This is a brief roundup of recent federal court environmental and regulatory law decisions from the federal courts over the past few months, including the much anticipated ruling in Sackett, et ux., v, Environmental Protection Agency.
THE U.S. SUPREME COURT
Sackett, et ux., v, Environmental Protection
Agency
Last year, the Supreme Court issued a significant
decision curtailing some of the EPA's regulatory powers in the
Clean Air Act in West Virginia v. Environmental Protection
Agency. On May 25, 2023, the Court limited EPA's—and
the U.S. Army Corps of Engineers' authority—under the
Clean Water Act. This, too, is a major environmental ruling. The
Court held that the EPA could not classify the wetlands located on
the Idaho property of Michael and Chantell Sackett as "Waters
of the United States" on the basis of the "significant
nexus" test devised by Justice Kennedy in his separate opinion
in the 2005 case of Rapanos v. United States. Accordingly,
the Court unanimously held that their property was not subject to
the EPA's or the U.S. Army Corps of Engineers' permitting
and enforcement power. In 2004, the Sacketts purchased a small lot
near Priest Lake in Bonner County, Idaho, on which to build a home.
As related by Justice Alito, once they began to fill in their
property with dirt and rocks, they were notified by EPA that their
backfilling operation violated the Clean Water Act (CWA) because
they were affecting protected wetlands. The Sacketts challenged
this action, thus beginning a long legal battle with EPA and the
federal government. In 2021, the U.S. Court of Appeals for the
Ninth Circuit upheld the federal government's regulatory
authority over these wetlands, holding that the CWA covers
"adjacent" wetlands having a significant nexus to
traditional navigable waters. The Supreme Court decided that this
case was suitable for determining whether the Sackett's
wetlands are "waters of the United States" and thus
subject to the permitting and regulatory enforcement powers of the
EPA and the Corps of Engineers.
The Court reviewed the long and complex history of the CWA, and its many interpretations the agencies have made over the years. As the Court notes, the term "waters of the United States" has been the focus of three intensive rulemaking proceedings since 2015, culminating the "significant nexus" test now being employed by the EPA and the Corps of Engineers. In a 5-to-4 vote, the Court held that the proper test to decide whether a body of water, particularly wetlands, was subject to federal jurisdiction was whether the wetlands have surface connection to bodies of water that are waters of the United States in their own right so that there is no clear demarcation between waters and wetlands. This ruling overturned the determination that the Sacketts' property contained regulated wetlands even though they were located on the other side of a 30-foot road which feeds into a non-navigable creek which then feeds into Priest Lake, an indisputably navigable body of water. The rejection of the significant nexus test was based on a close reading of the text of the CWA, and to those who criticized this approach, such as Justice Kavanaugh, Justice Alito responded that "textual arguments that ignore the operative test cannot be taken seriously."
While this decision will reduce the scope and scale of some federal powers under the CWA, it does not foreclose the ability of states to fill the void, or the ability of the Congress to amend the Act that was enacted more than 50 years ago. In the interim, the agencies have promulgated dozens of rules and developed permitting and enforcement policies based on their reading of the law as it was then, which are now likely to be revisited.
Axon Enterprise, Inc. v. Federal Trade
Commissionand Securities and Exchange
Commission v. Michelle Cochran
On April 14, 2023, the Supreme Court issued a unanimous
ruling holding that targets of investigations or enforcement
actions by federal agencies, in this case the Securities and
Exchange Commission (SEC) and the Federal Trade Commission (FTC),
may have their constitutional claims against these proceedings
heard by a federal district court and are not forced first to
channel those claims "through the administrative review
schemes at issue." The Court, in an opinion written by Justice
Kagan, states that "We now conclude that the review schemes
set out in the Exchange Act and the FTC Act do not displace federal
district court jurisdiction over [the petitioners] far-reaching
constitutional claims."
Bohon, et al.v. the
Federal Energy Regulatory Commission
A few days later, the Court remanded a similar decision to
the U.S. Court of Appeals for the District of Columbia Circuit for
further consideration in light of the Axon Enterprises
decision. This ruling is likely to have a significant impact on the
administrative enforcement procedures of many federal agencies,
where ongoing enforcement actions could be delayed until the
constitutional issues are resolved.
