Sackett Redux?

Posted on December 17, 2015 by Patrick A. Parenteau

As Annette Kovar recently predicted in her blog, the Supreme Court granted cert in United States Army Corps of Engineers v. Hawkes Construction., Inc. (15-290) to resolve a split in the circuit courts on the question whether a jurisdictional determination (JD) under the Clean Water Act constitutes “final agency action for which there is no other adequate remedy in a court" and is therefore subject to judicial review under the Administrative Procedure Act.

In Hawkes , the Eighth Circuit held that the JD was a final agency action subject to the APA. The case arose after a company sought to mine peat from wetland property owned by two affiliated companies in northwestern Minnesota. The Corps’ JD found that the wetlands onsite were "waters of the United States" and were therefore subject to the permit requirements of section 404 of the CWA. This decision runs counter to the Fifth Circuit decision in Belle Co., LLC v. U.S. Army Corps of Eng’rs.

Both courts evaluated the reviewability of JD’s in light of Sackett v. EPA, which held that property owners may bring a civil action under the APA to challenge EPA's issuance of a CWA §309 compliance order directing them to restore their property immediately pursuant to an EPA work plan and assessing penalties of $37, 500 per day for failure to comply. The Fifth Circuit in Belle declined to apply Sackett on the ground that a JD does not have the same legal consequences as a 309 compliance order. The Eighth Circuit disagreed and held that a JD presents landowners with a Hobson’s choice requiring them “either to incur substantial compliance costs (the permitting process), forego what they assert is lawful use of their property, or risk substantial enforcement penalties.”  

In my view the Fifth Circuit has the better reading of Sackett and the governing law on what constitutes final agency action. The Supreme Court uses a two prong test to determine finality:  first the action must “mark the consummation of the agency’s decision making process;” and second “the action “must be one by which rights or obligations have been determined, or from which legal consequences will flow.” Bennett v. Spear There is no question that a JD satisfies the first prong. But a JD does not meet the second prong for at least three reasons. First, a JD does not determine the rights and obligations of the landowner for the simple reason that the statute has already done that. Section 301 of the CWA prohibits any discharge by any person to a water of the US without a permit.   The landowner’s legal obligations are exactly the same with or without the JD. 

Second, unlike the compliance order in Sackett, a JD does not compel the landowner to take any action at all. Nor does it expose the landowner to penalties, let alone the double penalties at issue in Sackett. The JD notifies the landowner that a permit may be required for discharging dredge or fill material into the wetland unless one of the statutory exclusions such as prior converted cropland apply.  However as the Fifth Circuit said, “even if Belle had never requested the JD and instead had begun to fill, it would not have been immune to enforcement action by the Corps or EPA.” 

Third, the Eighth Circuit was simply wrong to equate the practical consequences of a JD putting the landowner on notice that a permit was required with Bennett’s requirement that the action must have legal consequences. In Bennett the action at issue was a biological opinion issued under section 7 of the Endangered Species Act. The Court found that under the ESA “the Biological Opinion at issue here has direct and appreciable legal consequences;” namely, that it curtailed the authority of the Bureau of Reclamation to provide water for irrigators from federal reservoirs in order to protect endangered fish. Nothing remotely similar to that follows from the issuance of a JD.

Finally the Court ought to be leery of broadening the reach of the APA to include actions having practical effects but not actual legal consequences. That could sweep in a large number of federal actions that have never been thought of as justiciable controversies—for example notices of violations which arguably trigger even more immediate and serious consequences than JD’s. Regulated entities are not the only ones who might benefit from a relaxation of the APA’s finality requirement. Environmental plaintiffs would gain increased access to the courts as well.   

DUE PROCESS TRUMPS DEFERENCE? JURIDICTIONAL QUIBBLING?

Posted on December 10, 2015 by Annette Kovar

The U.S. Supreme Court will likely agree to review the decision of the Eighth Circuit Court of Appeals in Hawkes Co. v. U.S. Army Corps of Engineers. So said John Cruden, Assistant Attorney General for Environment and Natural Resources and College Fellow, to the 2015 National Clean Water Law Seminar. He described the Hawkes case as the second generation of the U.S. Supreme Court’s Sackett v. EPA decision in 2012.

As noted here, the Hawkes case is another wetlands case, this time about a Minnesota peat farming company that applied for a permit from the U.S. Army Corps of Engineers under the Clean Water Act to expand its peat mining operation. The Corps advised Hawkes that it had made a preliminary jurisdictional determination (JD) that the property on which the expansion was planned included regulated wetlands requiring a more extensive environmental assessment. Despite Corps staff attempts to dissuade continuing with the permitting process, Hawkes challenged the preliminary JD. The Corps subsequently prepared an Approved JD and ultimately issued a Revised JD after its own internal review raised issues of concern. The Eighth Circuit Court of Appeals held that the Corps JD was a judicially reviewable final agency action under the Administrative Procedure Act (APA). Previously, the Fifth and Ninth Circuit Courts of Appeal had ruled that a Corps JD was not a judicially reviewable final agency action. The Hawkes case sets up a split in the Circuit Courts making Supreme Court review more likely.

One might recall that the Supreme Court’s unanimous Sackett v. EPA decision held an EPA compliance order, alleging the Sacketts had violated the Clean Water Act by placing fill material on their property without a permit and requiring restoration of the property, was a final agency action and subject to judicial review under the APA. The Supreme Court concluded the Sacketts had no other adequate remedy at law and further stated that the APA creates a “presumption favoring judicial review of administrative action.” Justice Scalia, writing for the Court, said this “presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all.” He continued that nothing in the CWA can be read to enable or condone “the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review—even judicial review of the question whether the regulated party is within EPA’s jurisdiction.” Clearly, principles of fundamental fairness and due process underlie the Sackett decision.

If one goes back to the Hawkes case, note that the Corps describes its preliminary and Approved JDs as tools-- i.e. guidance, to help implement the Clean Water Act, and not orders. JDs probably do streamline the permitting process because an applicant will know what the Corps’ position is before investing heavily in a permit process and may decide to abandon the project. But, there is a hint of “strong-arming” tactics in the Hawkes case that does not bode well for a deferential decision by the Supreme Court to the Corps. However, even if Corps’ JDs become subject to judicial review in the future, won’t a reviewing court still ascribe a certain amount of deference to the Corps’ expertise under APA standard of review precedents? Wouldn’t the Corps have to defend its JD at some point if challenged? Will the Corps really lose much by defending its JD sooner rather than later?

Does Colorado Support the Clean Power Plan? Yes. And No.

Posted on December 9, 2015 by Seth Jaffe

 

I have never understood why 43 states – including the great Commonwealth of Massachusetts – have independent elected attorneys general.  I’m sure my new colleague, former Massachusetts Attorney General Martha Coakley, would disagree with me, but I just don’t think that the value of having an AG independent of the Governor is worth the lack of policy consistency.  Exhibit A to my argument is the current dispute in Colorado between Governor John Hickenlooper and Attorney General Cynthia Coffman concerning EPA’s Clean Power Plan.  What’s the problem?

Hickenlooper supports the CPP; Coffman opposes it.  Indeed, Coffman does not just oppose it; on behalf of the State of Colorado, she’s joined the litigation seeking to stop the rule.  Excuse me, but shouldn’t the Governor speak for the citizens of Colorado on such matters?  Absent some kind of conflict of interest requiring independent counsel, the Governor has to be the boss.  I’m sure most citizens see it that way; it would be nice if reality mirrored perception.

I’d assume that the Colorado Governor has authority to retain separate counsel – and I hope my friends in Colorado will tell me if I’m wrong.  I’d love to see Governor Hickenlooper retain his own counsel and intervene in the litigation on the side of EPA.  What would the Court do if Colorado appeared on both sides of the V?

hickenloopercoffman

What Do Opponents of the Clean Power Plan and the Oklahoma Sooners Have In Common?

Posted on October 23, 2015 by Seth Jaffe

So the Clean Power Plan has been published in the Federal Register.  For those who cannot get enough, you can find all of the important materials, including EPA’s Technical Support Documents, on EPA’s web site for the CPP. 

Not surprisingly, given the number of suits brought before the CPP was even finalized, opponents were literally lining up at the courthouse steps to be the first to sue.  West Virginia apparently won the race and is the named plaintiff in the main petition filed so far. 

Perhaps because Oklahoma has been one of the most persistent, and vocal, opponents of the CPP, this called to mind the origin of the Sooner State’s nickname – which seems particularly apt, since Oklahoma was one of the states that couldn’t wait for the rule to be promulgated to sue.

Sooners

Oklahoma is not actually among the plaintiffs in the West Virginia suit.  Oklahoma filed its own petition today.  One wonders whether Oklahoma was banished from playing with the other states as a result of its impatience.  Unlikely, since most of those in the West Virginia suit also filed early, but it did call to mind that other famous event in the history of the west, as recorded in Blazing Saddles.

Curiouser and Curiouser: Sixth Circuit Not Sure of Jurisdiction but Stays WOTUS Rule Anyway

Posted on October 9, 2015 by Rick Glick

Does this make sense to you?  Eighteen states petitioned the Sixth Circuit to challenge the new rule adopted by EPA and the Corps of Engineers defining “waters of the United States” under the Clean Water Act.  Then the petitioners move the court to dismiss their own petition for lack of subject matter jurisdiction, but at the same time request a stay of the rule.  And then, the court acknowledges it may not have jurisdiction but issues the stay anyway!  That is exactly what Sixth Circuit did in the case published today.  

This case is among many seeking to block the rule.  The Clean Water Act confers original jurisdiction upon the circuit courts for challenges to “effluent limitations or other limitations.”  But as reported earlier in this space, thirteen states convinced a federal district judge in North Dakota that he had jurisdiction because the WOTUS rule is merely definitional, and neither an effluent nor other limitation. 

The court concluded that petitioners have a good chance at prevailing on the merits, that the rule exceeds “guidance” given by the Supreme Court in extending CWA jurisdiction too broadly.  The court also indicated that the final rule may have strayed too far from the notice given in the proposed rule in its definitions of jurisdictional waters.

The majority was not troubled by the fact the parties are still briefing subject matter jurisdiction, finding that it had plenty of authority to preserve the status quo pending a jurisdictional determination.  The dissent took the view that the proper sequence is to first decide jurisdiction, then decide on a national stay of a rule years in the making.  Pants first, then shoes.

Did the majority consider the situation an emergency that required immediate action?  No, the court found that petitioners were not persuasive that irreparable harm would occur without a stay, but neither could the court find any harm with freezing implementation of the rule.  The reasoning seems to be that we’ve muddled through so far, let’s take a step back and consider all the implications before implementation. 

Why do the states prefer to go after the rule in the district courts instead of the circuit courts of appeal?  Maybe they believe they can forum shop to find conservative judges and build a favorable body of case law before appealing.  Or maybe they believe they can more directly attack the science underlying the rule or otherwise augment the administrative record.  Whatever the reasons, the ultimate return of this issue to the Supreme Court will be delayed and the law dealing with regulation of wetland fills will remain as confused as ever.

Chicken Little Cannot Compare to the Opponents of the Clean Power Plan

Posted on September 10, 2015 by Seth Jaffe

On Wednesday, the D.C. Circuit Court of Appeals dismissed the latest effort to stay EPA’s Clean Power Plan before it has even been promulgated in the Federal Register.  The Court simply stated that “petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action.”

Really?  Tell me something I did not know.

I’m sorry.  The CPP is a far-ranging rule.  There are strong legal arguments against its validity.  Those arguments may prevail.  I see it as about a 50/50 bet.  This I do know, however.  The sky isn’t falling. The sky won’t fall, even for West Virginia, if the rule is affirmed and implemented. Those opposed to regulation have made these arguments from time immemorial – certainly no later than when Caesar tried to regulate the amount of lead in Roman goblets.  And if I’ve got that one wrong, at least no later than Ethyl Corporation v. EPA, when opponents of EPA’s rulemaking on leaded gasoline thought that the rule would mean the end of western civilization.

I’m not naïve.  I understand that these arguments are political as well as legal.  I just think that opponents of EPA rulemaking undermine their own political position in the long run by repeatedly predicting catastrophe, even though catastrophe never arrives.

sky is falling

Whole Lot of Craziness Going On

Posted on September 2, 2015 by Richard G. Stoll

A whole lot of craziness is going on in federal district and appellate courts all over the country right now.  About what?  About judicial review of EPA’s recent “WOTUS” rule under the Clean Water Act (CWA).  So I can avoid wheel re-invention, see the very recent ACOEL blogs by Seth Jaffe and Rick Glick.

So what’s the problem?  You might find a lot to hate about the Clean Air Act, the Resource Conservation Act, the Safe Drinking Water Act, and I could name a few others, but at least they all have one good thing going for them:  they all provide in a crystal clear manner that judicial review of EPA’s national rules under those statutes will lie exclusively with the D.C. Circuit.  No ifs, ands, buts, or maybes.

For reasons I have never understood (and I have been trying since the 1970s), Congress in its infinite wisdom chose a different path in the CWA.  In Section 509, they listed seven types of actions that must be reviewed in a federal Court of Appeal (not necessarily the D.C. Circuit) and left any other type of action to be reviewed initially in federal district court.

Over the years, a lot of mixed case law has developed regarding EPA’s CWA rules that don’t fit neatly within one of the seven types of actions Section 509 has specified for Court of Appeals review.  Quite predictably, as reflected in Seth’s and Rick’s recent blogs, three district courts last week reached conflicting results over whether WOTUS fits within the seven types.  In its WOTUS preamble, EPA included a discussion about confusion in the courts over the issue and took no position on whether WOTUS should initially be reviewed in a district court or Court of Appeals.

So how crazy is this:  right now, we have (1) a ruling from one district court judge in North Dakota finding he has jurisdiction and enjoining EPA from enforcing WOTUS; (2) a statement from EPA saying the agency will honor his injunction only in the 13 States that were plaintiffs in that action; (3) an order from that judge directing the parties to brief the issue of whether EPA has authority to honor his ruling in only those states; (4) decisions from two other federal district judges holding WOTUS judicial review must be brought only in a Court of Appeals; (5) numerous cases filed in several circuit Courts of Appeals that have been transferred (at least for now) to the 6th Circuit; (6) an almost certain EPA appeal to the 8th Circuit in attempt to reverse the North Dakota judge’s injunction; and (7) WOTUS review cases filed in numerous other federal district courts by lots of parties with various motions still pending.

This is early September, and I can’t imagine how this won’t get a lot crazier over the next few months.  Congress in its infinite wisdom!

First Blood: North Dakota Federal Court Strikes WOTUS Rule

Posted on August 31, 2015 by Rick Glick

With so many challenges filed in so many venues to EPA’s Waters of the United States or WOTUS rule, it seemed inevitable that some plaintiffs somewhere would find a sympathetic court.  And so it is that thirteen states found U. S. District Judge Ralph R. Erickson to preliminarily enjoin the “exceptionally expansive view” of the government’s reach under the Clean Water Act.

This case is interesting from a couple of perspectives.  First, Congress conferred original jurisdiction for challenges to EPA “effluent limitations or other limitations” and for permit decisions upon the Circuit Courts of Appeal.  In the past two days, district court judges in West Virginia and Georgia concluded they lacked jurisdiction over challenges to the WOTUS rule on that basis.  Judge Erickson, however, did not feel so constrained. 

The judge found that the WOTUS rule is simply definitional, and neither an effluent limitation nor an “other limitation” on states’ discretion.  Further, the judge found that the rule “has at best an attenuated connection to any permitting process.”   The conclusion states’ discretion is not affected is a bit odd in that the judge later concludes that the state plaintiffs satisfied all the criteria for a preliminary injunction, including irreparable harm caused by the rule. 

Second, Judge Erickson plays on an internecine dispute between EPA and the Army Corps of Engineers in an unusual way.   In my first sentence I refer to the WOTUS rule as EPA’s, although the rule was jointly adopted by EPA and the Corps.  However, recently leaked internal government memoranda indicate that the Corps disavows much of the technical support and policy choices underlying the rule.  Judge Erickson obliquely references these memoranda and seems to rely on them to conclude that plaintiffs are likely to succeed on the merits of their challenge. 

Typically, courts are loathe to rely on internal documents of uncertain provenance, as they prefer to leave the government room to openly discuss policies under development without fear its deliberations would be disclosed.  But in this case, Judge Erickson notes that he has not been presented with the full record for the WOTUS rulemaking, and so felt justified in citing the Corps memos. 

As Seth Jaffe has observed, it seems likely that Judge Erickson’s jurisdictional determination will not stand, and his reliance on the confidential exchanges between the Corps and EPA is a little disturbing.  However, his order highlights EPA’s poor management of this rulemaking, which has led to challenges from states, property rights advocates and environmentalists—a kind of anti-EPA trifecta. 

As previously noted, EPA released its draft WOTUS rule before the work of the Science Advisory Board was complete, thus raising questions as to the rule’s scientific objectivity.  Then EPA seemingly disregarded the technical concerns raised by its rulemaking partner, the Corps.  Any WOTUS rulemaking would be controversial, but EPA has unnecessarily raised the bar for public acceptance.

Two Days, Three Decisions, One Big Mess: Welcome to Judicial Review of the Waters of the United States Rule

Posted on August 28, 2015 by Seth Jaffe

On Wednesday, Judge Irene Keeley of the Northern District of West Virginia held that district courts do not have jurisdiction to hear challenges to EPA’s rule defining waters of the United States, because courts of appeal have original jurisdiction over “any effluent limitation or other limitation.”  Yesterday, Judge Lisa Wood of the Southern District of Georgia agreed.

Later yesterday, Judge Ralph Erickson of the District of North Dakota disagreed.  Finding that a definitional rule is not an effluent limitation and is not any “other limitation”, because it “places no new burden or requirements on the States”, Judge Erickson concluded that the district courts do have jurisdiction.  Addressing the merits, Judge Erickson concluded the states were likely to prevail, and would suffer irreparable harm in the absence of an injunction.  He thus enjoined enforcement of the rule in the 13 states involved in the case before him.

I’ll go out on a limb and assert that Judge Erickson’s decision is not likely to survive.  Why not?

  • Both the Georgia and West Virginia opinions cogently explain why the WOTUS rule is an “other limitation under existing CWA cases.
  • Judge Erickson was clearly trying to have his cake and eat it, too. It is, to put it mildly, internally inconsistent for Judge Erickson to conclude that he had jurisdiction to hear the case, because the “rule places no new burden or requirements on the States”, while ruling on the merits that the States will suffer irreparable harm if the rule goes into effect.  If they will suffer harm, it is precisely because the rule will limit them in new ways – which is pretty much what his own opinion says. 
  • As Judge Keeley noted, providing consolidated jurisdiction over all challenges to the rule in one court of appeals furthers

“the congressional goal of ensuring prompt resolution of challenges to EPA’s actions.”  That scheme would be undermined by … a “patchwork quilt” of district court rulings.

Based on these three decisions in just the last two days, it would seem that truer words were never spoken.

 

View from the Top: John Cruden on Federal Environmental Enforcement

Posted on July 28, 2015 by Blogmaster

 

ACOEL Fellow John Cruden, head of DOJ’s Environment and Natural Resources Division, recently gave this speech to the ABA Litigation Section on the current direction of federal environmental enforcement efforts.  The speech focuses on efforts to coordinate with and leverage local, state, regional and international partners.

DUTCH COURT: NETHERLANDS MUST DO MORE TO REDUCE GREENHOUSE GAS EMISSIONS

Posted on July 21, 2015 by John Dernbach

            On June 25, 2015, The Hague District Court in the Netherlands issued an order and opinion requiring the Netherlands to reduce its greenhouse gas emissions by 25 percent below 1990 levels by 2020.  This level is more ambitious than the 17 percent reduction goal to which the Dutch government has currently committed.  The case, Urgenda Foundation v. State of the Netherlands suggests what courts may be willing to do when government policy lags behind what climate science indicates is needed. 

            Urgenda sued the government in tort under the Dutch Civil Code on behalf of itself and 886 individuals, claiming among other things that “the State is in breach of its duty of care for taking insufficient measures to prevent dangerous climate change.”  For U.S. lawyers, accustomed to limited governmental tort liability under federal and state law, the breadth of this claim may be startling.  But it was also novel, though less so, to the court, which explained that this legal issue “has never before been answered in Dutch proceedings.” 

            Although the state has considerable discretion in policy making for climate change, the court said, that discretion is constrained by both the U.N. Framework Convention on Climate Change and the Treaty on the Functioning of the European Union (TFEU).  Objectives and principles of the Climate Change Convention and the TFEU that constrain Dutch discretion, the court said, include “protection of the climate system, for the benefit of current and future generations, based on fairness;”  the precautionary principle, and consideration of “available scientific and technical information.” 

            Urgenda’s case was based on numerous scientific reports, including the 2007 report of the Intergovernmental Panel on Climate Change (IPCC), which said that Annex I countries (including both the Netherlands and the United States), need to reduce their greenhouse gas emissions by 25-40 percent below 1990 levels by 2020, and 80-95 percent below 1990 levels by 2050, to limit the global temperature increase to 2.0 degrees Celsius.    Parties to the Convention on Climate Change have agreed that a temperature increase above that level (equivalent to 3.6 degrees Fahrenheit) would be dangerous. 

            After analyzing multiple factors relevant to the appropriate duty of care, the court concluded that the state “has acted negligently and therefore unlawfully towards Urgenda by starting from a reduction target for 2020 of less than 25% percent compared to the year 1990.”   It ordered a 25 percent reduction, saying there are “insufficient grounds for the lower limit” of a 40% reduction from 1990 levels specified in the 2007 IPCC report.  

            Although the case was decided under Dutch legal rules that are quite different from our own, and may be appealed, it has significance to U.S. lawyers.  First, it shows great respect for climate change science, describing IPCC and other scientific reports in considerable detail.  The case therefore underscores the important role that courts can play in affirming the validity of climate change science.

            Second, the court’s willingness to interpret domestic law in ways consistent with international commitments, including those in the Convention on Climate Change as well as the commitment to keep warming to 2.0 degrees Celsius, raises an interesting and important question about whether U.S. domestic laws related to climate change also should be interpreted in ways consistent with international commitments.  U.S. courts have often held that statutes should be construed in a manner consistent with treaties and other international obligations.    

            Finally, the decision indicates the value of judicial intervention as a way of forcing governments and businesses to do more than they are doing.  Additional legal support for such cases was provided, in March 2015, by the issuance of the Oslo Principles on Global Climate Change Obligations.  These principles were developed by a group of legal experts from around the world.  The central idea is that “[s]tates and enterprises must take measures, based on” the precautionary principle, “to ensure that the global average surface temperature increase never exceeds pre-industrial temperature by more than 2 degrees Celsius.”  Many sources of local, national, and international law support these principles, the experts said, including “international human rights law, environmental law and tort law.” 

            According to a report issued on July 16, 2015 by the American Meteorological Society, 2014 was the warmest year on record.  As the effects of climate change intensify, there may be more such litigation, and decisions like this could become more common.       

Can the Majority and the Dissent Both Be Wrong? The Supreme Court Remands the MATS Rule

Posted on June 30, 2015 by Seth Jaffe

In Jonathan Cannon’s excellent post on Monday’s Supreme Court decision in Michigan v. EPA, he noted that the majority and the minority aren’t actually that far apart in their views on whether EPA must consider costs in this rulemaking.  I have a slightly different take:  They may not be that far apart, but they’re both wrong.  

In fact, the issue in Michigan v. EPA seems so simple that the MATS rule could have been affirmed in a two-page opinion.  Judge Scalia notes that the word “appropriate” – on which the entire 44 pages of the majority, concurring, and dissenting opinions focus – is “capacious”.   I agree.  If so, and if Chevron means anything, “appropriate” is surely capacious enough to allow for an interpretation that does not include cost considerations.  That should have been the end of the case.

I do feel compelled to note, however, that Justice Kagan’s dissent also got it wrong, in at least three ways:

  • I think she’s flat wrong to suggest that, because the MATS “floor” is based on the top 12% of facilities already in operation, that means that establishment of the floor already takes cost into account. As Justice Scalia cogently notes, those existing facilities may well have been under their own regulatory duress – a duress that may not have considered cost.
  • Justice Kagan confuses cost-benefit analysis and cost-effectiveness analysis. For any given goal sought by EPA, the various options provided by the MATS rule may allow power generators to attain the goal in the most cost-effective means possible, but if even the most cost-effective approach were to yield $10B in costs and $10M in benefits, that would fail the cost-benefit test for most people.
  • Finally, and most importantly, Justice Kagan got the consequences wrong. Instead of suggesting, as she did, that the majority decision,
 "deprives the American public of the pollution control measures that the responsible Agency, acting well within its delegated authority, found would save many, many lives,"  
she should have made the point that the majority decision will have no impact on EPA or the MATS rule.  The Supreme Court did not vacate the rule; it merely remanded the rule to the Court of Appeals.  Justice Kagan’s position should have been that EPA still has sufficient discretion, even on the existing record, to defend the MATS rule within the confines of the majority opinion.  Instead, Justice Kagan gave ammunition to those who oppose the rule, by suggesting that it cannot be saved.

A pox on both their houses.

Do Climate Change and Same-Sex Marriage Have Anything in Common?

Posted on June 29, 2015 by Seth Jaffe

Recent events have me pondering this question.

Most notably, in two court decisions last week, courts ordered the State of Washington and the government of the Netherlands to take more aggressive action against climate change.  In the Washington case, in response to a complaint from eight teenagers, a trial court judge has ordered the Washington Department of Ecology to reconsider a petition filed by the teenagers requesting reductions in GHG emissions.  Similarly, in the Netherlands, a court ordered the government to reduce GHG emissions by 25% within five years.  The Dutch case was brought under human rights and tort law, not under existing Dutch environmental laws.

I have been very skeptical of the use of nuisance-type litigation to require more aggressive government regulatory efforts.  I still think comprehensive market-based regulation is the best approach.  However, in the absence of aggressive action in the United States and world-wide, these suits are going to increase in number.

So, how are they similar to the same-sex marriage issue?  First, as noted in Obergefell, courts were initially – and for some time – not just unfriendly to litigation efforts in support of same-sex marriage, they were positively dismissive.  Second, there is the gradual increase over time in the litigation.

Next, there is also the change over time in the scientific understanding of the issues.  While same-sex marriage has always been, on both sides, primarily a moral issue, it would be wrong to ignore the role that an increasing understanding of the genetics of sexual preference has played in the debate.  Similarly, the move towards an overwhelming weight of evidence, not just that climate change is occurring, but that it is anthropogenic, has obviously been important to the climate change debate.

Finally, while the moral issues in same sex marriage may seem to distinguish it from the climate issue, the recent papal encyclical makes clear that there are moral aspects to the climate change debate as well.

I have no crystal ball.  I do not know whether we are going to see a groundswell, and then, perhaps, a tidal wave that will somehow overcome the gridlock in United States and world politics on climate change.  There are differences in the two issues, most obviously in the short-run economic costs of addressing climate change.  Nonetheless, I do know that it wouldn’t surprise me if the tidal wave comes, and relatively soon.

GayMarriage-Court_jpg_800x1000_q100

Climate-change-how-does-it-work

If Congress Wants to Limit EPA’s Discretion, Perhaps It Should Do a Better Job Legislating

Posted on June 5, 2015 by Seth Jaffe

Earlier this week, the D.C. Circuit Court of Appeals rejected both industry and environmental group petitions challenging EPA’s determination of what is a solid waste in the context of Clean Air Act standards for incinerators and other combustion units.  It wasn’t actually a difficult case, but it does provide a lesson for Congress.  When the technical nature of EPA’s decisions was layered on top of the fundamental deference given EPA’s interpretation of the statute under Chevron, the petitioners were never going to prevail:

We afford great deference to EPA’s determinations based on technical matters within its area of expertise.

Scrap_Tires

The crux of the environmental petitioners’ case was that certain of the materials, such as scrap tires, exempted by EPA from the definition of solid waste, are unambiguously “discarded” within the meaning of RCRA, so that EPA did not have discretion to exempt them.  Unfortunately, as the Court noted:

the term “discarded” is “marked by the kind of ambiguity demanding resolution by the agency’s delegated lawmaking powers.”

In other words, given the current state of decrepitude of the non-delegation doctrine, when Congress enacts legislation using words as vague as “discarded”, it is essentially telling EPA to figure out what Congress meant to say.  And when EPA does figure out what Congress meant to say, the Courts are not going to disturb EPA’s interpretation.

For those in Congress who don’t like the way EPA implements statutes for which it is responsible, they might learn a lesson from Pogo.

EPA Is Not an Expert in Determining Electric System Reliability

Posted on May 7, 2015 by Seth Jaffe

The D.C. Circuit Court of Appeals just reversed and remanded EPA’s rule allowing backup generators to operate for up to 100 hours per year as necessary for demand response. It’s an important decision that could have lessons for EPA and the regulated community across a wide range of circumstances, including eventual challenges to EPA’s proposed GHG rule.

demand response

EPA said that the rule was necessary to allow demand response programs to succeed while maintaining grid reliability.  Commenters had argued that, by encouraging greater use of uncontrolled backup generators, EPA’s rule makes other generators less economic, thus creating a negative feedback loop, with less and less power generated by controlled units, resulting in greater and greater need for uncontrolled backup generators. Here’s what the Court concluded:

  1. EPA failed adequately to respond to the commenters’ arguments. Noting that “an agency must respond sufficiently to “enable [the court] to see what major issues of policy were ventilated,” the Court instead found that EPA “refused to engage with the commenters’ dynamic markets argument."
  2. To the extent EPA did respond, it was “self-contradictory”, arguing that it was not justifying the regulation on reliability grounds, even though the final rule said that it was based on reliability concerns.
  3. The 100-hour rule was based on faulty evidence. EPA relied on evidence that backup sources had to be available at least 60 hours to participate in a PJM “Emergency Load Response Program.”  However, PJM itself noted that this minimum does not apply to individual engines.
  4. Finally, and perhaps most importantly, while EPA justified the rule on reliability grounds, the Court stated that:

grid reliability is not a subject of the Clean Air Act and is not the province of EPA.

This last issue is the part of the opinion that could have some bearing on judicial review of EPA’s GHG rule.  The Court noted that there was no evidence that FERC or NERC had participated in the backup generator rule or provided comments to EPA.  When, during the course of the rulemaking, a commenter suggested that EPA work with FERC, this was EPA’s response:

the rulemaking’s purpose was to address emissions from the emergency engines “and to minimize such pollutants within the Agency’s authority under the CAA. It is not within the scope of this rulemaking to determine which resources are used for grid reliability, nor is it the responsibility of the EPA to decide which type of power is used to address emergency situations.”

This statement did not make the Court happy:

EPA cannot have it both ways it [sic] cannot simultaneously rely on reliability concerns and then brush off comments about those concerns as beyond its purview. EPA’s response to comments suggests that its 100-hour rule, to the extent that it impacts system reliability, is not “the product of agency expertise.”

And why is this relevant for the GHG rule?

First, because EPA had better consult with FERC and NERC, so that it can defend any statements it makes in the GHG rule about its impact, if any, on reliability.  Second, it’s clear that the court will not show deference to EPA’s conclusions about reliability, since that is not within the scope of EPA’s expertise.

Eroding Ice: Fourth Circuit’s recent decision limiting “Arranger Liability”

Posted on April 29, 2015 by George von Stamwitz

A plaintiff seeking to characterize a business transaction as “disposal” under CERCLA may now feel like a polar bear looking for a patch of thick ice. 

On March 20, 2015, a divided panel on the Fourth Circuit Court of Appeals, in Consolidation Coal Co. v. Ga. Power Co., affirmed a District Court's ruling holding that transformer sales did not evidence an intent on to dispose of hazardous materials, and therefore did not support a finding of “arranger liability” under “CERCLA” even when words like “scrapping” and “disposal” were used. Looking to the framework of the Supreme Court’s 2009 ruling in Burlington Northern Burlington Northern and Santa Fe Railway Co. v. United States and the Fourth Circuit’s 1998 ruling in Pneumo Abex Corp. v. High Point, Thomasville & Denton Railroad Co., the 2-1 majority held that while a party who sells a product that contains hazardous substances also “‘intends’ to rid itself of that hazardous substance in some metaphysical sense… [an] intent to sell a product that happens to contain a hazardous substance is not equivalent to intent to dispose of a hazardous substance under CERCLA.” Rather, in the court’s words, “there must be something more.” 

Georgia Power, a major Georgia electrical utility that supplies power to most of Georgia, sold used electrical transformers containing PCBs to Ward Transformer Company. Ward repaired and rebuilt used transformers for resale. In the process, Ward’s Raleigh, North Carolina, facility became contaminated with PCBs. After the Ward site was added to the National Priorities list, Consolidated Coal Company and another company bore most of the cleanup costs as PRPs under CERCLA, spending approximately $17 million each in cleanup costs. 

Any attorney who has ever tried or been involved with a CERCLA case knows that Georgia Power, given these facts, looks like a prime target to sue for contribution.

In their appeal to the Fourth Circuit Court of Appeals, Consolidated Coal argued the District Court improperly considered the low value of the used transformers and Ward’s ability to profit from their resale. This, Consolidated Coal contended, overlooks the possibility that Georgia Power had a “dual intent” to make money from the sales of transformers and thus had an intent to dispose of the hazardous materials as an arranger. Thus, according to Consolidated Coal, Georgia Power’s “secondary motive” for the transformer sales -- to dispose of PCBs –- was sufficient to create arranger liability under CERCLA. 

The Court concluded that there was no direct or substantial evidence that Georgia Power intended, “even in part,” to arrange for disposal. Furthermore, the use of the words “scrapping” or “disposal” in Georgia Power’s documents had “limited bearing” on their intent to “dispose” of transformers as the word is construed in CERCLA, let alone the PCBs within those transformers. The Court was also not swayed by the fact that the transformers were sold in lots and that some of the transformers were partially disassembled, or that old oil was required to be removed from the transformer as part of the reconditioning process. According to the Court, all Georgia Power did was to sell its transformers to the highest bidder.

While these cases remain fact sensitive, the trend lines suggest CERCLA plaintiffs alleging “disposal” may be on thin ice.

