Throughout his three terms as Mayor of New York City, Mayor Michael Bloomberg has kept policies designed to fight climate change at the forefront of his agenda.  Most recently, nearly one year following the devastation of Hurricane Sandy in New York City and the Mid-Atlantic coast, Bloomberg renewed his calls for mayors of the world’s largest cities to join him in combating climate change.  

According to Bloomberg, nearly half of the world’s population resides in large cities, which combined generate approximately 70% of the world’s global greenhouse gas emissions.   Therefore, influenced by this statistic, Bloomberg recently stressed that cities should not rely upon state and federal legislation to combat climate change.  Instead, he maintains that the leaders of these cities can and should take their own action to reduce greenhouse gas emissions around the world.

On the global stage, Bloomberg serves as chair of the C40 Cities Climate Leadership Group, a collaboration of cities and research institutions from around the world.  According to Bloomberg, this group, has “taken more than 4,700 actions to reduce greenhouse gas emissions and adapt to the possible effects of climate change,” and “has the potential to reduce emissions by more than one billion tons a year by 2030 — which is equivalent to making both Canada and Mexico entirely carbon-neutral.”  

Specific to New York City, Bloomberg has overseen the planting of over 500,000 new trees and spearheaded a major bike sharing initiative.   He also implemented a ban on the most-polluting form of heating oil, which according to Bloomberg, has “the potential to reduce [New York City’s] greenhouse gas emissions by at least five percent and save New Yorkers more than $750 million per year in energy costs.”

Although Bloomberg will be exiting the political stage in January 2014 when he completes his final term as Mayor of New York City, we can be sure that his framework for addressing climate change at the city level—rather than at the state and federal levels—will continue to shape the national and international climate change debate for years to come.

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On June 25, 2013, in a speech at Georgetown University, President Obama unveiled his Climate Action Plan (CAP) which sidesteps Congress and instead focuses on executive branch action, and more specifically, U.S. EPA action in an effort to reduce greenhouse gas (GHG) emissions.  As part of the CAP, the President recommitted the United States to reduce greenhouse gas (GHG) emissions by 17% below 2005 levels by 2020 (but only if all other major economies agree to similarly limit their GHG emissions).  In an effort to meet this commitment, the CAP targets, at least in part, GHG emissions from new and existing power plants.  

More specifically, in the CAP, the President directs U.S. EPA to promulgate regulations that limit GHG emissions at existing power plants. The CAP also directs U.S. EPA to re-propose New Source Performance Standards (NSPS) for newly constructed power plants. U.S. EPA had previously issued proposed NSPS rules in April 2012; however, U.S. EPA had missed its one-year deadline for issuing a final NSPS for new coal- and natural gas-fired utilities.  

Other key elements of the President’s CAP include: 

An end to public financing of coal-fired power plants abroad that do not include carbon capture and sequestration technology, except in developing nations where no viable alternatives exists; 
Setting a target for the Department of Interior to double renewable energy production on public lands (from 10 gigawatts to 20 gigawatts) by 2020; 
Directing federal agencies to streamline the siting, permitting and review process for electricity transmission projects; 
Directing U.S. EPA and the Department of Transportation to work on a second round of heavy-duty vehicle emission limits for post-2018 model years; 
Making available up to $8 billion in loan guarantees for advanced fossil energy projects that are intended to avoid, reduce, or sequester anthropogenic emissions of GHGs; 
Directing federal agencies to ensure that new roads and other taxpayer-funded projects are built to withstand extreme weather events and anticipated rising sea levels; 
Establishing a new energy efficiency standards goal for consumer products; 
Efforts to craft a free trade agreement on environmental goods and services that will seek to lower tariffs and other market barriers; 
Initiatives to curb emissions of hydrofluorocarbons and methane; and 
Directing agencies to focus on the impacts of climate change in key sectors, including health, transportation, food supplies, oceans and coastal communities and implement strategies to mitigate the impact of climate change on these key sectors. 

