Supreme Shocker: Environmental Law in the Scalia Era

Photo: Ryan Stoa.

Last Thursday in my Ocean and Coastal Law class, we discussed the Supreme Court's majority opinion in Lucas v. South Carolina Coastal Council.  The opinion, written, by Justice Scalia, required the state of South Carolina to find "background principles" that would have prevented the plaintiff in the case from building on his property before the state enacted regulations that prevented construction on coastal lands for the purpose of environmental protection.  Unable to do so, South Carolina was eventually required to pay compensation for the regulation.  Although a controversial case, most of my students found Scalia's reasoning persuasive, a testament to his skills of argumentation.

After his passing, many have questioned what his death will mean for the Clean Power Plan.  I wrote last week about the stunning implications of the Supreme Court's stay of the plan (putting it on hold until the DC Circuit Court hears the case).  Since Scalia was part of the 5 justices voting for the stay (with 4 against), his passing makes it less likely the CPP will be struck down.  As many others have speculated (see examples here, here, and here), a justice appointed by President Obama, or a hypothetical President Clinton or Sanders, would very likely be more friendly to the CPP than Justice Scalia.  If the Supreme Court doesn't have a ninth justice by the time the DC Circuit issues its ruling, then a 4-4 decision from the Supreme Court would simply maintain the DC Circuit ruling.  And as has been noted, the government got a bit lucky there: the 3-judge panel selected from the DC Circuit court (which has a reputation for being conservative) consists of two judges appointed by Democratic presidents.   

Here's another wrinkle: one of the judges on the DC Circuit panel hearing the case is Sri Srinivasan, an early front-runner for the Supreme Court vacancy in the eyes of many observers.  If he recused himself from the Circuit or was confirmed by the Senate fairly quickly, another judge would be appointed to the Circuit court, which could alter the outcome of the decision.  Alternatively, if Srinivasan participates in the Circuit decision and then gets confirmed, he might recuse himself from the Supreme Court hearing of the case, leaving the door open for a 4-4 decision.

It will be interesting to see how this all plays out.  In the meantime, Dan Farber provides a summary of Scalia's environmental legacy that bears reflection:

Administrative law.  The Chevron test says that an agency’s interpretation of a statute is entitled to deference.  It can be set aside only if it is contrary to an unambiguous statute or if it is an unreasonable interpretation of an ambiguous statute.  There are only three cases in which the Supreme Court has ever held that a statute’s interpretation of an ambiguous statute was unreasonable, all three written by Scalia: Whitman v. American Trucking, UARG v. EPA, and Michigan v. EPA.  In all three cases, the “unreasonable” agency was EPA.  To be fair, in American Trucking, he did admit that another portion of the statute unambiguously required air quality standards to be based solely on health effects, not cost.

Property rights.  Justice Scalia wrote two major opinions elevating property rights over land use controls.  In the Lucas case, he held that a government regulation is a taking if it completely blocks development or other economic use of the land.  In the Nolan case, he held that even when the government would be justified in denying a permit completely, it can’t impose “logically unrelated” conditions on the permit, even if those conditions are in the public interest. In Stop the Beach Renourishment, he tried to freeze property law in place for all time by holding that a decision by a state supreme court reinterpreting state property law can be a taking.

Standing.  Justice Scalia wrote major opinions limiting standing for environmental groups in National Wildlife Federation, Defenders of Wildlife, and Summers v. Earth Island Institute, Scalia narrowed standing law, making it more difficult for environmental groups to sue.

Federal jurisdiction. In Rapanos,  a plurality opinion by Scalia attempted to cut back drastically on federal authority over wetlands and streams.  Justice Kennedy, the swing voter, wrote a more nuanced opinion that gave the federal government more maneuvering room.

Supreme Shocker: court orders stay of Clean Power Plan

Courtroom of the United States Supreme Court.  Photo: John Marino.

