The Supreme Court and Environmental Law: A Whole New Ballgame?

Phillip D. Reed

The recently completed 1983-1984 Term of the Supreme Court has been labeled a sweeping victory for the Reagan Administration and conservatives on the Court.¹ Though only a few of the Court's decisions dealt directly with the substance or practice of environmental law, they largely reflect the conservative trend and hint at possible fundamental changes in the implementation of environmental law. The administration triumphed in most of the environment-related cases, winning freedom to lease outer continental shelf (OCS) oil without adhering to state coastal zone management plans, to allow industry greater flexibility to modernize in areas with unhealthy air quality, and to use and disclose industry health and safety data in registering pesticides. Environmentalists' victories mostly came in the Court's decisions not to review certain cases. The opinions issued give some impetus to the Reagan goals of new federalism, regulatory reform, and cost-benefit decisionmaking. The one goal arguably on the conservative agenda that is clearly not served by the decisions is enhanced protection of private property interests. The most significant developments for environmental law as a result of the Court's apparently increasing conservatism will be changes in judicial review of agency rulemaking and a tendency of the Court to force the balancing of environmental goals with economic interests, which together would give federal agencies greater flexibility and independence in interpreting and implementing environmental law.

Scorecard

During the 1983-1984 Term the Court denied review or dismissed appeals in 36 cases in environmental law and related fields, granted review in six cases, summarily vacated two decisions, and issued six opinions (of which only three actually construed environmental statutes).² The Court's actions will significantly affect the implementation of four major environmental statutes — the Clean Air Act;³ Coastal Zone Management Act (CZMA);⁴ Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA);⁵ and Federal Water Pollution Control Act (FWPCA)⁶ — and one area of nonstatutory environmental law: the public trust doctrine. The Court also ruled on a number of nonstatutory issues that arise in environmental law: judicial review, regulatory and eminent domain takings of private property, and preemption of state law by federal statutes.

The Court's Impact on Environmental Law

The Clean Air Act

The Court ruled in two Clean Air Act cases this Term, but in only one did it reach the statutory issue.⁷ Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.⁸ is principally a ruling on judicial review, but the Court's analysis of the Clean Air Act could have major ramifications. The Court upheld the Environmental Protection Agency's (EPA's) redefinition of "source" to allow use of the "bubble policy" to enable companies with plants in nonattainment areas to modernize without undergoing stringent new source review. The Court accepted EPA's argument that a major purpose of the 1977 amendments to the Act, which added the nonattainment program, was encouraging economic development, a purpose equal to that of cleaning up nonattainment areas. Coupled with the Court's ruling that EPA's discretion is virtually unassailable whenever the intent of Congress is ambiguous, this appears to give EPA much greater flexibility in implementing [14 ELR 10263] the potentially tough program for cleaning up the many areas of the country whose air is still unhealthy.

Coastal Zone Management Act

The Supreme Court used an axe to trim away what it concluded was an overextension of the CZMA's consistency requirements to OCS oil and gas leasing. The broad stroke also may have cut off other applications of the Act beyond the three-mile limit. In Secretary of the Interior v. California,⁹ the Court ruled by a five-to-four margin that OCS oil and gas lease sales do not "directly affect" the coastal zone (which extends to the three-mile limit of state jurisdiction) and thus do not require determination of their consistency with state coastal zone management plans under § 307(c)(1) of the Act. The Outer Continental Shelf Lands Act (OCSLA),¹⁰ which requires leaseholders to make consistency determinations before exploration and again before development, expressly provides all the CZMA review Congress intended for OCS leasing, the Court concluded. Because the Court's primary rationale was that the original CZMA (from which § 307(c)(1) remains unchanged) did not apply beyond the coastal zone, the decision also casts doubt on the applicability of § 307(c)(1) to other OCS activities.¹¹

Federal Insecticide, Fungicide, and Rodenticide Act

In Ruckelshaus v. Monsanto Co.¹² the Court upheld the constitutionality of the data use and disclosure provisions at the heart of FIFRA's pesticide registration scheme.¹³ FIFRA requires applicants to submit health and safety data for new products, but allows EPA to use that data later to support registration of other companies' products with the same ingredients and to disclose the data to the public. The Court ruled that the health and safety data could be a trade secret subject to property rights under state law. However, it went on to rule that there could only be property rights in the data if FIFRA affirmatively provided a basis for a reasonable investment-backed expectation that the data would be treated confidentially, which FIFRA did only in the period between 1972 and 1978 amendments. Finally, the Court narrowly construed an exclusive compensation provision in FIFRA to allow the Tucker Act's compensation remedy to apply, thus making any taking possible under FIFRA¹⁴ constitutional. The decision provides clear recognition of potential property rights in health and safety data, but makes the rights difficult to establish, and upheld the FIFRA regulatory scheme.

