Source: http://www.nelfonline.org/docket/category/me
Timestamp: 2018-06-24 07:32:45
Document Index: 161303683

Matched Legal Cases: ['§ 833', '§ 1251', '§ 401', '§ 1341', '§ 401', '§ 401', '§ 401']

Category: ME - New England Legal Foundation
Kaplan v. First Hartford Corporation and another
Arguing Against an Expansive Definition of “Oppression” Under Maine’s Business Corporation Act
This was an appeal to the First Circuit of a decision by the federal District Court in Maine. The plaintiff, who prevailed below, had sued First Hartford Corp. (a small, publicly-held Maine Corporation) under the provisions of Maine’s Business Corporation Act (“MBCA”) that permit an “oppressed” shareholder to bring a direct action against the corporation to obtain, inter alia, a buyout of his shares, the relief ordered in this case.
The issue on appeal was whether the plaintiff had the right to bring an oppression claim in the first place when virtually all of his claims concern alleged injuries to the corporation’s assets, and not to him personally. In other words, the plaintiff’s claims were indistinguishable from classic shareholder derivative claims, yet they had been brought under a different section of the MBCA, the oppression provisions.
Because the distinction between a shareholder derivative claim and a shareholder direct oppression claim is of great importance to principles of corporate governance, and most courts have firmly upheld that distinction, NELF filed an amicus brief in support of First Harford, arguing that a shareholder who alleges only harm to the corporation should be restricted to the MBCA’s derivative action requirements and should not be permitted to evade these requirements by invoking the oppression provision. NELF argued that the oppression provision should only be available to the shareholder who has alleged direct harm, i.e., a loss separate and distinct from that of the corporation and, indirectly, all of its shareholders. Where, as here, the claim actually relates entirely to the corporation, the corporation’s board of directors, and not the complaining shareholder, should have the opportunity and autonomy to decide in good faith whether pursuing the claim is in the corporation’s best interests. Moreover, even assuming a meritorious claim, any relief awarded should go the corporation, which is the injured party, and not to the complaining shareholder.
Disappointingly, on August 17, 2011, the First Circuit summarily affirmed the District Court’s decision in this case, without an opinion.
Opposing Expansion of Whistleblower Protection in Maine
The case of Costain v. Sunbury Primary Care, decided by the Maine Supreme Judicial Court on September 9, 2008, raised the question whether the Maine Whistleblower Protection Act, 26 M.R.S. § 833, extends beyond a current employment relationship to protect an individual who participated in an investigation of a business before she became its employee. The plaintiff, who alleged that she was fired by the defendant medical group after it was discovered that she had participated in an investigation of a physician in the group years before she was hired, argued even more broadly that the Act should protect an employee from adverse employment action based on any challenge the employee has ever made to the practices of any business that has employees. If adopted, this interpretation of the Act would have prohibited employers from considering any activity of a job applicant or employee challenging their own or any other employer’s business practices, and would have protected even the career corporate gadfly from the exercise of normal employer prerogatives under the employment-at-will doctrine.
NELF’s amicus brief in support of the defendant argued that the Act, properly construed, is limited to protecting employees who challenge the business practices of their then employer, from whom they may fear reprisal, and the Court agreed. The Court held that the Act “unambiguously limit[s] the protection afforded . . . to (1) employees (2) who report to an employer (3) about a violation (4) committed or practiced by that employer” and that the plaintiff’s participation in the investigation at issue here did not fit these parameters because the “investigation of the doctor bore no relationship to the employment in which she was engaged at the time of the investigation.”
FPL Energy Maine Hydro LLC v. Maine Department of Environmental Protection
Supporting Reversal of an Agency Decision that Requires Owners of an Artificial Water Storage Facility to Operate It as if It Were a Natural Lake
The Flagstaff Storage Project is an artificial reservoir constructed under state legislative mandate for the purpose of regulating the natural flows of the Kennebec River in Maine to enable its use during the entire year in connection with manufacturing and power generation. Thanks to the operation of the Flagstaff Project and other water storage reservoirs regulating its flows, the Kennebec River is the most productive source of clean, renewable power in the State of Maine. Despite these facts, the Maine Supreme Judicial Court, in a decision in this case rendered on July 26, 2007, decreed that the Flagstaff Project, an artificial creation, must be operated as if it were a natural water body in that any draw-downs of water in the reservoir must match the ebbs and flows of a natural lake. Disagreeing with NELF, the Court affirmed the Maine Board of Environmental Protection’s denial of water quality certification for the project. The Court deferred to and upheld the judgment of the Board that the use of other artificial impoundments as the reference standard for application of state water quality standards, rather than natural lakes, would require advance EPA approval under provisions of the federal Clean Water Act, 33 U.S.C. §§ 1251 et seq., and regulations thereunder. The decision imposes an operational regime on the Flagstaff Project that is inconsistent with its historical operations and adversely affects beneficial policy goals, including the creation of electricity through the renewable means of hydropower and regulation of the Kennebec River’s flows for other commercial and recreational uses.