In a move virtually no one saw coming, the United States Supreme Court ordered a stay of the Environmental Protection Agency's Clean Power Plan pending review by the DC Circuit court.  The Clean Power Plan requires states to reduce greenhouse gas emissions by regulating emissions from electricity producers such as coal plants.  The DC Circuit is hearing the case to decide on its constitutional validity.

While the constitutionality of the Clean Power Plan had been questioned and debated by observers, it is highly unusual for the Court to insert itself into a pending case of a lower court in this way.  The DC Circuit had scheduled review of the CPP according to a timeline that would allow for a decision before any major action by the states, so few were expecting the Supreme Court to intervene and put a hold on the CPP in such urgent fashion.  Here's Patrick Parenteau on how odd the order is:

This action is unprecedented in a number of ways. The majority made none of the findings typically required to obtain a stay. There is no analysis of the merits of any of petitioners’ claims. There is no showing that the rule threatens any immediate harm to petitioners, especially given the long lead times EPA has built into the process. There is no showing that the balance of hardships tips decidedly in favor of the petitioners, especially given the fact that most states are well into the process of developing implementation plans and those that do not want to submit a plan don’t have to. There is no showing that the stay is in the public interest, especially given the warnings from the scientific community that time is fast running out to avoid catastrophic consequences of climate disruption. Never before has the Court interjected itself in a case with such high stakes that hasn’t even been fully briefed and argued before the lower court.

This is what the Court's order looks like: 

The order isn't a final decision invalidating the CPP, but it does create uncertainty for states who were developing plans to comply.  And it suggests that the five justices in favor of the stay may eventually overturn the plan.  Some have suggested the Court believes the EPA needs a more express authorization from Congress to implement such sweeping regulations.  If that's the case, it will deal a severe blow to the United States' chances to meet the climate commitments we signed onto in the Paris Climate Agreement.  Many states are leading the way on climate change mitigation, but the CPP was a key tool in requiring regulation in all states.  At the very least, the order ensures there will be a lot of attention on the DC Circuit as it hears the case and renders its opinion.  

Supreme Court ruling preserves (and explains) electricity demand response programs

Image by Good Energy

The Supreme Court issued a ruling this week that hasn't dominated the news cycle, but will have a profound impact on the way electricity markets operate.  In Federal Energy Regulatory Commission v. Electric Power Supply Association, the Supreme Court upheld a Federal Energy Regulatory Commission (FERC) rule that required electricity operators to compensate demand reductions at the same rate as supplied electricity.  In other words, if you can manipulate the demand for electricity by communicating with consumers and asking for voluntary energy reductions during peak demand periods, every megawatt of avoided electricity will be compensated at the same price as a megawatt of supplied electricity.  

These manipulations are called demand response programs, and they provide benefits across the market.  Major consumers get paid to reduce their energy consumption during peak demand periods, utilities reduce their reliance on the most expensive energy sources, the likelihood of power outages goes down, and consumers benefit from lower prices of wholesale power.  And of course, a reduction in energy consumption is a win for the environment.  The only real losers are energy producers, such as the Electric Power Supply Association.  [David Roberts has a nice rundown of the history of demand response and this case.]

The EPSA contention was that FERC didn't have the authority to issue the rule because regulating retail electricity is a power reserved to the states.  The Court disagreed on the grounds that the Federal Power Act gives FERC the authority to regulate not only wholesale power rates, but also any practices affecting wholesale power rates.  Demand response directly affects wholesale power rates in obvious ways, so the Court ruled that FERC has the authority to create the rule.  The ruling preserves the existence and growth of demand response programs.

But as Matthew Christiansen notes, the Court went even further by finding that regulation of demand response is unambiguously within FERC's authority.  That means FERC won't be able to dismantle demand response programs in the future by reinterpreting its position that it has jurisdiction to regulate them (something a future FERC administration might want to do).  It could do so on substantive policy grounds, but at this point all the evidence on demand response programs supports their continued existence, so a substantive reversal would be tough to justify.

The Court's opinion, which is surprisingly clear in its explanation of demand response programs, can be seen here.