The Supreme Court 1983-1984

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— The Editors

[13 ELR 10298]

October 3, 1983 began another Supreme Court Term, the third since the retirement of Justice Stewart and the addition of Justice O'Connor. This Court has heard few major environmental cases. It has usually denied certiorari in cases requiring interpretation of the complex pollution control statutes, accepting cases primarily where there is a split among the circuits, as in the currently pending case of United States v. Stauffer Chemical Co.¹ When the court breaks this pattern, as it has with the D.C. Circuit's decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (Chevron, U.S.A.)² it invites speculation that the "conservative" Court will reverse the arguably more liberal and pro-environment decision below. But the Court cannot be so easily typed, and the issues before it this year may confound prognosticators. For example, Watt v. California³ is attracting intense interest because it pits two objectives of conservative members of the Court, protection of states' powers and narrow construction of environmental statutes, against each other. In addition to hearing these cases, the Court must sift through its docket, which inevitably will include several other major envoronmental cases. A review of the Court's decisions on review and its rulings in cases in the last two Terms sheds some light on how it may handle environmental cases in the new Term.

Granting Review

The Court's decision to deny review in a case can have as much of an impact on the law as a full opinion, though decisions on certiorari usually attract less attention. The Court enters the 1983-1984 Term with a rather short environmental docket, but one which will doubtless swell as the Term progresses. Last Term the Court agreed to hear about one in five of the environmental cases presented to it.

For those counting, the Court declined to hear roughly 30 environmental suits during the 1982-1983 Term while it granted review to seven. Among the decisions which the Court chose not to review were Don't Waste Washington Legal Defense Fund v. Washington⁴ and Hartigan v. General Electric Co.,⁵ two cases that struck down state bans on importing radioactive wastes. The Court also declined to hear Utah Power & Light Co. v. Federal Energy Regulatory Commission,⁶ which upheld the Commission's preference policy for public utilities in hydroelectric dam relicensing. And the Court denied review to Mobay Chemical Corp. v. Gorsuch,⁷ which upheld the constitutionality of the Federal Insecticide, Fungicide, and Rodenticide Act's (FIFRA's) pesticide safety data disclosure provisions. Four of those cases granted review came from the D.C. Circuit; three of those — Ruckelshaus v. Sierra Club,⁸ Metropolitan Edison Co. v. People Against Nuclear Energy,⁹ and Baltimore Gas & Electric Co. v. Natural Resources Defense Council, Inc.¹⁰ — the Court has already heard and reversed. The fourth, Chevron U.S.A., the Clean Air Act bubble case, will be heard this Term. Only three D.C. Circuit environmental cases were denied review, apparently underscoring the conflict between the liberal, activist philosophy of many of the D.C. Circuit's panels and the more conservative approach of the Court. In contrast, the Court declined to [13 ELR 10299] review all five of the environmental cases petitioned from the more conservative Seventh Circuit.

Although the Court had a range of constitutional issues brought before it, from equal protection to takings, preemption was the only constitutional issue reviewed in environmental cases, and even the preemption cases turned more on interpretation of state and federal statutes than the Constitution. The Court was not avoiding constitutional questions: most of the constitutional arguments on the environmental docket were weak. The key cases last Term dealt with statutory construction affecting agency powers and duties, or through preemption, state powers.

Among the six environmental cases docketed thus far are two of particular interest. The first is Los Angeles v. National Aububon Society,¹¹ in which the California Supreme Court for the first time extended the public trust doctrine to navigable waters, ruling that under California law, the public trust must be considered in making decisions concerning appropriation of waters feeding Mono Lake in Northern California. The Court must decide whether to take a direct appeal from a district court decision that the data use and disclosure provisions of FIFRA are unconstitutional in Ruckelshaus v. Monsanto Co.¹²

Cases To Be Heard This Term

While the docket of cases which the Court has decided to hear is thin, several cases involving the environment and related issues carried over from last Term will be heard this Term. The cases involve the labyrinthian complexities of the Clean Air Act, the relationship between the Coastal Zone Management Act (CZMA) and leasing programs under the Outer Continental Shelf Lands Act (OCSLA), FIFRA, billboard regulation, the public trust, and the scope of Atomic Energy Act (AEA) preemption of state law.

Chevron U.S.A. Inc. v. Natural Resources DefenseCouncil, Inc. should finally resolve a long-running battle over the use of the "bubble policy" in nonattainment areas under the Clean Air Act. In Chevron, U.S.A. the D.C. Circuit overturned the Environmental Protection Agency's (EPA's) change in the definition of "source," the basic regulated unit under the Act, as that definition applied in areas that have not attained the national ambient air quality standards. The Agency had changed its mind on the definition several times and in 1981 promulgated a rule changing the meaning of "source" from an individual piece of process equipment to an entire plant. The effect of the new rule was to allow a company to add to or modify an existing plant in a nonattainment area without undergoing the new source review specified by the Act, so long as the company offset any increase in emissions resulting from the modification with decreases in emissions from existing parts of the facility. This process of allowing companies to offset emission increases at some smokestacks by decreases at other stacks in order to find cheaper ways of achieving the net emission reduction results dictated by the Act is referred to as the bubble policy. The heart of the issue to be resolved by the Court in Chevron, U.S.A. is whether the D.C. Circuit properly found a new rule governing the use of the bubble policy in nonattainment areas in two convoluted earlier decisions instead of deferring to EPA's expertise.

The second major environmental case to be heard this Term is Watt v. California, which grows out of state opposition to the Department of the Interior's outer continental shelf (OCS) oil and gas leasing plans. Section 307(c)(1) of the CZMA imposes on the federal government the duty to determine if its activities "directly affecting" the coastal zone are consistent with approved state coastal zone management programs. The Ninth Circuit adopted California's argument that the statute, its legislative history, and past administrative interpretations support the conclusion that lease sales "directly affect" the coastal zone and therefore require a consistency determination. But the government has argued that the OCSLA and § 307(b)(3)(B), another consistency provision of the CZMA, dictate that a consistency determination need not be made until later in the leasing process. The Supreme Court is faced not only with a question of complex statutory interpretation on which Congress provided little guidance, but with the difficult task of balancing the responsibilities of the federal and state governments laid out in two apparently conflicting statutes.

In addition to the CZMA case, California also figures in several other cases scheduled for argument in the new Term. Challenges to sign ordinances are not new to the Court; two years ago it struck down San Diego's ordinance prohibiting all outdoor advertising signs. This term, in Members of Los Angeles City Council v. Taxpayers for Vincent,¹³ the Court will consider a First Amendment attack on a Los Angeles sign ordinance that appears even more restrictive than the San Diego law. The Court will also consider Summa Corp. v. State of California,¹⁴ which involves the application of the public trust doctrine to tidal lands whose ownership traces back to private grants from Mexico. The court will resolve a split among the circuits on whether EPA may use contractors to conduct compliance inspections under the Clean Air Act. United States v. Stauffer Chemical Co.¹⁵ is as much an estoppel case as a Clean Air Act dispute, although the resolution of the contractor inspection issue can have a significant impact on EPA's enforcement capability and on the extent to which corporations can maintain the security of their premises from inspectors from private organizations.

Finally, argument is scheduled the first week of the Term for Silkwood v. Kerr-McGee Corp.¹⁶ The issue is whether the Price-Anderson Act preempts punitive damage claims under state tort law for work-related plutonium contamination.

[13 ELR 10300]

Lessons from the 1982-1983 Term

The Supreme Court's last Term, like the one before it, produced only a handful of environmental law decisions. Five rulings last Term directly involved environmental law, though they took the Court into five varied sets of issues: states rights, the National Environmental Policy Act (NEPA), nuclear power, the role of the court, and regulatory reform. Of course, just as cases under environmental statutes raise broader legal issues, some cases that do not involve environmental statutes have an impact on environmental law. Illustrative of this proposition last Term was Immigration and Naturalization Service v. Chadha,¹⁷ which invalidated the legislative veto provision of the Immigration and Nationality Act. The Court used a scythe instead to a scalpel in excising the offending provision and apparently sliced away legislative veto provisions in FIFRA, the CZMA, the Comprehensive Environmental Response, Compensation, and Liability Act, the Federal Land Policy and Management Act, and the OSCLA as well. The effect of the Court's decision is already being put to the test in a conflict between the Secretary of the Interior and a House committee over coal leasing. But leaving cases like Chadha aside, a review of the Court's decisions in cases focusing directly on environmental issues suggests several trends that may affect the half dozen cases already set for oral argument in the new Term.

