U.S. Supreme Court to Hear ATS Case, Chinese Solar Subsidies Challenged, Bolivian Amazon Road Stopped, Pipeline Safety Bill Advances (by Bob Percival)

On Monday October 17 the U.S. Supreme Court announced that it will review a decision holding that corporations cannot be held liable under the Alien Tort Statute (ATS) because the “law of nations” does not apply to their conduct. The decision the Court agreed to review is a September 2010 judgment by the U.S. Court of Appeals for the Second Circuit in Kiobel v. Royal Dutch Petroleum, No. 10-1491 (see blog post of Oct. 4, 2010). The decision was by a split (2-1) panel of the Second Circuit with Judge Cabranes writing the majority opinion and Judge Leval writing a vigorous dissent. Last summer two other U.S. Courts of Appeal expressly rejected the holding in Kiobel - the D.C. Circuit in a case involving Indonesians challenging alleged human rights abuses by ExxonMobil (see blog posts of July 11, 2011) and the Seventh Circuit in a lawsuit against Bridgestone Firestone Tire (see blog post of July 17, 2011). The split in the circuits virtually guaranteed that the Court would agree to hear the case. Although the issue is one of statutory interpretation - the meaning of the ATS’s authorization of suits challenging conduct in violation of the “law of nations” -- it essentially will require the Court to address the scope of international law. The case is likely to be argued next spring and decided by the end of June 2012.

On October 19 a coalition of seven American companies filed a complaint with the U.S. Department of Commerce and the International Trade Commission arguing that the Chinese government has unfairly subsidized Chinese companies making solar panels. The U.S. companies are asking for the agencies to impose tariffs of more than 100% on solar panels imported from China. Solar companies based in the U.S. have been laying off workers due to competition from Chinese producers who have driven down the price of such panels from $3.30 per watt in late 2008 to between $1.00 and $1.20 per watt today. China has sold more than $1.6 billion in solar panels to the U.S. in the first eight months of 2011. Environmentalists are concerned that the imposition of tariffs could cripple the diffusion of solar technology. The Chinese ministry of commerce described the complaint as creating “a lose-lose situation” that “will cause an adverse impact on the bilateral trade interests of the two counties.” Keith Bradsher, China Charges Protectionism in Call for Solar Panel Tariffs, N.Y. Times, Oct. 22, 2011, at B6.

Last week President Evo Morales of Bolivia responded to protests by indigenous groups by suddenly canceling the construction of a highway through an ecologically sensitive region of the Amazon. The decision was made after indigenous groups completed a two-month march over hundreds of miles to the capital of La Paz to demand that the project be halted. The highway was to be built by a Brazilian construction firm. The indigenous groups feared that its construction would facilitate the expansion of coca leaf farming into the Isiboro Secure National Park, spawning increased deforestation. John Lyons, Bolivian Chief Scraps Road, Wall St. Journal, Oct. 22-23, 2011, at A12.

On October 17 the U.S. Senate unanimously approved a bill updating pipeline safety regulations. A similar bill has been approved by a House committee and awaits a vote on the House floor. The legislation is a response to the September 9, 2010 pipeline explosion in San Bruno, California. It will require more testing of pipelines, increase the number of pipeline inspectors and increase fines for major violations of pipeline regulations to as much as $2.5 million. Ryan Tracy, Pipeline-Safety Measure Passes Senate Unanimously, Wall St. J, Oct. 18, 2011, at A6. In an effort to win approval of the Keystone XL pipeline, TransCanada Corporation agreed last week to post a $100 million bond to ensure that funds would be available to respond to future spills. The company also agreed to build a concrete containment ditch to surround the pipeline when it crosses through environmentally sensitive areas of Nebraska. These and other concessions are designed to prevent the Nebraska legislature from forcing significant changes in the pipeline’s proposed route.

Last week Andarko Petroleum agreed to pay BP $4 billion to cover its share of liability for the Deepwater Horizon oil spill. Andarko owned a 25% stake in the project. Andarko agreed to drop its claim of gross negligence against BP and to transfer its stake in the project back to the British company. The money will be placed in BP’s $20 billion compensation fund for victims of the spill. Last week BP received preliminary approval to drill its first new well in the Gulf since the April 2010 spill. U.S. regulators also announced last week that they will inspect the an offshore oil drilling rig built in China that Repsol YPF SA, a Spanish company, plans to deploy in Cuban waters near the coast of Florida. Russell Gold, U.S. Will Inspect Cuban Rig, Wall St. Journal, Oct. 17, 2011, at A3.

Last week I visited my alma mater Macalester College in St. Paul, Minnesota. On Thursday October 20 I had dinner with faculty from the school’s interdisciplinary Environmental Studies department. On October 21 I gave guest lectures to a seminar on Climate and Society taught by Professor Louisa Bradtmiller and to Professor Katie Pratt’s Environmental Politics and Policy class. I had a wonderful lunch with students interested in environmental law followed by individual meetings with the school’s Environmental Studies faculty and the co-directors of the school’s Legal Studies program. It is so encouraging to see how strong student interest in environmental law is at the undergraduate level.