Both sides of the debate have weighed in on the CAP.  Not surprisingly, the coal industry is critical of the CAP, with the American Coalition for Clean Coal Electricity noting that “taking American’s most significant source of electricity offline would have disastrous consequences for our nation’s economy.”  On the other side of the fence, the Natural Resources Defense Council applauded the President, stating “the President’s commitment to set the first-ever carbon limits on power plants is an important first step … to protect Americans and future generations from the dangerous pollution fueling climate change.”  However, notwithstanding the diatribe from both sides of the debate, climate change doesn’t seem to be a priority for the average U.S. citizen.  Although a recent Pew Research Center poll of 37,000 respondents in 39 countries identified climate change and fiscal volatility as top global threats, in the United States, only 28% of Americans think climate change should be a top priority for the Administration.  It will be interesting to see if the President is able to convince the average citizen that climate change is an important issue that needs to be addressed, especially if the President’s CAP results in increased utility bills.    
  

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On June 8, 2013, President Barack Obama and President Xi Jinping of China issued a joint statement announcing that the two countries have agreed to work together to phase down the consumption and production of hydrofluorocarbons (HFCs), a potent greenhouse gas used in refrigerators, air conditioners, and industrial applications.  While the two countries have (at least for now) sidestepped any collaborative measures to address the consumption and production of carbon dioxide (CO2) -- generally considered to be the most harmful of the anthropogenic greenhouse gases -- the Presidents’ statement asserts that a global phase down of HFCs could potentially reduce some 90 gigatons of CO2 equivalent by 2050, equal to roughly two years’ worth of current global greenhouse gas emissions.

The Presidents’ statement comes on the heels of a pair of federal court actions that likely mark the final demise of two high-profile private climate change litigations in the United States federal courts.  On May 20, 2013, the United States Supreme Court denied certiorari in the case Native Village of Kivalina v. Exxon Mobil, wherein the plaintiffs unsuccessfully sought to sue the defendants under a federal common law nuisance theory for the destruction of the village of Kivalina, Alaska by flooding allegedly caused by climate change.  And on May 14, 2013, the United States Fifth Circuit Court of Appeals affirmed dismissal on res judicata grounds of the plaintiffs’ second lawsuit in Comer v. Murphy Oil, which sought to sue several alleged greenhouse gas emitters in tort for damages caused by Hurricane Katrina.  

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No good deed goes unpunished when it comes to the United States Environmental Protection Agency’s (“U.S. EPA”) efforts to regulate climate change.  Rather, U.S. EPA’s authority to regulate climate change (e.g. greenhouse gas emissions or “GHGs”) is currently being challenged by some States, while other States are simultaneously threatening to sue U.S. EPA for failing to act to address climate change.

Since the United States Supreme Court’s decision in Massachusetts v. EPA, 127 S. Ct. 1438 (2007) holding that U.S. EPA could regulate GHG emissions under the Clean Air Act, various States and industrial groups have challenged U.S. EPA’s subsequent attempts to regulate GHGs.  Most recently, on April 19, 2013, the Attorney General of Texas supported by 11 other state attorney generals, filed a petition for writ of certiorari to the United States Supreme Court claiming that U.S. EPA overreached its authority by regulating GHGs, and requested that the Court overrule its decision in Massachusetts v. EPA on the basis of the “absurd” and detrimental economic consequences of regulating GHGs under the Clean Air Act.

Ironically, on April 17, 2013, 10 different states, the District of Columbia and the City of New York jointly sent U.S. EPA a Clean Air Act Notice of Intent to Sue for U.S. EPA’s failure to promulgate rules on new power plant emissions by the regulatory deadline (the “Notice”).  Under the Clean Air Act, U.S. EPA was required to finalize the New Source Performance Standards for fossil fuel power plants and petroleum refineries by April 13, 2013.  These are contentious standards that have been the subject of millions of public comments, as they effectively bar the construction of new coal fired power plants without prohibitively expensive control technologies.  The States’ intention in filing the Notice is to force U.S. EPA to issue/finalize these rules through court order, or through an agreement with U.S. EPA.

