Justia Arbitration & Mediation Opinion SummariesArticles Posted in Environmental Law
PolyOne Corp. v. Westlake Vinyls, Inc.
Goodrich operated chemical-manufacturing plants at a Calvert City, Kentucky industrial site. In 1988, the Environmental Protection Agency designated the site a “Superfund Site” subject to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601. PolyOne and Westlake disputed their share of the cleanup costs. The parties entered a settlement agreement in 2007: PolyOne must reimburse Westlake for 100% of “allocable costs,” and every five years, either party may demand arbitration to modify the amount or allocation of costs. Either party may file a complaint in federal court for a “de novo judicial determination” of which costs are allocable after the arbitration panel has issued an award. The arbitration award becomes null-and-void upon the filing of a complaint; the Agreement prohibits either party from even admitting the arbitration award into evidence. PolyOne requested a declaration that the judicial-relief provision is invalid under the Federal Arbitration Act (FAA), 9 U.S.C. 9 and that the Agreement’s other arbitration provisions are unenforceable. The Sixth Circuit affirmed the denial of injunctive and declaratory relief. PolyOne has a strong case but its prior conduct does not align with its present position. Twice, PolyOne demanded arbitration. PolyOne seeks to enjoin the very arbitration it demanded in 2017. The court withheld judgment on whether PolyOne has waived its ability to challenge the arbitration provisions in the future. View "PolyOne Corp. v. Westlake Vinyls, Inc." on Justia Law
US Masters Residential Property (USA) Fund v. New Jersey Department of Environmental Protection
When a toxic disaster hits, claimants could seek relief in the form of assistance from the New Jersey Spill Fund by following promulgated claims procedures. In order to resolve disputes over denied Fund monies quickly and fairly, the Fund uses arbitrators and flexible procedures to allow claimants the opportunity to demonstrate that the denial constituted arbitrary and capricious action. Petitioner, US Masters Residential Property (USA) Fund, submitted a claim for Spill Fund monies for its multi-lot property located in Bayonne that was affected by storm floodwaters, which allegedly carried petroleum-based toxins. Neighboring properties also affected by the storm’s toxin-laden floodwaters were afforded Spill Fund relief. Following some back and forth with the Department of Environmental Protection (DEP), petitioner’s claim was denied. After petitioner filed an appeal, two years elapsed between the request for arbitration and the commencement of the arbitration proceeding. The results of the arbitration ended in favor of the Spill Fund, and payment remained denied. The New Jersey Supreme Court expressed "concerns" about the arbitration. "Although we are mindful of the deferential standard of review, flaws in the substantive reasoning of the arbitration decision as well as procedural fairness considerations undermine confidence in the outcome of this arbitration enough to persuade us, in the interest of fairness, to require that a new arbitration be conducted. Accordingly, we reverse and remand this claim for a new proceeding." View "US Masters Residential Property (USA) Fund v. New Jersey Department of Environmental Protection" on Justia Law
Forest Oil Corp. v. El Rucio Land & Cattle Co.
Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law
Panoche Energy Ctr. v. Pac. Gas & Elec.
Panoche, a producer of electricity, and Pacific Gas and Electric Company (PG&E), a utility that purchases its electricity, disputed which of them should bear the costs of complying with a legislatively-mandated program to reduce greenhouse gas emissions pursuant to the Global Warming Solutions Act (Assem. Bill 32 (2005–2006 Reg. Sess.). PG&E invoked the arbitration clause in its agreement with Panoche. Panoche resisted arbitration, arguing that the controversy was not ripe for resolution because ongoing regulatory proceedings at the California Air Resources Board and the California Public Utilities Commission would at least provide guidance in the arbitration and could render the proceeding unnecessary. The arbitration panel denied Panoche’s motion, and after a hearing determined that Panoche had assumed the cost of implementing AB 32 under the agreement and understood that at the time of signing. The arbitrators also concluded that the parties “provide[ed] for recovery of GHG costs” by Panoche through a “payment mechanism” in the agreement. The trial court agreed with Panoche, ruled that the arbitration was premature, and vacated the award. The court of appeal reversed and ordered confirmation of the award. Panoche identified no procedural disadvantage it suffered in going forward with the arbitration as scheduled and failed to meet the “sufficient cause” prong under Code of Civil Procedure 1286.2(a)(5). View "Panoche Energy Ctr. v. Pac. Gas & Elec." on Justia Law
Kluver v. PPL Mont., LLC
Plaintiffs commenced a lawsuit against several power companies alleging that the Colstrip power facility, which bordered land owned by Plaintiffs, contaminated groundwater under their property. The parties proceeded with mediation after three years of litigation. The mediation ended with the transmission of a memorandum of understanding (MOU) to the parties' counsel. After some of Plaintiffs expressed reservations about accepting the settlement, the power companies filed a motion to enforce the settlement agreement, arguing that the MOU was a written and signed settlement agreement. After a hearing, the district court granted the motion to enforce the settlement agreement, finding that the MOU was a binding, enforceable settlement agreement. The Supreme Court affirmed, holding that the district court (1) did not err by finding the MOU was an enforceable settlement agreement; (2) did not err by allowing parol evidence to change an option to purchase into a right of first refusal; and (3) erred in admitting evidence protected by the mediation confidentiality statute, but the error was harmless. View "Kluver v. PPL Mont., LLC" on Justia Law
State of New Jersey, et al. v. EPA
This case involved a motion for fees and costs under section 307(f) of the Clean Air Act, 42 U.S.C. 7607(f), which authorized courts to award costs of litigation whenever they determined that such award was appropriate. In the underlying litigation, movants intervened on behalf of petitioners who were challenging EPA rules regulating mercury emissions from power plants. The court vacated the mercury rules and agreed with petitioners that the rules violated the Act. Movants subsequently sought the court to order the EPA to pay their fees and costs. The court concluded that movants merited a fee award because they contributed to the proper implementation and administration of the Act or otherwise served the public interest. The court declined, however, to weigh in on the appropriate amount. Instead, the court directed the parties to its Appellate Mediation Program. View "State of New Jersey, et al. v. EPA" on Justia Law
Cape Flattery Ltd. v. Titan Maritime, LLC
Plaintiff filed a complaint against defendant, seeking indemnity and/or contribution based on the damage defendant allegedly caused through gross negligence in removing plaintiff's vessel from a coral reef. At issue was whether the district court properly denied defendant's motion to compel arbitration of the dispute under the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., where defendant alleged that the district court erred in refusing to apply English arbitrability law. The court held that based on the Supreme Court's reasoning in First Options of Chicago, Inc. v. Kaplan, courts should apply non-federal arbitrability law only if there was clear and unmistakable evidence that the parties intended to apply such non-federal law. Because there was no clear and unmistakable evidence in this case, federal arbitrability law applied. Under federal arbitrability law, the court's decisions in Mediterranean Enterprises, Inc. v. Ssangyong Construction Co. and Tracer Research Corp. v. National Environmental Services, Co., mandated a narrow interpretation of a clause providing for arbitration of all disputes "arising under" an agreement. Under this narrow interpretation, the present dispute was not arbitrable. Therefore, the court affirmed the district court's judgment. View "Cape Flattery Ltd. v. Titan Maritime, LLC" on Justia Law