Natural Resources Council of Maine, et al. v. International Paper Company
Arguing For An Interpretation Of The Clean Water Act That Allows A Company To Continue Operating While Its Renewal Application For A Discharge Permit Is Pending
The issue in this case was whether a company that has filed a timely application for renewal of a now-expired National Pollution Discharge Elimination System (“NPDES”) permit, may continue to operate and discharge pollutants under the expired permit’s terms until the relevant government agency, which was the Environmental Protection Agency (“EPA”) before 2001 and the Maine Department of Environmental Protection (“DEP”) thereafter, has issued a new permit. For over twenty years International Paper (“IP”) operated its paper mill in Jay, Maine, under a 1985 NPDES permit while waiting for the EPA and more recently the Maine DEP to issue a new permit. (As contemplated by the Clean Water Act (“CWA”), the EPA has delegated its NPDES permitting authority to the DEP.) It has done this pursuant to an EPA regulation and a specific provision of the federal Administrative Procedures Act which provide that, where a legally sufficient application for the renewal of a permit has been made to the responsible agency, the permittee may continue operating under the terms of its existing permit until the agency issues a new permit. Nevertheless, the plaintiffs brought this action against IP in the Maine federal District Court. The plaintiffs claimed both that the delegation by the EPA to the Maine DEP cancelled IP’s right to operate under its expired 1985 permit and that the continuation regulations should not be interpreted to mean that a permittee can continue to operate for over twenty years under an expired permit. Plaintiffs asked the District Court to order that IP immediately cease operations pending the issuance of a new permit and pay penalties for its operation after its permit allegedly expired due to delegation. IP moved to dismiss plaintiffs’ complaint on the ground that there is no language limiting the continuation regulations in the manner plaintiffs alleged and that the act of delegation had no impact on those regulations. IP also pointed out that the Maine DEP has issued a proposed permit for IP on which the public comment period had recently ended, and that it was likely that a final permit would issue in the near future thus rendering the matter moot.
NELF filed an amicus memorandum in support of IP in the District Court. In its memorandum, NELF supported IP’s argument that delegation of permitting authority to Maine did not invalidate IP’s ability to operate under its 1985 permit. NELF also argued that a contrary interpretation would expose any business that operates under NPDES permits, no matter how important its operation may be to the local and/or regional economy, to the risk that it may have to close down if a federal or state agency doesn’t renew its permit in time. Given the backlog at the EPA, which makes timely renewal of NPDES permits unlikely, this does not make sense from the policy perspective. Finally, NELF pointed out that the plaintiffs’ real complaint is with the regulations that permit continuation (which were held to be valid in Natural Resources Defense Council, Inc. v. U.S. Environmental Protection Agency, et al., 859 F.2d 156 (D.C. Cir. 1988)) and that they have no valid cause of action against IP.
On March 28, 2006, the District Court granted IP’s motion and dismissed the complaint.
S.D. Warren Company v. Maine Department of Environmental Protection
Seeking Reversal Of A Holding That The Passage Of River Water Through A Hydroelectric Dam Creates a “Discharge” Triggering The Federal Clean Water Act’s Requirement For State Water Quality Certification
In this case S.D. Warren Company (“Warren”) asked the United States Supreme Court to review the Maine Supreme Judicial Court’s denial of Warren’s appeal from a decision by the Maine Department of Environmental Protection (“DEP”) with respect to five contiguous hydroelectric dam projects in the Presumpscot River in Maine that Warren operates. Warren’s appeal hinged on the meaning of the term “discharge” in § 401(a) of the federal Clean Water Act (“CWA”), 33 U.S.C. § 1341(a). Under § 401(a), if the operation of Warren’s dams “may result in any discharge into the navigable waters,” Warren would be required to obtain a water quality certification from the DEP before it could renew its federal license to operate. Based on numerous federal cases that had held in other contexts that an “addition” to the navigable waters had to occur in order for their to be a “discharge” under the CWA, Warren argued that, because it was undisputed that the operation of its dams neither increased nor decreased the amount of water in the river and added no pollutants, there was no “addition” to the river and, therefore, no “discharge.” Therefore, DEP certification was not required by § 401(a). The Maine SJC agreed with Warren that an “addition” was required in order for there to be a “discharge,” but reasoned that, nevertheless, a “discharge” occurred because during the moments when the waters of the Presumpscot passed through Warren’s hydroelectric dams they were under private control and, therefore, had lost their status as waters of the United States. Accordingly, the SJC held, when those waters “are re-deposited into the natural course of the river it results in an addition to the waters of the United States.”