Thus, U.S. EPA now finds itself fighting a two fronted war both trying to defend its action and inaction at the same time.  Given these conflicting positions, U.S. EPA would be justified in feeling that it just can’t win when it comes to climate change, and it appears that the more aggressive states may be the ones that start to drive change in this arena.

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EPA and Texas have an ongoing fight about many things, greenhouse gas regulation and permitting being only one of them.  The State refused to accept EPA’s decision under what is known as the Tailoring Rule to require states to implement as part of air emissions permits for certain new and modified existing sources a greenhouse gas permitting requirement.  As a result, in Texas, for facilities that emit over a certain amount of greenhouse gases, they have to apply to the Texas Commission on Environmental Quality (TCEQ) for a permit for conventional emissions and a permit from EPA for emissions of GHGs.  One of the key issues is whether carbon capture will be required, and whether the State will ultimately take over the greenhouse gas permitting from EPA.

As Texas desperately needs new power plants to avoid rolling brownouts and blackouts, some of these permits are for new natural gas power plants.  One of the critical issues that arises is to what extent carbon capture and storage (CCS) or carbon capture and utilization (CCU) is required.  In every permit for a power plant, EPA Region 6 is requiring a demonstration under the Best Available Control Technology (BACT) that CCS or CCU is not economically feasible.  

In Texas, there are several plants under development on the coal side and one on the natural gas side that are seeking to capture CO2 for use for enhanced oil recovery in old oil fields that have extracted all of the oil they can in primary and secondary processes.  CO2 has long been used to remove even more oil in a tertiary process.  Historically, the CO2 has been obtained from natural sources.  Today there is greater demand than supply from natural sources.  Several oil companies are seeking to obtain CO2 from man-made sources.

The long-term viability of these processes may to some extent affect BACT analysis for power plants under the Prevention of Significant Deterioration (PSD) process under the federal Clean Air Act.  CCU for enhanced oil recovery (EOR) may prove one way to cost effectively capture CO2.  This will need to be proven through plants that are yet to be built.  
These developments may also affect EPA developing regulation on existing and new power plants.  So far the approach has been to set emissions from natural gas power plants as the standard under proposed rules for both natural gas and coal-fired power plants.  CCS or CCU/EOR has not been identified as a standard by EPA.

The construction of plants particularly natural gas fired plants with CCS may prove to be an interesting development over the next several years.  The ability to build and technically operate these plants and the ability to show they are economically viable may provide fodder for EPA regulation and technology requirements for fossil fueled power plants in the coming decade.  What may be a significant limitation is the cost to implement capture and the ability and cost to transport CO2 to its point of use in an old oil field.  Much of the country may simply not have the CO2 pipelines or oil fields for utilizing the CO2.

In Texas, the issue is much more of an issue because EPA is implementing the program, and the state has lots of old oil fields, which can use CO2, and the history of CO2 use dates back many decades.  There are no known cases of any problems with CO2 coming back to the surface.

A current question is whether the TCEQ will take over GHG permitting in Texas.  A bill has been proposed in the Texas legislature that would require the TCEQ to take over the job from EPA.  Several industry groups have testified in favor of the bill, to allow a streamlining of the air permitting process, and to reduce the time to get an EPA permit.  Some of the industry representatives are concerned that the EPA is taking too long to issue the permits.  The President and Chief Operating Office of Targa Resources and President of the Gas Processors Association is reported to have testified in favor of the bill.  

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It was reported on February 20, 2013, that President Obama appears to have selected federal air regulator, Gina McCarthy, to take over for Lisa Jackson as head of the EPA.  The news indicates that the executive branch intends to build upon the agency’s recently-validated efforts to regulate greenhouse gas (GHG) emissions, in the face of persistently anemic congressional action on the issue.

The likelihood of increased regulatory, as opposed to legislative, involvement is further evidenced by the reactions of various legislators who oppose GHG controls.  For example, Sen. David Vitter (R-La.) was quoted as saying, “[t]he administration should be looking for someone who will end the standard of ignoring congressional requests, undermining transparency and relying on flawed science…Instead, it looks like they may double down on that practice.”  “Obama Expected to Tap McCarthy for EPA, Moniz for DOE,” http://www.law360.com/articles/417045.

