Major U.S. Supreme Court Decisions in Enviro/Admin Agency Law

SCOTUS ADOPTS “MAJOR-QUESTION DOCTRINE” TO OVERTURN EPA CLEAN POWER PLAN.
Is this a preview of things to come in the next term when SCOTUS takes up WOTUS again?
The Supreme Court this morning issued its decision in West Virginia v. EPA, No. 20-1530. The case involves the EPA’s Clean Power Plan, which the EPA developed to reduce carbon-dioxide emissions by creating a cap-and-trade system. The goal of the Plan was to reduce the number of coal plants while encouraging the construction of new wind and solar power plants. Holding that Congress did not give EPA express authority under Section 111 of the Clean Air Act to adopt a cap-and-trade system, the Court struck down the Plan.

The decision will have broad consequences, not only with respect to environmental regulation but across all federal agency regulation. With regard to federal-agency authority of gap-filling on significant issues (“major questions,” as described below), the Court admonishes agencies against stepping beyond clear Congressional authorization. In examining the Clean Power Plan, the 6-3 majority stated “[a] decision of such magnitude and consequence rests with Congress itself, or an agency pursuant to a clear delegation from that representative body.”

For the first time, the Court expressly adopts the “major-question doctrine.” While the Court pointed to prior decisions that had adopted or applied some principles underlying the doctrine, this decision formally adopts the doctrine as a standard for examining the scope of agency authority. Under this doctrine, an agency “must point to clear congressional authorization for the power it claims” to justify regulations involving “major questions.”

What types of regulations would involve a “major question” is unclear. The Court describes a “major question” as one in which “both separation of powers principles and a practical understanding of legislative intent make us reluctant to read into ambiguous statutory test the delegation claimed to be lurking there.” But what does that mean?

Certainly, a regulation that imposes a significant change on an industry will be a “major question.” And an expansion of an agency’s view of the scope of its authority in the absence of new legislation will likely be a “major question.” Beyond that, there is a lot about the “major-questions doctrine” we don’t know.  

Two things are apparent: First, Congress will have to get deep into the weeds of the subject matter to vest an agency with regulatory authority over a “major question.” The statutory authority of the EPA to establish emissions caps at a level reflecting “the application of the best system of emission reduction” was not sufficient to save the Clean Power Plan. However, the Court did acknowledge that on the Clean Power Plan, “Congress had conspicuously and repeatedly declined to enact” such action by legislation – thus, implying that if a major-question requirement is considered and unsuccessful at the legislative level, it may be off-limits for regulatory action. The Court would likely have required congressional action specifying some measure of details of the plan it wanted implemented. As the Court stated, “agencies have only those powers given to them by Congress, and ‘enabling legislation’ is generally not an open book to which the agency may add pages and change the plot line.”

Second, what is and isn’t a “major question” will likely be a source of litigation for many years to come, as states, citizens, and industry groups seek to overturn new and existing federal regulations. Such challenges will have a significantly greater likelihood of success – and will surely consume significant time and legal resources – after this decision.

Another item that is not apparent from this decision is the status of the “Chevron deference” doctrine, whereby the courts historically have deferred to relevant agencies’ interpretations of ambiguous statutes they are tasked to administer. Whether Chevron deference survives and, if so, the circumstances and boundaries of that deference, are unclear from this decision. There are elements of both the majority decision and the concurrence of Justices Gorsuch and Alito that appear to cast doubt on some of the principles behind the Chevron deference standard; at the very least, it is likely that the doctrine also will be litigated vigorously in the very near future.   The Court’s opinion is available on its website at https://www.supremecourt.gov/opinions/21pdf/20-1530_n758.pdf

SCOTUS TAKES UP WOTUS FOR THE 2022-23 TERM.

In its next term that begins in October, the Supreme Court will take on another federal-jurisdictional decision regarding the Clean Water Act and the definition of jurisdictional waters. On January 24, 2022, the Court granted certiorari to determine the proper test for ascertaining whether wetlands are “waters of the United States” (“WOTUS”) under the Clean Water Act 33 U.S.C. § 1362(7). 

This is the second time the Sackett family will be before the Supreme Court, as the Court determined Sackett vs. EPA I on the issue of whether the Sacketts could bring suit against the EPA for a compliance order that EPA issued to the Sacketts for filling in half their property with dirt and rocks to build a home. Sacket v. EPA I, 566 U.S. 120 (2012). The Court held that the compliance order issued by EPA was subject to the Administrative Procedure Act, and thus APA review was not precluded by the Clean Water Act.

Now, the Sacketts are before the Supreme Court again, but this time they argue that EPA erred in using a certain test to determine whether to issue the compliance order. EPA relied on Justice Kennedy’s “significant-nexus” test from the plurality decision in Rapanos v. United States, 547 U.S. 715 (2006). The Sacketts argue that instead of using the significant-nexus test, EPA should have used Justice Scalia’s “relatively permanent” test, a narrower jurisdictional test which states that only relatively permanent tributaries and adjacent wetlands that have a continuous surface connection to such tributaries are jurisdictional as waters of the United States.

While EPA has attempted to capture both ends of the spectrum in WOTUS rulemakings since 2006 (with “relatively permanent” on the more limited jurisdictional side, and “significant nexus” with a broader hydrological-connection reasoning), the Court is now in a position to choose one, or perhaps adopt a different metric altogether. The Ninth Circuit found in favor of EPA, holding that Kennedy’s concurrence (and therefore the significant-nexus test) was the controlling opinion in Rapanos.  Sackett v. EPA, 2021 WL 3611779 (9th Cir.Aug. 16, 2021). The Supreme Court will hear oral arguments on this issue in the Fall of 2022.

This summary was prepared jointly by attorneys in Lloyd Gosselink’s Water and Litigation Practice Groups. If you would like more information, please contact us at 512-322-5800 or info@lglawfirm.com.

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