Perhaps a Corps Jurisdictional Interpretation is Final Agency Action After All

Posted on April 16, 2015 by Seth Jaffe

After Sackett, the question on everyone’s mind was “How far does it go?”  The first test of that question was the decision by the 5th Circuit Court of Appeals – not known as a bastion of liberalism – in Belle Company v. Corps of Engineers, holding that a Corps jurisdictional determination is not final agency action subject to judicial review.  Late last week, however, in Hawkes Co. v. Corps of Engineers, the 8th Circuit disagreed, creating a circuit split.

As we noted at the time, the 5th Circuit decision in Belle focused on the differences between the Sacketts’ position facing an enforcement order and that of Belle Company facing a Corps JD.  As the 5th Circuit emphasized, the JD did not require Belle Company to do anything.  Nor did the JD expose Belle Company to penalties.  Nor did it prejudice Belle Company’s ability to obtain a permit.  Nor did it include a finding of a CWA violation.

The 8th Circuit took a different tack, focusing instead on the one great, glaring similarity between the enforcement order in Sackett and the JD in Hawkes Co. – in both cases, the Corps’ decision, as a practical matter, defined the property owner’s rights and ended the proceeding.

It’s not obvious to me that the Supreme Court will take the case, even with the circuit split.  I don’t think that the Court likes these cases.  On the other hand, it is obvious that the conservative wing of the court sees Sackett as a very important decision and there could well be four votes to decide the issue at this point.

If the Court does take the case, all bets are off.  I think that the 5th Circuit still has the better of the legal argument, and I expect that will be sufficient for all but the most ardent property rights advocates on the Court.  Whether there are five ardent property rights advocates on the Court is what remains to be seen.

Oklahoma Federal Court Says It Lacks Jurisdiction to Award Declaratory Relief to EPA in Clean Air Act Case

Posted on March 23, 2015 by Donald Shandy

On January 15, 2015, Oklahoma Western District Judge Timothy DeGiusti dismissed a declaratory judgment action brought by the United States Environmental Protection Agency (EPA) against Oklahoma Gas and Electric Company (OG&E) under the Clean Air Act.  In United States v. Okla. Gas & Elec. Co. , the Court found that it lacked subject matter jurisdiction over EPA’s claims.

The litigation involved certain modifications made by OG&E at its Muskogee and Sooner plants.  These modifications occurred more than five (5) years prior to EPA’s suit.  Before commencing each of the projects, OG&E submitted “Project Notifications” to the Oklahoma Department of Environmental Quality (DEQ) that: (1) stated that each of the modifications would not result in a significant emissions increase; and (2) committed to submitting annual reports supporting this conclusion.  OG&E did not submit detailed emissions calculations.  However, five years of data subsequent to the modifications confirmed that significant emissions increases did not occur. 

Although the underlying dispute revolves around whether OG&E was required to obtain a Prevention of Significant Deterioration (PSD) permit before commencing each of the modifications, EPA did not allege that the projects were “major modifications” or that the projects resulted in “significant emissions increases” from the Sooner or Muskogee plants.  Nor did the government seek penalties for violations of the PSD permit requirements or injunctive relief requiring OG&E to obtain permits, likely seeking to avoid the application of the five year general statute of limitations applicable to government claims for fines, 28 U.S.C. § 2462. Instead, the government only sought a declaration that OG&E did not properly project whether the modifications to the Sooner and Muskogee plants would result in a significant increase in emissions.

Given that the government did not allege a “major modification” or a “significant emissions increase” for any of the projects, the Court found that the government had not presented an actual case or controversy sufficient for the Court's exercise of jurisdiction. 

Even if OG & E failed as a matter of law to evaluate whether the modifications would result in a significant increase in post-modification emissions of regulated pollutants at each facility, that failure to project is not, without more, determinative of whether a PSD permit is required. Unmoored from a claim that the modifications at issue are major modifications, Plaintiffs ask this Court to make a declaration as to a collateral legal issue governing aspects of a future potential suit. EPA's attempt at piecemeal litigation, therefore, cannot withstand the Court's jurisdictional limitations.

The Court also rejected EPA’s novel claim for injunctive relief seeking to require OG&E to properly calculate whether the projects were likely to result in a significant emissions increase prior to construction.

The Court is not aware of any decision in which the injunctive relief requested by EPA has been granted, or for that matter, ever requested. As the parties concede, there is no statutory or regulatory requirement that projections be submitted to EPA or any other regulatory authority in the first instance. And, as the Sixth Circuit addressed in DTE Energy, there is no prior approval required by the agency. Thus, if the Court were to grant the injunctive relief requested by EPA it would be directing OG & E to submit projections where no statutory or regulatory authority for such action exists. The availability of relief of the nature requested by EPA is a matter to be addressed by Congress, not this Court.

This is an important decision limiting EPA’s ability to “second-guess” a facility’s pre-construction permitting calculations in the absence of data demonstrating a significant emissions increase.  

Never Mind the Road to the Final Four. How About the Road to the Right Case for Revisiting Auer Deference?

Posted on March 17, 2015 by Andrea Field

In its March 9, 2015 decision in Perez v. Mortgage Bankers Association, the Supreme Court held that the Administrative Procedure Act’s notice-and-comment requirement “does not apply . . . to interpretative rules.”  The decision was unanimous, but the concurring opinions of Justices Alito, Scalia, and Thomas express concern with the consequences of the Court’s opinion.   As set out well in the temperate concurrence of Justice Scalia (yes, it really is temperate), in giving the category of interpretive rules Auer deference: 

we do more than allow the agency to make binding regulations without notice and comment.  Because the agency (not Congress) drafts the substantive rules that are the object of those interpretations, giving them deference allows the agency to control the extent of its notice-and-comment-free domain.  To expand this domain, the agency need only write substantive rules more broadly and vaguely, leaving plenty of gaps to be filled in later, using interpretive rules unchecked by notice and comment.

While the three concurring justices are looking down the road for the right case for revisiting what is generally known as Auer deference (i.e., judicial deference to an agency’s interpretation of its own regulations), Seth Jaffe’s next-day blog posting suggests that the road to the right case might be a long one.           

I agree that the Court is unlikely to revisit Auer during the current Administration.  But what happens if those in the next Administration disagree with choices made by the current Administration?  What if they choose to address those disagreements by issuing a tsunami of interpretative rules that reverse both longstanding interpretive rules on which people have relied and/or the newer interpretive rules of the current Administration?  What happens, for example, if the next Secretary of the Department of Labor reverses the interpretive rule upheld by Perez?  Will those adversely affected by such a new interpretive rule stand by without protest?  Will they be satisfied with Justice Sotomayor’s suggestions for recourse (e.g., by trying to persuade courts that the reinterpretations are arbitrary and capricious)? 

I think not.  I think that just a short jog down the road, we will see some particularly bold (or outrageous) re-interpretative rules flowing from agencies unimpeded by fears of the judicial review process.  That will prompt challenges from those supportive of the previous interpretive rules.  And that might well prompt the Chief Justice and one or more other justices to join Justices Alito, Scalia, and Thomas in revisiting Auer deference.  I, for one, would welcome that revisit.    

