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Supreme Court review

John R Jacus


  • Summarizes selected environmental, energy, and natural resources cases decided by the U.S. Supreme Court during its October 2021 Term.
  • Discusses the cases Mississippi v. Tennessee and West Virginia v. EPA.
Supreme Court review
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This issue of Trends’ Supreme Court Review provides a summary of selected environmental, energy, and natural resources cases decided by the U.S. Supreme Court (Court) during its October 2021 Term. The impact of the two decisions summarized here is quite significant, with broad implications for state water supplies and the regulation of greenhouse gas emissions.

Interstate water rights litigation

Mississippi v. Tennessee, 142 S. Ct. 31 (2021)

The Court unanimously held that the waters of the Middle Claiborne Aquifer underlying eight states are subject to the judicial remedy of equitable apportionment of the shared groundwater resource. In so doing, the Court rejected Mississippi’s claim of sovereign ownership of all water beneath Mississippi state lands and sustained Tennessee’s objection to the special master’s recommendation to grant Mississippi leave to amend its complaint to seek equitable apportionment. The Court overruled in part and sustained in part exceptions to the special master’s recommendation and dismissed the case.

Mississippi and Tennessee have waged a 17-yearlong battle over groundwater pumping from the Middle Claiborne Aquifer. Memphis, Tennessee, employs numerous wells to withdraw this groundwater, some of which are located near the Mississippi border and ultimately extract groundwater from beneath Mississippi. In 2005, Mississippi sued Memphis in federal district court, seeking damages for the city’s pumping of groundwater under state common-law tort theories. The Northern District of Mississippi concluded, and the U.S. Court of Appeals for the Fifth Circuit affirmed, that the aquifer is an interstate water resource subject to equitable apportionment. Because the Supreme Court has original jurisdiction over equitable apportionment actions between the states, and because Tennessee is a necessary party to such an action, the Court dismissed the case without prejudice. Mississippi petitioned for certiorari and simultaneously moved the Court for leave to file a bill of complaint. The Court denied certiorari review and denied Mississippi leave to amend, though without prejudice to refile.

In 2014, Mississippi again sought leave from the Court to file a bill of complaint against Tennessee and Memphis, disavowing any equitable apportionment claim. The Court granted leave and referred the case to a special master. Following years of discovery and a five-day evidentiary hearing, the special master issued a report in November 2020, concluding that the Middle Claiborne Aquifer is an interstate water resource. The special master reasoned that 1. geographic variability in hydrogeological characteristics does not justify treating subunits of the aquifer separately; 2. Tennessee’s pumping draws water from beneath Mississippi, demonstrating a hydrologic connection; 3. groundwater naturally flows toward Tennessee, albeit slowly; and 4. the Wolf River is hydrologically connected to the aquifer and flows between the states. The special master then explained that equitable apportionment provides the appropriate remedy for allocating the interstate groundwater resource and that, as part of the federal common law, equitable apportionment also displaces Mississippi’s state law claims. He recommended the Court dismiss Mississippi’s complaint with leave to file an amended complaint based on an equitable-apportionment theory.

Both Mississippi and Tennessee filed exceptions to the special master’s report. Tennessee’s exception was simple: the special master erred in recommending the Court grant Mississippi leave to seek equitable apportionment because, in Tennessee’s view, granting leave to amend would allow Mississippi to sidestep the stringent pleading standards of equitable apportionment. Tennessee argued that Mississippi had not alleged any actual harm, and expressly disavowed a claim for equitable apportionment in its 2014 complaint.

Mississippi filed numerous exceptions to the special master’s report, chief among them its claim of sovereignty “over groundwater located in Mississippi—a natural resource found in the soils of Mississippi and not shared like the surface water flowing through interstate rivers and streams.” In contrast to interstate rivers, Mississippi argued that it retains plenary control over Middle Claiborne Aquifer groundwater as a resource conveyed in trust to the state upon its admission to the Union in 1817. Mississippi also argued that, as another matter of state sovereignty, Tennessee has no right to capture groundwater outside of its territorial boundaries, citing Tarrant Regional Water District v. Herrmann, 569 U.S. 614 (2013). In Tarrant, the Court addressed Texas’s claim that it could cross Oklahoma’s border to access water to which it was entitled under the interstate Red River Compact. The Court in Tarrant rejected Texas’s claim, holding that the Compact did “not create any cross-border rights in signatory states” and explaining that “as sovereign entities in our federal system, the States possess an ‘absolute right to all their navigable waters and the soils under them for their own common use.’” The special master viewed Tarrant as addressing physical intrusion by signatory states, but not standing for the principle asserted by Mississippi. In support, the special master cited Idaho ex rel. Evans v. Oregon, 462 U.S. 1017 (1983), in which the Court rejected the notion that a state may “preserve solely for its own inhabitants natural resources located within its borders.”