The Supreme Court often must resolve conflicts between state and federal rights. The addition of Justice O'Connor, an ardent advocate of states rights, while not shifting the balance on the constitutional aspects of federalism, has intensified the Court's debates on state-federal relations. The Court's recent federalism decisions suggest a bifurcated approach. Where controversy arises in the context of federal authority under the Commerce Clause versus state authority under the Tenth Amendment, the Court has strongly reaffirmed the preeminence of the federal government. However, where the conflict arises from complex statutory schemes allowing both state and federal involvement, the Court has given greater weight to the states' interests.

In the Court's last two Terms, it decided four environmental cases involving state-federal conflicts; the federal government prevailed in three. In Sporhase v. Nebraska,¹⁸ in a 7-2 decision, the Court ruled that a Nebraska statute restricting groundwater exports violated the Commerce Clause. And in Federal Energy Regulatory Commission v. Mississippi (FERC),¹⁹ a divided Court upheld, against challenges that they interfered with states' sovereign powers, the constitutionality of provisions of the Public Utility Regulatory Policies Act that use the threats of withholding federal benefits and of preemption to "encourage" states to follow federal policies in regulating interstate utilities. Justice O'Connor, joined by Justice Rehnquist, dissented from both decisions, authoring a dissent in FERC that vigorously defended state sovereignty. But last Term, the State of California won a unanimous victory in Pacific Gas & Electric Co. v. State Energy Conservation and Development Commission (PG&E),²⁰ in which the issue was preemption. The Court held that the AEA does not preempt a state statute imposing a moratorium on new nuclear plant construction until the federal government approves a technology for disposing of nuclear wastes, finding a base for the state law in AEA-recognized state authority to regulate the economic aspects of power plant licensing. The pattern of federal constitutional victories and state statutory interpretation victories, if a pattern can be found in so few cases, was broken in North Dakota v. United States.²¹ The Court ruled that the provisions of the Wetlands Act of 1961 requiring state consent for the federal acquisition of waterfowl production areas for migratory birds did not allow a state to revoke its consent once given. One reason for the difference in the weight given the state interest in North Dakota versus PG&E is that the United States has a particularly strong interest in migratory birds that are governed by treaties, an interest which would have been defeated by allowing states a second chance to block federal land purchases for refuges.

The lessons learned from the last two Terms may provide some guidance for at least one case to be reviewed in the upcoming Term. In Watt v. California the Court must decide whether the Department of the Interior must consider under § 207 of the CZMA the effects of OCS oil and gas leasing on the state coastal zone. The case involves an even more complex question of statutory interpretation than PG&E. But California may have an even stronger argument this time. In PG&E it argued that the AEA did not preempt its nuclear moratorium law because the states have traditionally had the authority to regulate economic considerations involved in nuclear plant production. In Watt, the state has more than tradition, it has a federal statute that specifically requires its involvement in coastal zone management and oil and gas development. Because a ruling in favor of the state would not allow it to block federal efforts to develop the energy resources of the outer continental shelf, but only to have a more effective role in ensuring that such development conforms to state coastal zone programs, the Court may well rule in favor of California again.

Because PG&E considered preemption of state law under the AEA, it also could affect the resolution of the Silkwood v. Kerr-McGee case, where the issue is whether the Price-Anderson Act preempts punitive damage claims by nuclear industry employees under state tort law for work-related plutonium contamination. In PG&E the Court wrote that "the federal government has occupied the entire field of nuclear safety concerns, except the limited powers expressly ceded to the states." The question is whether punitive damages are an attempt to regulate nuclear safety and therefore preempted. Whether the Court follows the path it charted in PG&E in Silkwood may depend on the extent to which it is convinced that the state interest served is a strong one and not inconsistent with the federal interest incorporated in the AEA.

Silkwood and PG&E illustrate a second major issue in recent Supreme Court cases, environment and safety regulation of the nuclear power industry. In the 1982-1983 [13 ELR 10301] Term, the Court decided three cases involving nuclear power issues. In two of the cases, the Court continued a clear pattern of deference to the Nuclear Regulatory Commission (NRC) and nuclear industry. In PG&E, in which the NRC was not a party, the Court for the first time ruled against the nuclear industry. And of the three cases. PG&E may be the most important because it provides other states a way to block the construction of nuclear plants within their boundaries, while the potential impact of the other two decisions was limited to a few power plants.

