September 01, 2013

The Court’s 2013 Term and environmental law: A whimper, not a bang

Norman A. Dupont

The U.S. Supreme Court typically ends its season with a “bang”—the 2013 Term ended with two widely anticipated decisions addressing voting rights and gay marriage. For environmental, energy, and resources lawyers, however, this Term yielded more of a whimper than a bang. The Court’s narrow decisions in environmental law and water resources left some observers wondering if the rulings really matter to anyone other than specific litigants. But rumblings from at least three members of the Court suggest that the Court’s increasingly critical views of administrative agencies might portend major changes in administrative deference given to the U.S. Environmental Protection Agency (EPA) and other agencies.

Why did the Court take these Clean Water Act cases?

In two decisions this past Term, the Court’s decisions were so narrow as to raise the question of why the Court granted certiorari at all. In Los Angeles County Flood Control District v. Natural Resources Defense Council, 133 S. Ct. 710 (2013), a unanimous Court took barely a month to conclude that the Ninth Circuit incorrectly decided an issue imposing liability upon a flood control district for discharges of water into a concrete-lined channel. But, this was a case where all parties, including the United States as amicus curiae, agreed that the only response to the question posed in the certiorari petition was “No.” Not surprisingly, the Court quickly accepted the unanimous opinion of all parties and held that for purposes of the Clean Water Act, one could not “discharge” or “add any pollutant” to water where water is merely transferred from one portion of a river (or channel) to another portion of the same water body. That the Court’s prior holding from South Florida Water Management District v. Miccosukee Tribe, 541 U.S. 95 (2004), applied to a transfer from a lined portion of the Los Angeles River to an unlined portion of the same river was, in the Court’s opinion, “hardly surprising.” 133 S. Ct. at 713. Indeed, the only “surprising” thing was that the Court took the case in the first instance or did not dismiss the case as improvidently granted.

In Decker v. Northwest Environmental Defense Center, 133 S. Ct. 1326 (2013), consolidated with Georgia-Pacific West v. Northwest Environmental Defense Center, a nearly unanimous Court (8–1) held that the Oregon state forester and various logging companies were not liable for past practices that the Ninth Circuit had held constituted an unpermitted discharge under the Clean Water Act. The holding was limited to past practices because three days before oral argument EPA issued new regulations clarifying that discharges from logging roads do not need permits under the act. As the Court observed about the last-minute EPA regulations, EPA’s intent was to exclude most of the activities carried out by the petitioners. Although concluding that the new regulations did not moot the case because potential liability remained for actions taken prior to the regulatory clarification, the Court exonerated petitioners from such liability based upon an earlier EPA construction of its own regulation. Once again, an environmental lawyer wonders whether this party-specific determination merited the High Court’s intervention.

Water allocation and local agency air cases that turned on narrow facts

Tarrant Regional Water District v. Herrmann, 133 S. Ct. 2120 (2013), a potential water war between Texas and Oklahoma over rights to use Red River water, at least began with the possibility of a major decision. The Court granted certiorari to review a decision that appeared to implicate the “dormant” Commerce Clause but ultimately decided the case on narrow facts. Justice Sotomayor, writing for a unanimous court, held that Oklahoma’s contractual interpretation of the interstate compact controlling water rights to the Red River was the better interpretation. And, regarding Texas’ invocation of the dormant Commerce Clause to preclude Oklahoma state laws limiting water usage, the Court determined that there was no constitutional issue because Texas never challenged Oklahoma’s right to claim additional water. Where Texas did not seek an accounting of any purported “excess” water under the compact, there was no basis to determine that the challenged Oklahoma laws had in fact impacted any “excess” water.

In American Trucking Associations v. City of Los Angeles, 133 S. Ct. 2096 (2013), the Court again took a narrow path. The Port of Los Angeles, under its Clean Truck Program designed to deal with air pollution from idling trucks, required truckers to display certain placards with a phone number for reporting environmental or safety concerns and also to have a plan for off-street parking for trucks not in service. While declaring these two requirements preempted under the Federal Aviation Administration Authorization Act of 1994, the Court declined to examine other more significant Port requirements regarding financial capacities and standards for truck maintenance. In resolving the case, the Court narrowly construed one of its prior precedents, Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 (1954), to conclude that it did not preclude a port (or other facility) owner from limiting access for current violations of local standards. Because the Court found “no basis” to determine that the Port would ever use its sanctions to punish purely past violations, the Court concluded that therefore there was no question of implied preemption under Castle. 133 S. Ct. at 2105.