In other words, if President Obama is going to make climate change a legacy issue for his second term—which seems to be the case based upon statements made in his inaugural  and State of the Union addresses—he is going to have to revisit his previously-stated aversion to doing so primarily through top-down regulation.  But how is he going to go about doing that?  The issue of climate change was conspicuously absent from the topics discussed during the 2012 presidential campaign, and any increased attention it has received in recent months might deservedly be credited in significant part to Hurricane Sandy.  Nor does it help that the administration has offered up few, if any, real details about its future climate-change-related regulatory agenda (see, e.g., http://www.whitehouse.gov/energy/climate-change).

Until that plan is made public, outside observers must rely on a review of EPA’s past successes and ongoing initiatives in order to predict what the future has in store.  However, it seems clear that an emboldened EPA will likely pursue all or some of the following initiatives with increased vigor and political support in the coming months and years.

 

 

·         New Power Plants:  EPA is expected to finalize a rule, originally proposed in 2012, requiring new fossil-fuel-fired power plants to be constructed with carbon capture and sequestration technology.

 

·         Existing Power Plants:  Finalization of the rule governing CO2 emissions from new power plants will force EPA to address the same issue with respect to existing facilities.  EPA is expected to address this by requiring each state to adopt its own emission standards pursuant to guidelines issued by the federal agency.

 

·         Refineries:  The terms of a 2010 settlement agreement required EPA to issue a GHG rule for refineries by November 2012.  The agency did not comply with that deadline and expected to act on the issue this year.

 

·         Oil & Gas Operations:  EPA finalized emission standards for oil and gas operations in 2012.  Several states subsequently filed a notice of intent to sue the agency for its failure to include provisions that directly regulate methane.  EPA has indicated that it will revise the final rule in 2013.

 

·         Mobil Sources:  EPA has proposed a rule designed to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel.

 

·         Climate Adaptation Plan:  EPA released its draft Climate Adaptation Plan this month, which discusses the impact of climate change on the agency’s ability to fulfill its mission and describes how EPA will factor climate change adaptation into new regulations.  The public comment period runs through April 9th.

 

DRI’s Climate Change Task Force will continue to monitor developments in this evolving area of the law, and will submit regular blog postings and articles discussing relevant events.

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Even before Hurricane Sandy devastated the East Coast, climate change policy had been on the forefront of federal and state legislative agendas.    However, the size and scope of Sandy has brought a new wave of federal and state policy proposals aimed at preventing the frequency and magnitude of superstorms like Sandy.

In Congress, Senator Barbara Boxer (D-CA), the Chair of the Senate Environmental and Public Works Committee, is spearheading several efforts aimed at curbing climate change.  Although the legislation was proposed before Sandy, the aftermath of Sandy has renewed Senator Boxer’s calls to enact the Water Resources Development Act of 2012.  This bill authorizes infrastructure improvements to our nation’s water resources in order to reduce flood risk and storm damage and to foster ecosystem restoration. 

Senator Boxer, in a collaborative effort with the Chairs of the Senate Energy and National Resources Committee and Senate Foreign Relations Committee, has also recently proposed the creation of a “clearinghouse” in order to organize the Senate’s efforts on climate change legislation.  She intends the clearinghouse to be a central forum for lawmakers to examine the current state of the science on climate change and to raise federal and state-specific issues of interest.

In New Jersey, one of the states hit hardest by Sandy, the storm may already be shaping New Jersey’s strategic planning and growth efforts.  The State’s strategic development plan was scheduled for release just weeks after the storm; however, its release has been delayed, and according to the Christie Administration, the plan is under reconsideration “in light of the new challenges that have been presented by the storm and the aftermath of the storm.”     

While the predictability of future natural disasters is far from certain, we can be sure that in the aftermath of Sandy, legislative and public policy proposals addressing climate change will be on the horizon.    Indeed, since President Obama specifically mentioned climate change in his Inaugural Address on January 21, 2013, his Administration will likely seek congressional action before the 2014 mid-term elections.  

