The Tenth Circuit, in a 120-page opinion, reversed a lower court decision setting aside and permanently enjoining the U.S. Forest Service's Roadless Area Conservation Rule. In setting aside the rule, the lower court held that the Service violated the Wilderness Act of 1964 and NEPA. But the Wilderness Act did not repeal or in any way limit the Forest Service's broad authority to regulate National Forest System lands for conservation purposes, including "wilderness." Nor did the Forest Service violate NEPA. Because the record does not contain sufficient evidence to show that the Forest Service irreversibly and irretrievably committed itself to a certain outcome before the NEPA analysis was completed, and because the Forest Service otherwise complied with the mandates of NEPA, the Service took the requisite "hard look" at the environmental consequences of the Roadless Rule and did not act arbitrarily and capriciously in conducting its analysis. The court also rejected claims that the Service violated the Multiple-Use Sustained-Yield Act and the National Forest Management Act. The lower court, therefore, erred in permanently enjoining the Roadless Rule on a nationwide basis. Wyoming v. United States Forest Service, Nos. 08-8061 & 09-8075, 41 ELR 20327 (10th Cir. Oct. 21, 2011).
A district court held that the FWS violated NEPA, but not the ESA, when it issued a special rule that specifies the protective mechanisms that apply to the polar bear as a result of its threatened status. In May 2008, the FWS listed the polar bear as threatened under the ESA. The Service then issued a special rule that, among other things, addressed the threat of direct impacts to individual bears and their habitat from oil and gas exploration and development activities within the species' current range. Conservation groups filed suit, arguing that the FWS purposely and unlawfully crafted the rule in such a way as to avoid addressing the threat of climate change in contravention of the ESA's conservation mandate. They argued that the FWS cannot effectively provide for the conservation of the polar bear without addressing global greenhouse gas emissions, which the agency itself identified as the cause of increasing Arctic temperatures that are expected to lead to a significant decline of the polar bear's sea ice habitat. Climate change, however, poses unprecedented challenges of science and policy on a global scale that entitles the agency to great deference. Based on the evidence before it, the FWS reasonably concluded that ESA §4(d) is not a useful or appropriate tool to alleviate the particular threat to the polar bear from climate change caused by global greenhouse gas emissions, and the groups offered no compelling evidence to the contrary. However, the court agreed with the groups that the FWS violated NEPA by failing to analyze the potential environmental impacts of its special rule. The FWS was required to conduct at least an initial assessment to determine whether the rule warranted a full EIS. Because the FWS conducted no analysis whatsoever, the rule violates NEPA and must be vacated. In re Polar Bear Endangered Species Act Listing, No. 08-764, 41 ELR 20319 (D.D.C. Oct. 17, 2011) (Sullivan, J.).
A district court upheld the FWS's determination that sport-hunted polar bear trophies may no longer be imported into the United States under the Marine Mammals Protection Act (MMPA) as of the effective date of the ESA listing rule for the species. In May 2008, the FWS determined threatened status for the polar bear under the ESA. Because the MMPA generally prohibits the import of marine mammal species that the FWS has designated as "depleted," the FWS also determined that polar bear trophies may no longer be imported into the United States. A hunting group and several individuals filed suit challenging the FWS' determination. But the MMPA mandates the FWS' conclusion that sport-hunted polar bear trophies are no longer eligible for import as a result of the species' depleted status. Sport hunting is not among the narrow, enumerated exceptions to the MMPA's ban on taking and importing depleted marine mammals. Accordingly, the FWS did not err when it administratively closed permit applications to import trophies that were pending when the listing rule took effect. The court also rejected arguments that the import of polar bear trophies would actually enhance the species within the meaning of the MMPA. The plaintiffs failed to satisfy the enhancement exception to the MMPA's ban on importing depleted species. In re Polar Bear Endangered Species Act Listing, No. 08-764, 41 ELR 20318 (D.D.C. Oct. 17, 2011) (Sullivan, J.).
A district court held that environmental groups and water associations may intervene in a lawsuit challenging EPA's TMDL for the Chesapeake Bay and its tributaries. The plaintiffs in the lawsuit argued that the TMDL should be vacated because EPA lacked authority under the CWA to issue the TMDL, the TMDL was arbitrary and capricious, and the Agency failed to provided adequate public notice and comment. A number of environmental groups and water associations that support the TMDL filed motions to intervene in the case, and the court ruled that intervention was proper. The motions are timely and a grant of intervention will not cause prejudice or delay to the original parties. Moreover, the intervenors demonstrated that there is a tangible threat to a legally cognizable interest. The water associations have an interest in the amount of nutrients and sediment their members are authorized to discharge. The environmental groups also have a legally protectable interest in the outcome of this case, as evidenced by their past legal, educational, and physical efforts toward protecting and restoring the Bay and the personal use and enjoyment of the Bay by the groups' individual members. In addition, because the plaintiffs seek to have the TMDL vacated, the associations' and groups' interests may be impaired or affected by the practical consequences of the disposition of this action. The intervenors also demonstrated that EPA cannot adequately represent their interests. American Farm Bureau Federation v. United States Environmental Protection Agency, No. 1:11-CV-0067, 41 ELR 20322 (M.D. Pa. Oct. 13, 2011) (Rambo, J.).
A district court dismissed the U.S. government's lawsuit against the current and former owners of a coal-fired power plant in Indiana County, Pennsylvania, for alleged CAA violations. The government alleged that the former owners undertook construction projects at the plant without having obtained the necessary PSD preconstruction permits. It also alleged that the current owners violated the PSD program by failing to implement best available control technology at units that had been improperly modified because the PSD program imposes ongoing obligations at modified facilities. But the alleged PSD violations constitute singular, separate failures by the former owners to obtain pre-construction permits, rather than ongoing failures to comply with whatever hypothetical conditions might have been imposed during the PSD permitting process. Because the projects at issue in this case occurred 15-20 years ago and no enforcement action was taken until 2008, the five-year limitations period has long since expired. Accordingly, the government may not recover civil penalties for the alleged PSD violations. Nor is the government entitled to injunctive relief. Although the five-year limitations period applicable to civil penalties does not place a time limit on the government's ability to obtain injunctive relief, the former owners' alleged PSD violations are wholly past violations rather than continuing ones. The court also rejected the government's claim that the current owners failed to obtain a proper or valid Title V operating permit for the plant. There is no way that the current owners could have known that the Title V application submitted by the former owners was flawed because no PSD violation was ever established, and the current owners cannot be held liable for the alleged deficiencies and omissions in the underlying application submitted by the former owners. United States v. EME Homer City Generation L.P., No. 2:11-cv-19, 41 ELR 20326 (W.D. Pa. Oct. 12, 2011) (McVerry, J.).
A district court held that the owner of a restaurant may seek prospective damages, and possibly punitive damages, against an oil company for damages stemming from a leaking UST at a neighboring gas station. To obtain prospective damages for nuisance or trespass, the owner must prove that the contamination of the property is permanent, rather than continuing. A nuisance is deemed permanent unless the defendant can produce substantial evidence that the harm is capable of being abated at a reasonable cost. Here, the company relied on a "no further action" letter it received from a state agency when the remediation was complete. But a no further action letter does not necessarily mean that the harm is abatable as a matter of law. Here, the owner's expert report, as well as contamination levels at the site, create a "reasonably deductible inference" that the contamination was not properly remediated. The court, therefore, denied the company's motion for summary judgment as to the owner's tort claims for prospective damages. In addition, a reasonable jury could find that the company's inaction for nearly 10 years exhibited clear and convincing evidence of a "complete lack of concern regarding the harmful potential" of the contamination at the station. The court, therefore, declined to find that the company's conduct cannot constitute malice as a matter of law and denied the company's motion for summary judgment as to the owner's claims for punitive damages. Barrous v. BP P.L.C., No. 10-CV-02944, 41 ELR 20324 (N.D. Cal. Oct. 3, 2011) (Koh, J.).
A district court held that a developer may be liable under CERCLA for response costs the former owner of contaminated property incurred at the site. The developer, who now owns the site, filed suit against the former owner to enforce an administrative order on consent that requires the former owner to take various environmental remedial actions by specified dates. The former owner then filed a counterclaim, alleging that the developer contributed to the release of hazardous substances at the site. Specifically, the former owner alleged that when the developer destroyed a concrete slab at the property, it caused hazardous substances beneath the slab to migrate into additional soils and groundwater, thereby requiring the former owner to perform additional monitoring at the site. Because the former owner created a genuine issue of material fact as to whether the developer caused a release or disposal at the facility and whether this caused the former owner to incur necessary response costs, the court denied the developer's motion for summary judgment. In addition, the developer failed to show that it is entitled to either the innocent owner defense or the bona fide prospective purchaser defense at this stage of the litigation. The court also dismissed the developer's state-law claims of breach of contract, nuisance, and negligence, as well as portions of its lawsuit to enforce the order on consent. Saline River Properties, LLC, v. Johnson Controls, Inc., Nos. 10-10507, -13406, 41 ELR 20325 (E.D. Mich. Oct. 17, 2011) (Cox, J.).
A district court held that a bank may go forward with its CERCLA and negligence claims against engineering and remediation companies that prepared and implemented an environmental remediation plan for property in which the bank holds an interest, but it dismissed the bank's strict liability and negligent misrepresentation claims. The bank argued that the companies failed to completely remediate the site for the purpose of assisting a developer and lender with future redevelopment. The companies argued that the CERCLA claims should be dismissed because they had neither actual control nor the authority to control any of the environmental operations of the subject property. But the complaint alleges that the defendants knew that there were disposed hazardous materials on the property and that they engaged in deliberate disturbance, unearthing, spilling, moving, and re-releasing of hazardous materials and compounds into the property. The companies, however, cannot be held strictly liable for contamination caused by defective containment cells placed on the property. None of the companies were acting as a seller, manufacturer, wholesaler, or distributor of the defective product. And while the allegations in the complaint raised a reasonable expectation that discovery will reveal evidence of the bank's negligence claim, the complaint failed to show that any representations allegedly made by the companies to the bank were false. The companies' motions to dismiss were therefore granted in part and denied in part. Bankcorpsouth Bank v. Environmental Operations, Inc., No. 4:11CV9, 41 ELR 20323 (E.D. Mo. Oct. 11, 2011) (Autrey, J.).
The First Circuit upheld a lower court decision dismissing a biomedical waste disposal company's §1983 claims against the Puerto Rico Environmental Quality Board for rejecting its proposed plans for dealing with accumulated waste. The complaint states no plausible claim against any identifiable defendant. The complaint did not meet even minimal pleading standards. None of the defendants is alleged to have acted due to bias, to have retaliated against the company because of its protected conduct, to have deprived the company of any liberty or property interest without affording adequate procedural protections, or even to have acted arbitrarily. Because none of the claims are facially valid, the case was dismissed. Redondo Waste Systems, Inc. v. López-Freytes, No. 10-1865, 41 ELR 20320 (1st Cir. Oct. 18, 2011).
The Second Circuit reversed a lower court decision dismissing a property owner's lawsuit against a zoning district that denied his variance request to build a single-family home on his land. The district denied his application because his proposal did not comply with a local zoning law that sets height restrictions for new structures in order to preserve views of the Hudson River. Contrary to the ruling of the lower court, the law is unconstitutionally vague as applied to his home because it provides inadequate notice of the elevation point from which he should have measured the height of his house to determine compliance. The law also authorizes arbitrary and discriminatory enforcement. Cunney v. Board of Trustees of the Village of Grand View, No. 10-0485, 41 ELR 20321 (2d Cir. Oct. 19, 2011).
EPA proposed the 2012 critical use exemption from the existing pre-phaseout inventory of methyl bromide under the stratospheric ozone protection program. 76 FR 65139 (10/20/11).
EPA proposed to exclude 2,3,3,3-tetrafluoropropene and trans-1,3,3,3-tetrafluoropropene from the definition of volatile organic compounds (VOCs) for SIP purposes. 76 FR 64059 (10/17/11).
SIP Approvals: Indiana/Ohio (attainment of the 1997 annual fine particulate matter (PM) NAAQS for the Cincinnati-Hamilton nonattainment area) 76 FR 64825 (10/19/11). Maryland (VOC standards for drum and pail coatings) 76 FR 64015 (10/17/11); (VOC standards for plastic parts and business machines coatings) 76 FR 64020 (10/17/11); (VOC emissions from various sources) 76 FR 64237 (10/18/11). North Carolina (PSD thresholds for greenhouse gas emissions) 76 FR 64240 (10/18/11). Virginia (transportation conformity requirements) 76 FR 64823 (10/19/11).
SIP Proposals: Arkansas (partial approval of regional haze and visibility programs) 76 FR 64186 (10/17/11). Indiana/Ohio (attainment of the 1997 annual fine PM NAAQS for the Cincinnati-Hamilton nonattainment area; see above for direct final rule) 76 FR 64880 (10/19/11). Kentucky (redesignation of the Kentucky portion of the Cincinnati-Hamilton 1997 annual fine PM nonattainment area to attainment) 76 FR 65458 (10/21/11). Oklahoma (1997 ozone NAAQS determination) 76 FR 64065 (10/17/11). Virginia (transportation conformity requirements; see above for direct final rule) 76 FR 64881 (10/19/11).
EPA finalized a rule to allow refiners and laboratories to use an alternative test method for olefin content in gasoline. 76 FR 65382 (10/21/11).
EPA entered into a proposed administrative settlement under CERCLA that requires the settling parties to pay $1,050,000 in past and future U.S. response costs incurred at the ACM Smelter and Refinery NPL site near Great Falls, Montana, and to perform a remedial investigation and feasibility study for portions of the site. 76 FR 64943 (10/19/11).
OSM seeks public comment on a proposed amendment to Iowa's regulatory program under SMCRA concerning routine updates. 76 FR 64043 (10/17/11).
OSM seeks public comment on a proposed amendment to Montana's regulatory program under SMCRA concerning coal beneficiation and coal preparation plants. 76 FR 64045 (10/17/11).
OSM seeks public comment on a proposed amendment to Montana's regulatory program under SMCRA concerning coal prospecting. 76 FR 64047 (10/17/11).
The Forest Service implemented the Community Forest and Open Space Conservation Program to provide competitive grants for the establishment of community forests through fee-simple acquisition of private forest land. 76 FR 65121 (10/20/11).
EPA promulgated a rule under TSCA §4(a)(1)(B) to require manufacturers, importers, and processors to conduct testing to obtain screening level data for health and environmental effects and chemical fate for 15 high production volume chemical substances. 76 FR 65385 (10/21/11).
EPA proposed to issue a test rule under TSCA §4(a)(1)(B) to require manufacturers and processors of 23 high production volume chemical substances to develop screening-level health, environmental, and fate data based on the potential for substantial exposures of workers and consumers to these chemicals. 76 FR 65580 (10/21/11).
EPA established May 10, 2013, as the deadline for farms to amend their oil spill prevention, control, and countermeasure plans. 76 FR 64245 (10/18/11).
EPA proposed to establish May 10, 2013, as the deadline for farms to amend their oil spill prevention, control, and countermeasure plans. 76 FR 64296 (10/18/11).
EPA lifted the administrative stay of the chemical release reporting requirements for hydrogen sulfide that was promulgated under EPCRA on August 22, 1994. 76 FR 64022 (10/17/11).
EPA proposed two options for obtaining basic information from concentrated animal feeding operations (CAFOs) under the CWA; under one option, EPA would obtain certain identifying information from all CAFOs, and under the second option, EPA would obtain this information from CAFOs that fall within areas that have been identified as having water quality concerns likely associated with CAFOs . 76 FR 65431 (10/21/11).
NOAA-Fisheries designated approximately 335 miles of freshwater creeks and rivers and their associated estuaries in California, Oregon, and Washington as critical habitat for the southern distinct population segment of Pacific eulachon fish under the ESA, excluding the land of four Native American tribes. 76 FR 65324 (10/20/11).
FWS proposed to designate approximately 12,157 acres in 14 counties in California as critical habitat for the tidewater goby under the ESA. 76 FR 64996 (10/19/11).
United States v. Rineco Chemical Industries, Inc., No. 4-07-CV-01189SWW (E.D. Ark. Oct. 14, 2011). Under a modified consent decree, a settling RCRA defendant is given a one-year extension to obtain a final permit for its thermal metal washing unit and its related hazardous waste storage and control any fugitive emissions from the unit at its Benton, Arkansas, facility. 76 FR 65534 (10/21/11).
United States v. Airgas Carbonic, Inc., No. 1:11-cv-163 (S.D. Ga. Oct. 4, 2011). Seventy-three settling CERCLA parties responsible for violations at the Alternate Energy Resources, Inc., site in Augusta, Georgia, must perform remedial design and remedial action at the site; 797 other parties must pay a portion of the past and future response costs incurred by the United States and Georgia. 76 FR 64378 (10/18/11).
United States v. Ryland Group, Inc., No. 3:11-cv-00499 (W.D.N.C. Oct. 7, 2011). A settling CWA defendant responsible for stormwater violations must pay a $625,000 civil penalty and must institute a companywide management, reporting, and training program to improve compliance with stormwater requirements. 76 FR 64379 (10/18/11).
S. 270 (land use), which would direct the Secretary of the Interior to convey certain federal land to Deschutes County, Oregon, was passed by the Senate. 157 Cong. Rec. S6690 (daily ed. Oct. 18, 2011).
S. 275 (hazardous & solid waste), which would amend title 49, U.S. Code, to provide for enhanced safety and environmental protection in pipeline transportation and enhanced reliability in the transportation of the nation's energy products by pipeline, was passed by the Senate. 157 Cong. Rec. S6613 (daily ed. Oct. 17, 2011).
S. 292 (land use), which would resolve the claims of the Bering Straits Native Corporation and the state of Alaska to land adjacent to Salmon Lake and provide for the conveyance of certain other public land to the Bering Straits Native Corporation, was passed by the Senate. 157 Cong. Rec. S6691 (daily ed. Oct. 18, 2011).
S. 333 (energy), which would reinstate and extend the deadline for beginning the construction of a hydroelectric project involving the Little Wood River Ranch, was passed by the Senate. 157 Cong. Rec. S6691 (daily ed. Oct. 18, 2011).
S. 334 (energy), which would reinstate and extend the deadline for beginning the construction of a hydroelectric project involving the American Falls Reservoir, was passed by the Senate. 157 Cong. Rec. S6691 (daily ed. Oct. 18, 2011).
S. 404 (land use), which would modify a land grant patent issued by the Secretary of the Interior, was passed by the Senate. 157 Cong. Rec. S6692 (daily ed. Oct. 18, 2011).
H.R. 470 (energy), which would further allocate and expand the availability of hydroelectric power generated at Hoover Dam, was passed by the Senate. 157 Cong. Rec. S6692 (daily ed. Oct. 18, 2011).
H.R. 489 (land use), which would clarify the jurisdiction of the Secretary of the Interior with respect to the C.C. Cragin Dam and Reservoir, was passed by the Senate. 157 Cong. Rec. S6692 (daily ed. Oct. 18, 2011).
H.R. 2273 (hazardous & solid waste), which would amend subtitle D of the Solid Waste Disposal Act to facilitate recovery and beneficial use of materials generated by the combustion of coal and other fossil fuels and provide for their proper management and disposal, was passed by the House. 157 Cong. Rec. H6934-59 (daily ed. Oct. 14, 2011).
H.R. 258 (water) was reported by the Committee on Natural Resources. H. Rep. No. 112-245, 157 Cong. Rec. H6975 (daily ed. Oct. 14, 2011). The bill would require the Office of Management and Budget to prepare a crosscut budget for restoration activities in the Chesapeake Bay watershed and require EPA to develop and implement an adaptive management plan.
H.R. 1904 (land use) was reported by the Committee on Natural Resources. H. Rep. No. 112-246, 157 Cong. Rec. H6975 (daily ed. Oct. 14, 2011). The bill would facilitate the extraction of mineral resources in southeast Arizona by authorizing and directing an exchange of federal and nonfederal land.
H.R. 2150 (energy) was reported by the Committee on Natural Resources. H. Rep. No. 112-249, 157 Cong. Rec. H6975 (daily ed. Oct. 14, 2011). The bill would amend the Naval Petroleum Reserves Production Act of 1976 to direct the Secretary of the Interior to conduct an oil and gas leasing program in the National Petroleum Reserve in Alaska, including at least one lease sale per year in the period 2011 through 2021.
H.R. 2170 (energy) was reported by the Committee on Natural Resources. H. Rep. No. 112-250, 157 Cong. Rec. H6975 (daily ed. Oct. 14, 2011). The bill would streamline federal review to facilitate renewable energy projects.
H.R. 2171 (energy) was reported by the Committee on Natural Resources. H. Rep. No. 112-251, 157 Cong. Rec. H6975 (daily ed. Oct. 14, 2011). The bill would promote timely exploration for geothermal resources under existing geothermal leases.
H.R. 2173 (energy) was reported by the Committee on Natural Resources. H. Rep. No. 112-252, 157 Cong. Rec. H6975 (daily ed. Oct. 14, 2011). The bill would facilitate the development of offshore wind energy resources.
S. 1729 (Blunt, R-Mo.) (hazardous & solid waste) would amend CERCLA to clarify that manure is not considered a hazardous substance, pollutant, or contaminant under that Act. 157 Cong. Rec. S6665 (daily ed. Oct. 18, 2011). The bill was referred to the Committee on Environment and Public Works.
S. 1735 (Cochran, R-Miss.) (land use) would approve the transfer of Yellow Creek Port properties in Iuka, Mississippi. 157 Cong. Rec. S6764 (daily ed. Oct. 19, 2011). The bill was referred to the Committee on Environment and Public Works.
S. 1740 (Cardin, D-Md.) (water) would amend the Chesapeake Bay Initiative Act of 1998 to provide for the reauthorization of the Chesapeake Bay Gateways and Watertrails Network. 157 Cong. Rec. S6764 (daily ed. Oct. 19, 2011). The bill was referred to the Committee on Environment and Public Works.
H.R.3210 (Cooper, D-Tenn.) (land use) would amend the Lacey Act Amendments of 1981 to limit the application of that Act with respect to plants and plant products that were imported before the effective date of amendments to that Act enacted in 2008. 157 Cong. Rec. H6976 (daily ed. Oct. 14, 2011). The bill was referred to the Committee on Natural Resources.
H.R.3221 (DeLauro, D-Conn.) (energy) would authorize the Secretary of Energy to provide loan guarantees for energy efficiency upgrades to existing buildings. 157 Cong. Rec. H6976 (daily ed. Oct. 14, 2011). The bill was referred to the Committee on Energy and Commerce.
H.R.3222 (Dicks, D-Wash.) (land use) would designate certain National Park System land in Olympic National Park as wilderness or potential wilderness. 157 Cong. Rec. H6976 (daily ed. Oct. 14, 2011). The bill was referred to the Committee on Natural Resources.
H.R. 3227 (LoBiondo, R-N.J.) (energy) would prohibit the Secretary of the Interior from issuing oil and gas leases on portions of the outer continental shelf located off the coast of New Jersey. 157 Cong. Rec. H6976 (daily ed. Oct. 14, 2011). The bill was referred to the Committee on Natural Resources.
H.R. 3238 (Pascrell, D-N.J.) (energy) would amend the Internal Revenue Code of 1986 to provide for an investment tax credit related to the production of electricity from offshore wind. 157 Cong. Rec. H6983 (daily ed. Oct. 18, 2011). The bill was referred to the Committee on Ways and Means.
The Solid Waste Management Board amended 329 Ind. Admin. Code §3.1 to incorporate 40 CFR 261, Appendix IX, to describe hazardous wastes excluded from regulation under 40 CFR 261.20 and 40 CFR 261.22. Changes also remove the emission-comparable fuel exclusion, remove saccharin and its salts from the lists of hazardous wastes and hazardous constituents, and make technical corrections, among other alterations to the rule. The amendments take effect November 18, 2011. See http://www.in.gov/legislative/iac/20111019-IR-329110090PRA.xml.pdf.
The Pollution Control Board amended 35 Ill. Admin. Code §217, Nitrogen Oxides (NOx) Emissions. Changes add a provision sunsetting the NOx SIP Call requirements as set forth in Subpart U that apply to non-electric generating units. Beginning with the 2009 control period (May 1 through September 30), non-electric generating units will no longer be required to hold NOx allowances in an amount equal to their seasonal NOx emissions. These sources will continue to be required to monitor, record, and report seasonal NOx emissions. The amendments took effect September 27, 2011. See http://www.cyberdriveillinois.com/departments/index/register/register_volume35_issue42.pdf (pp. 16600-14).
The Pollution Control Board amended 35 Ill. Admin. Code 229, Hospital/Medical/Infectious Waste Incinerators. Changes incorporate altered U.S. EPA regulations. The amendment took effect September 29, 2011. See http://www.cyberdriveillinois.com/departments/index/register/register_volume35_issue42.pdf (pp. 16615-81).
The Illinois Environmental Protection Agency proposed to amend 35 Ill. Admin. Code §254, Annual Emissions Report. Changes would declare that greenhouse gas emissions would not determine what type of report an entity files and that the type of report would continue to be based on criteria pollutant emissions. The deadline for comment is November 28, 2011. See http://www.cyberdriveillinois.com/departments/index/register/register_volume35_issue42.pdf (pp. 16178-82).
The Illinois Environmental Protection Agency proposed to amend 35 Ill. Admin. Code §731, Underground Storage Tanks, and repeal §732, Petroleum Underground Storage Tanks (Releases Reported September 23, 1994 through June 23, 2002), and §734, Petroleum Underground Storage Tanks (Releases Reported On or After June 24, 2002). Changes would incorporate Public Act 96-908, which amends the Environmental Protection Act and pertains to releases. The deadline for comment is November 28, 2011. See http://www.cyberdriveillinois.com/departments/index/register/register_volume35_issue42.pdf (pp. 16183-381).
The Department of Environmental Protection repealed 06-096 Code Me. Regs. Ch. 122, Chlorine and Chlorine Dioxide Emission Standard. The Department repealed the rule, which establishes an emission limit for bleach plants of pulp and paper mills, as federal rules are more comprehensive. The rule takes effect October 16, 2011. See http://www.maine.gov/sos/cec/rules/notices/2011/101911.html.
The Department of Environmental Protection repealed 06-096 Code Me. Regs. Ch. 135, Hexavalent Chromium Particulate Emission Standard. The Department repealed the rule, which establishes a limitation on the amount of hexavalent chromium allowed to be emitted from any potential source of hexavalent chromium, as federal rules are more comprehensive. See http://www.maine.gov/sos/cec/rules/notices/2011/101911.html.
The Department of Environmental Protection repealed 06-096 Code Me. Regs. Ch. 155, Portable Fuel Container Spillage Control. The Department repealed the rule as it has been superseded by federal requirements. See http://www.maine.gov/sos/cec/rules/notices/2011/101911.html.
The State Environmental Commission proposed to amend Nev. Admin. Code §§701A.220 and .280, and to add §§701A.225 and .285. Changes relate to energy tax incentives for buildings or structures that meet certain standards under the LEED Green Building Rating System. See http://www.leg.state.nv.us/register/2011Register/R081-11I.pdf.
The Water Quality Control Commission proposed to amend N.M. Admin. Code §20.6.6, the Commission's Dairy Rule. Changes would provide greater flexibility to dairy operators in the management of their facilities, in addition to correcting minor errors. There will be a public hearing November 16, 2011. See http://www.nmcpr.state.nm.us/nmregister/xxii/xxii19/WaterQualnotice.htm.
The Department of Environmental Management proposed to amend 15A N.C. Admin. Code 02C .0201-.0202, .0204, .0206-.0209, and .0211, relating to injection wells. Changes are necessary to comply with federal regulations. There will be public hearings throughout November and December, and the deadline for comment is January 13, 2012. The proposed effective date is April 1, 2012. See http://www.ncoah.com/rules/register/Volume26Issue08October172011.pdf (pp. 647-94).
The Department of Ecology amended Wash. Admin. Code §173.224, Wastewater discharge permit fees. Changes increase fees 4.34 percent for state fiscal year 2012 and 4.62 percent for state fiscal year 2013. The rule takes effect October 28, 2011. See http://apps.leg.wa.gov/documents/laws/wsr/2011/20/11-20-035.htm.
The Department of Ecology amended Wash. Admin. Code §§173.98, Uses and limitations of the water pollution control revolving fund, and 173.95, Uses and limitations of centennial clean water fund. Changes establish funding categories, ceiling amounts, and project eligibility for green project reserves projects and forgivable principal loans as part of the revolving fund. The rule takes effect October 28, 2011. See http://apps.leg.wa.gov/documents/laws/wsr/2011/20/11-20-036.htm.
Canada's government and energy industry have launched an effort to reverse proposed European Union (EU) fuel quality standards that would rank Canadian oil sands as one of the earth's most carbon-intensive crude sources. The proposed Fuel Quality Directive would give oil sands a default greenhouse gas value of 107 grams of carbon per megajoule, while conventional fuel is given a value of 87.5 grams. Canada, which has been touting oil sands as a secure and stable energy supply, believes that the directive is discriminatory. The government of Alberta voiced "grave concerns" over the proposal, saying in a letter that it "believes that the Fuel Quality Directive implementing measure as it currently stands would be incompatible with the EU’s international trade obligations." The letter argues that there is no scientific reason to single out oil sands from other crude sources. Canadian Natural Resources Minister Joe Oliver said that he was "cautiously optimistic" that he could win European support against the proposal, as European companies that have heavily invested in Alberta's oil sands stand to be disadvantaged. However, EU legal advisers have said that the proposals can probably be defended should Ottawa challenge the ranking with the World Trade Organization (WTO). A letter sent by EU officials said the proposals were science-based and non-discriminatory, and that if the WTO disagreed it would claim a derogation under rules designed to conserve natural resources. The EU Commission has argued that the entire life-cycle of the fuel must be taken into account and that the measures would label oil sands from Venezuela carbon intensive as well. For the full story, see http://www.vancouversun.com/life/environment/Canada+fighting+plans+label+oilsands+world+dirtiest+crude+source/5575302/story.html. For Alberta's letter, see http://business.financialpost.com/2011/10/21/alberta-tells-eu-oil-sands-ranking-is-threat-to-trade/.For Joe Oliver's plans, see http://online.wsj.com/article/BT-CO-20111021-708713.html. For the story on the letter from legal advisers, see http://ca.reuters.com/article/domesticNews/idCATRE79K3E420111021.
The Scottish government plans to increase tidal energy support while decreasing subsidies for biomass and wind power plants. Tidal energy projects will now receive five Renewable Obligation Certificates, awarded to utilities for renewable energy generation, for every megawatt hour produced through 2013, compared with the three certificates offered previously. Scotland proposed a cap on the size of biomass plants receiving support, with smaller, more efficient facilities eligible for 1.5 certificates and those producing heat as well as power eligible for 2 certificates through 2015. The proposals bring support for marine energy in line with England and offshore wind in line with the rest of the United Kingdom. The government said that the proposals will cost less than leaving funding as is, between £400m and £1.3bn less, but figures showed that the cost would amount to £50 for an average household by 2016. According to the BBC, the solar industry had hoped for more funding, as it has argued that heavier subsidies now would help create an industry that could quickly operate without government support. For the full story, see http://www.bbc.co.uk/news/science-environment-15389147.
Barclay's said last week that the European Union's plan to extend the Markets in Financial Instruments Directive to cover spot carbon deals will probably encourage trading after thefts and fraud have turned traders away. While some carbon traders are not enthusiastic, "industry didn’t come up with anything better" for problems with the market, said Louis Redshaw, head of carbon, coal, dry freight, and iron ore for Barclays Capital. Climate Commissioner Connie Hedegaard said that the measure would extend finance market protections to the carbon market, and that it "will provide further certainty for carbon market participants as the market grows and matures." Last week, a UK climate negotiator said that EU governments should take advantage of the 31-month low in carbon prices to set more ambitious climate goals, as they will be cheaper. For the full story, see http://www.bloomberg.com/news/2011-10-21/eu-plan-for-spot-co2-regulation-will-entice-trade-barclays-says.html and http://www.reuters.com/article/2011/10/20/us-regulation-carbon-idUSTRE79J1YU20111020. For the story on advancing climate goals, see http://www.reuters.com/article/2011/10/20/us-carbon-price-idUSTRE79J4J220111020.


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The Respondent is Derk Hond of Sunset, Ohio, United States of America.
The disputed domain name <cheap-swarovski.net> is registered with Web Commerce Communications Limited dba WebNic.cc (the “Registrar”).
The Complaint was filed with the WIPO Arbitration and Mediation Center (the ”Center”) on January 3, 2013. On January 4, 2013, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On January 4, 2013, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the disputed domain name.
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on January 8, 2013. In accordance with the Rules, paragraph 5(a), the due date for Response was January 28, 2013. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on January 30, 2013.
The Center appointed Dietrich Beier as the sole panelist in this matter on February 4, 2013. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
Swarovski uses the SWAROVSKI trademarks in connection with crystal jewellery stones and crystalline semi-finished goods for the fashion, jewellery, home accessories, collectibles, and lighting industries.
Swarovski is a known and leading producer of cut crystal, genuine gemstones and created stones with production facilities in 18 countries, distribution to 42 countries and a presence in more than 120 countries. In 2011, Swarovski’s products were sold in 1,218 of its own boutiques and through 1000 partner-operated boutiques worldwide. Swarovski’s approximate worldwide revenue in 2011 was Euro 2.87 billion.
Swarovski has registered the SWAROVSKI trademarks globally, inter alia the word mark SWAROVSKI, US trademark No. 934915 in classes 14, 21 dating back to 1972 and the word mark Swarovski, CTM trademark No. 007462922 in classes 01, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 15, 16, 17, 19, 20, 22, 23, 27, 28, 29, 30, 31, 32, 33, 34, 36, 37, 38, 39, 40, 42, 43, 44, 45 registered on July 21, 2009.
The Respondent has registered the disputed domain name on September 11, 2012 and is operating an online shop with content in the English language. The website advertises for sale various purported Swarovski products e.g. “Beads”, “Charms”, “Bracelets”, “Pendants”, “Rings”.
The disputed domain name is confusingly similar to the SWAROVSKI trademarks. UDRP panels have recognised that consumers expect to find a trademark owner on the Internet at a domain name address comprised of the company’s name or mark.
The Respondent has used the SWAROVSKI trademarks in the disputed domain name so as to cause confusion among Internet users between the disputed domain name and the SWAROVSKI approved websites. Internet users who intend to purchase Swarovski products online may type “www.cheap-swarovski.net” into the address bar on their web browser, as a reference to the sale of cheap SWAROVSKI jewelry, and be directed to the Website of the disputed domain name..
Having arrived at the Website Internet users will most likely be confused into thinking that the Website is an official Website because of the use of the SWAROVSKI name.
This type of initial interest confusion is illegal because it wrongfully capitalises on the Complainant’s goodwill in the SWAROVSK Itrademarks to divert Internet traffic to the Website.
The addition of the term “cheap” as a prefix to the SWAROVSKI trademarks does not lessen the confusing similarity between the disputed domain name and the Complainant’s mark.
The Respondent has no rights or legitimate interests in the disputed domain name. The Respondent has no connection or affiliation with Swarovski and has not received any license or consent, express or implied, to use the SWAROVSKI trademarks in a domain name or in any other manner.
The Respondent has never been known by the disputed domain name and has no rights or legitimate interests in the SWAROVSKI trademarks or the name “Swarovski”.
The Respondent’s use of the SWAROVSKI trademarks is clearly for the purpose of misleading consumers into believing that the Respondent and the disputed website are associated with or approved by Swarovski. The Respondent is clearly seeking to trade on Swarovski’s goodwill and reputation. Accordingly the Respondent does not have no rights of legitimate interests in the SWAROVSKI trademarks.
The Respondent has registered the disputed domain name in bad faith because it was registered with the knowledge of the Complainant’s rights in the SWAROVSKI trademarks, as it is inconceivable that the Respondent was unaware of Swarovski’s rights in the SWAROVSKI trademarks.
Registration of a famous mark, like the SWAROVSKI trademarks, as a domain name by an entity that has no legitimate relationship with the mark is itself sufficient to demonstrate bad faith.
The Respondent’s bad faith is evidenced by several circumstances indicating that the Respondent must have been aware of the Complainant’s trademark at the time of the registration of the disputed domain name. The Complainant’s trademarks are well known in the United States if America and worldwide.
Furthermore, it is unlikely that the Respondent can prove good faith use of the disputed domain name because it is difficult to conceive of a use that would not infringe the SWAROVSKI trademarks.
The Respondent’s attempt to attract consumers for commercial gain to the disputed domain name by creating confusion among consumers by utilising the SWAROVSKI trademarks is compounded by the efforts to mislead consumers into believing the site was operated or authorised by the Complainant. The Respondent, without valid consent, utilises the SWAROVSKI trademarks and official SWAROVSKI advertising material throughout the disputed website and offers products identical or similar to SWAROVSKI products for sale on the disputed website.
The Complainant has established the fact that it has valid trademark rights for SWAROVSKI in several classes.
The disputed domain name is confusingly similar to the SWAROVSKI mark of the Complainant since the element “cheap” being a non distinctive word cannot be considered as relevant to influence the overall impression of the domain name (see also Swarovski Aktiengesellschaft v. James Johnson, WIPO Case No. D2012-0080.
The Panel therefore considers the disputed domain name to be confusingly similar to the trademarks SWAROVSKI in which the Complainant has rights in accordance with paragraph 4(a)(i) of the Policy.
The Panel finds the Respondent has no rights in the disputed domain name since the Respondent is not a licensee of the Complainant nor has the Complainant granted any permission or consent to the Respondent to use its trademarks. Furthermore, the Respondent has no rights or legitimate interests in the disputed domain name since there is no indication that the Respondent is commonly known by the name SWAROVSKI nor that the Respondent is using the disputed domain name in connection with a bona fide offering of related goods or services.
The latter could be discussed since it is not completely clear (”purported Swarovski products“) from the complaint whether or not the offered products are originally derived from the Complainant. However, the majority opinion of UDRP panelists follows in cases where a legitimate interest of resellers of original goods to use a trademark in the domain name is in question, the test of Oki Data Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903, after which such use might be legitimate if the use comprises the actual offering of goods, only the trademarked goods are sold on the site, and the site is accurately and prominently disclosing the registrant's relationship with the trademark holder.
Although this Panel follows even the argumentation that any reseller is not allowed to use the trademark, unless otherwise authorized, in a manner which goes beyond the scope of informing the customer about the core of its business activities (see also Ferrero S.p.A. v. Fistagi S.r.l., WIPO Case No. D2001-0262; Raymond Weil SA v. Watchesplanet (M) Sdn Bhd, WIPO Case No. D2001-0601; dissenting opinion in DaimlerChrysler A.G. v. Donald Drummonds, WIPO Case No. D2001-0160) and unless it is not clear for the customer that the retailer is not an authorized partner of the trademark owner, the present case does not meet even the less strong criteria of the test after Oki Data Americas, Inc. v. ASD, Inc., WIPO Case No. D2001-0903, since the website under the disputed domain name creates the impression of being authorized by the Complainant.
The Panel therefore finds that the Respondent does not have any rights or legitimate interests in the disputed domain name.
Due to the nature of the SWAROVSKI mark as well-known, if not famous, the Respondent must have been well aware of the Complainant and its trademarks when registering the disputed domain name. The Complainant had not authorized the Respondent to make use of its mark. This Panel does not see any conceivable legitimate use that could be made by the Respondent of this particular domain name without the Complainant's authorization.
Furthermore, by combining the suffix “cheap” and a well-known trademark, it is evident to the Panel, that the Respondent has registered the disputed domain name in bad faith.
The circumstances of this case furthermore indicate that the Respondent registered and uses the disputed domain name primarily with the intention of attempting to attract, for commercial gain, Internet users to a potential website or other online locations, by creating a likelihood of confusion with the Complainant's mark as to the source, sponsorship, affiliation, or endorsement of such potential website or location, or of a product or service on such website or location (See also Swarovski Aktiengesellschaft v. Liu Ji, WIPO Case No. D2011-0445; Swarovski Aktiengesellschaft v. putian coco kiss, WIPO Case No. DCC2012-0001).
The Panel therefore considers the disputed domain name to have been registered and used in bad faith in accordance with paragraph 4(a)(iii) of the Policy.
For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the disputed domain name <cheap-swarovski.net> be transferred to the Complainant.

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First, Competition Law Insight published an article containing some high level comments on the amended block exemption and Guidelines.
Secondly, a rather more discursive piece on the rights and wrongs of the Commission’s approach to non-challenge provisions has recently appeared in the Journal of IP Law and Practice. As well as looking at the competing policies in this area (benefits to implementers vs strong protection for IP and incentives to innovate), the conclusion also considers the prospect for such issues to come before the General Court in the appeals of decisions such as Motorola and Lundbeck. We now know that the former is off the table, but non-challenge clauses in the settlement context appear likely to feature in the various appeals of the Lundbeck decision, even though none of the various parties’ grounds of appeal specifically mention them (e.g. the Lundbeck grounds of appeal here).
In addition to the articles, Osman and I have also presented a two-part podcast on the new technology licensing regime – the podcasts are available from CPDCast.
Huawei v ZTE: will the CJEU be first past the post on SEP policy....?
The Huawei v ZTE CJEU (C-170/13) oral hearing took place on 11 September 2014. As ‘standardized’ readers will know this case has the potential to bring about a sea-change in EU policy on the enforcement of SEPs and so is being followed very carefully all over Europe – and even beyond, given that many of those involved in this sector are from elsewhere, including the unfortunate litigants in the case. Similar issues have been/are being debated in other jurisdictions – for example, we commented on the US perspective here and here earlier on in the year.
comply with the obligations which affect any actual licensee – i.e. account for past use and pay either directly or into escrow accrued licence fees.
This line of case-law has been put in the spotlight by the recent EU Commission cases dealing with injunctions sought by Motorola and Samsung for mobile telecoms SEPs. The decisions in these cases (an infringement decision and a commitments decision respectively) revealed that the Commission applies different criteria to the admissibility of the FRAND licence defence under competition law than those applied in Germany under its rules over recent years. The Commission considers that SEP holders should neither seek nor enforce injunctive relief against ‘willing licensees’. It is clear, particularly from the Motorola infringement decision which arose out of German patent litigation between Motorola and Apple, that it does not envisage the same criteria as in the OrangeBook line of case law, although its press release and FAQs announcing the Motorola decision sought to differentiate that case from the general line of OrangeBook cases (not entirely successfully in this blogger’s humble opinion). The questions posed by the court in the Huawei v ZTE reference therefore attempt to clarify what standard of licensee ‘willingness’ is sufficient for an SEP holder to be held to have abused a dominant position by seeking an injunction for an SEP against that potential licensee – and, perhaps more to the point from a practical perspective, what criteria can be applied to identify who is willing and who is not – or in the curious words of the Commission, who is ‘not unwilling’?.
