Supremes Let Hoopa Stand, Leave Door Open for EPA to Reshape CWA 401

Posted on December 10, 2019 by Rick Glick

On December 9, the Supreme Court denied certiorari to review the D. C. Circuit Court of Appeals ruling in Hoopa Valley Tribe v. FERC.  As reported in this space, in January the D.C. Circuit roundly rejected the common practice of withdrawing and then refiling applications for state water quality certification to avoid the one-year limit for state action under Section 401 of the Clean Water Act. 

Under Section 401, applicants for federal authorizations that could result in a discharge to navigable waters must first obtain certification from the state that applicable water quality standards would be met.  States must act on Section 401 applications within one year, or they are deemed to have waived their authority.  State authority under Section 401 is broad and presents an opportunity to superimpose state policy on federal licenses or permits, an opportunity many states are eager to exercise.

Section 401 is often invoked in the context of licensing and relicensing of hydroelectric power facilities before the Federal Energy Regulatory Commission.  Such facilities and their impacts are complex, and states struggle to complete their analysis within one year.  This has led to states offering applicants the choice of either withdrawing and refiling the application to reset the clock, or having their certification denied.

In the Hoopa case, PacifiCorp entered into a settlement agreement with the states of Oregon and California, and other stakeholders, concerning removal of four dams on the Klamath River.  As part of the settlement, PacifiCorp would annually submit a letter to withdraw its pending Section 401 applications before both states and simultaneously refile the application with no changes.  The D. C. Circuit found this practice a subversion of the plain statutory language limiting state action to one year.

So, with the Supreme Court’s denial of certiorari, the withdrawal/refile stratagem seems less viable.  Where do we go from here?  One answer is that when states need more time they will simply deny Section 401 applications without prejudice, meaning the applicant can reapply.  But that approach could also be seen by the courts as an evasion of the one-year limitation.

Another answer lies with EPA, which recently proposed new rules to constrain state authority under Section 401.  As part of the reform of Section 401 policy, the new rules would adopt time limitations “consistent” with the Hoopa decision:  “The certifying authority is not authorized to request the project proponent to withdraw a certification request or to take any other action for the purpose of modifying or restarting the established reasonable [i.e. no more than one year] period of time.”

Under the new rules, then, one year means one year.  However, the new rules, once adopted, will certainly be challenged.  Two related issues are whether EPA has authority to direct state implementation of Section 401 and, if it does, whether EPA’s interpretation is entitled to Chevron deference.

While all of this plays out, however, the D. C. Circuit’s decision in Hoopa stands, but many questions remain to be answered.  Did Hoopa effectively kill the withdraw/refile workaround?  Or should Hoopa be read narrowly and limited to the unique facts underlying the case?  And how will all this ultimately affect the timing and content of federal permits for major projects?  Stay tuned.

Confidentiality of “Voluntary” Submittals to EPA

Posted on November 25, 2019 by Stephen Gidiere

When is the confidentiality of sensitive information provided at EPA’s request protected?  In Food Marketing Institute v. Argus Leader Media (“FMI”), the Supreme Court addressed the question, but uncertainty remains.

It happens at least once in every television crime drama.  The police bring in for questioning the prime suspect.  After an initial back and forth, it becomes apparent they have no warrant or enough evidence to hold the suspect, who then asks:  “Am I under arrest?”  “No,” the police respond.  “You are free to leave.”  But of course, they never do.  In reality—warrant or not—the suspect is stuck there.

For years, the same drama repeated itself countless times for companies and individuals facing requests from EPA for confidential business information and, understandably, concerned about the further dissemination of sensitive data submitted to EPA via the Freedom of Information Act (“FOIA”).  While FOIA Exemption 4 provides that “trade secrets and commercial or financial information obtained from a person and privileged or confidential” are exempt from further disclosure, determining whether certain information is protected is no simple task, thanks mostly to a web of court decisions interpreting Exemption 4.

For decades, the inquiry began by asking whether the information was submitted to EPA “voluntarily.”  That’s the test the D.C. Circuit established in its 1992 Critical Mass decision.  If the information was submitted voluntarily, then the submitter could protect the information by simply showing it was not the kind of information that it normally releases to the public.  If the information was compelled or required, then the submitter would have to meet a more stringent “competitive harm” test.

And so debates raged over what exactly it meant to provide the information “voluntarily.”  If the submitter objected to EPA’s statutory authority to issue the request, but submitted the information anyway, was that “voluntarily?”  Did EPA have to issue and enforce a subpoena to defeat such a claim?  Or was it enough that EPA possessed authority to do so, even if not exercised?  In reality, like the suspect, the submitted was never really free to leave, right?

But thanks to the Supreme Court’s recent decision FMI, submitters of information to EPA have been liberated from their imaginary chains!  In FMI, the Supreme Court held that the “competitive harm” test is “inconsistent with the terms of statute” and rejected the D.C. Circuit’s “casual disregard of the rules of statutory interpretation” in formulating that test.  In addition, the Court found “no persuasive reason” to distinguish between “voluntary” and “required” submissions.  Instead, the Court held that all submissions should be evaluated for Exemption 4 coverage based on whether the information is “customarily and actually treated as private by its owner.”

So, now submitters are in control, right?  Not so fast.  The Court also found that Exemption 4 may not apply unless the information was “provided to the government under an assurance of privacy,” arguably putting EPA and other agencies back in control.  Should submitters insist on such an assurance before submitting their information and data?  Sounds likes it is time to lawyer up.

What’s Up with Gundy?

Posted on November 14, 2019 by Allan Gates

Last summer the Supreme Court announced its decision in Gundy v. United States.  Conservative advocates had eagerly followed the case, hoping it would restore the nondelegation doctrine to the glory days of 1935, the year Schechter Poultry and Panama Refining Co. v. Ryan used the nondelegation doctrine to cut down a broad swath of New Deal programs.

The decision in Gundy disappointed conservative hopes, but only by the slimmest possible margin.  A plurality of four justices — Justice Kagan joined by Justices Ginsburg, Breyer, and Sotomayor — voted to uphold the statute in question, following the very tolerant nondelegation analysis the Court has used consistently for decades.  Three justices — Justice Gorsuch joined by the Chief Justice and Justice Thomas — voted to invalidate the statute using a new and much more robust nondelegation analysis.  Justice Alito concurred in the judgment reached by the plurality, but only because a short-handed Court did not have a majority of Justices willing to establish a new (or resurrect a very old) nondelegation standard.  His opinion openly invited a new nondelegation challenge once the Court has a full complement of nine justices.  Justice Kavanaugh did not participate in Gundy because he was not on the Court when it heard oral argument.

College fellow Lisa Heinzerling wrote a very perceptive blog post about Gundy last May, three weeks before the decision was announced, noting that the Court was lingering over Gundy longer than any other case that Term.  In retrospect, the timeline is even more interesting than Lisa could have known.  Gundy was argued on the first day of the Term, October 2, 2018.  It was decided at the very end of the Term, June 20, 2019.  Justice Kavanaugh joined the Court on October 6, 2019.  Presumably, Justice Kavanaugh was in the room at every conference in which the Court struggled over how to resolve its 4-4 split over nondelegation in Gundy.  When one considers this timeline, Justice Alito’s open invitation for another nondelegation challenge packs special punch.

The significance of the unusual timeline was not lost on Gundy’s counsel, a New York public defender who had taken Gundy’s case farther than anyone could have expected.  She promptly filed a petition for rehearing.  Rehearing in the Supreme Court is extremely rare, but Gundy’s public defender aptly noted that her request presented one of the few circumstances that has prompted the Court to grant rehearing in the past, namely a short-handed Court that divided 4-4 with a new justice in place who could resolve the split if rehearing were granted.

The timeline of the Court’s consideration of Gundy’s petition for rehearing is also interesting.  The petition was filed on July 11 and scheduled for consideration at the Court’s October 1, 2019 conference.  Following that conference, the Court relisted the petition for consideration at the October 11, 2019 conference.  Since then it has been relisted four more times.  Most recently the petition has been scheduled for consideration at the November 15 conference. 

As the Justices ponder Gundy’s petition for rehearing, it seems likely they know if rehearing were granted, the result would be different the second time around.  Among other things, the Court is probably considering how the general public would react to seeing the Court flip on a do-over of a high profile constitutional case solely because a new Justice joined the Court, particularly when that Justice was confirmed by a bare partisan majority after a bruising confirmation hearing.

It is worth noting that there are petitions for certiorari pending in Paul v. United States and Caldwell v. United States, cases identical to Gundy, that were being held pending the decision in Gundy.  The Court might mitigate the public appearance of a highly political flip by taking one of those cases as the vehicle for addressing nondelegation.

SCOTUS Remands: Miles to Go Before I Sleep?

Posted on October 8, 2019 by Ed Tormey

As attorneys we are fascinated by U.S. Supreme Court cases, the ultimate jurisprudence in our country.  These decisions are analyzed, discussed and debated by legal scholars and practitioners alike.  What is often overlooked is the statement at the end of many of these cases: “we remand the case for further proceedings.”  While we have what we want from the case – Supreme Court precedent – the parties to the case still have a tough row to hoe working back through the federal court system.  It is worth asking what ultimately happened in those cases.  Who won?  After all isn’t the purpose of litigation to pick winners and losers? 

For curiosity’s sake I picked four Supreme Court cases where property owners and the federal government battled over WOTUS wetland jurisdiction issues under the Clean Water Act: Hawkes Co. v. U.S. Army Corps of Engineers, 136 S.Ct. 1807 (2016); Sackett v. Environmental Protection Agency, 566 U.S. 120 (2012); and Rapanos v. United States / Carabell v. U.S. Army Corps of Engineers, 547 U.S. 715 (2006).  In each of these cases, the property owner was successful in having the federal government’s position remanded back to a lower court for further proceedings.  But did they ultimately win?  