The other two nuclear cases raised the third major issue in the Court's limited 1982-1983 environmental docket, the continuing evolution of NEPA. In its last two Terms, the Supreme Court has delved into narrow questions on the fringes of NEPA and declined to expand the scope of the NEPA process. The 1981-1982 Term's Weinberger v. Catholic Action of Hawaii/Peace Eduction Project²² held that the public information component of the environmental impact statement (EIS) process must give way where necessary to safeguard military secrets. Last Term, the Court concluded the Metropolitan Edison Co. v. People Against Nuclear Energy that the NRC did not have to consider psychological health damage from restarting the undamaged reactor at Three Mile Island because NEPA was limited to the impacts of actions directly affecting the physical environment. In Baltimore Gas & Electric Co. v. Natural Resources Defense Council, Inc., another chapter in the long-running Vermont Yankee²³ saga, the Court ruled that NEPA allows the NRC to deal with scientific uncertainty concerning environmental impacts of long-term disposal of nuclear waste in a generic rule, thus precluding individual licensing boards from taking disposal issues into account. In these three cases, the Supreme Court reaffirmed bedrock NEPA tenets, i.e., that NEPA requires consideration of significant environmental effects in the decisionmaking process and disclosure of these effects in the EIS.

The fourth major theme in recent Court decisions is found in Ruckelshaus v. Sierra Club, a Clean Air Act attorneys fees case, which reflects the Court's view of the role of the courts themselves. In Ruckelshaus a losing party in an agency rulemaking challenge in the court of appeals sought to recover attorneys fees from EPA. Fee awards never go to losers in traditional suits because the loser is at fault. However, the Clean Air Act attorneys fees provision did not use the language of the traditional rule, allowing fees where "appropriate," not expressly limiting them to "prevailing parties." The court of appeals saw the challengers as public servants who were raising important issues and who ought to be reimbursed, viewing the suit as an integral part of the Agency's policymaking process. The Supreme Court ruled that Congress had not changed the traditional rule and reversed. The decision suggests that the Court views policymaking as the task of the agency and Congress, not of the courts, which are passive umpires ensuring that the agencies play by Congress' rules. In such a system, there is no reason to reward a citizen group and punish the agency with a fee award when the agency is found to have played by the rules. Four Justices dissented from the ruling in Ruckelshaus, finding the statute to be a clear congressional rejection of traditional fee shifting rules, but the traditional views nonetheless carried the Court.

The fifth subject covered by the court last Term is the administrative procedure of regulatory reform. The Court's decision in Motor Vehicle Manufacturers Association of the United States v. State Farm Mutual Automobile Insurance Co.²⁴ confirmed the principle that it is easier to avoid regulating than it is to undo existing regulations.The National Highway Traffic Safety Administration (NHTSA) had rescinded a rule issued under the Motor Vehicle Safety Act (MVSA) requiring passive restraints, either airbags or automatic seatbelts, in new cars. The Court unanimously ruled that the applicable standard of review for rescission of rules under the MVSA is the same as for promulgation of new rules, the arbitrary and capricious test, and that the NHTSA had violated the test by failing to consider a standards requiring airbags alone. The Court also ruled 5-4 that the agency was arbitrary and capricious in concluding that the standard should not be based on automatic seatbelts. The difference in the vote on airbags and seatbelts was that in concluding that the latter would not achieve the standard the agency presented reasons, albeit reasons which the majority found unsupported by the record.

The "airbag" decision upholds the principle of inertia in the field of regulation and regulatory reform.An agency decision not to regulate in an area within its discretion is not subject to the arbitrary and capricious standard, but once a rule is on the books, the rule has a sort of presumption of validity. To change the rule, the agency must not only have a reason, it must have a reason that takes into account all important elements of the original rule. Nor may the agency rely on uncertainty about the benefits of the rule as a basis for cancelling the rule without explaining why the uncertainty could not first be resolved. The decision is another stinging rebuff to the regulatory relief initiative launched when the Reagan Administration took power and may indicate in part how the Court will act in one of its pending cases.

In the D.C. Circuit opinion in Chevron, U.S.A. the court found that while EPA gave reasons for the complete reversal of its position on the impact of the original definition of source, there were absolutely no data in the record supporting the reasons. If the Supreme Court agrees with the appeals court's characterization of the administrative record, this aspect of EPA's redefinition of source alone might result in a remand in Chevron, U.S.A., though only a bare majority of Justices would support this analysis.

