Reference no: EM133735502

1) Scenario:

Ashton Kutcher, in addition to being a dreamy TV and movie celebrity, is fond of using his accumulated wealth to provide venture capital for techy start-ups that he envisions as having potential to ‘change the future' for the better. He holds interest in several companies at any given time, ranging from software start-ups to electric car companies.

One company that Ashton invested in was Exide Technologies, a small company that claimed to have developed a new process to recycle household batteries at a rate and quantity never before possible. This process had promise to break-through several economic barriers and make possible a scale of battery recycling that could in theory match battery production, a key aspect of attaining sustainability.

Exide turned out to be too good to be true however, and the process never lived up to expectations. The company plant ultimately shuttered, and left the site vacant. Worse, upon inspection, the site was now heavily contaminated and needed immediate removal action by the federal government under CERCLA using the ‘superfund' monies. As is common to the process and allowed under CERCLA, the federal government is now looking to recover those monies from responsible parties.

Exide Technologies no longer exists as a corporation, so the government is suing the former owners. And in turn, the former owners have sued Ashton Kutcher on the grounds that he is in fact a Potentially Responsible Party (PRP) because he held a portion of interest in the company (14% stake), and therefore was among the ‘owners' of the plant (and he is rich- while they are broke.) Ashton's (well-dressed) lawyer maintains that he does not meet the criteria of a PRP because he was only a ‘money man' (of which he lost it all) and was not involved in plant management decisions in any manner at any time. Whatever pollution happened there- he was not part of it.

The case has wound up in California Supreme Court (where all celebrity-related issues are decided.) You are Chief Justice and have agreed to lead the case.

Question 1) What is a Potentially Responsible Party? On what grounds are they determined?

Question 2) Can one PRP being sued by the government under CERCLA, then sue another PRP to get them to help pay?

Question 3)What about dreamy Ashton? Can a venture capitalist, someone who provides money to help the early operations of a company in exchange for a percentage of the assumed forthcoming profits, be considered a PRP? Why?

Question 4)What is your decision? How much, if any, liability should Ashton Kutcher be responsible for regarding the costs of clean-up at the former Exide Technologies plant?

2) Scenario:

The Greater Sage Grouse, a 2 foot tall, ground nesting bird native to the short-grass sage prairies of the Rocky Mountain West, is a candidate for listing as a federally endangered species under the Endangered Species Act (ESA). While not formally listed yet, all indications are that it will, after consideration by the Fish and Wildlife Service, meet the criteria for listing.

Its preferred habitat substantially overlaps with recent explosive growth in natural gas extractions from geologic shale deposits through the process known as hydraulic fracturing, or ‘fracking' for short. The increase in natural gas extraction has been highly subsidized by the government, both for reasons related to domestic energy and lessened reliance on imports, and has been identified as a ‘transitional' energy source bridging the end of affordable oil and the emergence of renewables. Private companies operate on federal lands through leases, and while many leases are already developed with fracking operations in place, others are leased, but yet to be developed (i.e., they are still unaltered short-grass prairie) with many more areas in limbo awaiting what will happen with the Sage Grouse issue.

Understandably, industry is concerned that the eventual listing of Sage Grouse will prompt the designation of critical habitat under the provisions of the ESA which may curtail their operations in several ways- from potentially canceling leases promised, yet undeveloped, all the way to shortened lease length and forced abandonment of fracking rigs, many of which are so new they have yet to pay for themselves in profit from natural gas sales. Industry has been busy lobbying Congress to do something, and a bill was passed through the Republican-controlled Senate this session stating that all existing fracking leases on federal lands, both developed and undeveloped, are to be considered exempt from any forthcoming designation of critical habitat for any endangered species listed under the ESA. Importantly, this law is separate from, and not an amendment to, the actual ESA. In essence, creating two seemingly conflicting statutes.

The President (a centrist Democrat), is attempting to decide if she should sign the bill or veto, and has asked her old friend (you), who happens to be a retired judge who has dealt with ESA issues before, for some advice. The President would like to seek a balance between energy production and wildlife, and thinks this might be a reasonable solution, but is no scholar on the ESA and does not want to overly offend environmentalists- and would also like to avoid signing something into law coming from the Republicans if it will ultimately be struck down in the courts.

1)What is critical habitat under the ESA?

2)What types of activities can and cannot happen in critical habitat?

3)Is there precedent in the courts regarding attempts to circumvent the critical habitat designation requirement under the ESA? How is this issue the same or different?

4)Assuming the President signed the bill into law, and it was quickly challenged by environmental lawyers, what potential legal avenues and issues do you see as having weight in a court of law, both for and against the new law exempting certain fracking operations?

3) Scenario:

The state of Vermont's Dept. of Environmental Quality (DEQ) had recently published updated amendments to the Plant Quarantine Rule banning the commercial sale and movement of several species of non-native freshwater aquatic plants, commonly sold in aquarium stores and home and garden shops, for which evidence exists that they may be able to establish wild populations in Vermont. These plant species are not currently on the list of federally banned plants considered invasive by the USDA. Identified invasive aquatic plants on the USDA list were already banned in Vermont in the original version of the Plant Quarantine Rule.

Vermont's DEQ conducted a series of site visits to retailers some 6 months after the new regulation took effect and found banned plants in most locations. According to the language in the rule, they levied stiff fines on all violating retailers.

These fined retailers now bring suit against the State of Vermont and Director of the DEQ on grounds that the rule is unlawful. The retailers' environmental lawyer asserts that the federal government through the Noxious Weed Act, giving authority to the USDA, has preempted state regulatory authority on this issue as witnessed by the existence of the federally banned invasive plant list included within the federal Noxious Weed Act*. They further complain that the DEQ banned plants are not even widely acknowledged as invasive- and are just non-native plants that "could" survive in the wild, and further that such a conservative regulation is overly harmful to the retailer's businesses.

The case was originally awarded to the retailers and the DEQ ordered to strike down the new amendments to the rule. But the DEQ appealed and the case is now being heard in the Supreme Court of Vermont and has garnered national attention.

*Federal Noxious Weed Act -- Public Law 93-629 (7 U.S.C. 2801 et seq.; 88 Stat. 2148), enacted January 3, 1975, established a Federal program to control the spread of noxious weeds.

The Secretary of Agriculture was given the authority to designate plants as noxious weeds by regulation, and the movement of all such weeds in interstate or foreign commerce was prohibited except under permit. The Secretary was also given authority to inspect, seize and destroy products, and to quarantine areas, if necessary to prevent the spread of such weeds. He was also authorized to cooperate with other Federal, State and local agencies, farmers associations and private individuals in measures to control, eradicate, or prevent or retard the spread of such weeds.

Section 1453 of P.L. 101-624, the 1990 Farm Bill, enacted November 28, 1990 (104 Stat 3611) amended the Act by requiring each Federal land-managing agency to: