April 1, 2013
On March 20, 2013, the Supreme Court upheld the Environmental Protection Agency’s (“EPA”) exclusion of ditches, channels, culverts, and other stormwater conveyances associated with logging roads from permitting requirements under the National Pollutant Discharge Elimination System (“NPDES”) program established by the Clean Water Act (“CWA”). The eight-justice majority deferred to EPA’s interpretation of two CWA regulations, although a dissent by Justice Antonin Scalia argued such deference was misplaced and that the conveyances should have been regulated as “point sources” under the Clean Water Act.
The case arose when Northwest Environmental Defense Center (“NEDC”) sued several timber companies and state and local government officials, arguing that discharges of pollutants through stormwater conveyances associated with logging roads were discharges through point sources that required NPDES permits. The defendants – and EPA – argued that the conveyances were in fact exempted from the broad definition of “point source” under their interpretation of two federal regulations. One of those regulations, the Silvicultural Rule, 40 C.F.R. § 122.27(b)(1), defined certain types of conveyances associated with logging and other timber operations as “silvicultural point sources” and excluded others. The other regulation, known as the Industrial Stormwater Rule, 40 C.F.R. § 122.26(b)(14), fleshed out the nexus of two provisions of the CWA: section 1342(p)(1), which exempted discharges “composed entirely of stormwater” from CWA permitting requirements, and section 1342(p)(2)(B), which required NPDES permits for stormwater discharges “associated with industrial activity.”
NEDC argued that stormwater conveyances associated with logging roads were not excluded from the definition of silvicultural point sources under the Silvicultural Rule, and that the Industrial Stormwater Rule – which included “logging” under a list of industrial activities – could only be interpreted to mean that stormwater associated with logging roads was in fact stormwater associated with industrial activity, and thus required a NPDES permit. The trial court agreed with the defendants, but the Court of Appeals for the Ninth Circuit reversed, holding that the stormwater conveyances were in fact point sources discharging stormwater associated with industrial activity and that EPA’s regulations governing the issue were unambiguous – that is, they could not be interpreted in any manner other than the one the Ninth Circuit (and NEDC) chose. This last part of the Ninth Circuit’s holding was of particular importance, as two Supreme Court cases – Auer v. Robbins, 519 U.S. 452 (1997), and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945) – have created a rule that courts will defer to an agency’s interpretation of its own regulations, so long as the interpretation is not plainly erroneous or inconsistent with the regulation itself. This principle, known as “Auer deference”, is binding upon the courts; hence if EPA’s Silvicultural Rule and Industrial Stormwater Rule were ambiguous, and EPA’s interpretation of those rules was not plainly erroneous or inconsistent with the regulations themselves, the Ninth Circuit would be obligated to defer to EPA’s interpretation and rule against NEDC.
The Supreme Court reversed the Ninth Circuit and applied Auer deference: it found that EPA’s regulations were ambiguous, the agency’s interpretation of those regulations was plausible, and that therefore the courts should defer to the agency and hold that discharges from logging roads did not need NPDES permits. In fact, the Court did not even consider for itself the issue of whether the stormwater conveyances associated with logging roads were point sources under the CWA or EPA’s implementing regulations – this despite the fact that the Court at one point said that it found NEDC’s interpretation of EPA’s rules “more plausible” than EPA’s.
A lone dissent by Justice Scalia argued – as the Ninth Circuit had – that NEDC’s interpretation of the rule was in fact the only plausible interpretation, and that the majority’s ruling suggests that it is time to reconsider whether Auer deference is an appropriate rule of law. Chief Justice Roberts wrote a concurring opinion, joined by Justice Alito, suggesting that the Court might revisit Auer deference in the future, but that it would wait for a case in which the issue was clearly presented.
The Supreme Court’s decision in Decker has important implications, not only for the question of whether stormwater discharges require NPDES permits, but for interpretation of environmental regulations more generally; for the foreseeable future, it will remain difficult to challenge an agency’s interpretation of its own regulations.
For more information on stormwater permitting issues, please contact Michael Bogin.
June 26, 2012
On June 21, 2012, the Supreme Court ruled in Southern Union Co. v. United States that the Sixth Amendment’s guarantee of a jury trial – and the corresponding requirement that a jury must decide, beyond a reasonable doubt, all facts leading to criminal liability – applies to criminal fines under RCRA. Because the ruling applies broadly to all criminal fines, it may affect criminal enforcement of other federal and state environmental laws as well.
Southern Union had been convicted by a jury of one count of violating RCRA by knowingly storing liquid mercury without a permit. Violations of RCRA are punishable by fines of up to $50,000 per day of violation. The jury’s verdict form stated that Southern Union had unlawfully stored mercury “on or about September 19, 2002 to October 19, 2004” – a period of 762 days – but the jury was not asked to specify the number of days of violation and did not do so. Hence Southern Union argued that the jury had only necessarily found them guilty of one day’s violation, and that increasing the fine above $50,000 would therefore violate a previous Supreme Court decision, Apprendi v. New Jersey, which held that the Sixth Amendment right to a jury trial in criminal cases prohibits a judge from deciding facts that increase a criminal defendant’s maximum potential sentence.
The rule of Apprendi had generally been applied to prison sentences, but courts had reached differing decisions on whether it applied to criminal fines. The trial court in Southern Union decided that Apprendi applied to criminal fines, but that the jury had effectively found a 762-day violation. It calculated the maximum fine for that violation at $38.1 million, and imposed a $6 million fine and a “community service obligation” of $12 million. The appeals court affirmed the amount of the verdict, but held that Apprendi did not apply to criminal fines.
The Supreme Court reversed, holding that Apprendi applies to criminal fines. Since the jury’s verdict did not specify the number of days of violation, the verdict was limited to a single violation, with a maximum penalty of $50,000. Justices Breyer, Kennedy and Alito dissented from the Court’s decision.
This ruling has potentially broad implications for criminal prosecution of environmental violations, since several other environmental statutes – including the Clean Water Act, the Toxic Substances Control Act, and numerous provisions of the New York Environmental Conservation Law – include criminal fines that are keyed to the number of days of violation. Any prosecution under those statutes will now require that the jury decide, beyond a reasonable doubt, the number days of violation committed by the defendant. Those statutes also provide for civil penalties, including daily fines, which are not covered by the 6th Amendment or affected by the Supreme Court’s ruling.
For further information, contact Dan Riesel or Michael Lesser.
March 22, 2012
In a unanimous decision that could herald major changes in federal and state environmental enforcement, yesterday the Supreme Court upheld a property owner’s right to challenge the basis for a Clean Water Act compliance order alleging unlawful filling of wetlands, before the Environmental Protection Agency (“EPA”) had filed suit to enforce it. Previously, EPA and every Circuit Court to consider the issue had denied pre-enforcement review of such orders, requiring landowners to apply for a fill permit in order to challenge EPA’s assertion of jurisdiction or risk substantial penalties for violating EPA’s directives.
The significance of the Supreme Court’s ruling in Sackett v. EPA is likely to extend beyond the Clean Water Act, however, as administrative agencies frequently issue interim decisions – similar to the EPA’s compliance order in Sackett – while claiming that such actions are either non-final or statutorily precluded from pre-enforcement review. Writing for the Court, Justice Scalia found that the order “has all the hallmarks of … finality” and “there is no reason to think that the Clean Water Act was uniquely designed to enable 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 the EPA’s jurisdiction.” Similar reasoning could apply to other federal environmental statutes as well, aside from the federal Superfund law which is “uniquely designed” in its express preclusion of certain pre-enforcement review.
Sackett arose out of an Idaho couple’s filling of part of a residential lot, which the EPA later determined to be regulated wetlands. EPA issued a compliance order directing the landowners to remove the fill and implement a Restoration Work Plan, and threatening penalties of up to $75,000 per day of non-compliance.
The landowners sued, arguing that EPA had incorrectly classified their property as a wetland and its compliance order was arbitrary and capricious as a result. Both the District Court and the 9th Circuit Court of Appeals dismissed their challenge for lack of jurisdiction, holding that the Clean Water Act precluded pre-enforcement review of compliance orders, and that such limitation did not violate the Due Process Clause because the landowners could still apply for a wetlands fill permit from the U.S. Army Corps of Engineers (“Army Corps”) or ignore the order and challenge EPA’s wetlands determination in defense of an EPA civil enforcement action.
The Supreme Court reversed. As a threshold matter, the Court ruled that the compliance order was “final agency action” subject to challenge under the Administrative Procedure Act (“APA”), because it determined the landowners’ legal obligations and marked EPA’s final determination as to the scope of its jurisdiction. The Court rejected the argument that the landowners were required to apply for and challenge the denial of a wetlands fill permit, instead holding: “The remedy for denial of action that might be sought from one agency does not ordinarily provide an ‘adequate remedy’ for action already taken by another agency.”
Finally, the Court found that the Clean Water Act does not limit the courts’ pre-enforcement jurisdiction, finding no evidence in the statutory text or legislative history to overcome the APA presumption of judicial review. It thus did not determine whether denial of review would have violated the landowners’ Due Process rights, but a concurrence from Justice Alito suggests that he would have upheld the Sacketts’ constitutional argument that without the opportunity for judicial review they would have been deprived of property rights without due process.
In addition to the compliance orders at issue in Sackett, the Supreme Court’s reasoning may expand judicial review over a broad range of interim administrative decisions. For instance, federal and state agencies often issue “jurisdictional determinations” defining the boundaries of regulated wetlands, limiting the use of such property where no alleged violation has yet occurred. Future litigation will likely determine whether such determinations can be challenged under the APA and its state counterparts, as well as whether Clean Air Act Administrative Compliance Orders – which EPA has historically interpreted as not subject to pre-enforcement review – are affected by the Supreme Court’s ruling.
For more information on the Sackett decision and judicial review of agency actions, contact Daniel Riesel.
June 20, 2011
Dealing a blow to climate change tort litigants, the Supreme Court ruled 8-0 on June 20, 2011 that Congressional authorization of greenhouse gas (“GHG”) limits has displaced federal common law suits seeking GHG reductions. The Court’s decision in American Electric Power v. Connecticut reversed the Second Circuit Court of Appeals’ ruling that allowed a group of states, cities and land trusts – including New York State and New York City – to pursue federal public nuisance claims against the nation’s largest electric utility GHG emitters.
Justice Sotomayor, who sat on the Second Circuit panel that initially heard the case, recused herself from the Supreme Court’s deliberations. Although the ruling on displacement of federal common law claims was unanimous, the remaining justices were equally divided over whether federal jurisdiction even existed. Four members of the Court (presumably Justices Alito, Roberts, Thomas and Scalia) would have barred the suit on standing or other jurisdictional grounds, while four others (presumably Justices Kagan, Breyer, Ginsburg and Kennedy) affirmed plaintiffs’ standing. (Slip. Op. at 6.) This split – which upholds the Second Circuit’s finding of the plaintiffs’ standing – dates back to the Supreme Court’s 2007 climate change decision, Massachusetts v. EPA, where by a 5-4 margin the Court affirmed the state petitioners’ standing and upheld EPA authority to regulate GHGs under the Clean Air Act.
Justice Ginsburg – part of the five-member majority in Massachusetts v. EPA – authored the latest climate decision. Without deciding whether federal common law could redress GHG-related claims in the absence of Congressional action, she wrote that “any such claim [in this case] would be displaced by the federal legislation authorizing EPA to regulate carbon-dioxide emissions.” (Slip. Op. at 9.) Rejecting the states’ argument that displacement should not apply until EPA actually regulated the sources in question, which it has yet to do, Ginsburg answered: “The critical point is that Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation is what displaces federal common law.” (Slip. Op. at 12.)
The Supreme Court decision does not necessarily foreclose all future climate change tort suits. The Court did not determine whether federal law has preempted state common law remedies, as this issue was not decided below or briefed before the Supreme Court. (Slip. Op. at 15-16.) That issue was left open for consideration on remand. Moreover, the Court’s displacement-based decision could be revisited should Congress withdraw or otherwise interfere with EPA’s existing climate change authority, as several opponents of EPA regulation have proposed in recent years.
On Thursday, June 30th, the New York City Bar Association’s Environmental Law Committee and International Environmental Law Committee, the Environmental Law Institute, and the Center for Climate Change Law at Columbia Law School are sponsoring a debate on the Supreme Court’s decision at 6:00 p.m. in the Great Hall of the New York City Bar Association. Event information and registration are currently available online.
December 6, 2010
On December 6, the Supreme Court granted review of the climate tort suit Connecticut v. American Electric Power (“AEP”), setting the stage for a major decision on the availability of common law remedies for climate-related harms.
Justice Sonia Sotomayor, who presided over oral arguments in the case while a judge on the Second Circuit, did not participate in the Supreme Court’s consideration of the petition for review. Justice Sotomayor is expected to recuse herself when the case comes before the Court.
The case arises out of a 2004 suit filed by eight states (including New York), three land trusts and New York City against five electric utilities and one of their subsidiaries, alleged to be the “five largest emitters of carbon dioxide in the United States.” The plaintiffs claimed that the power companies’ greenhouse gas (GHG) emissions constituted a public nuisance under federal common law and the common law of 20 states where the defendants operated power plants, and sought an injunction requiring “each defendant to … cap its carbon dioxide emissions and then reduce them by a specified percentage each year ….”
In 2005, United States District Judge Loretta A. Preska dismissed the suit under the political question doctrine, reasoning that the policy determinations required to set and implement a GHG emissions cap were of the type reserved for Congress and the President. Connecticut v. Am. Elec. Power Co., 406 F. Supp. 2d 265, 272 (S.D.N.Y. 2005), vacated and remanded 582 F.3d 309 (2d Cir. 2009). In a footnote, the Court withheld judgment on whether the plaintiffs would have been able to establish standing to bring their suit. Id. at 271, n. 6.
The Second Circuit heard an appeal from the dismissal order in 2006, with then-Circuit Court Sotomayor sitting on the three-judge panel. Following a three-year delay and Sotomayor’s nomination to the Supreme Court, the remaining two judges reversed the District Court and remanded the case for further consideration, ruling that: (a) the suit was not barred by the political question doctrine, (b) the plaintiffs had standing to litigate the dispute, and (c) the common law claims had been not been displaced by EPA’s then-unfinalized proposals to regulate GHGs under the Clean Air Act. Connecticut v. Am. Elec. Power Co., 582 F.3d 309 (2d Cir. 2009).
The defendants petitioned for Supreme Court review of the Second Circuit decision last August. In a move that took many by surprise, the Obama Administration filed a brief in support of the utilities’ petition, arguing that the plaintiffs lacked “prudential standing” and that the finalization of the EPA climate regulations which were pending at the time of the Second Circuit decision had displaced the federal common law relief sought by the states.
The Supreme Court’s decision could set key precedent for other pending climate tort suits and for environmental litigation more broadly. The standing doctrine – which requires litigants to establish a particularized injury caused by the opposing party and redressable by judicial action – is often highly contested in environmental cases, especially those involving harms like global warming which have broad impacts and multiple causes. While the Supreme Court found that a similar set of state plaintiffs met the constitution’s standing requirements in its 2007 climate change decision Massachusetts v. EPA, a rejection of the current suit on “prudential standing” grounds could give lower courts broad discretion to dismiss pending and future climate litigation. If Justice Sotomayor recuses herself, the Court may end up deadlocked between the four Massachusetts v. EPA dissenters and the four remaining justices, a split which would leave the Second Circuit decision on the books but would not set binding precedent for other courts.
The Supreme Court could also conclude that EPA climate regulations finalized since the Second Circuit decision have displaced the common law remedies sought by the plaintiffs. Many of those regulations are currently facing their own legal challenges, however, creating the possibility that the rules central to this displacement argument could themselves be overturned.
Oral arguments and a decision in the Connecticut v. AEP case are expected over the coming year. For more information on pending global warming litigation and EPA’s climate rules, please contact Jeffrey Gracer.
August 26, 2010
In a significant and surprising development, on August 24 the Solicitor General of the United States filed a brief in the Supreme Court asserting that a groundbreaking climate change decision by the Second Circuit Court of Appeals should be vacated and remanded for further consideration.
The brief, submitted on behalf of the Tennessee Valley Authority (“TVA”), a defendant in the Second Circuit case, Connecticut v. American Electric Power Co., 582 F.3d 309 (2d Cir. 2009), forcefully asserts that:
- as a matter of judicial self-restraint (under non-constitutional prudential standing doctrine), federal courts should decline to hear cases alleging that global warming creates a common law nuisance because “courts – when no statute is in place to provide guidance – are simply not well-suited to balance the various interests of, and the burdens to be borne by, the many entities, groups and sectors of the economy that, although not parties to the litigation, would be affected by a grievance that spans the globe,” and
- the predicate for the Second Circuit’s decision, that common law nuisance claims had not been displaced by EPA action, is “no longer true” because “EPA has now taken final action that, as of January 2, 2011, makes carbon dioxide subject to regulation under the [Clean Air] Act.”
In his brief, the Solicitor General requests that the Supreme Court grant the writ of certiorari, vacate the judgment of the Second Circuit, and remand the case for further proceedings to consider these issues.
The Solicitor General’s brief parts ways to a certain extent from arguments advanced by power companies in their petition for Supreme Court review, but nonetheless forcefully advances a number of arguments against using common law nuisance actions to reduce greenhouse gas emissions through case-by-case adjudication. The brief will likely take many in the climate law community by surprise, because the federal government has been perceived recently as an advocate for stronger climate regulation, and the threat of nuisance litigation may help spur legislative and/or regulatory action. One advocate reacted to the filing by stating that he felt like he’d been stabbed in the back. Some of the more powerful statements in the Solicitor General’s brief include:
- The medium that transmits injury to potential plaintiffs is literally the Earth’s atmosphere – making it impossible to consider the sort of focused and more geographically limited effects characteristic of traditional nuisance suits targeted at particular nearby sources of water or air pollution.
- Courts should not “sit as arbiters of scientific and technology-related disputes” and as “de facto regulators of power plants and other sources of pollution.”
- Public nuisance cases involving climate change are ill-suited to judicial resolution because they “present a unique confluence of a vast category of potential plaintiffs who may sue any among a vast category of potential defendants by alleging that their actions affected the entire Earth.”
The state, municipal and land trust plaintiffs can be expected to mount significant arguments against Supreme Court review and in favor of the Second Circuit’s decision. We will provide an update after those filings have been lodged.
- A copy of the brief may be accessed here (pdf)
May 13, 2010
Since President Obama announced his intention to nominate Elena Kagan for the U.S. Supreme Court much attention and speculation has centered around Kagan’s opinions on various issues, including her environmental record. Some have observed that we know “nothing” about her environmental preferences except a preference for executive power, and a notable role in creating the environmental law clinic at Harvard Law School. The clinic, a greening initiative at the school, and the hiring of professor Jody Freeman, a leading environmental law scholar, suggest that Kagan supports environmental protection and climate regulation as a general matter. But it is not quite accurate to say that Kagan, as has been suggested, “hasn’t written or said much at all about climate change or the government’s role in regulating clean air and water or protecting land and species,” because her writing on administrative law provides some clues as to how she would approach EPA’s actions.
In fact, Kagan has publicly taken a significant position on administrative law that, if implemented, could have important practical implications for environmental regulation.
In a lengthy and nuanced 2001 law review article co-authored with David J. Barron,[1] the authors argue for a new rule of law defining when courts should defer to decisions made by administrative agencies. Because much of environmental law is implemented through administrative agencies, Kagan’s view, if adopted by courts, could have far reaching implications.