 

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With an election brewing, plaintiffs trying to impact climate change may find themselves lobbying politicians rather than running to the nearest courtroom.  On September 21, 2012, the Ninth Circuit further slammed the door on the ability for such claims to succeed in federal court.  Specifically, the Court held that federal common law public nuisance claims are unavailable to parties seeking damages or injunctive relief based on global warming.  Native Village of Kivalina v. ExxonMobil Corp., 2012 U.S. App. LEXIS 19870 (9th Cir. 2012).  In this case, the Native Village of Kivalina and the City of Kivalina filed federal common law public nuisance claims (among others) against twenty-two oil, energy, and utility companies alleging that greenhouse gas emissions caused by Defendants have resulted in global warming impacts to the Village and City.  Kivalina appealed the case to the Ninth Circuit following the district court’s dismissal of its claims for lack of subject matter jurisdiction.

The Ninth Circuit affirmed the district court’s holding and dismissed Kivalina’s federal common law public nuisance claims, explaining that “claims can be brought under federal common law for public nuisance only when courts are “compelled to consider federal questions which cannot be answered by federal statutes alone.”  In other words, federal common law cannot apply when congressional legislation directly speaks to an issue.  To make this determination, the Court relied on the recent Supreme Court decision in Connecticut v. Am. Elec. Power Co., Inc., 131 S. Ct. 2527 (2011) in which the Supreme Court concluded that the Clean Air Act provides a means to seek limitations on greenhouse gases, and thus, displaces any federal common law right to seek abatement of greenhouse gases.  While AEP focused on the abatement of emissions (i.e. injunctive relief), the Ninth Circuit’s holding significantly broadened AEP by applying this analysis equally to claims for damages.

Accordingly, the combination of Kivalina and AEP seems to bar future federal public nuisance claims for damages or injunctive relief based on global warming, and is likely to be a significant deterrent if not a complete bar to such claims being filed in federal court.  Significantly though,  the Ninth Circuit did not address Kivalina’s state claims, and thus, it is possible that  Kivalina will pursue those claims in state court.  State courts are likely to become the next battleground (in this action or in similar actions) to determine whether parties can assert similar public nuisance claims under state law, or if plaintiffs will need to wait for legislation to address climate change and forego any type of damage recovery. 

Heidi Goldstein and Devin Barry, Thompson Hine LLP

 

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On April 18, 2012, Winston & Strawn and the Environmental Law Institute co-hosted an informative seminar on, “Hydraulic Fracturing Risks and Opportunities: Regulator, NGO, Industry and Investor Perspectives,” in New York City. The meeting was expertly chaired by May Wall, a partner in the law firm’s Environmental Law Department in Washington, D.C. The panelists included Kate Sinding, an NRDC Senior Attorney and Deputy Director of NRDC’s New York Urban Program; John Imse, a principal at Environ in Denver, who advises clients in the oil and gas industry; Lawrence A. Wilkinson, an analyst with Standard & Poor’s Oil & Gas Team; and Carol P. Collier, the Executive Director of the Delaware River Basin Commission. All four speakers were knowledgeable, informative and articulate. Unfortunately, there is insufficient space here to summarize all of the speakers' discussion points.

John Imse emphasized how horizontal drilling evolved from the development of  “game-changing technology,” which has spurred significant changes in the gas exploration industry. As a result of new technology, there may be multiple horizontal wells drilled and developed from a single pad location – four to eight wells from a single drilling pad is not uncommon. Each well may have from as few as four to as many as twenty fracturing intervals. According to Imse, “these are not your wildcat wells of the early twentieth century,” but represent highly sophisticated technology.

Imse also discussed the evolving environmental consciousness of the gas exploration industry. He emphasized that “protective steel casing” and “a good cement job” is critical to a well’s success. Contrasting prior poor practices with current practices, Imse described the construction of drilling pads as “highly engineered sites” with liners and berms for spill control, and structural panels on working surfaces to protect the integrity of the liner. He emphasized the evolving consciousness concerning materials management, including the handling of chemicals in large volume containers; spill containment and secondary containment; and on-site 24/7 spill response.