Suncor Energy v. Board of Commissioners of Boulder
County
This was one of several cases of which the Court denied
review in several greenhouse gas cases alleging, under state law,
that the defendant energy companies caused property damage through
their activities. The energy companies argued that these complaints
should be heard in the federal courts.
Loper-Bright Enterprisesv.
Raimondo, Secretary of Commerce
Finally, the Court has agreed to hear another challenge to
the Chevron doctrine. The DC Circuit applied
Chevron to uphold the National Marine Fisheries
Service's application of a rule to the fishing industry.
THE FEDERAL COURTS OF APPEAL
The U.S. Court of Appeals for the District of Columbia Circuit
State of Kansas and State of
Illinoisv. Ferrero, Archivist of the
United States
On February 28, 2023, the court affirmed the lower
court's dismissal of a mandamus action filed against the
Archivist, that would direct him to codify and publish the Equal
Rights Amendment to the Constitution, which did not obtain the
needed state concurrences in accordance with the time limits
imposed by the Congress. The states failed to show, "clearly
and indisputably," that the Archivist had a duty to do.
Midwest Ozone Group v.
EPA
On March 3, 2023, the DC Circuit turned away a challenge
to an Environmental Protection Agency (EPA) order described as a
revised Cross-States Air Pollution rule for the 2008 Ozone NAAQS.
The court noted that agency determinations based upon highly
complex technical matters are entitled considerable difference by
the courts, and that approach was sustained here.
Mandan, Hidatsa and Arikara Nation v. Department of
the Interior
On April 21, 2023, the court reversed the lower
court's decision barring the State of North Dakota from
intervening in a dispute over the ownership of the riverbed of the
Missouri River that runs through certain North Dakota Indian
reservations. The state avers that it owns this land and the
royalties associated with hundreds of oil and gas leases granted by
North Dakota to operate in the riverbed. The Interior Solicitor
issued conflicting opinions on this ownership issue, and then filed
documents in Interior's Office of Land Titles supporting the
Indians' claims. As a result, the Department could no longer be
viewed as a neutral party.
State of New York v. META Platforms, Inc.
On April 27, 2023, the Court affirmed the holding of the
lower court that dismissed an antitrust case filed against Facebook
(now known as Meta Platforms, Inc.) by 46 states. Noting that the
case is not only "odd, but old," the DC Circuit held that
the defense of laches was available to the defendant and that the
states' allegations did not set forth a violation of Section 2
of the Sherman Act.
The U.S. Court of Appeals for the First Circuit
Relentless, Inc. et al. v. U.S. Department of
Commerce
On March 26, 2023, the court decided another case
involving the National Marine Fisheries Service rule described
above and upheld that rule as being authorized by Congress. The
First Circuit panel referenced the DC Circuit's 2022
Loper-Bright Enterprises ruling as support for its decision, which
is now on appeal to the Supreme Court.
The U.S. Court of Appeals for the Third Circuit
Adelphia Gateway, LLC v.
Pennsylvania Environmental Hearing Board, et al.
At issue in this March 14, 2023, ruling: Adelphia was
granted a certificate by the Federal Energy Regulatory Commission
(FERC) to construct and operate an interstate gas pipeline and
filed an application with the Pennsylvania Department of
Environmental Protection (PADEP) to construct a compressor station
pursuant to the federal Clean Air Act and its Pennsylvania
counterpart. Adelphia received the necessary authorization, subject
to further review by the Hearing Board, which dismissed the appeal
for want of jurisdiction; however, the Commonwealth Court reversed,
holding that administrative proceedings are not civil actions and
that the Natural Gas Act did not preempt state jurisdiction. A
federal appeal was taken and now the Third Circuit has ruled that
the Natural Gas Act is not in an irreconcilable conflict with
giving state court jurisdictional decisions "full faith and
credit."
United Refining Company v.
U.S. EPA
On April 5, 2023, the Third Circuit decided a Renewable
Fuel Standards case, involving the EPA's rejection of a
petition for hardship relief filed by a "small refinery."
The court upheld the EPA's rejection of this petition for a
hardship exemption, and ruled that the agency reasonably relied on
the Department of Energy's analysis of the refinery's
hardship position.
The U.S. Court of Appeals for the Fourth Circuit
The U.S. Court of Appeals for the Fourth Circuit continues
to hear and decide interstate gas pipeline cases involving the
Mountain Valley Pipeline.