When Warren petitioned the U.S. Supreme Court for certiorari, NELF filed an amicus brief in support, arguing that the legal test applied by the SJC to determine whether the flow of water through Warren’s dams results in an “addition,” and thereby a “discharge,” was erroneous under Section 401(a) of the CWA. NELF pointed out that by resting its decision on the ownership status of the water as it passed through the dams, the SJC failed to condition a discharge under the CWA on an actual addition to the waters at issue. In addition, the SJC’s reasoning would lead to absurd results, e.g., it would mandate a finding that an addition has occurred even where a dam’s operation reduces the volume of water in a river, since even a smaller volume of water reentering the river would still be an “addition to the waters of the United States.” Finally, NELF pointed out that the SJC’s test contradicted the Supreme Court’s teaching in South Florida Water Management District v. Miccosukee Tribe, 541 U.S. 95, 109 (2004) that the simple redeposit of the same water back into the body of water from which it came does not constitute an addition—and therefore cannot be a discharge—under the CWA. After the Supreme Court granted certiorari, NELF filed an amicus merits brief in support of S.D. Warren. In this brief NELF argued that, contrary to the SJC’s finding, river water passing through a hydroelectric dam never loses its status as waters of the United States.
On May 15, 2006, the Supreme Court issued a decision rejecting Warren’s appeal. Although the Court agreed with NELF that the SJC’s reasoning was incorrect and that the exercise of private control does not denationalize national waters, it nonetheless upheld the SJC’s decision on the ground that, under § 401(a), an “addition” is not required for there to be a “discharge.” Rather, the Court construed “discharge” according to its ordinary English usage, which the Court found to be a “flowing or issuing out.” On this basis the Court found that the operation of Warren’s dams (and all other hydroelectric dams) did raise the potential for a discharge, and thus Warren was required to obtain DEP water quality certification before it could renew its federal license.
Arguing That Maine Should Interpret Its Disability Discrimination Law Consistently With Federal Law And The Majority Of Other States
The issue in this case was whether the Maine Human Rights Act (“MHRA”), which prohibits employment discrimination based on a physical or mental disability, requires that a plaintiff must show a “substantial limitation on a major life activity” in order to prove a disability. This is the standard under the federal Americans with Disabilities Act (“ADA”); it is also the standard adopted under state anti-discrimination statutes in 43 of the 50 states. The question arises under Maine law because, unlike the federal statute, Maine’s statutory definition of disability does not expressly contain this requirement.
The Maine Human Rights Commission (“MHRC”) promulgated a regulation in 1985 bringing Maine into line with the ADA by requiring a plaintiff to prove a substantial limitation on a major life activity. However, that regulation was attacked in this case as invalid and ultra vires because it allegedly exceeded the Maine Legislature’s intent in the MHRA. The case involved a current employee of Wal-Mart in Maine, who has brought suit under the MHRA claiming that the company discriminated against him when it failed to accommodate his medical condition. He had been in a position that Wal-Mart said required 48-52 hours of work per week and did not allow two consecutive days off during one week. The employee presented Wal-Mart with a physician assistant’s note indicating that, as a result of high blood pressure and heart disease, he could not work more than 45 hours per week and required two consecutive days off each week. Because these limitations did not match the requirements of his position, Wal-Mart required him to give up that job. The company offered him another less stressful job, which he took. The plaintiff then sued in Maine state court under the MHRA. Wal-Mart removed the matter to federal court, which certified to the Maine Supreme Judicial Court (“SJC”) the question whether the plaintiff must meet the “substantial limitation” requirement in order to prevail in his suit under Maine law.
In an amicus brief filed on July 1, 2005, NELF, together with co-amici the Maine Chamber of Commerce and others, urged the SJC to uphold the MHRC “substantial limitation” requirement, which would align Maine with the majority of other states and federal law. Amici argued that the majority position preserves a reasonable balance between an employee’s right to non-discriminatory treatment and an employer’s right to protect its own economic interests by making reasonable employment decisions. Amici also argued that upholding the MHRC’s “substantial limitation” regulation would advance the economically desirable goals of national uniformity and predictability of results in employment matters while a rejection of the regulation would create a disincentive for businesses to remain or locate in Maine.