To date, thirteen states have enacted statues requiring disclosure of fracking chemicals used by industry. These thirteen states account for 90% of current gas drilling, according to Imse. In response to pressure by the public and environmentalists, the additives used in fracking have evolved to “more green and more benign components.” For example, Halliburton is increasingly using guar-based gels and food grade mineral oil carriers, and less diesel for fracking.

There are a number of new web-based resources available to the industry. For example, the University of Colorado Natural Resources Law Center has assembled a compilation of Best Management Practices, which Imse strongly recommends as a reference.

Carol R. Collier, the Executive Director of the Delaware River Basin Commission, discussed the importance of the Delaware River Basin to New York City, which extracts 8.7 billion gallons of water per day. Collier’s “bosses” are the governors of the four states that comprise the Delaware River Basin – Pennsylvania, New Jersey, New York and Delaware. Significant portions of Marcellus Shale underlie portions of the Delaware River Basin. Water withdrawal from the Delaware River Basin is a significant concern. In addition to the 100,000-500,000 gallons of water extracted during the drilling of the well, another 5,000,000 gallons of water is withdrawn during the production life of each well.

Kate Sinding, a Senior Attorney with NRDC, discussed the highly charged political backdrop to the fracking controversy. According to Sinding, experiences in Pennsylvania over the past three to four years have given rise to much of the current environmental debate. Fracking has challenged the long held assumption that natural gas is a more environmentally benign fuel than coal, an assumption that is now coming under fire. Sinding expressed concern about environmental issues that she believed were “not amenable to best practices.” 

Originally published in the Toxic Tort Litigation Blog of Epstein Becker Green
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The U.S. Supreme Court has rejected the federal government’s argument that compliance orders issued by the U.S. Environmental Protection Agency (“EPA”) under the Clean Water Act, 33 U.S.C. §§ 1251 et seq. (the “CWA”), cannot be challenged in court.  In a unanimous opinion issued on March 21, 2012, the Court held that such orders constitute “final agency action” that can be challenged under the Administrative Procedure Act, 5 U.S.C. § 706(2)(a) (the “APA”).  Sackett v. United States Environmental Protection Agency, 566 U.S. ___, No. 10-1062 (Mar. 12, 2012).  In so doing, the Court has weakened one of the favored arrows in the EPA’s enforcement quiver. 

The case arose when Chantell and Mike Sackett bought two-thirds of an acre near Priest Lake, Idaho, intending to build their home there.  The vacant lot is zoned residential and is located in a platted subdivision, with sewer and water hookups.  The lot is separated from the lake by several lots where homes have already been built.  Sackett, slip op. at 3.  The Sacketts applied for and obtained the necessary building permits from the local authorities.  They began preparing the lot to build their home by filling in part of it with dirt and rock.  Id.  Not long after they did so, the EPA hit them with a compliance order. 

As the Court explained, the EPA’s compliance order contained a number of “Findings and Conclusions,” including: that the Sacketts’ property contains “wetlands”; that the property’s wetlands are adjacent to Priest Lake, a “navigable water” under the CWA; and that, by filling in about half an acre of the “wetlands” on their property, the Sacketts had discharged pollutants into waters of the United States in violation of 33 U.S.C. § 1311(a).  Slip op. at 3-4.  The order required the Sacketts to return the property to its prior condition and to seek a wetlands permit – costs that, according to the Sacketts, would add up to tens of thousands of dollars, many times the $23,000 they paid for the property.  Failure to comply with the order could result in fines of up to $75,000 per day – $37,500 for the statutory violation and up to $37,500 for violating the compliance order.  Id. at 2.

