiLaw Center. The U.S. Government and the SeaGrant College Program are authorized to pro-duce and distribute reprints notwithstandingany copyright notation that may appear hereon.This newsletter was prepared by the Sea GrantLaw Center under award NA06OAR4170078from NOAA, U.S. Department of Commerce. Thestatements, findings, conclusions, and recommen-dations are those of the author(s) and do not nec-essarily reflect the views of the Sea Grant LawCenter or the U.S. Department of Commerce.

The University of Mississippicomplies with all applicablelaws regarding affirmativeaction and equal opportunityin all its activities and pro-grams and does not discrimi-

nate against anyone protected by law because ofage, creed, color, national origin, race, religion,sex, handicap, veteran or other status.

MASGP 07-004-02 July, 2007

Editor: Terra Bowling, J.D.

Publication Design: Waurene Roberson

Research Associates:Sarah SpigenerAllyson L. VaughnApril Williams

Contributors:Josh ClemonsStephanie Showalter

THE SANDBAR is a quarterlypublication reporting onlegal issues affecting the U.S.oceans and coasts. Its goal isto increase awareness andunderstanding of c o a s t a lp r o b l e m s a n d issues. Tosubscribe to THE SANDBAR,

contact: the Sea Grant Law Center, Kinard Hall, WingE, Room 262, P.O. Box 1848, University, MS, 38677-1848, phone: (662) 915-7775, or contact us via e-mail at:[email protected] . We welcome suggestions for top-ics you would like to see covered in THE SANDBAR.

Documents

Volume 6:2, July, 2007 Supreme Court Rules EPA’s Denial to