On April 11, 2006, the Maine SJC sided with the plaintiff, deciding 4-3 that the MHRA does not require a showing of substantial limitation on a major life activity to establish a disability. The Court concluded therefore that the MHRC’s regulation was invalid as ultra vires.
Opposing Nationwide Long-Arm General Jurisdiction Based on “Significant” Internet Presence
Gator.com Corp. (“Gator.com”), a California-based software company, received a cease-and-desist letter in March, 2001, from L.L. Bean, a Maine corporation, demanding that Gator.com cease using its “pop-up” internet software to cause advertisements offering a coupon for one of L.L. Bean’s competitors to pop up each time one of Gator.com’s users visited the L.L. Bean website. Gator.com then instituted a declaratory judgment action in the federal district court in California, requesting a judgment that its actions did not violate state or federal law. The district court dismissed Gator.com’s complaint on the ground that it did not have personal jurisdiction over L.L. Bean, which has its principal place of business in Maine, has a limited number of retail stores, and has no retail stores in California. L.L. Bean’s only contacts with California are its catalog sales, a toll-free telephone number, and an interactive website which produces about 16% of L.L. Bean’s total sales. Gator.com appealed to the Ninth Circuit, a panel of which found, based on these facts, that L.L. Bean has sufficient contacts with California to permit the court to exercise general personal jurisdiction. See Gator.com Corp. v. L.L. Bean, Inc., 341 F.3d 1072 (9th Cir. 2003).This finding was based on the panel’s view that, in particular, L.L. Bean’s substantial mail-order and internet-based commerce in the state are sufficient to support the assertion of general personal jurisdiction. In addition, the panel noted that, even if L.L. Bean’s only contacts with California had been through its “virtual store,” i.e., its interactive website, a finding of general jurisdiction would be warranted.
On April 29, 2004, the Ninth Circuit granted L.L. Bean’s petition for a rehearing en banc, Gator.com Corp. v. L.L. Bean, 366 F.3d 789 (9th Cir. 2004), and on July 27, 2004, NELF filed an amicus letter in support of L.L. Bean on its own behalf and on behalf of Associated Industries of Massachusetts. The letter sought to apprise the Ninth Circuit of two issues that it should consider. First, the letter discussed the potentially adverse impact of the panel’s decision not only on the business community as a whole but especially on small businesses that use interactive internet sites, who would be devastated by the costs of defending a lawsuit in a distant state. Second, the letter addressed a issue not reached by the panel, arguing that, not only should the panel’s decision on general jurisdiction be reversed, but there should also be no finding of specific personal jurisdiction in California based on L.L. Bean’s cease and desist letter. If Gator.com were to obtain specific personal jurisdiction, based on that single letter, for litigation relating to any internet activities, it would have obtained through the back door of specific jurisdiction what NELF and AIM contend it cannot obtain through general personal jurisdiction. The dispute in this case is whether Gator.com infringed L.L. Bean’s Maine-based trademark rights, which is not an appropriate basis for specific personal jurisdiction in California.
As an anticlimactic conclusion to this closely watched case, in a decision issued on February 15, 2005, the Ninth Circuit en banc panel dismissed the appeal as moot, based on the parties’ settlement of their dispute. Although the parties had sought to structure their settlement so as to keep alive the hotly contested jurisdictional issue, the Ninth Circuit determined that the matter was no longer an actual case or controversy, as required by Article III of the Constitution. The upshot of the dismissal is that the only decision in this matter that remains valid is the District Court’s holding that it did not have personal jurisdiction over L.L. Bean.
Bisbing v. Maine Medical Center
Reducing Penalties on Employers in Good Faith Disputes with Employees
Plaintiff Bisbing was employed as an emergency physician with the Maine Medical Center (“MMC”) and left voluntarily in 2000. He claimed that MMC owed him eight weeks of accrued vacation time. MMC countered that Bisbing, like all other MMC emergency doctors, worked an irregular schedule that had allowed ample vacation time. A jury found for Bisbing, and the presiding judge assessed treble damages and attorneys’ fees against MMC, in accordance with the Maine delayed wage statute. MMC appealed the award of treble damages and fees to the Maine Supreme Judicial Court, asserting that the statute contained an implicit good-faith defense against such relief.