Federal Water Pollution Control Act

Though the Court decided no FWPCA cases last Term, it tacitly reinforced vigorous implementation and enforcement of the Act by denying certiorari in several cases. The Court declined to review a D.C. Circuit ruling that continued district court jurisdiction over EPA's implementation of a 1976 settlement agreement establishing a framework for regulating toxic water pollution does not impermissibly infringe on EPA's discretion.¹⁵ The Court thus preserved the Natural Resource's Defense Council's unusual leverage over EPA's implementation of the toxic water pollution program. The Court also let stand two criminal convictions and a decision allowing EPA to monitor wastewater before treatment, even though the applicable permit only specified post-treatment monitoring.¹⁶ The Court also rejected certiorari in a case upholding a Corps of Engineers denial of an application for an after-the-fact § 404 permit for construction of a levee and pumping station.¹⁷ Other certiorari denials preserved decisions limitingFWPCA authority, but only in areas at the fringe of the Act's established reach.¹⁸ The Court's [14 ELR 10264] FWPCA actions suggest a desire to avoid cases involving the details of implementation. Next Term, however, the Court will hear a major case addressing fundamental FWPCA standard-setting issues in the context of EPA's pretreatment program.¹⁹

Public Trust

The 1983-1984 Term was a partial victory for those seeking to expand the environmental role of the public trust doctrine, which gives the states a right and fiduciary duty to control development of certain resources traditionally held by the sovereign for the commonweal. The Court considered two California Supreme Court decisions recognizing and expanding the scope of the public trust in navigable waters and associated lands. The Court chose not to hear the appeal²⁰ from National Audubon Society v. Superior Court.²¹ There the California court held that the public trust applies to the nonnavigable tributaries of Mono Lake, a navigable water body, and provides an independent source of water law applicable to Los Angeles' past and proposed diversions of water from the tributaries. On the other side of the ledger, in Summa Corp. v. California ex rel. State Lands Commission,²² the Court reversed the California Supreme Court's decision finding a public trust interest in privately held tidelands ceded by Mexico in the Treaty of Guadalupe Hidalgo after the Mexican-American War.The Court held that the public trust interest claimed by the state did not survive patent proceedings conducted to carry out an internatonal duty owed to Mexico as a result of a treaty. The Court said, for the first time,that although the public trust arises from sovereignty, it can be extinguished under some circumstances. Since the Treaty of Guadalupe Hidalgo covered much of today's American Southwest, the limitation on the public trust is substantial. However, the decision did recognize that a state's public trust interest can be strong enough to allow control of private use of the affected lands for environmental protection.

Judicial Review

In two of its decisions the Court struck blows at judicial activism. In Chevron, the Court rebuked the D.C. Circuit for resolving policy questions properly left to Congress or EPA. The Court directed the lower court to confine its attention to statutory language and legislative history. Those waiting for the substantive "other shoe to drop" since the Court's 1978 command²³ that the federal judiciary not meddle in agency procedures heard it loud and clear in Chevron. In Hawaii Housing Authority v. Midkiff,²⁴ a land use case, the Court reminded the Ninth Circuit that its role in reviewing a state exercise of its power of eminent domain is narrow and the state law must be upheld if it is rationally related to a conceivable public purpose. The Court went on to announce that a federal court owes a state legislature the same deference it must extend to Congress.

Property Rights

While trimming back the reach of environmental programs in some areas, the court confirmed in unmistakable terms the power of government to restrict private property rights by the exercise of its police powers. In Monsanto, the Court recognized that companies can have protected property rights in pesticide health and safety data produced to comply with FIFRA. However, this can only be the case where the operative federal law affirmatively establishes the basis for a reasonable expectation that the data will not be used in a way that benefits competitors and will not be disclosed to the public. The Court also ruled that data use by EPA to the benefit of subsequent pesticide registration applicants is a public use. In Hawaii Housing Authority, the Court ruled that condemning privately owned land for resale to other private owners as part of a land reform program was for a public use and thus was constitutional. From a conservative Court, Hawaii Housing Authority seems a strikingly liberal construction of the Fifth Amendment's Public Use Clause.