The Sacketts tried to challenge the wetlands finding – both before the EPA and in federal court under the APA – but their challenges were rejected.  The district court in Idaho concluded that the CWA precludes judicial review of compliance orders before the EPA has started an enforcement action in federal court, and granted the EPA’s motion to dismiss.  Sackett v. EPA, No. 08-CV-185-N-EJL, 2008 WL 3286801 (D. Idaho Aug. 7, 2008).  The Ninth Circuit affirmed.  Sackett v. EPA, 622 F.3d 1139 (9th Cir. 2010).  In other words, under the lower courts’ decisions, the only way in which the Sacketts could obtain judicial review of the compliance order would be to violate the order, wait for the EPA to sue them, and then raise their arguments in the enforcement action brought by the EPA, while potentially accruing up to $75,000 per day in civil penalties.

In his opinion for a unanimous Court, Justice Scalia set out to explain to the reader “what all the fuss is about.”  After describing the Sacketts’ situation and history – what Justice Scalia referred to as the “strong-arming of regulated parties” by government regulators – the Court held that the Sacketts were entitled to seek relief from the courts. 

The Court explained that the APA has a strong presumption in favor of allowing judicial review of final agency actions.  The Court rejected the EPA’s argument that the lack of an express provision allowing judicial review of administrative compliance orders in the CWA precluded such review, explaining:

[I]f the express provision of judicial review in one section of a long and complicated statute were alone enough to overcome the APA’s presumption of reviewability for all agency action, it would not be much of a presumption at all.

 

Slip op. at 8.

The Court held that the EPA’s compliance order against the Sacketts met all the requirements for APA judicial review.  First, the Court held that the compliance order was a “final agency action” because it imposed serious legal obligations on the Sacketts, including significant potential double penalties.  Even more importantly, the order represented the “‘consummation’ of the agency’s decisionmaking process” – because the terms of the compliance order were not subject to any further review, as the Sacketts discovered when they unsuccessfully sought a hearing before the EPA.  Slip op. at 5-6.  Second, the order clearly determined the Sacketts’ obligations by ordering them to restore their property to its prior condition.  Finally, the CWA does not expressly preclude review by the courts.  The Court therefore reversed the judgment of the Court of Appeals and remanded for further proceedings.  Id. at 10. 

Justice Ginsburg and Justice Alito filed concurring opinions.  In her one-paragraph concurrence, Justice Ginsburg emphasized that the opinion does not address the question of whether the property owners “could challenge not only the EPA’s authority to regulate their land under the Clean Water Act, but also, at this pre-enforcement stage, the terms and conditions of the compliance order” – a question that is left for another case and another day.

Justice Alito, in contrast, issued a scathing rebuke of the EPA, the CWA, and Congress, stating that “[t]he position taken in this case by the Federal government – a position that the Court now squarely rejects – would have put the property rights of ordinary Americans entirely at the mercy of [EPA] employees.”  Alito, J., concurring op. at 1.  While the Court’s opinion “provides a modest measure of relief” by allowing property owners to challenge the EPA’s jurisdictional determination under the APA, Justice Alito stated that “[r]eal relief requires Congress to do what it should have done in the first place: provide a reasonably clear rule regarding the reach of the Clean Water Act.”  Id. at 2.  Specifically, Judge Alito criticized the EPA’s and Congress’s failure to define what is meant by “the waters of the United States,” leaving this crucial jurisdictional determination to be made “on a case-by-case basis by EPA field staff.”  Id. 

The decision does not reach the merits of the Sacketts’ challenges to the compliance order, nor does it address the Sacketts’ due process argument.  Nonetheless, the decision is significant, and the stakes are high.  While the media has consistently portrayed this case as a battle between property owners as David against the EPA’s Goliath, the opinion also represents a victory for all property owners, including businesses and corporations.  Indeed, General Electric Co. had sought similar relief in a case last year, and filed an amicus brief in support of the Sacketts.  Moreover, the Court’s decision could impact not only CWA enforcement authority, but possibly could also impact review of compliance orders issued under other federal environmental statutes which, like the CWA, do not contain express prohibitions to judicial review.  And, for cases arising out of orders issued pursuant to statutes that do contain an express prohibition against judicial review, the Court may yet decide to go beyond the terms of the statute and the APA and address the due process argument it did not reach in the Sacketts’ case.

 

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