NELF filed an amicus brief supporting MMC, arguing that Maine case law limiting common-law punitive damages to egregious circumstances should apply to statutory multiple damages. An implied good-faith defense should prevent the imposition of a severe penalty on employers that have genuine factual disputes with employees about past due wages.
On April 10, 2003 the Supreme Judicial Court issued its opinion upholding the lower court ruling. The court recognized that the “effect of the statute is harsh.” Nevertheless, it indicated that any remedy lay with the legislature because the plain words of the Maine delayed wage statute (unlike most other state delayed wage statutes) require multiple damages and attorneys’ fees without regard to the good faith nature of the employer’s defense.
Conservation Law Foundation v. Maine Dept. of Environmental Protection
Retroactive Invalidity of State Permitting Process
Maine has a permit-by-rule process that permits the construction of docks that meet specifications set out in the rule. The only procedural requirement is notification of the Department of Environmental Protection. A landowner built a dock under the authority of the permit-by-rule. A Maine superior court held that the regulation authorizing the permit-by-rule process was void as ultra vires. The court also held that the rule was arbitrary and capricious because it had a purpose in addition to protecting the environment, that of saving agency time and money. The court further held that the permit itself was invalid because it was based on the unlawful rule.
While there were a number of issues on appeal, NELF’s brief focused on two. First, NELF argued that the court erred, as a matter of law, in declaring the permit invalid. Both the United States Supreme Court and the Maine Law Court have held that judicial invalidation of a statute or regulation does not automatically invalidate action taking under that statute or regulation. Those precedents require that a court consider the rights that may have become vested and the protection of reliance interests. Second, NELF made the policy argument that permit-by-rule provisions are not arbitrary and capricious merely because one purpose behind them is saving money and staff time and streamlining the process for applicants. NELF pointed to well-established federal permit-by-rule processes and to analogous programs in other states, and argued that regulatory agencies act appropriately, responsibly, and reasonably when they act to conserve limited agency resources, focus enforcement activity, and streamline the regulatory process through a permit by rule.
On April 29, 2003 the Maine SJC upheld the rule, finding that it was neither ultra vires nor arbitrary and capricious. Since the rule and permit were valid, the SJC did not reach the retroactivity issue.
Great Northern Paper, Inc. v. Penobscot Nation
Urging that Indian Tribes are Subject to Maine's Freedom of Access Act When Acting in a Municipal Capacity
This appeal to the Maine Law Court arose out of the attempt by three paper companies to gain access to documents of the Penobscot Nation and the Passamaquoddy Tribe (collectively the "Tribes") through Maine's Freedom of Access Act ("FOAA"). The FOAA request was made after the companies learned that the Tribes had applied to the EPA for "Treatment as a State" status under Clean Water Act. The companies sought documents related to the Tribes' attempts to regulate water quality and to obtain permitting authority under the Clean Water Act. The FOAA defines "public records" as all records "in the possession or custody of an agency or public official of this State or any of its political subdivisions . . . [that] ha[ve] been received or prepared for use in connection with the transaction of public or governmental business or contain[] information relating to the transaction of public or governmental business" with several specific exceptions, none of which are relevant to this case. The Tribes rejected the request and contended that FOAA did not apply to them because, if it did, it "would constitute state interference with internal tribal affairs." The paper companies sued. The Superior Court held that, under the federal and state statutes governing the settlement of the Maine Indian land claims, when the Tribes act as "municipalities" of Maine, "they are reachable under state and federal law, but when they function as a tribe as to internal matters they are not." Using analyses adopted by the First Circuit and the Law Court, the Superior Court concluded that the requested records did not relate to "inner-workings of the tribes." The Court, accordingly, ordered production of the requested documents. The Tribes appealed.
NELF filed an amicus brief in the Law Court on behalf of numerous Maine municipalities and several municipal water districts that would be affected by the Tribe's regulation of water quality outside of Indian land. The NELF brief argued that, when the Tribes act to regulate conduct and activities outside of Indian land, they act in their municipal capacity and are, therefore, subject to the requirements of FOAA. The Law Court agreed and held that the Tribes act in their municipal capacity when they "interact with persons or entities other than their tribal membership, such as the state or federal government." The Court, accordingly, held that "the Tribes' communications with the federal government or the state in the context of their water quality authority are not matters ‘internal' to the Tribes, and are subject to the public records provisions of" FOAA. The Court also held that the "Tribes are ordinarily acting with regard to internal tribal matters when they are engaged in the deliberative processes of self-government," and, therefore, minutes of tribal council meetings are not public records.