Recent Supreme Court Cases Impact Environmental and Natural Resources Law

The final days of the 2023 term of the U.S. Supreme Court have seen the issuance of several decisions that may or may not, depending on one’s perspective and desired strategy, have significant implications for the practice of administrative law, as well as the interpretation and enforcement of environmental and natural resources law (among other areas of law). They include Loper Bright Enterprises v. Raimondo, Relentless, Inc. v. Department of Commerce, Securities and Exchange Commission v. JarkesyAND Corner Post, Inc. v. Board of Governors of the Federal Reserve Systemtogether with Ohio. v. Environmental Protection Agency (in which B&D successfully represented the petitioner in obtaining a stay of the U.S. Environmental Protection Agency’s (EPA) Good Neighbor Rule. Major media outlets provided high-profile coverage of each case and its potential ramifications. B&D provided summaries of these cases earlier this year in our Litigation Look Ahead series.

While each case may have its own unique implications, in this review we highlight some of the potential impacts these cases may have when considered collectivelyWhile the long-term effects are unknown and could manifest themselves in different ways depending on the statute, venue, and case at hand, these decisions and others in the 2022 and 2023 Supreme Court terms continue the Court’s trend toward deregulation in the federal government and consolidation of power in the judiciary to decide regulatory issues. This creates both challenges and opportunities for the regulated community.

Each regulated entity should reassess, in a holistic manner, its regulatory and litigation strategy—including active or recently concluded rulemaking challenges, enforcement actions, and lawsuits—because the latter can create new risks and opportunities. U.S. federal and state regulators—as well as environmental and other nongovernmental organizations—are undoubtedly doing the same.