Two takings cases—A broader view of takings claims but with narrow implications

Arkansas Game & Fish Commission v. United States, 133 S. Ct. 511 (2012), involved a state challenge to periodic but repeated flooding of lumber-bearing riparian property caused by the U.S. Army Corps of Engineers. In a “no good deed goes unpunished” tale, the Corps slowed the rate of released water from a dam it operated to assist farmers with an extended harvest season. The same slow release, however, impacted tree-growing activities of the Arkansas Game and Fish Commission. The Court rejected the government’s argument that the Court’s past precedents could and should be read to imply a “temporary flooding exception” from the takings clause and held that Arkansas could assert a claim for periodic flooding that damaged its real property on a periodic basis. The Court found that “To reject a categorical bar to temporary-flooding takings claims, however, is scarcely to credit all, or even many, such claims. It is of course incumbent on courts to weigh carefully the relevant factors and circumstances in each case, as instructed by our decisions.” 133 S. Ct. at 521. Thus, even at the end of its discussion, the Court warned that its decision was not to be taken as approval for all (or even many) future temporary-flooding cases.

Koontz v. St. Johns River Water Management District, 133 S. Ct. 2586 (2013), is the one “big” takings case, which was resolved in a 5–4 decision that could raise major issues for lawyers dealing with development permits conditioned upon monetary payments to compensate for environmental impacts. Koontz involved an application to develop a property in Florida where wetlands were located. Under Florida law, the applicant sought a permit from the state agency (the District), and the District conditioned approval of the permit upon the applicant’s funding certain off-site work that would enhance other property owned by the District. The developer sued under Florida law seeking just compensation for an “unreasonable exercise” of the state’s police power. In a unanimous portion of the opinion (where the four dissenters joined the five in the majority), the Court held that a takings claim could arise from a “conditional” approval as well as an affirmative denial of a developer’s application. The majority reasoned that any other rule would allow a local agency to game the system by simply phrasing its demands for property as a “conditions precedent to permit approval.” 133 S. Ct. at 2595. Justice Kagan, writing for the four dissenters, agreed as to the majority’s conclusion on this issue, noting that “This means an owner may challenge the denial of a permit on the ground that the government’s condition lacks the ‘nexus’ and ‘rough proportionality’ to the development’s social costs that Nolan and Dolan require.” 133 S. Ct. at 2603. (Kagan, J. with Ginsburg, Breyer & Sotomayor, JJ., dissenting). The Court split 5–4 on the second question—whether a monetary condition (as opposed to a condition requiring the dedication of certain real property) could also trigger a claim that the local agency violated the “nexus” and “rough proportionality” standards that could result in a taking. As to this second question, the majority held that even “monetary extractions” must satisfy the nexus and rough proportionality requirements of the Court’s prior cases to ensure that local agencies could not “evade” the nexus and proportionality standard by simply imposing monetary fees. The dissenters pointed out, however, that the majority’s conclusion threatened to subject “a vast array of land-use regulations, applied daily in States and localities through the country, to heightened constitutional scrutiny.” 133 S. Ct. at 2604. Although the dissenters’ prophecy might be borne out in future land use litigation, the facts in Koontz suggest a more narrow result and even for the majority, the best that Mr. Koontz achieved was a remand back to state court to determine the merits. As the majority made clear: “The Court expresses no view on the merits of petitioner’s claim . . .” 133 S. Ct. at 2603. This bottom line conclusion did not help the developer, who spent many years and lots of money developing a portion of a 14-acre plot of land, just to then have to spend many years and lots of money litigating up to the Supreme Court a case that really did not provide a bottom line but, instead, threw the matter back to a potentially hostile state court to start a merits battle anew.

Enough is enough?

Although the 2013 Term was a somewhat ho-hum year for environmental, energy, and resources lawyers, Justice Scalia provided some excitement with his fiery dissent in the Decker case, marked by the words many non-agency lawyers have longed to express: “Enough is enough.” Justice Scalia, no doubt irritated by EPA’s announcement of a new set of directly applicable rules just three days before oral argument, launched a broadside attack on one of the pillars of administrative law—judicial deference to agency interpretations of its own regulations and, in particular, the Auer deference standard. Justice Scalia attacked “decades” of judicial decisions deferring to an agency’s interpretation of its own regulations, arguing that the prior cases lacked a “persuasive justification.” More importantly, for Justice Scalia the notion that an agency can resolve ambiguities in its own regulations would violate a “fundamental principle of separation of powers—that the power to write a law and the power to interpret it cannot rest in the same hands.” 133 S. Ct. at 1342. The Chief Justice and Justice Alito concurred noting that in a proper case they too would consider this issue. A more detailed discussion of the doctrine of judicial deference to agencies’ administrative interpretations of their own regulations is found at Q. Sorenson, Decker v. NEDC: A new dispute over judicial deference to an agency’s interpretation of its own regulation, Trends (July/August 2013).

The potential impact of Justice Scalia’s dissent in Decker—whether it augurs the end of Auer deference to administrative agencies or whether it will simply be “Yet another Scalia diatribe”—remains for the future. What can be said, however, is that this single dissent (coupled with the related concurrence by the Chief Justice and Justice Alito) provided the only “big bang” from the Court’s 2013 Term for Section of Environment, Energy, and Resources’ lawyers.

Norman A. Dupont

Norman A. Dupont is a shareholder at Richards Watson Gershon, where he practices environmental law and litigation. He is a prior editor-in-chief of Trends.