Some commentators have argued that such an intense focus on the behaviour of the licensee is misguided (for example, see here) as it is the licensor who has given a FRAND undertaking (and who the Commission has stated is likely to be dominant). That being the case, arguably it is its behaviour that should be tested – has it made a FRAND offer and/or, at the very least, has it given the licensee the opportunity to negotiate and/or to show that it is willing? Some flavour of this can be found in the Samsung commitments, which provide for a minimum negotiation period and offer a mechanism for third party determination, allowing the potential licensee to take advantage of a clearly defined ‘safe harbour’. Notwithstanding views to the contrary, however, the Huawei v ZTE proceedings, unsurprisingly given their German origins, focus squarely on the question of licensee willingness.
The only member states that intervened at the oral hearing were the Netherlands and Finland. A representative from the Commission also made submissions, as did the parties. The Netherlands and Finland strongly argued that SEP holders have the right to seek injunctive relief for all patents and that this can only be limited in ‘exceptional circumstances’. For example, Finland asserted that an SEP holder can only abuse a dominant position if it refuses to license its SEPs when offered terms proven by a court or arbitration to be FRAND. The Netherlands, in line with the commentators mentioned above, emphasised that the conduct of the licensor is more relevant to the issue of abuse than that of the licensee. On the other side of the Court room the Commission and ZTE asserted that as we are dealing with very ‘special’ kinds of patents, a lower threshold for abusive behaviour should apply i.e. that the seeking of injunctive relief against someone who agrees in principle to take a licence is abusive.
The CJEU judges asked a number of questions (from how to assess dominance in SEP cases; the proper method for determining FRAND royalties; to whether injunctive relief could be sought if the potential licensee does not make an offer to be bound by a third party determination and/or if such offer can also be made by the SEP holder). Interestingly, all parties appeared to agree that a licensee must remain free to challenge validity and infringement in general (although Huawei submitted that licence proposals made by prospective licensees must not be conditional on proving the validity or infringement of the SEP(s) in question as this creates undue delay in agreeing a licence). The acceptance of third party determination of the terms of a FRAND licence (by Court or arbitration) was also a central theme indicating that this may become a key criterion in the assessment of both licensor’s and licensee’s conduct. This would, of course, be in line with the Commission’s Decisions against Samsung and Motorola.
The next procedural step is the Advocate General (AG) opinion from AG Wathelet on 20 November 2014. This will not be binding on the CJEU (although the CJEU follows AG opinions in the majority of cases...). The Commission has indicated that the CJEU’s judgment is likely to be handed down in early 2015 so, if that timetable is followed, the industry could finally get some* clarity within half a year.
The ability of SEP holders to seek injunctive relief also continues to be debated within ETSI in the IPR SC meetings which began in March 2010. At the end of 2013/beginning of this year it looked as though some progress was being made towards agreeing an ‘industry led solution’. However, submissions made before and during the most recent ETSI IPR SC meeting held in mid September suggest that any progress that appeared to have been made may have been illusory. At this rate it looks like the CJEU may get there first, presenting ETSI members with something of a dilemma, given that ETSI is an official European Standardisation Body and might be expected to reflect EU law in its policies, notwithstanding that there clearly remains intense disagreement within the industry (and thus among ETSI members) about how, if at all, to limit recourse to injunctions for SEPs.
* ‘Some’ is a key word in this sentence. Given the sometimes perfunctory nature of CJEU judgments, we do not expect that all of the questions surrounding this issue are likely fully to be answered.
The CJEU serves up a little common sense in Cartes Bancaires?
Sophie blogged a wee* while ago on the Opinion of AG Wahl in Cartes Bancaires, of interest because it discussed the distinction between agreements which are anti-competitive ‘by object’ and those which are anti-competitive ‘by effect’. AG Wahl noted that the former ought to be reserved for “conduct which presents an intrinsic risk of particularly serious prejudicial effects or of conducts where it can be presumed that the detriment to competition outweighs the pro-competitive effects” – the Court of Justice (CJEU) has in its judgment last week broadly followed this approach.
Second, the CJEU followed AG Wahl in noting that a “restrictive” interpretation must be given to the question of which agreements are anti-competitive by object: “The concept of restriction of competition ‘by object’ can be applied only to certain types of coordination between undertakings which reveal a sufficient degree of harm to competition that it may be found that there is no need to examine their effects, otherwise the Commission would be exempted from the obligation to prove the actual effects on the market of agreements which are in no way established to be, by their very nature, harmful to the proper functioning of normal competition” (recital 58). Unlike the General Court, the CJEU was clearly not in the mood to make life any easier for the Commission.
So it seems that to the extent that intentions are relevant to determining whether or not there is a restriction of competition ‘by object’, they must explain “in what respect that restriction of competition reveals a sufficient degree of harm in order to be characterised as a restriction ‘by object’” (recitals 69 and 75). If this is right, then this could rein in the role of the parties’ intentions in many cases on the competition/IP interface which have been articulated as ‘by object’ infringements (Sophie mentions some of these here). Authorities might want to start thinking about exactly how the parties’ subjective intentions are relevant to the legal determinations that they are required to make, certainly in ‘object’ cases at least. Of course, whether evidence of an exclusionary intent should be relevant at all in cases where parties have already signalled to the world their intent to exclude others by seeking/obtaining/enforcing an exclusionary IP right, is a question that keeps many of us up at night at Bristows. Thoughts and/or comments welcome.
* For the avoidance of doubt: yes, I am a big fan of the Scottish – I’ll be going to a haggis and whisky evening on Thursday!
As you may have gathered by now, on this blog we are a little obsessed by the topic of Intellectual Property and how it is dealt with (for good and bad) by competition law.
As part of our wider focus on Intellectual Property issues, in 2013 we worked with Journal “Legal Business” on a research project looking at client attitudes to Intellectual Property and its importance to business (see here). By way of follow up to that, during the summer we hosted a round table discussion with representatives from a number of major companies who see Intellectual Property and innovation as core to their business. We asked them to discuss whether DGComp’s recent cases applying competition law to the exercise of intellectual property, or in dynamic industries where innovation is rapid and essential, might help or hinder innovation. The resulting discussion perhaps bears out the continuing relevance of the comment by Supreme Court Justice Oliver Wendall Holmes Jr (made in a dissenting opinion in an antitrust case) that “Great cases like hard cases make bad law”.
The general tension between effective long term policy choices and expedient short term resolutions was a theme of the discussion. This arose in a number of guises, indicating why policy making through case law can be a fraught exercise and why policy considerations can take a back seat when dealing with immediate pressures.
For example, several participants spoke of the incentives to settle disputes, remarking that such settlements can make perfect sense in their own immediate short term context but can have long term consequences if all of the nuances of that context are not understood. This was raised both in the context of the settlement of pharmaceutical patent litigation, which several particpants felt was capable of being misinterpreted by DGComp, and also in the context of competition cases themselves. In competition enforcement, settlements by companies who do not wish lengthy fights with DGComp, or to pursue appeals through the Luxembourg process at the General Court or the CJEU, can result in a form of “soft law”. Such legal developments evolve without rigorous testing through an adversarial process and may be the result of significant prosecutorial zeal, not always leavened with a balanced reflection on the possible long term policy impact beyond the confines of the immediate case.
It is fair to say that while some of the difficulties with aspects of IP grant and enforcement were recognised by all of the participants, there was also a good deal of frustration at the uncertainty for business caused by very active competition enforcement in novel areas, particularly when the appeal process is so long drawn out that any significant investigation can take in excess of 10 years to reach a final outcome, unless the parties agree to settle, or to accept the Commission’s decision. It was noted that the long term nature of incentives for much investment in R&D and resulting intellectual property can make this a particular problem, and it seems that the additional uncertainty caused by unexpected interventions from the competition authorities makes corporate decision making much more difficult.
During the debate, even those who have gone on record as saying that the patent system needs reform were not persuaded that the use of competition law by DGComp was an effective or appropriate mechanism for bringing about reform. Notwithstanding the current moves towards a unitary patent and a unified patent litigation system in Europe, which were the result of a huge political effort by the Commission generally (you can find more detail on everything to do with the UPC here) there was a sense that one of the difficulties is the lack of a single powerful voice within Europe on intellectual property issues capable of consistently engaging in the policy debate alongside DGComp about the potential long term impact of signals given in individual cases. While the Commission has many advocates for innovation and intellectual property within it (including within DGComp), they are spread across a number of DGs, and much of the development of intellectual property law and policy happens outside or alongside the Commission, at national patent or IP offices, within the European Patent Office or in national courts.
Having said all that, some of DGComp’s interventions were welcomed as providing valuable guidance to companies in areas where there had been real uncertainty – the decision in the recent Motorola SEP investigation about the circumstances in which a patentee can safely seek an injunction being mentioned as a case in point.