News Flash: Courts Still Defer to an Agency’s Interpretation of Its Own Rules

Posted on March 10, 2015 by Seth Jaffe

The Supreme Court on Tuesday ruled that, when an agency revises its interpretive rules, it need not go through notice-and-comment rulemaking.  Although the decision, in Perez v. Mortgage Bankers Association, required the court to reverse a long-held line of D.C. Circuit cases, the decision was not difficult; it was, in fact, unanimous.  In short, the Administrative Procedures Act:

states that unless “notice or hearing is required by statute,” the Act’s notice-and-comment requirement “does not apply … to interpretative rules.”

It carves out no exception for revisions to interpretive rules.  Game over.

The truly interesting part of the case was in the concurring opinions.  Both Justices Scalia and Thomas, effectively joined by Justice Alito, argued that Supreme Court decisions giving deference to agencies’ interpretation of their own rules have no constitutional foundation and should be overruled.

This is not the first time that they have made these arguments.  As I noted previously, in Decker v. Northwest Environmental Defense Center, Chief Justice Roberts also suggested that it might be time to revisit what is generally known as Auer deference.  It is notable in Perez that the Chief Justice joined the Court’s opinion.  Absent a change in the make-up of the Court, I don’t see it revisiting Auer any time soon.

Otherwise, the most notable part of the case is a statement from Justice Thomas that, to me, already wins the metaphor of the year prize.  Justice Thomas’s argument against Auer deference, while couched in constitutional terms, is really a screed (parts of which I sympathize with) against the growth of rulemaking and the modern administrative state.  He laments the use of interpretive rules and the decline of formal notice-and-comment rulemaking, and the protections that are required:

Yeti-590x330

Today, however, formal rulemaking is the Yeti of administrative law. There are isolated sightings of it in the ratemaking context, but elsewhere it proves elusive.

True dat. It just doesn't justify abandoning Auer deference in my book.

 


No Competitors In My Backyard?

Posted on March 2, 2015 by Seth Jaffe

In Paradise Lost, John Milton wrote that “easy is the descent into Hell, for it is paved with good intentions.”  

road to hell

A modern environmental lawyer might say that the road to waste, inefficiency, and obstruction is paved with good intentions.  Nowhere is that more apparent than with citizen suit provisions, as was demonstrated in the decision earlier this week in Nucor Steel-Arkansas v. Big River Steel.

Big River Steel obtained a permit from the Arkansas Department of Environmental Quality to construct a steel mill in Mississippi County, Arkansas.  Nucor owns an existing steel mill in – you guessed it – Mississippi County, Arkansas.  Nucor brought a host of claims in various forums (Sorry; I’m not a Latin scholar and cannot bring myself to say “fora”) in an effort to derail the Big River Steel project.  It appealed the permit in Arkansas courts.  It also petitioned EPA to object to the permit.

Finally – the subject of this case – it brought a citizens’ suit under the Clean Air Act alleging that the permit did not comport with various CAA provisions addressing permitting.  The Court rightly dismissed the complaint, basically on the ground that the suit was simply an improper collateral attack on the air permit.  The 5th and 9th Circuits have reached similar conclusions in similar circumstances.

The point here, however, is that clients don’t want to win law suits; they want to build projects.  Even unsuccessful litigation can tie projects up in knots, jeopardizing project financing or causing a project to miss a development window.

The road to hell is paved with the pleadings of bogus citizen suits.

Court Rejects Preemptive Declaratory Judgment Lawsuit Against NGOs

Posted on February 24, 2015 by Peter Van Tuyn

In a decision lauded by local residents, Alaska Native tribal and business interests, the commercial and sport fishing communities, and conservationists, President Obama recently withdrew the Arctic waters of the North Aleutian Basin (also known as Bristol Bay) from future oil and gas leasing.  As President Obama  noted, Bristol Bay is a national treasure, one of Alaska’s most powerful economic engines, and home to one of the world’s largest salmon runs.  At the same time, the Obama Administration is working on the next outer continental shelf leasing program, and will soon be making critical decisions about whether and how to include within it leasing in the U.S. portion of the Arctic’s Chukchi and Beaufort Seas.

Industry interest in the area is led by Shell, which holds leases in the Chukchi and Beaufort Seas, and as detailed in an article I recently co-authored and in a dramatic cover story in the New York Times Magazine, has experienced a stormy effort to drill there.  Not content, however, to focus on the on-the-water challenges of drilling in the Arctic, Shell also pursued a novel legal strategy by preemptively suing its critics in an effort to smooth the waters for its drilling.

 After receiving approval from U.S. agencies for various aspects of its drilling plans, Shell filed lawsuits against conservation groups alleging that the groups were engaged in an “ongoing campaign to prevent Shell from drilling in the Arctic” and that it was “virtually certain” that the groups would challenge the federal approvals.  Shell sought a declaration from the courts that the approvals were legal. 

            The Ninth Circuit Court of Appeals recently issued an opinion rejecting Shell’s strategy on the jurisdictional ground that the Declaratory Judgment Act, on which Shell had based its strategy,  “does not create new substantive rights, but merely expands the remedies available in federal courts.”  The court noted that the law underlying Shell’s request for declaratory judgment was the Administrative Procedures Act (APA), which allows a party aggrieved by agency action to seek judicial review of that action, and that since it is only the agency that can be sued under the APA, “it would be odd to conclude that a [jurisdictionally-required] case or controversy exists merely because Shell seeks to know who would prevail if the environmental groups asserted an APA claim against the [agency].”  Indeed, as the court found, were it to hold otherwise, its “holding would create several unusual consequences,” two of which it found “particularly noteworthy”:

First, it would allow a district court to declare the [agency]’s actions unlawful under the APA in a judgment that is not binding on the [agency] itself. ... Second, absent agency intervention, such a lawsuit would allow the lawfulness of agency action to be adjudicated without hearing the agency’s own justification for its actions.

I would suggest that two other “unusual consequences” of a ruling for Shell would have been the upsetting of the historical body of administrative law guiding judicial review of federal agency action and an illegal limit on the First Amendment right of citizens to petition the government.  

The Poop on (and Unfortunately Surrounding) the Cow Palace

Posted on February 23, 2015 by Brian Rosenthal

The exception from solid waste regulations for agricultural waste applied as fertilizer is a safe harbor that has boundaries based on use. In Community Ass’n for Restoration of the Environment, Inc. v. Cow Palace, LLC (E.D. Wa, 2015), facts evidencing over applied fertilizer and leaking storage lagoons, recently led a district court to a finding of possible imminent peril to public health, welfare or the environment under RCRA.

The court’s partial framing of the legal questions was telling: 

(1) [W]hether the manure at the Dairy, when over-applied to land, stored in lagoons that leak, and managed on unlined, permeable soil surfaces, constitutes the “handling, storage, treatment, transportation, or disposal of . . . solid waste....” 

Defendant’s useful product counterargument did not overcome its waste handling practices, which were deemed deficient by the court. The case is an excellent primer for the storage and handling of agricultural waste and the parameters for waste handling by large concentrated animal feeding operations (CAFOS). The proper methods and conditions for land applying the waste as fertilizer are also discussed.