Conclusion

The 1983-1984 Term of the Supreme Court promises to be much like the preceeding two Terms, featuring several important environmental cases, but devoid of blockbuster cases that will dictate the shape of a major body of environmental law. Of the cases the Court has already agreed to decide, the most important appear to be the [13 ELR 10302] Clean Air Act bubble case, which will determine the scope of EPA's most promising substantive regulatory reform, and the CZMA consistency case, which will determine the state role in the leasing of oil and gas resources on the outer continental shelf. Of the cases waiting in the wings, the FIFRA case, which has left EPA's pesticide regulation program in a bit of disarray, and the Mono Lake public trust case, in which the California Supreme Court has rewritten California water law, are the most significant. While there is no crystal ball that shows how the Court will handle these cases, the experience of the last two Terms suggests possible outcomes. The Court may decide to remand the bubble case due to the absence of a rationale in the record for EPA's reversal of its position of the impact of allowing the bubble for new sources in nonattainment areas, but to sidestep the complex statutory issue, leaving that to EPA's discretion. In Watt v. California, the Court may affirm the appeals court decision requiring a consistency determination at the lease sale stage, showing state interests the same deference it did in PG&E. As to the cases on the docket, it seems likely that faced with conflicting lower court FIFRA rulings, the Court will feel compelled to resolve the challenge in Ruckelshaus v. Monsanto Co. Whether the Court grants review in the Mono Lake case may depend on whether it decides the federal issue involved warrants reviewing a state court decision interpreting state law. Whether these rather simple-minded guesses prove accurate remains to be seen, but it is certain that the Editors of ELR, along with the rest of the environmental bar, will be following the Court's actions closely.

The Editors

1. 684 F.2d 1174, 12 ELR 20810 (6th Cir. 1982), cert. granted, 51 U.S.L.W. 3756 (U.S. Apr. 18, 1983).

2. 685 F.2d 718, 12 ELR 20942 (D.C. Cir. 1982), cert. granted, 51 U.S.L.W. 3857 (U.S. May 31, 1983).

3. 683 F.2d 1253, 12 ELR 21084 (9th Cir. 1982), cert. granted, 51 U.S.L.W. 3825 (U.S. May 16, 1983).

4. 51 U.S.L.W. 3789 (U.S. May 2, 1983).

5. 51 U.S.L.W. 3789 (U.S. May 2, 1983).

6. 51 U.S.L.W. 3938 (U.S. July 6, 1983).

7. 51 U.S.L.W. 3363 (U.S. Nov. 8, 1982).

8. 13 ELR 20664 (U.S. July 1, 1983).

9. 13 ELR 20515 (U.S. Apr. 19, 1983).

10. 13 ELR 20544 (U.S. June 6, 1983).

11. 13 ELR 20272 (Cal. Feb. 17, 1983), petition for cert. filed, 52 U.S.L.W. 3142 (U.S. Aug. 22, 1983).

12. Monsanto Co. v. Ruckelshaus, 13 ELR 20561 (E.D. Mo. Apr. 19, 1983), appeal filed, 52 U.S.L.W. 3122 (U.S. Aug. 5, 1983).

13. 682 F.2d 847 (9th Cir. 1982), prob. juris. noted, 51 U.S.L.W. 3611 (U.S. Feb. 22, 1983).

14. 31 Cal. 3d 288, 182 Cal. Rptr. 599, 644 P.2d 792 (1982), cert. granted, 51 U.S.L.W. 3684 (U.S. Mar. 21, 1983).

15. 684 F.2d 1174, 12 ELR 20810 (6th Cir. 1982), cert. granted, 51 U.S.L.W. 3756 (U.S. Apr. 18, 1983).

16. 667 F.2d 908, 12 ELR 20367 (10th Cir. 1981), juris. postponed, 51 U.S.L.W. 3508 (Jan. 10, 1983).

17. 13 ELR 20663 (U.S. June 23, 1983).

18. 457 U.S. 273, 12 ELR 20749 (1982).

19. 456 U.S. 742, 12 ELR 20896 (1982).

20. 13 ELR 20519 (U.S. Apr. 20, 1983).

21. 13 ELR 20312 (U.S. Mar. 7, 1983).

22. 454 U.S. 139, 12 ELR 20098 (1981).

23. See Natural Resources Defense Council, Inc. v. NRC, 435 U.S. 519, 8 ELR 20288 (1978).

24. 13 ELR 20672 (U.S. June 24, 1983).