Sierra Club, et al. v. State Water Control
Board
On March 29, 2023, the court decided this case. On
December 14, 2021, the Board had granted the pipeline the Clean
Water Act 401 certification that construction of a segment of the
pipeline in Virginia would comply with the State's Water
Quality standards. The petitioners challenged this certification in
the Fourth Circuit, which held that: (a) it had jurisdiction to
hear the appeal; and that (b) the state Department of Environmental
Quality (DEQ) before deciding to issue the authorization, correctly
applied the law and carefully considered the merits of the
application, and (c) that it did not act in an arbitrary and
capricious manner.
Sierra Club, et al,v. West
Virginia Department of Environmental Protection
However, a few days later, on April 3, 2023, the Fourth
Circuit vacated the West Virginia DEQ's certification that the
Mountain Valley Pipeline would not violate West Virginia's
water quality standards. The court reviewed the administrative
record and concluded that the agency failed to provide a reasoned
explanation as to why the pipeline's past permit violations
will not continue to occur in the future, and other assurances made
to the court were unconvincing.
The U.S. Court of Appeals for the Fifth Circuit
The Fifth Circuit has decided several significant cases in
the past few months.
Flight Training
Internationalv. Federal Aviation
Administration
On January 24, 2023, the court vacated a new rule issued
by the Federal Aviation Administration which changed a longstanding
pilot training rule without notice and comment.
Mexican Gulf Fishing Company, et al. v. United
States Department of Commerce, et al.
On February 23, 2023, the court reversed the lower court
and set aside a rule issued by the National Marine Fisheries
Service requiring small charter boats operating the Gulf of Mexico
to install, at their expense, onboard monitoring systems,
regardless of whether the vessel is being used for commercial or
personal purposes. The statutory authority cited by the Service was
the Magnusen-Stevens Act, enacted to protect offshore fishing
areas. Using the Chevron framework, the court held this
rule was not authorized by the Act. Also, reporting GPS data to the
government 24 hours a day could create constitutional issues of
search and seizure; no criminal warrants for such information had
been issued. A similar case will be reviewed by the Supreme Court
in the next term.
Newbold v. Kinder Morgan,
et al.
On March 14, 2023, the court decided this case, which
involved a fatal boating accident caused by a collision with a
fully submerged warning sign. The defendant's liability
depended on whether the accident took place in Louisiana or federal
waters. The court decided that the accident took place in Louisiana
waters and used the 1870 Daniel Ball decision of the
Supreme Court as guidance to what constitutes
"navigability."
BNSF Railway Company v. Federal Railroad
Administration
On March 15, 2023, the court held that the rejection by
the Federal Railroad Administration (FRA) of the railway's
request that the standard track-inspection rules be waived to
enable the railroad to test a new technology was arbitrary and
capricious as it appeared to ignore the data submitted to support
the waiver request, and its decision was, in any event not
justified by a rational explanation. The agency was ordered to
reconsider this decision in 100 days.
Nix v. Major League Baseball
In a change of pace, on March 16, 2023, the court
dismissed an appeal of the lower court's rejection of a lawsuit
filed against major league baseball, some MLB teams and agents by
the plaintiff, who has filed many lawsuits in many courts
complaining that MLB has frustrated his attempt to sell performance
enhancing drugs. According to the court, the plaintiff's latest
complaint fell "far below the Mendoza line."
Harrison County, Mississippi, et al.
v. U.S. Army Corps of Engineers
Following the historic 1927 Mississippi Valley flooding,
the federal government authorized the construction and operation of
an extensive system of flood controls, including the construction
of the Bonne Carre Spillway. After many years of use, the
plaintiffs filed a lawsuit seeking the court to require the Corps
to compile a supplemental Environmental Impact Statement (EIS), to
supplement the 1976 EIS. The plaintiffs contend that the increased
reliance on the Spillway has exacerbated other problems, and the
National Environmental Policy Act (NEPA) requires that a
supplemental EIS be conducted. On March 27, 2023, agreeing with the
lower court, the Fifth Circuit held that NEPA, in such
circumstance, does not authorize a supplemental EIS.