Preemption

In Silkwood v. Kerr-McGee Corp.,²⁵ the Court held that the Atomic Energy Act (AEA)²⁶ does not preempt recovery of punitive damages otherwise available under state tort law from the operator of a federally licensed plutonium-processing facility. The five Justice majority concluded that the legislative history of the AEA does not evince an intent to preempt state common law remedies for radiation injuries and that allowing such remedies neither conflicts irreconcilably with the federal scheme nor frustrates its implementation. Coupled with a decision in the preceding Term,²⁷ Silkwood gives the states a significant handle on nuclear power development and production. The Court's reluctance to allow preemption of state tort law may give further impetus to the growing [14 ELR 10265] field of toxic torts litigation, but the Court kept its hands off all other cases more directly dealing with that field in the last Term.²⁸

How Conservative Was the Court?

The Court's last Term saw modest advances toward some traditional conservative goals: the new federalism, regulatory reform, and cost-benefit decision making. Two decisions addressed the balance between state and federal interests in environmental law. In Secretary of the Interior the Court refused to approve a strengthening of the states' role in overseeing OCS oil and gas development. In Silkwood the Court again narrowly construed the AEA's preemption of state involvement in the nuclear power industry. A possible distinction is that the state interests in Silkwood stemmed from the state's sovereignty, while those in Secretary of the Interior stemmed from a grant of Congress, extending state influence to an area of unquestioned federal jurisdiction.

On the regulatory reform front, where the conservative objectives include deregulation and increased independence of regulators from judicial oversight, conservatives scored two victories in Chevron. The Court showed that it is more sympathetic to regulatory reform than to simple deregulation. It held that EPA's articulation of some reasonable rationale for revising its "source" definition sufficed, even though EPA had no data backing up its rationale. This distinguishes Chevron from a case in the preceding Term,²⁹ where the Court disapproved a regulatory reversal for which the agency's limited justification was contrary to the established record. An agency can reshape a regulation within the bounds of its discretion; it cannot so easily erase one. And in Chevron the Court also laid out narrow limits on judicial review of agency interpretation of the statutes it must implement.

The Court did not directly address cost-benefit decisionmaking, but the results in two of its cases suggest some support for the general approach, which treats environmental harm not as a prohibited evil, but as one cost to be factored into a broad analysis of the costs and benefits of alternative actions.Chevron and Secretary of the Interior taken together suggest a desire on the part of a majority of the Justices to ensure that environmental protection objectives in federal statutes not be given primacy over other national objectives unless Congress expressed that intent with utmost clarity. In Secretary of the Interior the Court recognized that Congress intended the CZMA and OCSLA to be dance partners. The majority concluded on the basis of rather strained reasoning that the latter statute with its resource development purpose and specific consistency requirements was to lead, although a more straightforward argument can be made that Congress intended the OCSLA to follow the CZMA's preexisting consistency scheme. In Chevron the Court forced integration of environmental protection and economic development purposes it found, somewhat surprisingly,³⁰ reflected with equal strength in the Clean Air Act's legislative history. The result is that EPA now has great flexibility to balance these objectives in overseeing implementation of the Act.

It is only in the area of private property rights that the Court seems to have departed from the conservative agenda. In Hawaii Housing Authority and Monsanto the court rejected property-based constitutional challenges to state and federal legislation. The Monsanto Court did give limited recognition to property interests in health and safety data required for registration of new pesticide products, but it is apparent from these decisions that private property rights can offer only slight resistance to the exercise of properly authorized government regulatory authority.

Conclusion

The Supreme Court may have begun to chart a radical departure from established norms of environmental law in its recently completed Term. The conservative influence is making itself felt. Judicial conservatism is not necessarily anti-environmental, but it will strongly affect environmental law and litigation. The Court's apparent desire to accommodate environmental protection commands with conflicting commands of other national programs could dull the cutting edge of rigid environmental standards and deadlines. The Court's present course on judicial review will lead to significant changes in the venue of environmental disputes. Within the state-federal system, the Court has blessed state efforts to exercise their sovereign powers, even when the states cut very close to areas under federal control. This suggests enlarged opportunities for development of state environmental jurisprudence. Within the federal system, the Court has cut back on judicial review of administrative action, in effect tossing the task of oversight back to Congress in a constitutional game of hot potato.³¹ Broad statutory directives, general statements of policy, and delegations of rulemaking power, the hallmarks of environmental legislation and administrative law generally since the New Deal, may give way to more specific, restrictive language to check [14 ELR 10266] agency discretion. Congress will have to face issues that it deliberately glossed over in the past.