Writing for a unanimous court, Chief Justice Roberts observed that, while the Court had not previously addressed whether equitable apportionment applies to interstate aquifers, apportionment of the Middle Claiborne Aquifer is sufficiently similar to past applications of the doctrine to warrant the same treatment for several reasons. First, the aquifer’s multistate character seems beyond dispute. Additionally, the aquifer contains groundwater that flows naturally between the states, and although that flow is slower than surface streams, the Court has apportioned surface water from streams and rivers that periodically run dry. And Tennessee’s pumping clearly has effects on groundwater beneath Mississippi, creating a cone of depression in the water table beneath Mississippi. For all these reasons, the Court held that the judicial remedy of equitable apportionment applies to the waters of the Middle Claiborne Aquifer.

The Court specifically rejected Mississippi’s claim of sovereign ownership of the groundwater beneath it, observing that the Court has “consistently denied” the proposition that a state may exercise exclusive ownership or control of interstate “waters flowing within her boundaries,” citing Hinderlider v. La Plata River & Cherry Creek Ditch Co., 304 U.S. 92, 102. The Court further observed that Mississippi’s ownership approach would allow an upstream state to completely cut off flow to a downstream one, a result contrary to the Court’s equitable apportionment jurisprudence. Finally, the Court agreed with the special master that its decision in Tarrant does not support Mississippi’s position, because Tarrant involved compact-signatory states, so there was no basis for the application of equitable apportionment. 

Clean Air Act: Regulation of greenhouse gases

West Virginia v. EPA, No. 20-1530, 20-1531, 20-1778, 20-1780, 2022 U.S. LEXIS 3268, 2022 WL 2347278 (June 30, 2022)

A 6-3 majority of the Court held that the Environmental Protection Agency’s (EPA’s) 2015 Clean Power Plan rule to regulate carbon dioxide emissions under Clean Air Act section 111(d), though withdrawn and replaced by a Trump administration rule that was itself challenged and then vacated by a lower court, still presented a justiciable controversy on petitions for certiorari by affected states. The Court then ruled that EPA had exceeded its congressional authority in attempting generation-shifting requirements at the power grid level in the Clean Power Plan rule as the best system of emissions reduction (BSER). The Court further held that the Clean Power Plan ran afoul of the “major questions doctrine,” announced for the first time by the Court in this decision, finding more explicit authorization by Congress was needed to effect such a fundamental transformation of the U.S. energy sector.

EPA promulgated the Clean Power Plan rule in 2015 to address carbon dioxide emissions from existing coal and natural gas fired power plants as part of then-President Obama’s Climate Action Plan. The agency based the plan on its authority under Clean Air Act section 111(d) with respect to regulation of pollutants from existing sources not already subject to regulation under other major Clean Air Act programs. Under that provision, EPA sets the emissions limit that sources will need to meet by determining the BSER that has been “adequately demonstrated.” The Clean Power Plan did this at the individual facility level by requiring “heat rate improvements,” but also went beyond that to require “generation shifting” across multiple power plants in each state from coal to natural gas fired plants, and from both of those types of plants to renewable energy resources consisting primarily of solar and wind generation facilities to deliver more significant emission reductions.

The Clean Power Plan was vigorously challenged and defended by various interested parties in the D.C. Circuit Court of Appeals. That court upheld the plan, but the U.S. Supreme Court stayed it in late 2016. Shortly thereafter, with the change in presidential administration in 2017, EPA developed a replacement rule, the Affordable Clean Energy rule (ACE Rule) promulgated in 2019. EPA took the position in the ACE Rule that the Clean Power Plan had exceeded EPA’s statutory authority, and therefore limited its determination of BSER to a combination of equipment upgrades and operating practices to effect heat rate improvements at individual power plants, but no generation shifting at the grid level. EPA repealed the Clean Power Plan in its ACE Rule. The ACE Rule was met with strong opposition and support in petitions for review filed by states and private parties, and the repeal of the Clean Power Plan was the subject of petitions for judicial review. The D.C. Circuit consolidated the various petitions and held that EPA’s repeal of the Clean Power Plan relied upon a mistaken reading of the Clean Air Act, i.e., that “generation shifting” cannot be a “system of emission reduction.” The court vacated the agency’s repeal of the Clean Power Plan, vacated the ACE Rule, and remanded to EPA for further consideration. The D.C. Circuit’s decision was followed by another change in presidential administration, after which EPA moved to partially stay the court’s mandate as to the Clean Power Plan so the agency could consider whether to promulgate a new section 111(d) rule to control emissions of carbon dioxide from existing power plants. The D.C. Circuit granted EPA’s partial stay of the mandate. State and private petitioners then sought writs of certiorari with respect to the D.C. Circuit’s vacatur of the ACE Rule, which raised the prospect of the Clean Power Plan once again becoming effective. Certiorari was granted with respect to the scope of congressional authorization of EPA in 42 U.S.C. section 7411(d) to unilaterally decarbonize any sector of the economy, and the cases were consolidated.