The Hawkes case was brought by three peat mining companies who were seeking approval to discharge material onto wetlands located on property that the miners owned and hoped to mine.  The Supreme Court held that the Army Corps of Engineers’ jurisdictional determination was final agency action judicially reviewable under the federal Administrative Procedure Act.  After the Supreme Court decision, the case was sent back to federal district court for consideration of the Army Corps’ jurisdiction over the wetlands.  The district court held that the Clean Water Act was not applicable to the wetlands in question, and granted summary judgment in favor of the miners.  2017 WL 359170 (D. Minn.). The court went further and enjoined the Army Corps from ever exercising jurisdiction over the land.  So here we have a clear win for the property owners. 

In Sackett, the property owners discharged material into what the EPA claimed to be wetlands.  The EPA issued an administrative order requiring the Sacketts to restore and provide access to the site.  The Sacketts asked the EPA for a hearing, but that request was denied.  The Supreme Court remanded the case back after holding that EPA’s administrative order was effectively a “final agency action” and thus reviewable under the Administrative Procedure Act.  After a significant time gap, the district court granted EPA’s motion for summary judgment finding that the property in question was a WOTUS.  The Sacketts have appealed this decision to the Ninth Circuit Court of Appeals.  For now, we have a clear win for the government. 

The holding of Rapanos/Carabell is well-known for its lack of lack of clarity.  I will not attempt to add any more confusion.  What is pertinent here is that the case was remanded back for further proceedings to determine if two sets of Michigan property developers had WOTUS issues related to their planned development.  The first developer, John Rapanos, had backfilled three wetland areas without a permit.  EPA and Rapanos ultimately entered into a consent decree whereby Rapanos did not confirm or deny any violation of law but nevertheless agreed to pay a fine of $150,000.  In addition, Rapanos agreed to construct 100 acres of wetlands to mitigate the 54 acres he had backfilled.  Finally, Rapanos agreed to designate 134.60 acres of land as conservation areas protected under conservation easements.  As a settlement, neither side walked away with everything they wanted.  But I would imagine that the government is chalking this up as a win.

June and Keith Carabell were also litigants against the federal government after the Army Corps denied their request for a permit to develop a wetland adjacent to a drainage ditch.  After remand by the Supreme Court, it appears that the Carabells have not had any further conflict with the Army Corps and the court has closed the case.  But it does appear that the property owners may still want to develop the land.

There you have it.  Four cases with only one clear cut victory for property owners, despite promising holdings from the Supreme Court.  And in most of these cases, the Supreme Court’s involvement in the matter was far from the end of the litigation.  For example, in Carabell the matter is still outstanding thirteen years later.  In Sackett, it’s been seven years since the Supreme Court decision and the parties are still litigating this matter. In Rapanos, it took three years for the parties to settle the matter after the decision. 

So while we enjoy reading a SCOTUS opinion, we should remember that the parties’ involvement in that case is often far from over and far from a clear victory or defeat. 

The Supreme Court’s Most Important Environmental Law Decision in 35 Years

Posted on July 30, 2019 by Robert Brubaker

As our esteemed colleague John Cruden is fond of saying, administrative law is a subset of environmental law.  My vote for the most important Supreme Court environmental law decision in 35 years goes to the administrative law case (involving not environmental rules but the interpretation of a Department of Veterans Affairs rule) handed down on June 26, Kisor v. Wilkie.

I believe Kisor will prove to be the watershed case that that marks a consensus on shifting core principles of administrative law for decades to come.  To me, it continues what I saw as Justice Scalia's project to reform reflexive deference to agency “interpretations” (with the GHG Tailoring Rule case, UARG v. EPA, being a notable milestone, and probably also the thinking behind his final vote, on the extraordinary Clean Power Plan stay).  What are the odds that Auer v. Robbins is the unnamed case that Justice Thomas was referring to in his humorous anecdote at former Justice Scalia’s memorial about “Nino’s” outrage at “one of the worst ever” decisions of the Court (that Nino wrote)?   

Kisor goes a long way toward fulfilling Justice Kennedy's 2018 recommendation in his final opinion (Pereira v. Sessions) to reconsider "the premises that underlie Chevron and how courts have implemented that decision."  And, it further cements Justice Kagan's observation, in her 2015 Scalia Lecture at Harvard that "we're all textualists now."  It clearly articulates and shines a bright and permanent light on the concern about administrative agencies pushing too far at times in combining the power to make, interpret, change, administer, and enforce binding law, with too little independent judicial oversight.

The four separate opinions in Kisor distinguish judicial review of agency interpretations of their own rules (Auer deference) from agency interpretations of statutes (Chevron deference), but there are some inevitable parallels.  Kisor establishes a three-step analysis for agency interpretations of its own rules: 1) is the rule genuinely ambiguous? 2) if so, is the agency’s interpretation of the genuine ambiguity reasonable? and 3) even if an agency interpretation of a genuine ambiguity is reasonable, is it of a “character and context” that justifies deference?  Step 1 is strikingly similar to the pre-Chevron deference analysis under Skidmore (acceptance of an agency’s interpretation is commensurate with its “persuasive power”).  As Justice Kagan put it: “serious application of these tools [of construction, such as text, structure, history] therefore has use when a regulation turns out to be truly ambiguous.  The text, structure, history and so forth at least establish the outer bounds of permissible interpretation.”  Steps two and three of the Kisor framework add specificity and rigor to the judicial inquiry not spelled out in Skidmore.  Importantly, Kisor casts a highly skeptical eye on agency interpretations that circumvent appropriate procedural safeguards, or veer outside the lane of the agency’s expertise, or conflict with a prior agency construction.

It is significant that Kisor is authored by Justice Kagan, and joined by Justices Ginsburg, Breyer (noted for his command of administrative law), and Sotomayor, and joined in part by Chief Justice Roberts.  This is not a majority that can be characterized as anti-administrative state or as sponsors of a partisan Republican or conservative agenda.  Chief Justice Roberts wrote a short concurring opinion, expressing his view that the “distance between the majority and Justice Gorsuch is not as great as it may initially appear” because the majority’s catalog of the “prerequisites for, and limitations on” Auer deference has much in common with Justice Gorsuch’s list of the reasons that a court might be persuaded to adopt an agency’s interpretation.  Justice Gorsuch wrote a 42-page concurring opinion, joined by Justice Thomas and in parts by Justices Kavanaugh and Alito, touring the history of the Court’s deference jurisprudence and expressing a preference for overruling Auer and reverting to Skidmore deference.  Justice Kavanaugh wrote a concurring opinion, joined by Justice Alito, opining that “rigorously applying footnote 9” in Chevron (exhorting courts to “exhaust all the ‘traditional tools’ of construction” before concluding that an agency rule is ambiguous) should lead “in most cases to the same destination” as Justice Kagan’s majority opinion and eliminate any basis “to put a thumb on the scale in favor an agency” interpretation.

The boundaries on administrative powers and discretion are placed by Kisor in the hands of the judiciary, with paramount responsibility to judge conscientiously based on a searching and independent inquiry into the relevant legal and factual circumstances involved, and not based on some dogmatic, oversimplified, or wooden formula.  Deference cabined by a diligent judiciary is better than deference too readily or haphazardly granted or denied.  Justice Kagan's detailed instructions ("we mean it" she wrote) to judges handling administrative interpretation cases may well do more good for the opponents of Auer deference than an outright overruling of Auer.  If the Auer precedent had been overruled, instead of being "restated" and "somewhat expanded on," there would be more uncertainty and inconsistency, over a longer period of time, about exactly what replaces Auer deference.  The implicit call to legislators and administrators to pay better attention to the text and clarity of the laws they write is constructive too.  Good work Justice Kagan.

HEY CONGRESS: PLEASE FIX THIS “JUST PLAIN NUTS” SITUATION

Posted on June 10, 2019 by Dick Stoll

Seth Jaffe’s recent ACOEL post correctly laments that the current judicial review regime for EPA’s Waters of the United States (WOTUS) rule is “just plain nuts.”  He points to two recent (May, 2019) conflicting federal district court decisions, leaving the Obama WOTUS rule in place in one area and remanding it in another.

I similarly complained of a “whole lot of craziness going on” regarding WOTUS judicial review in my 2015 ACOEL post.  I related how inconsistent decisions coming out of various courts were leaving the rule in force in some states, yet throwing it out in other states.  Since then, we have seen even crazier situations with some counties left subject to the rule while other counties in the same State are not!

Here is a recent sad summary from the May 29, 2019 Inside EPA: “Due to a variety of district court decisions, the 2015 rule continues to apply in 23 states and 23 of New Mexico’s 33 counties, but it is blocked in 26 states and in the other 10 New Mexico Counties.”  And to make the patchwork even crazier, the 23 states where the rule remains in place are anything but contiguous – looking at a U.S. map, it appears someone threw darts.

As Rick Glick recently reminded us, we will soon have a brand new WOTUS from the Trump EPA folks.  This will inevitably trigger a slew of new judicial review actions in numerous federal district courts, with another crazy-quilt patch of inconsistent results sure to follow.

Seth appears to blame this situation on the Supreme Court, which ruled last year that initial judicial review of the WOTUS rule must lie in the federal district courts – not, as the federal government had urged, in a U.S. Court of Appeals.  Seth notes that “the Supreme Court had the luxury of ignoring the chaos that would ensue” from its decision.

I blame this situation squarely on Congress, however.  Given the way the Clean Water Act is drafted, I just don’t see how the Supreme Court could have ruled otherwise.  And it is telling that the Court’s opinion was unanimous.  That’s right, a unanimous opinion from this Supreme Court! 

The heart of the problem is straightforward.  Under the federal APA, direct judicial review of final agency rules lies in federal district courts except where Congress has provided that certain types of rules are to be reviewed directly in a Court of Appeals.  As I outlined in my 2015 “craziness” post, Congress has provided that all sorts of national rules under the Clean Air Act, the Resource Conservation and Recovery Act, and many other statutes, shall be directly reviewed by a Court of Appeals.

But in 1972 Congress took a different approach in the Clean Water Act, and specified that only seven types of final EPA actions would be directly reviewed in a Court of Appeals.  As the Supreme Court unanimously ruled last year, the WOTUS rule does not fit within any of these seven types of actions.  As a matter of pure (and unfortunate) logic, this means the district courts have initial jurisdiction over the WOTUS rule.

The federal government argued before the Supreme Court that the policy arguments in favor of direct Court of Appeals review are overwhelming.  The crazy-quilt patchwork that would take years (probably decades) to resolve would be avoided, as federal rules would require challenges filed in various Court of Appeals circuits to be consolidated in one Court. 

I wholly agree with these policy arguments, and I believe it is up to Congress to fix this mess. Just a few words added to the CWA would do it.  For example, Congress could simply provide that final rules defining the extent of “waters of the United States” would be the eighth type of action subject to direct Court of Appeals review.  Or many other formulations with just a few words could do the trick.

I know we live in polarized political times, and it is hard to secure Congressional consensus on major issues like reproductive rights, immigration, etc.   But should it be polarizing to provide direct Court of Appeals review of a critical EPA rule to avoid “just plain nuts” and “whole lot of craziness” inconsistencies throughout the nation?  If it is, I think that is just plain nuts.

Woe is WOTUS

Posted on June 7, 2019 by Seth Jaffe

When the Supreme Court decided that the district courts had jurisdiction over challenges to the Obama administration WOTUS rule, I described it as a victory of the “give me a break” doctrine of statutory interpretation over the “just plain nuts” theory.  I also noted that the Supreme Court had the luxury of ignoring the chaos that would ensue.

Whatever one may think of the merits of the competing theories, two district court decisions in the past week have made clear that it is, indeed, just plain nuts to have these cases before the district courts.

First up, Texas v. EPA, in which Judge George Hanks (an Obama appointee, no less) ruled that EPA and the Corps of Engineers had violated the Administrative Procedure Act in two ways by promulgating the 2015 Rule.  First, while the proposed rule had defined “adjacent waters” based hydrogeological criteria, the final rule used specific numerical distance criteria instead.  The Court concluded that the use of distance criteria was not sufficiently anticipated in the proposed rule and thus EPA violated the APA when it failed to take comment on the new approach.  Judge Hanks also concluded that the 2015 Rule violated the APA because the Agencies relied on what is known as the “Final Connectivity Report,” even though the comment period closed before the Final Connectivity Report was available.  As a result, Judge Hanks remanded the 2015 Rule to the Agencies “for proceedings consistent with this order.”  Of course, the Agencies have already announced that they intend to replace the 2015 Rule, so I think we all know what those proceedings will be.

Next up, Oklahoma v. EPA, in which Judge Claire Eagan (a Bush appointee, no less!), refused to issue a preliminary injunction against the enforcement of the 2015 Rule.  Simply put, Judge Eagan was not persuaded by any of the declarations submitted by the plaintiffs that they would suffer irreparable harm if the 2015 Rule were to remain in effect in Oklahoma.  She described them as “speculative.”  This was particularly troubling because:

the 2015 Rule has been in effect for varying periods of time since this case was filed, and the State can identify no evidence of an aggressive expansion of federal regulation of Oklahoma waters. … This case has been pending for nearly four years, and the Court would have anticipated a showing of substantial, actual harm in support of a motion for preliminary injunction.

We now have a situation where an Obama appointee has remanded the 2015 Rule and a Bush appointee has refused to enjoin its enforcement.  I do get some pleasure from these two judges upsetting preconceived notions in this partisan age about what judges do and how they decide.

Beyond that, however, I have no idea what these cases mean for the enforcement of the 2015 Rule.  I understand that this may all soon be moot, but in the meantime, it’s hard to defend this as a logical system of judicial review of agency action.  Indeed, I might even go so far as to say that it’s just plain nuts.

Where Is Gundy v. United States?

Posted on May 30, 2019 by Lisa Heinzerling

In the first week of October, the justices heard argument in Gundy v. United States, in which a convicted sex offender argues that the Sex Offender Registration and Notification Act (SORNA) violates the nondelegation doctrine by giving the Attorney General untrammeled authority to decide whether the law's registration requirements, backed by criminal penalties, apply at all to offenders convicted before the statute was enacted. Gundy is the only case from the Court's October argument session left to be decided.

Around the time of the oral argument in Gundy, I heard several Court watchers predict that the case would be decided easily, and against Gundy, through a narrowing interpretation that would avoid any serious nondelegation issue. The government had argued that the Attorney General's discretion could be limited by finding that "the text and context" of SORNA convey an instruction to the Attorney General to "specify the applicability of SORNA's registration requirements to pre-Act offenders 'to the maximum extent he finds to be feasible.'" Such guidance from Congress would easily satisfy the Court's existing jurisprudence on nondelegation.

As time passes, however, this seemingly straightforward resolution of Gundy seems ever less probable. One problem for the government is that the limiting principle it asserted – "to the maximum extent he finds to be feasible" – does not appear in the statute. Conservative justices wedded to textualism may be hesitant to read into the statute a limitation the text does not identify.

Moreover, the justices have already passed up a chance to interpret SORNA narrowly to avoid the very challenge they now face. In 2013, in Reynolds v. United States, the Court found that SORNA's registration requirements did not apply to pre-Act offenders until the Attorney General said they did. Chief Justice Roberts, who at oral argument had asked counsel for the government whether delegating this degree of authority would create a nondelegation problem, joined Justice Breyer's majority opinion without comment. By interpreting SORNA to require action from the Attorney General before the law's registration requirements may apply to pre-Act offenders, the Court in Reynolds created the constitutional conflict it now confronts.

Another worrisome sign for the government is that four of the Court's current justices have in recent years expressed constitutional anxieties about Congress's broad delegations of power to administrative agencies. Gundy may give them the chance to revive or even expand a constitutional doctrine that has not been used to invalidate a federal statute since 1935.

If the Court invalidates SORNA as an unconstitutional delegation of legislative authority, the consequences could be gigantic. A reawakened nondelegation doctrine could run like a scythe through the scores of statutes – including, of course, environmental statutes – that grant broad authority to administrative agencies. Operating that destructive instrument would be the least politically accountable of all the branches of government.

The Court could try to limit a decision invalidating SORNA, based on such factors as the criminal context; the worrisome power of the Attorney General as both prosecutor and quasi-legislator; and the backward-looking nature of the application of registration requirements to pre-Act offenders. Even a limited invalidation, however, would mark a significant turning point in administrative law, with destabilizing consequences for federal environmental programs. The longer we wait for the Court's decision, the more likely it is that the justices are grappling with the most fundamental questions raised by this case.

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NOTE: A version of this post was published by ACSblog in September 2018.

Does the Clean Water Act Cover Discharges to or Through Groundwater, Part III?

Posted on March 7, 2019 by David Buente

In both 2016 and 2017, I blogged to discuss a key Clean Water Act (“CWA”) jurisdictional issue:  whether the indirect discharge of pollutants into groundwater which is hydrologically connected to a surface water of the United States is regulated under the CWA.  At the time, the district courts were split on this issue, and the only courts of appeals to rule on this point (a Fifth Circuit opinion from 2001 and a Seventh Circuit opinion from 1994) got the issue right by rejecting CWA or Oil Pollution Act jurisdiction over such discharges.  Since then, the landscape has shifted dramatically.  In 2018 alone, three circuit courts weighed in on this topic in five decisions.  And, as noted on this blog last month, the Supreme Court recently granted a petition for certiorari in one of these cases, meaning that years of confusion will finally be resolved, in some fashion, by 2020. 

The first circuit court to issue an opinion in 2018 was the Ninth Circuit in February 2018, in Hawai’i Wildlife Fund v. County of Maui (the opinion was amended in March 2018).  That case addressed whether treated wastewater effluent which traveled from the County’s underground injection wells, through groundwater, into the nearby Pacific Ocean constituted discharges regulated under the CWA.  The Ninth Circuit held that the wastewater was a covered discharge since it came from a point source (the wells) and was “fairly traceable from the point source,” even if it did not make its way directly from the wells to the ocean. 

The next circuit to weigh in was the Fourth Circuit, in April 2018 in Upstate Forever v. Kinder Morgan Energy Partners, L.P.  This decision held that the movement of gasoline which resulted from a pipeline spill in 2014 and was allegedly still seeping through groundwater approximately 1000 feet into surface waters constituted a CWA discharge, since it originated from a point source (the pipeline rupture) and there was evidence of a “direct hydrological connection between [the] ground water and navigable waters….”  This decision in fact expands the CWA even further than the Maui opinion, because it held that the CWA covered discharges when the original release of pollutants from the point source has ceased, but the pollutants continue to travel diffusely through groundwater.  In a September 2018 decision, a different Fourth Circuit panel in Sierra Club v. Virginia Electric & Power Company acknowledged the Upstate Forever panel’s adoption of the direct hydrological connection theory but rejected liability on the grounds that the coal ash landfills and basins at issue were not point sources.   

Finally, on the same day in September 2018, the Sixth Circuit issued decisions in Kentucky Waterways Alliance v. Kentucky Utilities Company and in Tennessee Clean Water Network v. Tennessee Valley Authority.  Both cases dealt with alleged discharges through groundwater from coal ash basins to navigable waterways.  Contrary to the Fourth and Ninth Circuits (and in line with the earlier circuit court case law), the Sixth Circuit held that groundwater was not a point source and that these discharges are not regulated since they must be directly from the point source to a water of the United States.

Petitions for writs of certiorari before the Supreme Court have proceeded on similar timeframes in the Maui and Upstate Forever cases.  In each case, the petitioners filed their petitions in August 2018.  The Maui petition addressed the indirect discharge via groundwater issue and a fair notice question.  The Upstate Forever petition raised both the indirect discharge through groundwater issue and whether an ongoing violation for purposes of a CWA citizen suit occurs when the point source ceased discharging but pollutants are still reaching navigable waters via groundwater.  In December 2018, the Supreme Court, signaling interest in the cases, requested the Solicitor General to file an amicus brief in both cases by January 4, 2019, expressing the view of the United States.  In that amicus brief, the United States urged the Supreme Court only to accept the Maui case, and only on the groundwater discharge issue.  The United States’ rationale was that Maui presented the groundwater discharge issue more squarely, since the ongoing violation issue in Upstate Forever was a threshold concern.  The brief separately observed that EPA was planning to take action shortly in response to its February 2018 request for comment on the groundwater discharge issue. 

On February 19, 2019, the Supreme Court, adhering to the United States’ request, accepted only the Maui petition and only on the groundwater discharge question.  The Maui case will likely be the Supreme Court’s most seminal CWA decision in over a decade, since the split decision in Rapanos v. United States, 547 U.S. 715 (2006).  Industry should track this case closely, as its resolution will have an effect on everything from federal and citizen suit enforcement to National Pollutant Discharge Elimination System permit requirements.   

Supreme Court to Visit Maui

Posted on February 21, 2019 by Patrick A. Parenteau

As anticipated in an earlier post, the Supreme Court has granted review in County of Maui, Hawaii v. Hawai'i Wildlife Fund limited to the question “Whether the Clean Water Act (CWA) requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater.” The Court took no action on a related petition in Kinder Morgan Energy Partners, L.P. v. Upstate Forever involving groundwater contamination from a ruptured gas pipeline. The Court will presumably hold that petition pending the outcome in the Maui case.

As described in the Ninth Circuit decision, the County of Maui owns and operates four wells at a wastewater treatment plant that processes four million gallons of sewage per day. Treated wastewater is then injected via the County’s wells into the groundwater which flows directly into the Pacific Ocean. Approximately one out of every seven gallons of groundwater entering the ocean near the plant is comprised of effluent from the wells.

Both the District Court and the Ninth Circuit ruled that the wells were point sources, and that the injection of treated wastewater into the groundwater constituted a discharge subject to the permitting requirements of the CWA. Specifically, the Ninth Circuit held that “an indirect discharge from a point source to a navigable water suffices for CWA liability to attach.” The Ninth Circuit adopted a “fairly traceable” test for determining when a discharge via groundwater to navigable water would require a permit. As discussed in my earlier post, the court relied in part on Justice Scalia’s plurality opinion in Rapanosin support of this conclusion.

The Ninth Circuit expressly left for another day “the task of determining when, if ever, the connection between a point source and a navigable water is too tenuous to support liability under the CWA.”  

The Solicitor General supported the grant of certiorari in Maui (but not in Kinder Morgan) to resolve the split in the circuit courts on whether the CWA covers activities that cause pollutants to be conveyed through groundwater to waters of the United States.

Conventional wisdom suggests the Supreme Court is likely to reverse the Ninth Circuit. However, once the Justices (and their clerks) have had the opportunity to dig into the record, they may find that CWA regulation actually makes sense in this situation. Some of the key facts are these.

  • Maui originally considered an ocean outfall but opted for the less obvious injection wells located within a quarter mile of the shore.
  • A 2013 EPA dye tracer study confirmed that the treated effluent enters the Pacific Ocean at Kahekili Beach - - a popular surfing and snorkeling beach.
  • Monitoring has shown that nutrients, fecal coliform, and other pollutants in the effluent are impacting the reef and exposing the public to potential health risks at Kahekili. EPA studies have confirmed that reef productivity declined 44% over the time the system has been operating, and fecal coliform counts regularly exceed safe levels.
  • EPA Region 9 advised Maui it would need to obtain a discharge permit and communicated that to the Hawaii Department of Health, which failed to take any action. EPA was acting under its 40+ year-old policy that discharges through ground water with a “direct and immediate” hydrologic connection to surface waters (i.e., the ocean) require a permit.

EPA is now reviewing this policy and may well change its position, either by adopting an interpretive rule or issuing guidance in some form. The Agency will no doubt try to complete this process before the Court hears argument in the fall. Should EPA adopt an interpretation that groundwater can never be the “conduit” for conveying pollutants for point sources to waters of the United States, the next question will be whether that new interpretation is entitled to any deference. Given the skepticism that several Justices have shown towards a mechanical application of Chevron, it will be interesting to see how this all “sugars off” as we say in Vermont. 

We may soon get an answer to the question that the 9th Circuit ducked, namely when does the connection between a point source and a navigable water become too tenuous to support CWA liability.

Froggie Goes A Courtin’ in the Home of the Hapless Toad

Posted on August 29, 2018 by Allan Gates

John Roberts’ first opinion as a judge on the D.C. Circuit was a dissent from denial of rehearing en banc in an Endangered Species Act case.  His opinion famously referred to the endangered species at issue as “a hapless toad that, for reasons of its own, lives its entire life in California[.]”  Two years later critics pointed to this flippant reference to species extinction as a reason to oppose his nomination to be Chief Justice.

On October 1st the Supreme Court will begin a new term.  The first case scheduled for oral argument is another ESA case involving another amphibian, the dusky gopher frog.  In this case, private landowners challenge the government’s designation of 1,500 acres of pine forest not occupied by the frog as critical habitat essential for survival of the species.

The ESA clearly authorizes the designation of private land as critical habitat; and it expressly authorizes the designation of land not occupied by an endangered species if the Secretary finds the area to be essential for the species’ survival.  The fight over habitat for the dusky gopher frog in the Supreme Court involves two relatively straightforward issues of statutory construction:

  1. Whether land not occupied by an endangered species may be designated as critical habitat if the land currently lacks one or more of the physical or biological features essential to conservation of the species; and
  2. Whether the agency’s decision not to exercise its discretionary authority to exclude petitioner’s land from critical habitat on grounds of economic impact is committed to agency discretion.

A district judge appointed by President Reagan and generally regarded as staunchly conservative, upheld the critical habitat designation, but did so with clear distaste for the result:

“The Court has little doubt that what the government has done is remarkably intrusive and has all the hallmarks of government insensitivity to private property.  The troubling question is whether the law authorizes such action and whether the government has acted within the law.  Reluctantly, the Court answers yes to both questions.”

The Fifth Circuit, widely regarded as one of the most conservative federal circuits, affirmed the district court, albeit with one judge on the panel dissenting and six judges dissenting from denial of rehearing en banc.

The Supreme Court’s decision to hear the case does not bode well for the dusky gopher frog.  As the saying goes, “The Supreme Court does not grant cert. to affirm.”  The broad picture of this case is familiar.  A small, seemingly insignificant creature is allegedly blocking the common sense path of economic development and prosperity. The arguments challenging the habitat designation are long on drama regarding supposed economic impact, despite the fact the habitat designation only affects government actions, and in the absence of a federal nexus, does nothing to change the landowners’ private use of their property.  And, the arguments against the habitat designation are very short on concern over the survival of what the landowners dub as the “phantom frog.”

So far, the sturdy structure of the ESA has generally withstood this type of full frontal assault, from the snail darter to the Delhi Sands flower-loving fly, to the hapless toad, and now to the dusky gopher frog.  If the dusky gopher frog wins, it will not be the first time the Supreme Court took an ESA case that seemed at first blush to be an easy reversal only to find itself ultimately affirming a decision protecting the species.  That was exactly what happened with the snail darter in TVA v. Hill.  And, as was the case in TVA v. Hill, a victory for the dusky gopher frog in the Supreme Court will undoubtedly fuel arguments that Congress should amend the ESA.

Brett Kavanaugh’s recent nomination to succeed Justice Kennedy has prompted speculation that he would vote against the dusky gopher frog based on his opinion in the D.C. Circuit vacating the critical habitat designation for the San Diego fairy brine shrimp and his critical view of Chevron deference.  Such speculation may be overstated.  It is not clear the Senate will vote on Judge Kavanaugh’s confirmation in time for him to participate in the decision regarding the dusky gopher frog.  And, in any event, the record supporting the habitat designation for the frog is far more robust than that involving the fairy brine shrimp.  In this case, conservative principles supporting strict adherence to statutory language may carry the day for the dusky gopher frog.

Takings Math for Dummies: When 1+1=1

Posted on March 7, 2018 by Mary K. Ryan

One benefit of preparing an annual review of last year’s important cases, as I just did for MCLE, is that you may have missed a significant case when it came out. That’s why I’m writing now about Murr v. Wisconsin, 137 S. Ct. 1645, decided on June 5, 2017. Murr, which incorporates the mathematical conundrum in the title, expands the Supreme Court’s regulatory takings jurisprudence by asking a preliminary question—what parcel or parcels of land are at issue? The Court held that this question must be answered before reaching the ad hoc case-by-case analysis established by Penn Central Transportation Co. v. New York City, Lucas v. South Carolina Coastal Council, and Palazzolo v. Rhode Island which examines the economic impact of the challenged regulation, the investment-backed expectations of the landowner, and the character of the government action.

Murr involved the owners of two adjacent waterfront properties on the St. Croix River in Wisconsin which, given their location, were subject to numerous regulations, including a one acre buildable lot requirement. The properties lost their original grandfathered protection from that regulation when they were put into common ownership. The county denied requests for variances and the owners filed a regulatory takings claim, which they lost at the state level.

In a 5-3 opinion written by Justice Kennedy, the Court developed a new, three-factor test for determining the “denominator” in the regulatory takings analysis—in other words, the unit of property against which a court must assess the effects of the challenged governmental action. First, courts must assess the treatment of the land under state and local law, in particular how state law bounds and divides the land. Second, courts must look at the physical characteristics of the landowner’s property, e.g., whether the land is subject to further environmental or land use regulations due to the nature of the land or adjacent natural resources. Third, courts must consider the value of the property under the challenged regulation. Under this test, there was no regulatory taking. The Court rejected the bright line tests offered by the state (state law controls) and the landowners (lot lines define the relevant parcel) as too easily subject to manipulation. The Court defined the relevant parcel as a single combined lot based on several factors:  (1) that merger as a result of common ownership is a reasonable and usual zoning and land use control and there was a voluntary merger; (2) riverside property is often subject to restrictions on development; and (3) treatment as one lot did not substantially diminish the value of the land without the regulation.    

Murr may be an example where the “no harm, no foul” rule led to the right result. But generally speaking, the government’s defenses just got better, and the landowner’s burden tougher, in regulatory takings cases. And while there were three dissenters (Justice Gorsuch did not participate in the case), without two more votes, Murr will be the law for the foreseeable future.

One Brief Shining Moment of WOTUS Clarity

Posted on January 24, 2018 by Rick Glick

In a rare moment of clarity in the benighted history of the Waters of the United States or WOTUS rule, a unanimous Supreme Court declared that jurisdiction to review the WOTUS rule lies in the District Courts and not the Courts of Appeal.  The immediate effect of the January 22 ruling in National Assn. of Manufacturers v. Dept. of Defense  is to lift the nationwide stay of the rule imposed by the Sixth Circuit—which held that the appellate courts have original jurisdiction over the rule—thus reigniting a lot of dormant trial court challenges. 

The Clean Water Act applies to “navigable” waters, which is defined simply as “waters of the United States, including the territorial seas.”  EPA and the Army Corps of Engineers administer the CWA, and have tried without much success to refine this vague definition.  The latest attempt is the WOTUS rule, adopted by the Obama EPA in 2015.  The issue in National Assn. of Manufacturers is not whether that attempt hits the mark, but in which court should challenges be heard.

As noted in Bob Brubaker’s take on this case, the Court looked to the plain language of the statute, and to context when further explanation is needed.   The CWA extends original jurisdiction to the Circuits for EPA “approving or promulgating any effluent limitation or other limitation.”  The government argued that the WOTUS rule falls within “any . . . other limitation.”  The Supreme Court rejected that argument, holding that such other limitations must be related to effluent limitations, and the WOTUS rule just establishes a definition that would apply generally to the scope of CWA.  The Court also rejected applicability of another CWA basis for Circuit Court jurisdiction advanced by the government, “issuing or denying any [NPDES] permit,” concluding simply that the WOTUS rule is not the same as permit issuance.

So what difference does it make if a trial judge or an appellate judge makes the initial decision on WOTUS?  WOTUS has drawn a multitude of challenges in both the District Courts and Courts of Appeals, including some in which plaintiffs filed in both courts to be on the safe side.  The case will end up at the Supreme Court anyway, right? 

True, but consider that the Sixth Circuit consolidated all the challenges in other Circuits and issued a decision that applied across the country.  The district court litigation has not been consolidated, and some cases have come to different conclusions, with many remaining to be litigated.  So, we can expect years of litigation in many different courts, followed by years of appeals heard by the Circuits, and finally to the Supreme Court . . . again.

But wait, Scott Pruitt’s EPA has initiated a rulemaking process to rescind and replace the WOTUS rule, so wouldn’t that moot the pending challenges to the rule?  It would not.  EPA has announced it is delaying the effective date of the 2015 rule for two more years to allow the Agency to develop its replacement.  But, in the meantime, the 2015 WOTUS rule remains in place.

The practical result is that the current round of cases in the District Courts will continue, followed -- if not accompanied -- by a new round of litigation challenging the proposed change of effective date, and the proposed rescission and replacement rules.  Safe to say there will be no certainty on the definition of WOTUS and the scope of Clean Water Act jurisdiction for many years to come.

Oh, Well, Some Folks Don’t Like Oysters, Anyway….

Posted on December 12, 2017 by James I. Palmer, Jr.

As a kid growing up in the hills of North Mississippi, I was introduced to oysters by my maternal Grandmother in Biloxi, down on our Coast.  I wasn’t particularly impressed with the slimy mollusks then, but my tastes changed over many years and I now enjoy them, especially in po’boys and on the half shell.

For the longest, I have considered oysters from Apalachicola Bay, Florida, to be the best along the Gulf Coast.  Large, plump, salty, everything an oyster fan likes.  But, today the oyster industry in the Bay has declined dramatically, and many Floridians believe that the ultimate fate of this historic mainstay of the economy of the area will soon be determined by the Justices of the United States Supreme Court.

The “Tri-State Water Wars” among Alabama, Georgia, and Florida are now several decades long, and never more intense.  Two interstate compacts, covering six river basins in the three states, failed to yield an “equitable apportionment” of the flows from these basins, and expired by their terms.  Follow-on negotiations fared no better.  So, in 2013 Florida sued Georgia in the Original Jurisdiction of the Supreme Court, but didn’t join Alabama.  The case was tried before the Special Master from October 31, 2016 through December 1, 2016.

At the core of Florida’s claims is the ever-growing demand for water in Georgia, principally (but not only) in metropolitan Atlanta.  Even the definition of “metropolitan Atlanta” differs among websites, so the data showing the population trends over the last 50 years also differs somewhat, but the numbers I will use for general reference show that the population of metropolitan Atlanta was 3,317,000 in 1990, 4,548,000 in 2000, 5,034,000 in 2004, and the 2010 U.S. Census recorded 5,800,000.  I’ve seen one projection of 8,000,000 by 2020.  Using these statistics purely for the sake of argument, the population of metropolitan Atlanta in 2020 – just over two years away – could have grown by over 240% in 30 years.  

Too, production agriculture in southwestern Georgia, heavily dependent upon surface water and groundwater supplies for irrigation, has also burgeoned during this same time period.  Groundwater levels in the Flint River basin have declined significantly because of what one of Georgia’s own witnesses at trial attributed to essentially lax regulatory management at the State level.  No surprise, these declines in groundwater availability have ratcheted up pressures on surface water resources in the Flint River watershed.

Thus, given these twin realities of seemingly insatiable urban and agricultural demands for water in Georgia, it’s no wonder that folks down in the Apalachicola Bay area staunchly believe that this is the principal cause of declining freshwater flows into the Bay, and, inevitably, will lead to the irrecoverable loss of the Bay ecosystem, itself.

The Special Master rendered his Report on February 14, 2017, and it was filed on March 20, 2017.  The Special Master found, as a matter of fact and law, that Florida had failed to prove its case by clear and convincing evidence, and recommended that the Supreme Court deny Florida’s claims.

Florida filed its Exceptions to the Report of the Special Master on May 31, 2017.  Georgia filed its Reply opposing Florida’s objections on July 31, 2017, and Florida filed its Sur-reply on August 30, 2017.  Amicus briefs supporting Georgia’s position have been filed by the United States (on behalf of the Corps of Engineers), the State of Colorado, and the Atlanta Regional Commission, et al.  The case has been set for oral argument before the Supreme Court on Monday, January 8, 2018.

Of the several issues before the Court, the two major ones are the “clear and convincing evidence”  burden of proof standard the Special Master imposed upon Florida and the general issue of “redressability,” which turns on the obligation of Florida to prove both substantial (some would say “irreparable”) injury and that the relief sought (a consumption cap on Georgia water use, primarily in the Flint River Basin) would, in fact, provide additional flows into Apalachicola Bay sufficient to save the ecosystem and the oyster industry.  Understandably, Georgia strongly rejects Florida’s contentions.

The cases relied upon by Georgia and the amici are, in the main, decisions in litigation between and among western states whose organic water resources laws are grounded in the doctrine of prior appropriation.  Here, the dispute is between two states whose organic water resources laws arise under the common law doctrine of riparianism (or, in modern times, regulated riparianism).  Interestingly, because the Supreme Court departed from pure riparian principles in early cases involving interstate fights over the water needs of huge urban areas like New York City, Florida contends that it is appropriate in this case for the Court to apply traditional equitable principles in addition to equitable apportionment principles that have evolved over many years of case law.  While not dismissing the argument out of hand, I think it could be a real challenge for Florida to make it stick.

Ultimately, the Court will either accept the Report and recommendations of the Special Master and dismiss Florida’s case outright, or decline to accept the Report and remand the case to the Special Master for further proceedings.  Given the deference the Supreme Court generally accords Special Masters in Original Jurisdiction cases, I think Florida, figuratively, now has to push a very heavy anchor chain up a very steep hill to stay in the fight it started.  If the State fails, locals say that the loss will likely result in a knockout blow to the oyster industry in Apalachicola Bay, which is already on the ropes.  Maybe, yes.  Maybe, no.  Maybe, not yet.  Time will tell.  Oh, well, some folks don’t like oysters, anyway….

Is Neil Gorsuch Poised To Obliterate Deference – or only Chevron/Auer Deference?

Posted on March 13, 2017 by Christopher R. Schraff

Recently, our ACOEL colleague Bob Percival penned an article in which he notes that Supreme Court nominee Judge Neil Gorsuch is a leading critic of Chevron (and Auer) deference , and suggests that Judge Gorsuch’s separation of powers concerns (and those of other opponents of Chevron/Auer deference) “…are really attacks on the constitutionality of the larger administrative state.”  But if Judge Gorsuch is confirmed and his views command a majority of the Court, is his skepticism about the viability of deference to agency interpretations likely to lead to a collapse of the modern administrative state?  Is Judge Gorsuch really little more than a judicial extension of Steve Bannon’s and the Alt-Right’s campaign to deconstruct the administrative state and roll back the federal government to a size more appropriate to 19th Century America?  I suspect not—and here’s why.

A reading of Judge Gorsuch’s opinions reveals a jurist who is not only an engaging writer, but who digs deep into the facts and details of each case before  applying the law in an appeal before him.  In one of the few environmental cases which Judge Gorsuch has authored, United States v. Magnesium Corp. of America, Judge Gorsuch duly applied Auer deference to uphold EPA’s interpretation of a RCRA regulation, observing that an agency’s interpretation of its own ambiguous regulation was entitled to deference. 

But in other contexts, Judge Gorsuch denied Chevron deference to agency decisions that directly implicate (some might say trample upon) individual liberties and rights.  Here’s an example:  In 2014, the 10th Circuit took up the case of Andrew Yellowbear, who had bludgeoned to death his 22-month-old-daughter, and was serving a life term in a Wyoming prison.  Mr. Yellowbear brought suit against the prison for refusing to allow him access to a sweat lodge to practice his Arapahoe religion, which he claimed violated his rights under the federal Religious Land Use and Institutionalized Persons Act of 2000.  Now one might think that Judge Gorsuch, conservative fellow that he appears to be on criminal matters, would give short shrift to Mr. Yellowbear’s claims.  But that is not what happened.  

In Yellowbear v. Lampert, Judge Gorsuch, writing for a unanimous court, struck down the prison’s efforts (and arguments) to deny Mr. Yellowbear his religious practice.  In rejecting the prison’s poorly documented claims of a “compelling governmental interest,” Judge Gorsuch wrote:  “the deference this court must extend the experience and expertise of prison administrators does not extend so far that prison officials may declare a compelling governmental interest by fiat.”

Now that decision hardly seems to presage the dismantling of the administrative state, but does suggest the administrative state had better show it deserves deference. 

Judge Gorsuch’s concurring opinion in Guitierrez-Brizuela v. Lynch offers a window into his views on the limits and shortcomings of Chevron deference.  Among other things, Judge Gorsuch suggests that the Chevron/Auer doctrines already may have no applicability with respect to agency interpretations of criminal statutes—of which we have many in the environmental law field.  Even more to the point, Judge Gorsuch questions how Chevron/Auer deference  squares with the judicial review provisions of the Administrative Procedure Act, 5 U.S.C. (“…the reviewing court shall decide all questions of law, interpret constitutional and statutory provisions and determine the meaning or applicability of the terms of an agency action.”).  Judge Gorsuch questions whether Chevron, in effect, overrides the APA.

But don’t simply focus on Judge Gorsuch’s concurring opinion:  look to the facts of the case, and to an earlier Gorsuch opinion. Guitierrez-Brizuela involved an attempt by the Board of Immigration Appeals (BIA) to retroactively apply a decision of the 10th Circuit deferring to BIA’s reconciliation of two statutory provisions of immigration law.  In Padilla-Caldera v. Holder, the 10th Circuit had upheld BIA’s interpretation of the immigration law on Chevron deference grounds, notwithstanding that BIA’s interpretation effectively overruled an earlier 10th Circuit decision interpreting those same laws.   

But in Guitierrez-Brizuela, BIA sought to accord retroactive application of the Padilla-Caldera decision in order to deport an illegal alien.  Judge Gorsuch, writing for a unanimous 10th Circuit panel, concluded that the BIA cannot use Chevron deference principles to retroactively impose their interpretation of immigration law upon an illegal alien to deport him—not the kind of result which would endear Judge Gorsuch to the Alt-Right.

What resonates in Judge Gorsuch’s opinions is a reluctance to unconditionally embrace Chevron/Auer deference in order to allow administrative agencies to trample on individual liberties and rights.  Is that such a bad thing?  And Judge Gorsuch is not calling for an end to deference.  He acknowledges that some form of deference should be given to administrative agencies, as he notes in Guitierrez-Brizuela:  “Of course, courts could and would consult agency views and apply the agency’s interpretation when it accords with the best reading of a statute.” 

But more fundamentally, will a reconsideration—and even a repudiation—of Chevron/Auer deference signal the end of the modern administrative state?  The administrative state survived and grew comfortably for more than fifty years before Chevron was decided. 

My guess is that, if the Supreme Court revisits the question of Chevron/Auer deference when (and if) Justice Gorsuch joins the Court, and if his views carry the day, we are likely to return to Skidmore deference, or to a flexible rule of deference of the kind outlined in United States v. Mead Corp, here the degree of deference varies according to an agency’s care, consistency, formality, expertness and the persuasiveness of the agency’s position.

That hardly signals the end of the administrative state as we know it.

Justice Scalia and Environmental Law, Part II: Takings and Administrative Law

Posted on June 9, 2016 by James May

Justice Scalia’s jurisprudence had a huge impact on environmental law. Part I focused on standing. This short piece addresses his impact on takings and Administrative Law.

Takings

Modern takings jurisprudence is also Justice Scalia’s handiwork. He, more than any other Justice, was inclined to find government regulation – particularly that which serves environmental ends – “goes too far” and thus constitutes a regulatory taking warranting just compensation. In Lucas v. South Carolina Coastal Council, he held for the majority that a state law designed to protect barrier islands constituted a compensable taking when it had the effect of depriving a developer of what he considered to be all economic use. And in Nollan v. California Coastal Commission, Justice Scalia—again for the majority—held that a requirement that a shorefront property owner maintain a public pathway to a public beach was “illogical” and constituted a compensable taking.

Justice Scalia’s jurisprudence makes policymakers think twice about regulating in the environmental realm.

Deference to Agency Rulemaking

Justice Scalia was consistently skeptical of environmentally-protective interpretations by federal agencies, especially those by EPA. In Rapanos v. EPA, writing for a plurality of the Supreme Court, he rejected the Army Corps of Engineers’ interpretation of the Clean Water Act’s term “navigable waters” to include temporally-saturated areas, instead insisting on a direct surface water connection to a water that is “navigable in fact.” Likewise, he joined the Court’s decision in SWANCC v. Army Corps of Engineers, holding that Congress did not intend to permit the Corps and EPA to regulate dredging and filling of isolated ponds and wetlands that are not adjacent to otherwise navigable waters, under what was known as the “migratory bird rule.” Most recently, in Michigan v. EPA, he wrote for the majority to invalidate EPA’s mercury and toxics rule, finding it unreasonable “to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.” And shortly before he died, he joined four other justices to order a stay of EPA’s Clean Power Plan.

Yet Scalia was more inclined to defer to EPA interpretations that were less environment-minded. For instance, in Entergy v. Riverkeeper, he wrote on behalf of the majority to uphold EPA’s use of cost-benefit analysis in assessing “best technology available” for minimizing the adverse environmental effects of cooling water intake structures under section 316(b) of the Clean Water Act. Likewise, he dissented in EPA’s favor in Massachusetts v. EPA, voting to uphold the agency’s decision at that point that greenhouse gases are not “air pollutants” under the Clean Air Act.

Early during his tenure on the bench, however, Justice Scalia seemed more inclined to endorse the edict from Chevron U.S.A., Inc. v. NRDC, to defer to “reasonable” statutory interpretations from mission-oriented agencies. For example, in EDF v. Chicago, Scalia on behalf of the Court upheld EPA’s interpretation under the Resource Conservation and Recovery Act that “solid waste” includes ash from municipal waste incinerators. And then in dissent he decried the result in U.S. v. Mead Corp., where the Court strayed from the Chevron standard by granting only “power to persuade” as opposed to “reasonableness” deference to agency interpretations that are not the result of a deliberative process.

Last, Whitman v. American Trucking stands as a bit of an outlier to Scalia’s seeming antipathy to EPA’s reach, in which his majority opinion upheld as an “intelligible principle” under the non-delegation doctrine Congress having EPA establish national ambient air quality standards that are “requisite” to protect human health and the environment.

Justice Scalia’s views on deference to rulemaking gave agencies – except for EPA – more leeway. For further reading on these subjects, please see Principles of Constitutional Environmental Law.

Justice Scalia and Environmental Law, Part I: Standing

Posted on June 9, 2016 by James May

Justice Scalia’s jurisprudence had a huge impact on environmental law. Part I focuses on standing. Part II (a forthcoming post) then turns to takings and Administrative Law.

Standing 

Justice Scalia’s most lasting legacy on environmental law is how his jurisprudence makes it more difficult for environmental plaintiffs to demonstrate constitutional standing under Article III of the Constitution. Since at least Sierra Club v. Morton, plaintiffs needed to show that they possessed an “injury in fact,” which could be commercial, economic, aesthetic, or environmental. Raising the bar, Scalia stated that plaintiffs must demonstrate at an “irreducible minimum”: (1) imminent and concrete “injury-in-fact” that is (2) fairly “traceable” to the defendant’s actions, and (3) “redressible” by the court. Applying this standard, Scalia found standing lacking in Lujan v. National Wildlife Federation, because using land “in the vicinity of” affected federal land wasn’t sufficient, and in Lujan v. Defenders of Wildlife, due to the absence of what has come to be known as “tickets in hand” to return to the places of alleged injury. Dissenting in Defenders of Wildlife, Justice Blackmun, bemoaned Scalia’s new requirements as “a slash-and-burn expedition through the law of environmental standing.”

Justice Scalia then dissented in Friends of the Earth v. Laidlaw Environmental Services v. EPA, when the majority held that it is injury to the person, and not the environment, that matters in standing analysis. There, he complained that the majority had proceeded “to marry private wrong with public remedy in a union that violates traditional principles of federal standing—thereby permitting law enforcement to be placed in the hands of private individuals. I dissent from all of this.”

Justice Scalia was skeptical that the effects of climate change could ever support standing, even for states. Speaking from his dissent in Massachusetts v. EPA, Scalia would have found that petitioning states lacked standing to challenge the U.S. Environmental Protection Agency’s (EPA’s) failure to institute rulemaking to regulate greenhouse gas emissions from stationary sources, thereby rejecting that states are entitled to “special solicitude” in standing analysis.

Justice Scalia was more inclined to find standing when litigants challenged environmentally-protective agency action. For example, writing for a plurality, he found that alleged injury to economic interests to water districts and to corporate ranching and agricultural interests was sufficient injury in Bennett v. Spear. Moreover, he held that homeowners possessed both standing and a cause of action to challenge an EPA-issued but not enforced administrative compliance order in Sackett v. EPA.