Congress has begun to reexamine some of the areas³² where the Court has so readily bowed to agency interpretation of statutes. Congressional review of these issues is proving time-consuming and divisive. The nature and magnitude of Congress' new administrative oversight review responsibilities are sure to be unwelcome. Congress may be forced to toss the potato back to the courts through reforms in regulatory review laws.

1. N.Y. Times, July 8, 1984, § 1, at 1.

2. For summaries of all the Court's actions this Term, see In the Supreme Court at 13 ELR 10381 & 10424; 14 ELR 10026, 10084, 10143, 10178, 10210, 10247, & 10280.

3. 42 U.S.C. §§ 7401-7642, ELR STAT. 42201.

4. 16 U.S.C. §§ 1451-1464, ELR STAT.41701.

5. 7 U.S.C. §§ 135-135k, 136-136y, ELR STAT. 42301.

6. 33 U.S.C. §§ 1251-1376, ELR STAT. 42101.

7. In United States v. Stauffer Chemical Co., __ U.S. __, 104 S. Ct. 575, 14 ELR 20064 (Jan. 10, 1984), the court did not reach the Clean Air Act issue. The government appealed a Sixth Circuit decision that § 114 does not authorize the use of private contractors to conduct enforcement inspections. The Court ruled that the government was collaterally estopped from litigating the issue against Stauffer in the Sixth Circuit since it had litigated the same issue against the company in the Tenth Circuit, lost, and failed to seek Supreme Court review. The Clean Air Act question remains unresolved. The decision's impacts will be on where and against whom the federal government decides to fight its legal battles and on how it evaluates whether to take its first adverse court of appeals ruling on an issue to the Supreme Court.

8. 14 ELR 20507 (U.S. June 25, 1984).

9. __ U.S. __, 104 S. Ct. 656, 14 ELR 20129 (Jan. 11, 1984). For a discussion of the opinion, see Comment, Supreme Court Beaches Coastal Zone Management Act, 14 ELR 10161 (Apr. 1984) [hereinafter cited as CZMA Comment].

10. 43 U.S.C. §§ 1801-1866, ELR STAT. 42475.

11. See CZMA Comment, supra note 9.

12. 14 ELR 20539 (U.S. June 26, 1984).

13. See Safir & Reagan, Data Use and Compensation Under FIFRA: Monsanto in the Supreme Court, 14 ELR 10055 (Feb. 1984).

14. The Court subsequently also vacated and remanded the decision in Union Carbide Agricultural Products Co. v. Ruckelshaus, 571 F. Supp. 117, 13 ELR 20969 (S.D.N.Y. 1983). That decision held that FIFRA's data disclosure provision was constitutional, but that the provision establishing exclusive compensation through binding arbitration was not. The Supreme Court's summary action in Ruckelshaus v. Union Carbide Agricultural Products Co. is cited at 52 U.S.L.W. 3927, 3928, 14 ELR 10280 (U.S. July 2, 1984).

15. Union Carbide Corp. v. Natural Resources Defense Council, Inc., No. 83-1345, 52 U.S.L.W. 3859, 14 ELR 10281 (May 29, 1984), rehearing denied 52 U.S.L.W. 3929, 14 ELR 10281 (July 2, 1984).

16. Frezzo Brothers v. United States, No. 82-2136, 52 U.S.L.W. 3263, 13 ELR 10382, (Oct. 4, 1983); Lanigan v. United States, No. 82-1635, 52 U.S.L.W. 3262, 13 ELR 10382 (Oct. 4, 1984); and Mobil Oil Corp. v. Environmental Protection Agency, No. 83-1290, 52 U.S.L.W. 3818, 14 ELR 10248 (May 14, 1984).

17. Bayou Des Familles Development Corp. v. United States Corps of Engineers, No. 83-734, 52 U.S.L.W. 3628, 14 ELR 10178 (Feb. 28, 1984).