At the outset, EPA opposed Supreme Court review of the lower court’s ruling on the basis that none of the petitioners had Article III standing in light of EPA’s stated intention not to enforce the Clean Power Plan. The Court disagreed, finding that state petitioners were likely injured by reinstatement of the Clean Power Plan, their injury is fairly traceable to the action being appealed (vacatur of the ACE Rule and reinstatement of the Clean Power Plan), and the reviewing court could redress such injury. The Court then indicated that EPA’s stated intention not to enforce the Clean Power Plan did not moot the case, as EPA claimed, since such action would be akin to “voluntary cessation,” and nowhere had EPA suggested it will not reimpose emissions limits predicated on generation-shifting.

Turning to the merits, the Court majority evaluated Clean Air Act section 111(d) with respect to EPA’s determination of the “best system of emission reduction” that has been adequately demonstrated for existing power plants in the Clean Power Plan and the agency’s subsequent determination of the degree of carbon dioxide emission limitations achievable. In doing so, the Court identified the issue before it as whether restructuring the nation’s overall mix of electricity generation to move from 38 percent coal-fired down to 27 percent by the year 2030 can constitute BSER within the meaning of section 111(d).

The Court observed that there are “extraordinary cases” in which the “history and the breadth of the authority that [the agency] has asserted,” and the “economic and political significance” of that assertion provide a “reason to hesitate before concluding that Congress” meant to confer such authority, citing FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159–60 and Utility Air Regulatory Group v. EPA, 573 U.S. 302, 324, among other cases. The Court labelled the body of case law cited as the “major questions” doctrine, which it explained stands for the proposition that an agency must point to “clear congressional authorization” for the authority it asserts in such extraordinary cases, and then concluded this was a “major questions” case.

Turning to the history and text of section 111(d), Chief Justice Roberts observed that prior to 2015, EPA had always set section 111(d) limits based on the application of measures that would reduce pollution by requiring the regulated source to operate more cleanly, not by looking to a “system” that would simply shift polluting activity “from dirtier to cleaner sources.” He rejected EPA’s assertion that the 2005 Mercury Rule promulgated under section 111 relied upon a cap-and-trade mechanism, observing that in the Mercury Rule EPA set the cap based on technologies that could be installed and operated on a nationwide basis, while the Clean Power Plan provided no controls for a coal-fired power plant to install so as to meet the carbon dioxide emissions limits set by EPA therein. EPA’s view of its authority under section 111(d) in the Clean Power Plan was not only unprecedented according to the Court, it also effected a “fundamental revision of the statute, changing it from [one sort of] scheme of. . . regulation” into an entirely different kind, citing MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U.S. 218, 231. Nor could the Court ignore that EPA’s newly found view of its 111(d) authority enables it to enact a cap-and-trade program for carbon that Congress has considered and rejected multiple times.

Under these circumstances, and again citing the “major questions” jurisprudence identified above, the Court observed that EPA must point to “clear congressional authorization” to regulate in the manner provided by the Clean Power Plan. EPA’s assertion that its authority to establish emission caps at a level reflecting the “application of the best system of emission reduction . . . adequately demonstrated” was not a sufficiently clear authorization for such a sweeping power generation shifting rule, according to the majority. The Court observed that the vague statutory grant in section 111(d) is not close to the sort of clear authorization required, and further rejected the government’s reference to the Acid Rain and National Ambient Air Quality Standards programs utilizing “system” and similar words, concluding that those “systems” were not the kind of “system of emission reduction” referred to in section 111. Finally, the Court did not address the question of whether BSER under 111(d) refers exclusively to measures that improve the pollution performance of individual sources, although it observed that EPA has acted consistent with such a limitation for four decades. The D.C. Circuit’s vacatur of the ACE Rule was therefore reversed and remanded.

Justice Kagan wrote a lengthy dissenting opinion that took issue with many of the majority’s findings, noting that the Court need not even decide the issue given EPA’s consideration of a different 111(d) rule prospectively, that Section 111(d) was not a legal “backwater” as the majority claimed, and that the Court’s conservative textualist majority had crafted a “get-out-of-text-free card” in establishing the “major questions” doctrine, among other things.