Concur or not, Justice Scalia’s standing test took hold and stands firm. For further reading on this subject, please see Principles of Constitutional Environmental Law.

The Supreme Court Doesn’t Think Much of Paris in the Springtime

Posted on February 17, 2016 by William Session

            For us gray hairs, the phrase used to be “Dateline”, now it’s “Tweetline” . . .  Flash!. . . President Obama @POTUS “. . . Addressing climate change takes all of us, especially the private sector going all-in on clean energy worldwide."

            Apparently “all of us” didn’t include five Supreme Court Justices, led by its Chief Justice, John Roberts.  Indeed, it was SCOTUS going “all out” for climate change.  As in, going “all out” to frustrate one of the EPA’s and President Obama’s signature efforts to respond to and act upon climate change challenges to the global environment. What EPA and the President got (by a split decision) instead was a stay that some have characterized as the quashing of the biggest environmental regulatory change in United States history. 

            That body blow to regulatory appropriation of the climate change debate was instigated by the challenge of virtually every major coal power company to the EPA’s issuance of binding emission reduction requirements for existing domestic power plants.  The coal, fired power industry argued that EPA’s action was “draconian” and would cause the “shutting down or curtailing generation from existing plants and shifting that generation to new sources”.  That, of course, was the precise intent of POTUS and other signatories of the Paris climate change accord last year.

            SCOTUS’s stay was unprecedented and terse.  Not a word of explanation about why the stay was issued.  The proponents of the stay were modestly baffled.  In the words of Basin Power’s legislative rep, Dale Niezwaag, the decision came as a surprise . . . "The supreme court has never issued a stay on a rule that hasn't been ruled on by a lower court.  So this is precedent, setting from our point.  When we put it in, we figured it was going to be a long shot, so we were very surprised that the Supreme Court ruled in our favor”. 

            There are takeaways galore.  However, two are most intriguing to me.  Was this unprecedented stay an unwarranted and thinly disguised, reach into the realm of executive branch constitutional authority?  Second, did the Supreme Court simply muscle its way into a social and scientific debate that begs any legal or factual question of “irreparable harm” to either the power industry or the citizenry of the republic.  In short, was the stay an expression of SCOTUS climate change denial?

The stay makes EPA’s rules unenforceable and will undoubtedly limit their intended goal of achieving emissions cuts to (ostensibly) slow global warming.  More importantly, the ruling, in effect, invalidated POTUS’s pledge on climate agreement made in Paris last spring.  How should one construe the interjection of the Supreme Court into a case that would have, under normal circumstances, been taken up by the Court of Appeals for the District of Columbia Circuit as soon as early 2017?  Was a signal being sent to that court to heed the antipathy some believe certain SCOTUS justices have towards the global warming debate altogether? 

            In keeping with my “newsflash” metaphor, since I started writing this post, the country mourns the unexpected passing of Justice Antonin Scalia.  The lack of a tie breaker justice for the foreseeable future could throw the question of the right of the EPA to forge ahead on the POTUS’s climate change agenda into months or years of limbo.  Will the D.C. Circuit’s decision answer the question next spring?  Will certain senators relent and vote in a replacement for Justice Scalia this year?  Will the eight remaining justices do something other than call things a tie until they have a full complement on the bench? 

            Stay tuned to this blogspot for more breaking news.

Supreme Court Puts Clean Power Plan on Hold, but Clean Agriculture Can Move Forward

Posted on February 12, 2016 by Peter Lehner

The Supreme Court's unexplained stay of the clean power plan was "one of the most environmentally harmful judicial actions of all time," writes Michael Gerrard of Columbia Law School in a recent, excellent blog. Rather than venting outrage, Gerrard quickly moves on to explain that the Clean Power Plan isn’t the only way to cut carbon pollution.

Ramping up efforts like fuel efficiency standards for cars and trucks, and building efficiency standards, he notes, will also help reduce carbon pollution. Gerrard mentions a couple of points about agriculture, but often, this sector is overlooked when it comes to climate solutions. It’s worth taking a closer look at some of the opportunities to reduce climate pollution from our food system.

Food waste is the second largest component of most landfills. As it rots, it releases methane, a potent greenhouse gas. A recent report by the UN Conference on Trade and Development estimates that 2 percent to 4 percent of all manmade climate pollution arises simply from food rotting in landfills.

Keeping food waste out of landfills can help reduce methane pollution. Massachusetts, California, Connecticut, Rhode Island, Vermont, and some cities have enacted laws to manage organic waste disposal in landfills. The idea is to create incentives to reduce food waste and divert it to other purposes, such as animal feed or composting. Instead of being thrown away and becoming a source of pollution, this “waste” can be put to good use. Landfill gas collection systems can be further incentivized. And the nascent effort to reduce food waste from businesses and households can be significantly ramped up.

Another major source of greenhouse gases is the over application of fertilizer. Excess nitrogen fertilizer causes two big problems. The first is water pollution. Nitrogen that isn’t taken up by crops runs off farms and enters larger waterways, where it stimulates the growth of algae and creates “dead zones” deprived of oxygen. The second, and less frequently discussed issue, is the volatilization of nitrogen into nitrous oxide, a greenhouse gas about 300 times more potent than CO2.  The IPCC estimates that 12 percent of all non-CO2 greenhouse gas emissions come from synthetic fertilizer application.  

A number of techniques can reduce these emissions while also providing a cost benefit to farmers. Farm policies could encourage practices like cover cropping, which reduces the need for fertilizer by making soils more rich and fertile. Crop rotations can do the same, yet current crop insurance programs actually discourage the use of these practices. Precision application technologies for fertilizers are getting ever better, but their uptake on farms is slow.

Manure from animals, and the "enteric emissions" from cattle (more commonly thought of as belching) are two more significant sources of climate pollution. Enteric fermentation alone may account for as much as 40 percent of all non-CO2 greenhouse gas emissions, according to the IPCC. Changes in diet might help with these emissions, but this is an area that needs more research.

Some of the emissions from manure can be captured if manure lagoons were covered and better managed. As it stands, these pits are only slightly regulated and are major sources of water pollution sources as well as odor nuisances. An even better practice is to raise cows on rotating pastures, where their waste can enhance soils and help store carbon. And, of course, if Americans did shift to a diet lower in red meat, as per the recommendation of the Dietary Guidelines Advisory Committee, we could further reduce climate pollution from cattle.

Agriculture is one of our nation's most important economic sectors, and is especially vulnerable to the extreme weather impacts of climate change. Its product -- food -- is critical not only for our economy, but is an integral and uniquely personal part of our everyday lives. When we think about how to address climate change, it makes sense to think about food and agriculture. The food we choose to produce, and how we produce it, use it, and dispose of it, all have an impact on climate pollution—and therefore have the potential to become climate solutions. 

Unprecedented Program Leads To Unprecedented Response

Posted on February 11, 2016 by Andrea Field

I am a terrible predictor of what cases the Supreme Court will hear and what the Court will decide on those matters it chooses to hear.  For example, I wrongly predicted that the Supreme Court would never consider reviewing the D.C. Circuit’s decisions in cases involving other recent EPA regulations, but the Supreme Court chose to hear those cases, which led to its decisions in Utility Air Regulatory Group v. EPA and Michigan v. EPAAnd if asked to guess whether the Court would issue a stay of EPA’s Clean Power Plan under section 111(d) of the Clean Air Act, I might well have said that the odds were greatly against that happening – despite the merits of the arguments being raised by those seeking the stay. 

Perhaps, though, my poor predictive abilities are the result of my looking at each case in isolation instead of looking at them in combination and considering whether the Supreme Court’s February 9, 2016 stay decision is an outgrowth of the combined knowledge gained by the Court in its recent reviews of those other Clean Air Act cases.  Specifically, as pointed out by State Petitioners in their briefs in support of a stay of the Clean Power Plan (see here and here,) EPA has touted its Plan as being one that will completely transform the way energy is created and delivered in this country even though – argued State Petitioners – the plain statutory language (of Clean Air Act section 111(d)) does not authorize such Agency action, and the approach of the Clean Power Plan is at odds with EPA’s 45-year history of implementing section 111(d).  Maybe such claims struck a chord with the Court, which – in UARG – told EPA that the Agency cannot make “decisions of vast ‘economic and political significance’” under a long-extant statute, like the Clean Air Act, without “clear congressional authorization.” 

And then there was Michigan, where the Court determined that EPA had proceeded unlawfully in adopting another extensive and expensive Clean Air Act regulatory program.  State Petitioners in the Clean Power Plan litigation made sure that the Court was aware that by the time the Court issued its decision in Michigan – a case where the underlying rule was not stayed during the pendency of litigation – the affected parties had spent billions of dollars to meet the terms of the underlying, un-stayed rule.  In other words, justice delayed in Michigan was justice denied.

None of this is to say what the Court will or will not do if and when it reviews arguments on the lawfulness of the Clean Power Plan.  I make no predictions on that.  But I believe the Court acted appropriately in calling for the completion of litigation before requiring affected parties to make the massive, unprecedented, costly, and transformative changes to the energy industry that the Clean Power Plan demands.       

The Supreme Court Stay of the Clean Power Plan and the Paris Pledges

Posted on February 10, 2016 by Michael Gerrard

The Supreme Court’s unprecedented, unexpected and unexplained action yesterday staying implementation of the Clean Power Plan is one of the most environmentally harmful judicial actions of all time. However, the damage it does to the United States’ ability to meet its Paris pledge is less than it might seem. But that is not because the Clean Power Plan wasn’t important; it is because the Plan didn’t do nearly enough.

The Intended Nationally Determined Contribution (INDC) that the U.S. submitted in advance of COP21 reiterated the prior goal of achieving a 17% reduction below 2005 levels in 2020, and conveyed a new pledge of a 26% to 28% reduction by 2025. The INDC cited the Clean Power Plan as one of the actions being taken to meet those pledges, but did not present any numbers on what actions would lead to what reductions.