Bonin, et al. v. Sabine
River Authority-Louisiana
Then, in a case decided on April 14, 2023, the court
upheld the lower court's dismissal of a defense to lawsuit
filed against the Sabine River Authority for negligently releasing
water from the Toledo Bend Reservoir that caused flooding damage to
homes in Texas and Louisiana. The Louisiana Authority claimed that
it was an "arm of the state" and enjoyed sovereign
immunity. The Fifth Circuit has devised a test for such claims (see
Clark v. Tarrant County, 798 F 2d 736 (1986)) and holds
that the Louisiana defendant was not an arm of the state and could
not claim sovereign immunity.
State of Louisiana et al.
v. Biden
On April 5, 2023, the court dismissed for lack of
jurisdiction and vacated the preliminary injunction redder by the
lower court which held that the "issuance of social cost of
greenhouse gases" by the current administration was
procedurally invalid. The Fifth Circuit held the damages claims
were only speculative, thus plaintiff states had no standing to
file this lawsuit.
State of Texasv.
EPA
On May 1, 2023, the Court rejected EPA's arguments
that a controversy regarding the State Implementation Plan (SIP)
must be transferred to the DC Circuit.
Environment Texas Citizen Lobby, Inc.
v. ExxonMobil Corporation
Finally, an en banc panel of the Fifth Circuit will hear
arguments regarding "standing" under the Clean Air Act on
May 17, 2023.
The U.S. Court of Appeals for the Sixth Circuit
The court has decided another "Flint Water"
case.
Waid v. Hall, et
al.
On March 17, 2023, in the matter of, a group of
"Objectors" appealed the trial court's award of
attorney's fees in this massive litigation and reimbursement
for counsel's expenses. The court of appeals held the Objectors
were not entitled to the detailed discovery they were seeking, and
that they lacked standing to appeal the "common benefit
structure" used by the trial court, and that the court did not
abuse its discretion in making these awards.
The U.S. Court of Appeals for the Eighth Circuit
State of Minnesota v. American Petroleum Institute;
Exxon Mobil Corporation; ExxonMobil Oil Corporation; Koch
Industries; Flint Hills Resources LP; Flint Hills Resources
Pine Bend
On March 23, 2023, the U.S. Court of Appeals for the Eighth Circuit
rejected an appeal filed by several energy interests that
challenged a climate change lawsuit filed by the State of Minnesota
against a "litany of fossil fuel producers," who, they
alleged, committed common law fraud and violated the state's
Consumer protection laws by selling fossil fuels in Minnesota while
they knew that the production and use of these fuels harms the
environment. The court held that no federal law preempted these
state law-based claims, making them amenable to removal to the
federal courts. A concurring opinion sympathized with the
defendants, but as the law stands now, the court could not agree
with the defendants that the lawsuit arises under federal law.
Consequently, only the Congress or the Supreme Court can change
that result.
The U.S. Court of Appeals for the Ninth Circuit
California Restaurant Association v. City of
Berkeley
On April 17, 2023, the court reversed the lower court and
held that a local city ordinance that prohibits the installation of
natural gas piping within new building, was preempted by the
federal Energy Policy and Conservation Act, located at 42 USC
Section 6297(c) which explicitly preempts such state or local
regulations. The law's exemption provisions encompass building
codes that regulate natural use by covered products.
City of Pomona v. SQM North America
Corporation
On April 28, 2023, in an unpublished opinion, the Ninth
Circuit vacated an award of damages in this long-running
controversy. The case has been tried three times; it involves a
claim that the defendant's actions in importing, distributing
or selling defectively designed sodium nitrate fertilizer
contaminated the City's water supply with perchlorate. The jury
awarded the city over $48 million in damages, but the lower court
failed, the Ninth Circuit concluded, in not documenting how the
award was supported by the record. The case was remanded to the
lower court for appropriate action.
The U.S. Court of Appeals for the Eleventh Circuit
RMS of Georgia, LLC. v.
EPA
On April 14, 2023, the U.S. Eleventh Circuit Court of
Appeals discussed how the courts decide whether a petition to
review an EPA determination under the Clean Air Act involves a
"nationally applicable" standard reviewable only in the
DC Court of Appeals or whether a local federal circuit court has
jurisdiction because it involves a local or regionally applicable
action. The subject of this litigation is an EPA "Allocation
Action" affecting permits to consume
hydrofluorocarbons—a chemical refrigerant. Because the EPA
was allocating these permits on a nationwide basis, this was a
nationally applicable action whose legality should be addressed by
the DC Circuit.
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