Many large farm operations properly manage waste and its use as land applied fertilizer. In Cow Palace, the court reviewed federal law and the overlay of required nutrient management best practice plans applicable to Washington farms by state regulation. Natural Resource Conservation Service lagoon storage rules and RCRA open dump rules were also addressed.

Deflated Footballs and Environmental Trials

Posted on February 11, 2015 by James Price

The 2015 Super Bowl between the New England Patriots and Seattle Seahawks is over, but the NFL’s investigation continues into whether the Patriots cheated by deflating footballs during earlier National Football League contests.  There are lessons in this experience for those of us who handle environmental trials or advise clients in such matters.

“Deflategate,” as this incident came to be known, tapped into sportswriters’, NFL veterans’, and the public’s distrust for (and maybe even dislike of) the Patriots in general and Bill Belichick, in particular.  Many critical comments referred back to the 2007 scandal in which Belichick and the Patriots were caught videotaping an opponent’s game signals.

Similar preconceived attitudes and prejudgments affect juries, and sometimes even judges, that are called on to decide environmental disputes.  Polling regularly shows that protecting the environment is a goal approved by a large percentage of the public.  Polling also shows that large percentages of potential jurors do not trust big business.  Jim Stiff, a jury consultant from Dallas, Texas, has studied comments during many mock jury deliberations and reports that potential jurors expect large corporations to know the regulations to which they are subject.  Jurors seldom give credence to a corporation’s arguments that the requirements were unclear, that the company thought it was complying when hindsight shows it was not, or that the company was doing the best it could in a difficult situation. Further, jurors often come to trial with a hindsight bias that leads them to ignore the evolution of environmental information and judge earlier conduct based on today’s knowledge.  

With civil trials, if an individual or small business is alleging injury from a large corporation’s environmental activities, jurors may focus on the specific allegations of damage they can see or with which they can identify, in contrast to the more abstract arguments advanced by the defendant. 

With environmental criminal trials, such difficulties are compounded by additional factors that can lower the thresholds of liability-creating activity and feed into jurors’ tendencies to reduce complex arguments into core principles they can grasp:

             -- Some environmental statutes impose criminal liability on the basis of negligent acts without requiring specific intent to commit a criminal act;

            -- Court rulings under other environmental statutes hold a defendant need only have intended to conduct the act at issue and not the resulting consequence of that act;

            -- Many environmental criminal cases include at least one count of failing to report an environmental event.  Prosecutors try to reduce failures to report to a black-and-white analysis:  The defendant did not report an event the statute required.

To counteract these attitudes, corporate defendants facing environmental allegations early on must develop themes that will appeal to juries (and judges, too) such as opponents’ overreaching and lack of harm.  They may need to cultivate arguments surrounding the complexity of the issues in dispute, but they must also make their case and themes simple.  They may argue that their actions were approved by environmental regulators, and, surprisingly enough, they should be prepared to demonstrate that the regulators have the public’s interest at heart and are not coddling the regulated community.  They need to have witnesses who can clearly explain complex technical matters in a way those without technical degrees can understand.  They will seek to exclude potentially prejudicial evidence of earlier events.  They will want to develop a thoughtful and strategic approach to juror selection. 

In the case of the Patriots, Bill Belichick gave a press conference a week before the Super Bowl in which he reported the Patriots had conducted experiments showing changes in weather and temperature could account for deflating the footballs.  He did not provide any details.  About the same time, physics professors and mechanical engineers reported online that the intrinsic physical properties of gases such as air are governed by a principle known as the Ideal Gas Law.  They said that under such principles, when footballs inflated at room temperature are taken to cold, wet, outdoor weather, drops in PSI are inevitable.  Most talking heads, however, seemed to brush off these assertions of physics properties and experiments.

All of the evidence in this matter is not in.  Nevertheless, in the court of public opinion, a large number of well-informed and probably well-intentioned people have made up their minds.  Maybe the Patriots did cheat.  Maybe not.  But the people who have already made up their minds, either way, might just be demonstrating the challenges corporate defendants face in environmental trials.

THE (NON)FINALITY OF SUPREME COURT OPINIONS

Posted on December 17, 2014 by Richard Lazarus

Last spring, as the Washington Post reported, I caught Justice Scalia in an embarrassing blunder that prompted the Justice to revise overnight the version of his dissenting opinion in EPA v. EME Homer City Generation, L.P. posted on the Supreme Court’s website. Scalia’s stumble? In his zeal to condemn EPA for what the Justice plainly considered to be an outrageous construction of Clean Air Act language in EME Homer, he somehow managed to get completely backwards what EPA had argued in Whitman v. American Trucking Ass’n.  And as the environmental law blogosphere cheerily trumpeted, what made the mistake especially “cringeworthy” was that Scalia himself had written the Court’s opinion in Whitman, so one was hard-pressed to blame just his law clerk.  (On the other hand, here at Harvard Law School, I was very much hoping it was not a Harvard clerk.)

However, what most fascinated me about the entire episode was not Scalia’s initial mistake, but the Court’s procedures for correction. The only reason the public knew about this particular correction was because Justice Scalia’s initial error had been so widely publicized, which was what in turn led me and others to spot the correction and publicize that as well. Otherwise, the correction was made entirely without the Court itself providing any notice. The slip opinion that appeared on the Court’s website was simply different from the one appearing the very next morning.

I was likely more focused on the Court’s process for correction because at that very moment, I had just completed a law review article on the Court’s longstanding, but wholly unappreciated, practice of revising slip opinions in just this kind of clandestine manner. And, not just dissenting opinions as in EME Homer, but also majority opinions of the Court.  The Court has literally always done this sort of thing, although no one had ever called them out on it.

I first became aware of the practice as a lawyer for the U.S. Department of Justice in 1987 when, at EPA’s prompting, we urged the Court to correct a “mistake” in its original slip opinion in International Paper Co. v. Ouellette, a significant Clean Water Act case, because of EPA’s concern that certain language in that opinion mischaracterized the role of citizen suits.  At our client’s urging, my then-boss, the Solicitor General, formally notified the Court of this “formal error” and the Court changed the language, precisely as we recommended, to eliminate the issue. As a result, the language appearing several years later in the bound volume of the U.S. Reports differed substantively from the original slip opinion language. No notice of this change was given, including to any of the parties in the case. The U.S. had participated as an amicus.

When this happened in 1987, I vowed someday to write on the topic.  It took me only about 27 years to do so, and the upshot appeared a few days ago in a lengthy article published in the December 2014 issue of the Harvard Law Review.  The article undertakes a full look at the Court’s practice, extending back to its earliest days until the present. (For example, Chief Justice Roger Taney added 18 pages to his opinion for the Court in Dred Scott v. Sandford in 1857, after the original opinion announcement.)

In my partial defense, not only did the necessary archival research require significant work over an extended time period, but the topic invariably took a backseat to other, seemingly more pressing, topics on which I was engaged.   In all events, the final article is now available here, and includes discussion of EME Homer, International Paper Company, and other environmental cases.