Beyond WOTUS in SCOTUS: Environmental and Energy Litigation in the Supreme Court

WOTUS
While WOTUS is certainly an environmental rulemaking regarding when water resources may be subject to federal Clean Water Act (CWA) jurisdiction, the appeal recently argued in SCOTUS is really about which lower court is the proper venue to bring CWA challenges.

A key provision in the Clean Water Act (CWA) prevents discharge of pollutants into navigable waters, which term is defined to be the “waters of the United States.” CWA § 502(7), 33 U.S.C. 1362(7). The “navigable waters” term is used throughout the CWA, including the section 402 National Pollutant Discharge Elimination System (NPDES) permit program; the section 404 dredge/fill permit program; the section 311 oil spill prevention and response program; the water quality standards and total maximum daily load (TMDL) programs under section 303; and the section 401 state water quality certification process. The WOTUS language is, therefore, a trigger for determining whether the federal CWA will apply to a variety of discharges, wetlands, and other activities.

In 2015, the Environmental Protection Agency (EPA) promulgated a rule at 80 Fed. Reg. 37,054 (Jun. 29, 2015) that interpreted what WOTUS means and applied it to eight different categories of waters. Because of its broad, national impact, the regulation was almost immediately challenged in multiple lawsuits. The merits of those challenges have yet to be resolved because of a court jurisdictional dispute.

The National Association of Manufacturers v. Department of Defense case (No. 16-299), now pending in SCOTUS, will decide in which court the challenge to the WOTUS rule belongs. Two types of EPA actions go directly to the federal courts of appeals:

1. “approving or promulgating any effluent limitation or other limitation.”
2. “issuing or denying [certain] permits.”

CWA § 509(b)(1)(E) & (F).

The challengers argue that the WOTUS case belongs in the district court because the plain language of the jurisdiction-conferring statute does not apply. The federal government, however, says the case belongs in the courts of appeals because the rule serves as a functional “limitation” by requiring some dischargers to get permits, and the Court should take a “pragmatic” view toward jurisdiction.

When SCOTUS heard oral argument in the WOTUS matter on October 11, 2017, a memorable quote came from Justice Elena Kagan regarding trying to decipher congressional intent for the proper Clean Water Act venue summarized above: “So . . . Congress said what it said. Nobody can figure out what the reasons are that Congress included those things and not other things. It’s all a themeless pudding and that’s just what it is?” We cannot wait for how this pudding gets sorted out by SCOTUS, and this will also be the first opportunity to see how new Justice Neil Gorsuch might address environmental disputes.

Florida Versus Georgia Interstate Water Rights
No, this is not an Southeastern Conference football contest, but the long-standing feud between Florida and Georgia regarding water rights may be the most significant environmental decision by SCOTUS in years. Florida v. Georgia, No. 142, Orig. (Nov. 3, 2014). On October 10, SCOTUS agreed to review challenges to a special master’s report in this case where SCOTUS has original jurisdiction. It is expected that oral argument will be held during this term, which continues into Summer 2018.

In this case, SCOTUS in 2014 appointed a special master to resolve this water-rights dispute. On February 14, 2017, the special master issued a lengthy report regarding water rights to three rivers that form the Apalachicola-Chattahoochee-Flint River Basin. The dispute originated because Florida claimed that Georgia’s increasing water consumption from the Basin damaged Florida’s ecology and economy. Georgia objected to any cap on use of these waters because of the economic detriment to its agriculture industry and the millions of water users in the Atlanta metropolitan area. The relief sought essentially is an equitable apportionment of these waters.

The special master’s report “recommends that the Court deny Florida’s request for relief because the Corps [U.S. Army Corps of Engineers] is not a party to this original jurisdiction proceeding. Without the ability to bind the Corps I [Special Master] am not persuaded that the Court can assure Florida the relief it seeks. I conclude that Florida has not proven by clear and convincing evidence that its injury can be redressed by an order equitably apportioning the waters.” The crux, then, seems to be the failure to include the U.S. Army Corps of Engineers, which has jurisdiction over the basin water.

After two years of discovery, dozens of depositions and expert witnesses testifying, and a five-week trial before the special master, SCOTUS will now issue a ruling as to whether the relief sought can be granted or not. Regardless of the ruling from SCOTUS expected later this year, the water war may continue.

GHG Back in SCOTUS?
The EPA’s Clean Power Plan (CPP) has been treading water in the U.S. Court of Appeals for the D.C. Circuit, and the new EPA on October 16, 2017, published plans to rescind and possibly replace the CPP rule (82 Fed. Reg. 198, 48,035). The CPP rule was promulgated in 2015, and then challenged by many states and other parties. Those cases were consolidated in the D.C. Circuit Court of Appeals as West Virginia v. EPA, No. 15-1363.

In that case, the petitioners sought a stay of the CPP rule in the D.C. Circuit Court, but that was denied. However, on February 9, 2016, SCOTUS reversed and granted a stay of the CPP pending the court challenge. Order in Pending Case, West Virginia v. EPA, 136 S. Ct. 1000. In September 2016, the D.C. Circuit Court heard oral arguments en banc (rather than the typical three-judge panel), but no decision has been rendered yet while the D.C. Circuit is holding the case in abeyance.

The possibility of this case rising again to SCOTUS sooner than later depends on whether the environmental groups try to sustain this litigation by arguing that greenhouse gas (GHG) regulation under the Clean Air Act is required by the 2007 Supreme Court ruling in Massachusetts v. EPA, and the subsequent EPA Endangerment Finding. Massachusetts v. EPA, 127 S.Ct. 1438 (2007); Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act (Endangerment Finding), 74 Fed. Reg. 66,496 (Dec. 15, 2009).

Alternatively, SCOTUS may not agree that hearing this dispute over a rescinded CPP rule is a good use of judicial resources—in which case the litigation may start all over with threatened lawsuits by New York’s attorney general and others challenging the CPP repeal.

When Is an Old Power Plant a “New” Air Pollution Source?
DTE Energy is seeking SCOTUS review of a U.S. Court of Appeals for the Sixth Circuit decision regarding whether modifications of a DTE coal-fired power plant in Monroe, Michigan, trigger Clean Air Act New Source Review (NSR) permitting requirements. DTE Energy Co. v. U.S., 845 F.3d 735 (6th Cir. 2017), petition for cert. filed, (U.S. July 31, 2017) (No. 17-170). That litigation arises from the EPA’s August 2010 enforcement action alleging that the power-plant modifications were not exempt “routine maintenance, repair and replacement” and therefore a permit and pollution controls were required. The utility relies on post-construction data to show that the facility changes did not constitute a “major modification.”

The Sixth Circuit Court reversed the district court judge and ruled that post-construction data may not be used to determine whether facility modifications increased the amount of air pollution or not. This case may also be another example of whether the courts should step aside while the EPA considers potential reforms to programs such as NSR permitting exemptions.

Tribal Groundwater Rights?
A significant western United States water-rights decision petitioning for certiorari to the Supreme Court, Desert Water Agency v. Agua Caliente Band of Cahuilla Indians, seeks review of the U.S. Court of Appeals for the Ninth Circuit ruling that the federal water rights of a Native American tribe extend to groundwater and override local control. Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water Dist.,849 F.3d 1262 (9th Cir. 2017), petition for cert. filed, (U.S. Jul. 3, 2017) (No. 17-42). The Desert Water Agency and the Coachella Valley Water District dispute the tribe’s jurisdiction over groundwater in the region, and argue that state and local governments must manage scarce water resources. Other western states are supporting the local water district. The practical and legal concern is whether prior allocations of these limited water resources over the past decades can be upset by tribal claims now being asserted.

Other Cases?
There are other environmental and energy cases winding their way through the court system that could end up in SCOTUS. Here are a few of them:

• Will “sue and settle” be addressed in the North Dakota challenges to a prior consent decree between the EPA and environmental public-interest groups regarding oil and gas drilling waste-disposal regulations? The D.C. Circuit heard oral argument on November 7, 2017, in Environmental Integrity Project v. EPA,No. 17-5010 (D.C. Cir. Nov. 7, 2017).
• On October 11, 2017, the U.S. District Court for the District of Columbia ruled that the Dakota Access Pipeline can continue operating even while the dispute is remanded for the U.S. Army Corps of Engineers to complete its inadequate NEPA environmental-impact assessment. Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, Case 1:16-cv-01534-JEB, (D.D.C. Oct. 11, 2017).The new environmental study is not expected until spring 2018, but future litigation after this remand will address whether the pipeline will continue to be operated based on alleged impacts to significant tribal interests.
• Can gold mining on federal land be criminally prosecuted under a California state law banning suction dredging? This is the question the defendant attempts to argue in claiming that the California Supreme Court erroneously ruled that federal law does not preempt the state ban. Rinehart v. California, 1 Cal. 5th 652 (Cal. 2016), petition for cert. filed, (U.S. Feb. 2, 2017) (No. 16-970).
• Other cases involving natural resources and endangered species may or may not rise to the level of significance for attention by SCOTUS, including: dusky gopher frog habitat impacts; andPacific bearded seal endangered species listing. Markle Interests, LLC v. U.S. Fish and Wildlife Serv., 827 F.3d 452 (5th Cir. 2016), petition for cert. filed, (U.S. July 14, 2017) (No. 17-14) (dusky gopher frog); Alaska Oil and Gas Ass’n v. Pritzker, 840 F.3d 671 (9th Cir. 2016), petition for cert. filed, (U.S. July 21, 2017) ( No. 17-133) (Pacific bearded seal).

Conclusion
These and many other cases will wind their way through the court system, and, whether or not they are decided by SCOTUS, may have substantial impacts on environmental and energy litigation practices. To stay abreast of these and other significant case developments, be sure to visit the EELC Committee website.

Charles M. Denton is a partner with Barnes & Thornburg LLP, and a former cochair of the ABA Environmental & Energy Litigation Committee. The author gratefully acknowledges the assistance of Cheryl A. Gonzalez, of counsel with Barnes & Thornburg’s Environmental Law Department, in researching and drafting this article.

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