18. The court declined to review a rejection of an inferred private right of action under the FWPCA, Davis v. United States, No. 83-1241, 52 U.S.L.W. 3773, 14 ELR 10248 (Apr. 23, 1984); and a decision that reconstruction and operation of a water diversion project does not constitute a discharge from a point source, Tennessee Water Quality Control Board v. Tennessee Valley Authority, No. 83-1184, 52 U.S.L.W. 3749, 14 ELR 10210 (Apr. 16, 1984).

19. National Association of Metal Finishers v. Environmental Protection Agency, 719 F.2d 624, 13 ELR 21042 (3d Cir. 1983), cert. granted sub nom. Chemical Manufacturers Association v. Natural Resources Defense Council, Inc. No. 83-1013 and Environmental Protection Agency v. Natural Resources Defense Council, Inc. No. 83-1373, 52 U.S.L.W. 3783, 14 ELR 10247 (Apr. 30, 1984). See Neuman, Third Circuit Clears Way for National Pretreatment Program, 14 ELR 10039 (Feb. 1984) and Want, Third Circuit Reopens Basic Water Act Issues by Invalidating FDF Variance, 14 ELR 10047 (Feb. 1984).

20. Los Angeles v. National Audubon Society, No. 83-300, 52 U.S.L.W. 3362, 14 ELR 10424 (Nov. 7, 1983).

21. 33 Cal. 3d 419, 658 P.2d 709, 13 ELR 20272 (1983). See Rossmann, Public Trust in Appropriated Waters: California Supreme Court Decides Mono Lake Case, 13 ELR 10109 (1983); and Dunning, The Mono Lake Decision: Protecting a Common Heritage Resource from Death by Diversion, 13 ELR 10144 (1983).

22. __ U.S. __, 104 S. Ct. 1751, 14 ELR 20464 (Apr. 17, 1984).

23. Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 8 ELR 20288 (1978).

24. 14 ELR 20549 (digest) (U.S. May 30, 1984).

25. __ U.S. __, 104 S. Ct. 615, 14 ELR 20077 (Jan. 11, 1984).

26. 42 U.S.C. §§ 2011-2282, ELR STAT. 41201-41241.

27. Pacific Gas & Electric Co. v. State Energy Conservation & Development Commission, __ U.S. __, 103 S. Ct. 1713, 13 ELR 20519 (1983) (California's moratorium on nuclear power plant construction is not preempted by the AEA because it addresses economic, not safety concerns).

28. Court denied certiorari in five toxic tort cases: Todd Shipyards Corp. v. Black, No. 83-1201, 52 U.S.L.W. 3750, 14 ELR 10210 (Apr. 16, 1984) (Employer covered by Longshoremen's and Harbor Workers' Compensation Act is liable for employees' asbestos injuries as against subsequent employer not covered; and the time of injury is the date of loss of wage-earning capacity); Thompson v. Johns-Manville Sales Corp. No. 83-1192, 52 U.S.L.W. 3680, 14 ELR 10179 (Mar. 20, 1984) (Louisiana law does not recognize market share or enterprise theories of liability for asbestosis); Diamond Shamrock Chemicals Co. v. Ryan, No. 83-1174, 52 U.S.L.W. 3636, 14 ELR 10178 (Feb. 28, 1984) (Agent Orange plaintiffs certified as a class); Mondelli v. United States, No. 83-632, 52 U.S.L.W. 3597, 14 ELR 10143 (Feb. 21, 1984) and Hinkie v. United States, No. 83-809, 52 U.S.L.W. 3597, 14 ELR 10143 (Feb. 21, 1984) (both cases: Federal Tort Claims Act action for injuries caused by exposure of serviceman to radiation barred by Feres doctrine).

29. Motor Vehicle Manufacturers Ass'n of the United States v. State Farm Mutual Automobile Insurance Co., __ U.S. __, 103 S. Ct. 2856, 13 ELR 20672 (1983) (National Highway Traffic Safety Administration acted arbitrarily and capriciously in rescinding passive restraint requirement without considering alternatives to complete rescission and without explaining its reasons in the record).

30. See Comment, NRDC v. Gorsuch: D.C. Circuit Bursts EPA's Nonattainment Area Bubble, 12 ELR 10089 (1982).

31. Congress is ill-equipped for this task, since its legislative veto power was eliminated by the Court in Immigration and Naturalization Service v. Chadha, __ U.S. __, __ S. Ct. 2764, 13 ELR 20663 (1983).

32. See CZMA Comment, supra note 9.