More detail was presented in the Second Biennial Report of the United States under the Framework Convention on Climate Change, submitted by the Department of State in January 2016. As the report makes clear, the Clean Power Plan’s actual emissions reductions do not begin until 2022, and thus have no bearing on achievement of the 2020 goal. From 2020 to 2025, the Report expects carbon dioxide emissions to fall from 5,409 to 5,305 MtCO2e (Table 4) with implementation of the Clean Power Plan, energy efficiency standards, fuel economy standards, and numerous other measures that are already on the books, and down to 5,094 in 2030.  (The report does not separately specify how much of this is due to the Clean Power Plan alone; the numbers result from a complex modeling exercise that included numerous interrelated actions.)

That is not nearly enough of a reduction to meet the 26% target (much less the 28% aspiration) for 2025.  Instead, a host of additional measures are also needed. The Biennial Report lists these as possibilities to reduce carbon dioxide emissions:

  • Full implementation of Phase II heavy-duty vehicle fuel economy standards.
  • Finalization of proposed, new, or updated appliance and equipment efficiency standards.
  • Increased efficiency of new and existing residential and commercial buildings.
  • Reduction in industrial energy demand in several subsectors.
  • Additional state actions in the electricity sector.
  • Enhanced federal programs that lead to greater efficiencies in industry and transportation, including greater biofuel deployment and commercial aviation efficiency.

To address other greenhouse gases, the Biennial Report lists these possible added measures:

  • An amendment (already in the works) to the Montreal Protocol on Substances that Deplete the Ozone Layer to phase down production and consumption of hydrofluorocarbons.
  • Measures to reduce methane emissions from landfills, coalmining, agriculture, and oil and gas systems.
  • More efficient nutrient application techniques that reduce nitrous oxide emissions

Even all of the above is not enough to meet the 2025 goals. The Biennial Report puts heavy reliance on the land-use sink – on the ability of forests and other vegetated areas to absorb a considerable amount of the greenhouse gases that are emitted. And even with an “optimistic sink” scenario and a number of other favorable assumptions, the key summary graph in the Biennial Report (Figure 6) shows a reduction of about 27% in 2025.

In sum, while the Clean Power Plan is the biggest game in town in terms of achieving the Paris goals, it is by no means the only game in town. While we express our justifiable fury over the Supreme Court’s action, we need to bear in mind that there are many other things that the U.S. must do in the next several years to control greenhouse gas emissions.

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?

Deference to EPA on the Wane?

Posted on July 13, 2015 by Renee Cipriano

The Supreme Court’s latest opinion in an environmental rule challenge, this to the Mercury and Air Toxics Standard, or MATS, raises more questions than it answers.  As discussed on this blog site (see here, here and here,) the Court in Michigan v. EPA held that EPA had not reasonably considered costs when determining to regulate power plant mercury emissions.  EPA must factor cost into its initial determination that it is “appropriate and necessary” to regulate hazardous pollutants from power plants.  The Court passed no judgment on whether EPA can meet that burden. 

At the heart of the issue was Congress’ acknowledgement that the 1990 Clean Air Act Amendments would subject power plants to numerous controls to reduce sulfur dioxide, nitrogen oxides, and particulates.  Section 112 of the Act requires EPA to regulate power plants if “regulation is appropriate and necessary after considering the results of the study.”  Congress further acknowledged that these measures also might reduce hazardous air pollutants, and that no one knew at the time whether additional controls would be required to protect human health from air toxics emitted by power plants. 

To determine that, EPA was required to conduct a study.  In 1998, EPA’s study concluded that regulation of coal and oil fired power plants was “appropriate and necessary.”  EPA reaffirmed this finding in 2012, noting that mercury and other hazardous air pollutants were “appropriate” to regulate because they posed a risk to human health and the environment and that controls were available to reduce the pollutants.  EPA found that it was “necessary” to regulate because other pollutant emission limits and requirements did not eliminate the risks. 

The Court, in a 5-4 decision written by Justice Scalia, analyzed EPA’s action through the Chevron deference standard, determining that “EPA strayed far beyond those bounds when it read §7412(n)(1) to mean that it could ignore cost when deciding whether to regulate power plants.”  Ultimately, the Court held that “Chevron allows agencies to choose among competing reasonable interpretations of a statute; it does not license interpretive gerrymanders under which an agency keeps parts of statutory context it likes while throwing away parts it does not.”  Id. at 9.

The Court went on to reject EPA’s contention that it need not factor cost into its initial determination to regulate because the agency must take cost into consideration when later determining how much to regulate.  The Court colorfully remarked that:  “By EPA’s logic, someone could decide whether it is ‘appropriate’ to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system.” The Court’s strong language cautioning EPA to use “reasoned decision making” and not “gerrymander” statutory requirements should give EPA pause as it is set to promulgate greenhouse gas reduction measures for power plants in its Clean Power Plan this summer.  Numerous comments filed in the so-called Clean Power Plan rulemaking docket have charged EPA with overstepping its statutory boundaries, and the Court seems to be signaling its disfavor of such action.

Since the decision, speculation as to whether and how EPA will fix MATS has been rampant. 

  • Will EPA abandon MATS completely, requesting vacatur?  Not likely.  In public remarks and testimony before a Congressional subcommittee during the week of July 6, Administrator Gina McCarthy cited the health benefits already achieved by the rule, indicating the agency would not back down.
  • Can EPA fix the rule based on the current administrative record?  Some believe that EPA can simply re-jigger its existing analysis and logic, fronting the cost issue in the “appropriate and necessary” finding, perhaps calling this a “technical amendment” to the rule. 
  • Will EPA seek a stay of the existing rule while it recalculates costs and re-proposes the rule?  Because the rule went into effect in April 2015, companies already have installed a range of controls from activated carbon injection to installation of flue gas desulfurization equipment.  Each type of control has costs and benefits, as well as impact on other pollutants.  Many of these controls may remain operational to comply with other CAA requirements; therefore, a stay may have disproportionate impacts on industry members as some cease to operate controls and others continue to operate them.
  • But could EPA’s re-proposal result in even more stringent emission limits?   Absolutely.  Would EPA be wise to lower the standards further?  Given the cost and disruption caused by MATS so far, absolutely not.
  • And how will any of these possibilities affect the “already regulated” argument that will be used to attack the Clean Power Plan?  Section 111(d), the basis for the Clean Power Plan, prohibits regulation (whether of the source or the pollutant remains to be decided) if a Section 112 standard exists.  So if MATS goes away, does the legal basis for the Clean Power Plan become stronger?

How the ongoing, never-ending EPA effort to achieve hazardous pollutant reductions from power plants will play out remains to be seen.  The Supreme Court’s close reading of the directives contained in the statute, coupled with its references to balanced costs and benefits, leaves the impression that any rule with wide reach better be well-reasoned and justified.  No doubt EPA is taking notice. 

WILL POWER PLANT HAZARDOUS AIR POLLUTION SURVIVE MICHIGAN V. EPA?

Posted on July 8, 2015 by Leslie Carothers

Twenty-five years in the making, the Environmental Protection Agency’s regulations to reduce emissions of mercury and other hazardous air pollutants (HAPS) from power plants recently ran aground in the Supreme Court.  As discussed in this blog site last week, (see here and here,) the majority opinion by Justice Scalia in Michigan v. EPA held that EPA erred in failing to consider cost when it made the threshold statutory finding that listing of power plants for regulation was “appropriate” under a special provision for power plants in the hazardous pollutant sections of the Clean Air Act. 

The dissenters, in an opinion by Justice Kagan, disagreed that costs had to be considered at the initial listing stage.  She contended that costs were properly addressed when specific standards and requirements were developed for various source categories in the course of the normal rulemaking process, and emphasized that a final cost-benefit analysis was conducted to evaluate and support the decisions made. 

Although Justice Scalia was at pains to say that the Court was not specifying the details of the cost analysis required, the majority was plainly troubled by the agency’s findings that the benefits of the mercury controls alone were valued at an annual value of only  $4-6 million compared to an annual cost of $9.6 billion.  However, mercury was not the only HAP controlled by the rule, and the co-benefits of incidental removal of other toxic fine particulate pollutants were estimated at $36-90 billion in EPA’s cost-benefit analysis.  Those big numbers reflect robust scientific evidence of the incidence of illness and death caused by particulate emissions. 

The majority did not address whether such co-benefits could be relied upon in a determination that the cost of the power plant rules was “appropriate.“ The D.C. Circuit will have to define the terms of EPA’s redo of the cost analysis.  We are likely to hear more about counting of co-benefits in cost benefit comparisons, an issue also presented in EPA’s proposed Clean Power Rule for power plant greenhouse gas emissions.  Reducing carbon emissions also reduces particulate emissions even more, and the monetized benefits of that effect exceed the harder to estimate benefits achieved in slowing global warming. 

Public Health and Environmental Consequences of the Decision

Despite the Supreme Court’s action, commentators on both sides of the issues agree that major benefits of the regulation will not be lost.  A trade publication estimated in May that half of the power plants subject to the rule have already installed the required emission control technology to meet multiple EPA air pollution rules, in addition to the hazardous pollutant rule.   Another 200 plants given an extra year to comply are installing and testing equipment.  Several dozen plants accounting for only 1% of industry capacity reportedly are the remaining uncontrolled sources that will continue to operate without controls or plans to install them until the Michigan case is concluded. 

Many companies that have complied with the rules are doubtless disappointed to see the perennial “free riders” get another reprieve; some intervened on EPA’s side in the Michigan case to complain about unfair competition from uncontrolled plants.  But the majority of power plants, to their credit, are already delivering the public health and environmental benefits of the rule for the community.  

Citizens unhappy with the continuing failure to regulate old coal plants may wish to support the divestment movement, recently joined by Georgetown University, in dumping coal company securities.  The day Michigan v. EPA was decided, the stock of three major coal producers rose about 10%.  If the price jump holds, now looks like a good time to sell.