The debate was interesting and at times heated, kept moving along by comments from, among others, Fidelma Macken, formerly a judge at the CJEU, and Simon Thorley QC, one of the foremost IP barristers of the last 25 years. The discussion has been summarised in the September edition of Legal Business (see here – subscription only) – for space reasons we have given only a flavour on this blog. It will be interesting to see how Commissioner Almunia’s successor chooses to move forward on some of these charged topics – something that this blog will return to as the new era takes shape.
At the time of my blog I suggested that we might ask some economists to comment on the issue, in part because within the regulatory agencies and at the Court level it is not clear how much weight is actually given to the long term incentives offered by Intellectual Property when weighed against the shorter sharper shock tactics of existing competition and active competition enforcement. So far we haven't quite got around to arranging for someone to guest on that topic (but do feel free to volunteer if you are interested!).
In the meantime, those who are particularly interested could have a look at recent posts on the US blog “Truth On The Market”. An interesting spat has broken out between some of those commenting on that blog and others, principally those at The Mercatus Center. The initial debate appears to have arisen in the context of copyright and has some particularly US aspects, but it is worth reviewing for those who take a close interest in the relationship between IP rights and innovation, whether it actually exists and how direct it is - something that is, of course, relevant to policy choices made by competition enforcers.
The particular dialogue in the US seems likely to run and run given the heat on both sides (see some of the comments on the blog post) and we will be watching it, given the importance of the issue – we may even find a future “CLIP of the Month”!

matches: CJEU CJEU CJEU CJEU CJEU CJEU CJEU CJEU CJEU CJEU


Chapter 59B - Uniform Unincorporated Nonprofit Association Act.
§ 59B-3. Supplementary general principles of law and equity.
§ 59B-4. Title to property; choice of law.
§ 59B-5. Real and personal property; nonprofit association as devisee or beneficiary.
§ 59B-6. Statement of authority as to real property.
§ 59B-7. Liability of members or other persons.
§ 59B-8. Capacity to assert and defend; standing.
§ 59B-9. Effect of judgment or order.
§ 59B-10. Disposition of personal property of inactive nonprofit association.
§ 59B-11. Appointment of agent to receive service of process.
§ 59B-12. Claim not abated by change.
§ 59B-14. Uniformity of application and construction.
§ 59B-15. Effect as to conveyances by trustees; prior deeds validated.


Heron, Burchette, Ruckert Rothwell, Washington, D.C. (Thomas A. Rothwell, Jr. and James M. Lyons), Washington, D.C., for plaintiffs.
Michael P. Mabile, Asst. Gen. Counsel and Wayne Herrington, Washington, D.C., for defendant U.S. Intern. Trade Com'n.
Plaia Schaumberg, Washington, D.C. (Herbert C. Shelley, Tom M. Schaumberg, Joel D. Kaufman and George W. Thompson, Washington, D.C.), for defendant intervenor Joseph E. Seagram and Sons, Inc.
Covington Burling, Washington, D.C. (Harvey M. Applebaum, O. Thomas Johnson, Jr. and David R. Grace, Washington, D.C.), and Wiggin Dana, New Haven, Conn. (Shaun S. Sullivan and Mark R. Kravitz), New Haven, Conn., for defendant intervenor, Banfi Products Corp.
Barnes, Richardson Colburn, Washington, D.C. (James H. Lundquist, Gunter von Conrad and Matthew J. Clark, Washington, D.C.), for defendants-intervenors Moet-Hennessy U.S. Corp., Schieffelin and Co., and I.L. Ruffino.
Schreiber MacKnight, Washington, D.C. (William B. Schreiber and Louis Armand Dejoie, Washington, D.C.), for defendant-intervenor Wellington Importers, Ltd.
Law Offices of Max N. Berry, Washington, D.C. (Max N. Berry and Marsha A. Echols, Washington, D.C.), for amicus curiae French Federation of Wein and Spirits Exporters.
This action challenges determinations made by the International Trade Commission (ITC) at the first stage of its involvement in countervailing duty and antidumping duty investigations of table wine from France and Italy. The ITC found, under the authority of sections 703(a) and 733(a) of the Tariff Act of 1930, ( 19 U.S.C. § 1671b(a) and § 1673b(a)) that there was no "reasonable indication" that the imports of table wine, allegedly subsidized and sold here at less than fair value, were the source of material injury or threat of material injury to an industry in the United States. That finding terminated the investigations.
Investigations Nos. 701-TA-210 and 211 (Preliminary) and 731-TA-167 and 168 (Preliminary), USITC Public. 1502, 49 Fed. Reg. 10587 (1984).
The matter is before the Court on cross-motions for summary judgment under Rule 56, which, for all practical purposes, are the same as motions for judicial review on the administrative record under Rule 56.1. There are no factual issues which are material to the making of this decision and the action can be entirely decided on questions of law. The Court finds no need for oral argument.
In this proceeding the Court previously decided that domestic grape growers did not have standing to challenge the determinations and dismissed various plaintiffs from the action.
American Grape Growers, et. al. v. United States, 9 CIT ___, (Slip Op. 85-28, March 11, 1985).
Two basic issues remain. The first issue is whether or not the ITC should have combined or "cumulated" the imports of table wine from France and Italy, instead of examining them separately. The second issue is whether or not the ITC applied an erroneous legal standard in determining that there was no "reasonable indication" of injury or threat of injury.
On both of these issues the Court concludes that the ITC actions were not in accordance with the law.
The cumulation issue has a logical priority in the sense that the determination of the corpus of imports subject to investigation ought to come before consideration of whether there is a reasonable indication that a domestic industry is being injured or threatened with injury by that corpus. For this reason, the Court turns first to the ITC's decision not to cumulate the table wines from Italy and France.
That decision was based on a conclusion that the imports from Italy and France did not exhibit a collective "hammering" effect on domestic wine prices. This in turn was based on a finding that the French imports were concentrated in the traditional white wine category while most of the Italian wines were of an effervescent type. In addition, it was considered significant that the imports were generally marketed by separate groups of importers.
The ITC contrasted the wine investigations with a previous steel investigation in which the imports were found to be comparable and competing in the same markets and exhibiting a "hammering" effect. In that investigation the factors considered relevant included "the fungibility of the subject imports, marketing practices of each country, market shares, pricing practices, inventory practices, and the presence or absence of coordinated action."
In the first place, the decision not to cumulate was erroneous because it depended on a depth of analysis and specificity of information which is unreasonable to expect, and unlawful to demand, in the preliminary phase of the investigation. This relates generally to the second issue and to the Court's opinion that the ITC has inflated the preliminary determination into an investigative evaluation of conflicting or incomplete material far beyond the intention of the law.
In the second place, even if we were to ignore the involvement in ambiguous factors and the level of complex judgment which the decision to cumulate purportedly requires, the decision must still be consistent with the basic decision as to what is the product subject to investigation and it cannot create a more stringent standard.
It was error for the ITC to make the standard of competition needed to justify cumulation of the imports subject to investigation more rigorous than the standard used for matching the domestic product with the imported product. It was error to use one standard to define the borders of the investigation and another, more stringent standard, to justify combined analysis of the effect of articles already within those borders. The definition of "like product" is a key to the lawful enforcement of this law. It is defined as a product like the article subject to investigation. 19 U.S.C. § 1677(10). From that definition flows the identification of the domestic industry as producers of a "like product." 19 U.S.C. § 1677(4).
In making the basic determination that the domestic "like product" was all ordinary table wine, the ITC specifically rejected an argument that the "effervescent" Italian wines had no domestic counterpart and should be excluded. This rejection was based on a conclusion that some domestic products were substantially similar and were beginning to compete for the same market.
It is contradictory for the ITC, in the very same stage of the determination, to suddenly develop a distinction based on a putative difference between effervescent table wine and traditional white table wine. The coherence of an investigation depends on a uniform definition of the like product and this definition should not be tampered with unless it is modified due to indisputable preliminary facts, or fully developed final investigative facts. If imported articles match the definition of the "like product" they should be considered together and further distinctions based on national origin or variations in character are artificial and irrelevant.
The ITC made an unassailable determination of what is the "like product." This basic determination used the product subject to investigation to define the industry on whom the effect of that product must be measured. By necessity the definition reflects back to match the imported product subject to investigation. That product is non-premium or "ordinary" table wine, valued at less than $8.00 a gallon, f.o.b. winery.
If the law has any flexibility on this point it moves entirely in the opposite direction. In the absence of a domestic "like product" it covers a domestic product which is "most similar in characteristics and uses" with the article subject to investigation. 19 U.S.C. § 1677(10).
The law also provides for the possibility that data for the domestic "like product" may be embedded in the industry production in such a way that separate data cannot be extracted. In that case the law allows the use of the data for the production of the narrowest range of products which include the like product. See 19 U.S.C. § 1677(4)(D). Why would such a law, tolerant of inexactitude in the determination of domestic product lines, display excessive concern for the niceties of competition between imports. It is inconceivable that the law would demand that imports be more competitive with each other than with the products whose producers they are alleged to be injuring. This is particularly true when the ITC has already found that no clear dividing lines can be drawn in making distinctions regarding characteristics and uses between imported varieties of ordinary wine.