Kagan’s argument seeks to limit the application of a powerful doctrine of federal administrative law known as “Chevron deference”[2] to only those administrative decisions where the specific decisionmaker appointed by Congress actually makes the decision – and not to the determinations of lower-level decisionmakers in the agency acting pursuant to delegated authority. Chevron is considered a rule of judicial restraint, whereby courts will not second-guess an agency’s reasonable interpretation of ambiguities in a statute it is charged with enforcing, absent convincing circumstances. Notably, it was Justice Stevens, who Kagan would replace on the bench, who authored the opinion in the Chevron case, which is the most cited in Supreme Court history.
The approach suggested in Kagan’s article would mean that generally only the head of an administrative agency, such as the administrator of EPA, would receive Chevron deference in court for their decisions.[3] Often in current practice Congress will direct an agency administrator to make a decision, and this official will in turn delegate authority to lower officials. Decisions made pursuant to delegated authority within the agency would not receive Chevron deference under Kagan’s proposed rule. Kagan’s approach builds on prior caselaw, including United States v. Mead Corp., 533 U.S. 218 (2001), but her primary focus on the identity of the decisionmaker is a significant departure from, and extension of, these prior cases.[4]
This change, if ultimately adopted by the Supreme Court, would be significant, because, as Kagan points out, “the vast majority of agency action [other than formal rulemaking, etc.] is issued under the name of these [lower-level] officials.”[5] Under Kagan’s approach, all of these decisions would be subject to potential second-guessing in court, under a less-deferential standard known as Skidmore deference.[6]
The possible effects of Kagan’s approach could be to:
- Strengthen the presumption that a head administrator’s decision, based on legitimate exercises of their authority, is sound;[7]
- Weaken the authority of lower agency officials, holding them to a higher standard; and
- Increase the administrative workload for higher-level decisionmakers in an agency.
Limiting the application of the Chevron deference doctrine could weaken the authority of most agency administrative personnel. Lower-level decisionmakers could not, under Kagan’s rule, seek to defend their decisions by arguing they are entitled to the special deference given to statutory interpretation, without prior action from a higher-level decisionmaker. This rule would also likely have the beneficial effect of reducing the potential for ad-hoc decisionmaking at lower levels within an agency, when clear interpretations have not been provided from higher officials.
However, if Kagan’s approach were adopted by the Supreme Court, agencies may respond by making all important statutory interpretation decisions through its administrator. Thus, a new regulatory dynamic could emerge whereby an agency, in an effort to secure judicial deference for its top priorities, routes these decisions through their primary decisionmaker for substantive review and adoption.[8]
While much has been said about the lack of a paper trail to discern the type of justice that Kagan would be, she plainly has taken a clear and firm position on a seminal administrative law principle, and suggests a potential to reexamine doctrines of judicial deference to regulation, including environmental regulation. Of course, her article was written from the perspective of a law professor, not a judge, so Kagan’s overall approach to respecting Supreme Court precedent would also play a prominent role in deciding whether she would press her suggested approach once she ascends to the bench.
[1] David J. Barron and Elena Kagan, Chevron’s Nondelegation Doctrine, The Supreme Court Review, Vol. 2001, at 201-265 (2001) (“Barron & Kagan”).
[2] Named after the Supreme Court case of Chevron U.S.A. v. NRDC, 467 U.S. 837 (1984) (“Chevron“).
[3] Congress could name another agency official, but in practice generally agency heads, or the President, are named by statute as the relevant decisionmaker.
[4] According to Kagan, the court in Mead looked to how “general” and “formal” an administrative decision is to evaluate whether Chevron may apply. Barron & Kagan at 234. Kagan argues that “accountable and disciplined policymaking” may be better promoted by focusing on who makes the decision—i.e., the statutory delegee named by Congress—as opposed to how it is made. Id. at 204, 238.
[5] Barron & Kagan at 237.
[6] Barron & Kagan at 236.
[7] Barron & Kagan at 263 (“[a]n agency should not have to conform its decision making to some idealized notion of either general lawmaking or courtlike formality to receive deference”).
[8] Barron & Kagan at 262.
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