Key Potential Implications

• Although the Supreme Court did not refer directly to Chevron at least since 2016. Chevron was the rule in force in lower courts. Depending on the location, problem and case, the effects Loper Light the decision could therefore be more gradual and subdued or immediate and significant. For example, the Supreme Court’s latest ruling orders the District of Columbia Court of Appeals to reconsider a renewable fuel developer’s victory after Loper Light decision.
• Loper Light invalidates Chevron based on a separation of powers analysis that emphasizes judicial decisions rather than agency interpretations. It provides an opportunity to challenge provisions that did not previously exist. Although courts are likely to consider an agency’s interpretation of technical language in a statute if the agency’s area of ​​expertise can shed light on the meaning of the term (without having to rely on the agency’s interpretation).
• When we consider the effects of capsizing Chevronget used to it Skidmore respect from pre-1944 timesChevron decision. Indeed, Skidmore provides that judicial obedience to an agency’s interpretation depends on its “persuasiveness.” Chief Justice Roberts refers to Skidmore five times in his Loper Light opinion. The US government may try to use Skidmore instead Chevron arguments.
• This Loper Light This decision will have a significant impact on agencies’ ability to adopt new interpretations of the regulations. For example, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service routinely relied on Chevron introduction of far-reaching regulations under the Endangered Species Act and the Marine Mammal Protection Act.
• There will probably be many cases in which the language of the statute will be so clear that judges will not be able to discern the ambiguities claimed by applicants. Still, some key statutory interpretation issues could be revisited. Some provisions of the Clean Air Act (CAA), Clean Water Act (CWA), Endangered Species Act (ESA), and Resource Conservation and Recovery Act (RCRA), as well as recent major environmental and energy cases such as those involving the SEC’s climate change disclosure rules and electric vehicles, are among those most likely to be revisited.
• Judges may interpret unclear provisions differentlywhich could lead to more conflicting interpretations of the same statutory provisions and force the intervention of an appellate court or the Supreme Court to resolve divisions in lower courts.
• Industry and trade associations should consider which issues should be re-examined. There may be disincentives to revisit an issue if the industry has already invested significantly in adoption and implementation. Loper LightThe Supreme Court has made it clear that this decision is a decision for the future. However, Corner post in some cases, it allows for the possibility of challenging provisions that go beyond the six-year limitation period set out in the Administrative Procedure Act (APA).
• The EPA will continue (and likely increase) to shape policy by interpreting data and making policy in ways that are less amenable to judicial review. Companies will have to actively engage in situations where even in the new Loper Light landscape, the opportunities to take up challenges are limited.
• Auer the issue of deference, Supreme Court precedent regarding how the agency interprets its own regulations, was not discussed in Loper Light decision and remains available, especially after the Supreme Court decision in the case Kisor vs Wilkie. This will impact many rulemaking, compliance and enforcement activities. Application Auera court may be more likely to defer to an agency’s interpretation of ambiguities in its own regulations than to its interpretation of ambiguities in the law enacted by Congress. For example, the EPA has increasingly used its “reinterpretations” of old regulations (such as the Benzene Waste Operations NESHAP) in the context of enforcement to achieve results that it could not achieve through regulation or that would be difficult to achieve because it would have to go through the rulemaking process, cost-benefit analysis, and so on.
• EPA and other agencies can use the enforcement approach to rulemaking and avoid APA rulemaking. Companies must pay maximum attention to compliance with existing regulations to minimize the leverage agencies have in the enforcement context. Any matters of interpretation or challenge to the regulations will also need to meet the requirements of the statute under which they arise (CAA, CWA, RCRA, etc.), which may involve jurisdictional limitations.
• Almost every time a litigant argues with the government about the interpretation of a statute, in any way, Loper Light will be quoted. Corner post reinforces this phenomenon by creating the possibility of challenging agency regulations even after several years. Loper Light may be broader in scope than just statutory matters because it includes more detail and content regarding the APA.
• View analogies of state courts and state laws. Full impact Loper Light it is unclear where the current requirements in state courts require deference to agency interpretations in favor of the strict separation of powers approach that underlies Loper Light.
• Loper Light should be read in accordance with West Virginia v. EPAalso written by Chief Justice Roberts on the “most important questions doctrine,” which still applies. To the extent that complainants can present their arguments as addressing important issues that Congress has not specifically authorized any agency to regulate, their complaint is more likely to succeed.
• Even on the face, Jarkesy concerns only SEC fraud claims heard by SEC administrative judges, but the implications of the case could be much broader and involve more agencies. In some cases, there may now be an option to challenge an agency’s authority to impose penalties in an administrative action. If it is applied to the EPA, practical issues will arise, such as whether there is a benefit to challenging or not to challenge an administrative action when the alternative might be to litigate in federal court. And the issues of when to press for jury trials are complicated, especially after Err decision of the United States Court of Appeals for the Fifth Circuit providing for jury trials in Oil Pollution Act cases.
• Take a second look and familiarize yourself with the “canons of interpretation” (also called canons of construction). According to the changed doctrines in Loper Light and other cases, courts that want to keep pace with the U.S. Supreme Court will be more likely to use such canons to give meaning to statutory language.
• Corner post creates a new avenue through which regulated entities can challenge long-standing regulations. This decision opens the door to direct challenges to regulations under the APA when the regulations are first promulgated or when a regulated entity first suffers a “legal harm” or “adverse impact” as a result of a final agency action, regardless of the date of promulgation, provided the challenge is filed within six years of the initial harm.
• Decisions regarding the development of the project will probably not have an impact Loper Light but it can be through Corner post. As an example of a probable area NO touched by Loper Light decision, individual project development decisions typically involve the application of existing agency rules to particular facts rather than a new statutory interpretation. Corner postHowever, it increases the risk of delayed challenges for projects with long construction schedules that are not subject to a shorter limitation period than the general six-year period (e.g. FAST-41).
• Expect the future Waters of the United States (WOTUS) the creation of regulations and even the determination of the scope of WOTUS in individual cases is based to a much greater extent on the text of the act and Sackett than on the basis of scientific considerations. The courts were already moving in this direction, but Loper Light will accelerate this trend.