The Court emphasizes that it is impossible to believe that Congress wanted varieties of the article subject to investigation to compete with each other to a greater degree than they competed with the like product of the domestic industry. The primary concern of the law is with the effect on domestic industry. If imports fall within the scope of the standards used to express that fundamental purpose the only escape for them is if they do not compete with each other at all. And that circumstance will probably signal some needed adjustment to the definition of like product or will represent the final investigative facts of an unusual commercial situation.
The Court has previously set out its understanding of the necessity of cumulation in Republic Steel Corp. et al. v. United States, 8 CIT ___, 591 F. Supp. 640, motion for rehearing denied 8 CIT ___, (Slip Op. 85-27, March 11, 1985). The reasoning and language of that opinion is fully adopted and incorporated here. The Court remains of the opinion that the purpose of the law, and the harmonious relationship of its various provisions and procedures, require cumulated consideration of all imports whose effect may be experienced by a domestic industry during the same period of time. This is a fundamental necessity to the meaningful enforcement of the law.
The Court is led to discuss the cumulation provision of the Trade and Tariff Act of 1984, even though it did not control these investigations, because the ITC argues that its determination is consistent with that new law. It would be a great irony if the new law, passed to "ensure that the injury test adequately addresses simultaneous unfair imports from different countries" (H.Rep. 98-725, 98th Cong.2d Sess. 37 (1984), U.S. Code Cong. Admin. News 1984, pp. 4910, 5164, is read as requiring a higher degree of competition between simultaneous imports than between those imports and the domestic like product. That would amount to the introduction of an impediment to cumulation and would be exactly opposite to the expressed intention of the law.
It follows that when the Trade and Tariff Act of 1984 speaks of imported products competing with each other and with products of a domestic industry it is not elaborating a more involved method of cumulation. It is simply stating the common sense standard of competition and allowing a way out for the exceptional situation in which imported products may be in competition with a domestic product but for some special reason are completely uncompetitive with each other. There should almost be the simplicity of a mathematical equation: Articles which compete with a like product must compete with each other.
Cumulation should not be avoided by the sort of superficial product distinctions that are made in advertisements. It is always possible to develop rational distinctions between products in terms which ultimately relate to questions of consumer taste. But if such distinctions are treated as creating noncompeting separate products, the legitimate corpus of articles subject to investigation will be fragmented and the purpose of the law will be frustrated.
Cumulation is a necessary and unavoidable consequence of the proper enforcement of the laws governing the determination of injury.
In this context, in a preliminary determination, it is error to condition cumulation on anything more than the possibility that imports from a given source will participate in a combined injurious effect on domestic industry. It is unreasonable to demand that the products be fungible, unreasonable to require coordinated action and unreasonable at this early stage to engage in the measurement and weighing of a host of conflicting and ambivalent marketing and pricing factors.
The ITC's prefunctory statement that, even if it had cumulated these imports, the analysis would not change, is unreasoned and unsupported and does not merit discussion.
In any event, cumulated or uncumulated, the determinations are subject to another error, namely the use of an excessively stringent standard for determining the possibility of injury. The ITC has erroneously used a prohibitively difficult standard for finding a "reasonable indication of injury." It has made the preliminary proceeding a full scale investigation into all aspects of the question of injury. Instead of concentrating at this early stage on the limited, relatively simple question of whether there is a possibility of injury, the ITC became involved in the full analysis of complex, conflicting and incomplete data. This inevitably led to contradictions between the conclusions reached and the simple necessities of the law.
In order to reach a conclusion that there is no reasonable indication of injury the ITC has to be able to say, in effect, that the information before it does not raise the possibility of injury to the domestic industry. In that instance what would be needed is a complete justification for terminating the investigation.
There was no justification here. The ITC had before it what it called "conflicting data regarding the financial performance of the domestic industry." It based its determination on a conclusion that, regardless of the financial condition of the domestic industry, a "causation analysis" did not show a reasonable indication of material injury.
This "causation analysis" contains some factors which might support an ultimate finding of injury and certainly raised the possibility of injury. Thus, wine imports from Italy accounted for approximately 16 percent of domestic consumption in 1983, and the abstract volume of imports is a named factor whose significance must be considered under 19 U.S.C. § 1677(7)(C)(i) and 19 U.S.C. § 1677(7)(B)(i). But the ITC weighed against that prominent fact the conclusion that Italian imports held a relatively flat share of the domestic market during the relevant period and consisted in major part of an effervescent type. The volume of imports from Italy had risen by 6 percent.
Some Italian imports undersold domestic wines but they were found to "account for an extremely small share." The leading Italian brands were found to be priced higher than the leading domestic brands.
Although the prices of domestic table wines declined during the relevant period and there was evidence that the prices of some major Italian wines declined, the ITC found that it was the domestic wines that initiated the downward pressure on market price.
All of this indicates that the ITC was engaged in a detailed evaluation of conflicting and incomplete evidence and was exercising the full range of its powers of final determination at an improperly early stage of the proceedings. At that stage a petitioner is entitled to have the investigation go forward so long as it has raised the possibility of injury.
In the case of French imports of table wine, their volume rose by 48 percent although the ITC did not find this significant because the ratio of French imports to domestic consumption was "miniscule." That ratio, however was increasing from 3.9 to 5.5 percent during the relevant period. This too shows the ITC resolving difficult questions of measurement and evaluation of conflicting data.
The burden which the ITC seems to be placing on the petitioners is a burden of ultimate proof, which is entirely out of place and unfair at this early stage. If there is a burden at all it is simply the burden of raising the issue of injury, not the burden of proving injury.
With respect to the question of whether there was a reasonable indication of a threat of material injury the ITC again engaged in a wide-ranging evaluation of conflicting factors, some of which were of questionable relevance.
On the question of "threat" the ITC acknowledged the important fact that Italy and France were experiencing problems of over-production. The ITC did not mention the related and obvious point that France and Italy already had established channels of importation into the United States.
Against the fact of over-production the ITC weighed its finding that the volume of imports had not risen "significantly" — which, aside from being a matter of judgment, is a questionable factor to be considering for a determination that does not necessarily depend on any current importations at all.
The ITC also weighed data showing the imports to be higher-priced than domestically produced wines and found that price and the likelihood of increased domestic demand through the end of the decade would respectively limit importers' ability to increase sales and presumably keep the domestic industries from being injured.
In any event, the Court is at a loss to find any meaningful difference between this determination and a final determination. The ITC has engaged in the measurement, evaluation, and resolution of subtle, conflicting and incomplete information.
Foreign over-production and established importation channels are sufficient to create a possibility of a threat.
Meaningful volumes of importation or rising volumes or increasing market penetration, or underselling, are all signs of a possible connection between imports and injury. of course it can ultimately be found that these factors do not support a finding that imports are injuring or threatening to injure a domestic industry. But that ultimate determination must not be unjustifiably advanced to a time when the only question is whether the petitioners have a right to further investigation. These preliminary determinations constituted prejudgments of questions which the parties are entitled to have investigated fully and fairly in the stages provided by law.
The Court has analyzed the statutory basis for its decision extensively in Republic Steel Corp. v. United States, supra, and incorporates that analysis in its entirety herein.
The laws and their operation are so complicated in their interrelationships that serious imbalance in one part is almost certain to disrupt the entire statutory scheme. The attempt to enlarge the substantive content of these preliminary determinations threatens to make a mockery of the legislative intention that investigations be readily undertaken.
There is one additional legal argument which the Court wishes to address. The ITC argues that its position is supported by the decision of the Court of Appeals for the Federal Circuit in United States v. Roses Incorporated, 706 F.2d 1563 (1983) and asserts that the decision of the Appellate Court sanctions the weighing of conflicting evidence even at the very earliest stages of the receipt of the petition by the Department of Commerce. This argument overstates the holding of the case.
The opinion of the appellate court did not grant a broad license to the agency to weigh conflicting evidence at all preliminary stages. Properly read, the decision approves the use of indisputable matters of public record to assess the sufficiency of a petition. It does not approve the premature making of final determinations or any other distortion of the investigative proceeding.
This Court recognized this acceptable degree of agency discretion when it said in its denial of the government's motion for rehearing in the Republic case that the ITC might properly conclude that a reasonable indication of injury was lacking if the petitioner's information was in conflict on essential points with matters of public record. But when the ITC becomes involved in the full use of its investigative expertise and begins to weigh conflicting evidence and evaluate alternative predictions it is no longer overseeing a low threshold. It is raising a drawbridge.
In light of the above, plaintiffs' motion for summary judgment is GRANTED. All cross-motions are DENIED. The ITC determinations are reversed and the matter is remanded for proceedings consistent with this opinion.