Supreme Court Beaches Coastal Zone Management Act

Phillip D. Reed

Editors' Summary: In 1981, in an effort to gain leverage over federal plans to sell outer continental shelf oil and gas leases, California and several environmental groups sued the Interior Department. They argued that under § 307(c)(1) of the Coastal Zone Management Act (CZMA), Interior must certify that such lease sales are consistent with approved state coastal management plans. The case progressed to the Supreme Court where last January, in Secretary of the Interior v. California, the Court ruled against the plaintiffs. The Court construed the states' power under the CZMA narrowly, casting serious doubt on § 307(c)(1)'s application to any activity not physically within the coastal zone. This Comment examines the law at issue in the dispute, the possible consequences of the ruling, and a reaction to the ruling now brewing in Congress.

[14 ELR 10161]

In Secretary of the Interior v. California¹ the Supreme Court interpreted the ambiguous language and legislative history of Coastal Zone Management Act (CZMA)² § 307(c)(1)³ narrowly, preventing the expansion of the states' leverage over the early stages of outer continental shelf (OCS) oil and gas leasing. The case presented the Court with a difficult balancing problem: Congress had made development of federally owned energy resources on the OCS and federal-state cooperation to protect the valuable and fragile coastal zone national priorities, but had not clearly specified how strong a voice the states were to be given in shaping OCS development. In California v. Watt⁴ the Ninth Circuit had interpreted CZMA § 307(c)(1) broadly, holding that all OCS lease sales had to be tested for consistency with state coastal zone management plans and giving the states increased influence over the leasing process at a critical stage. The legal basis of the Ninth Circuit's decision made it difficult for the Supreme Court to topple, but five Justices found a way. In the process, however, the Court cast doubt over other established CZMA consistency requirements. The case has played before a livid political backdrop sparked by former Interior Secretary Watt's aggressive energy leasing programs, and continued since Secretary Watt's departure by state hostility to the Court's decision itself. The drama now is continuing on administrative and legislative stages with new Interior Secretary Clark trying to defuse his explosive political legacy by shelving Watt leasing policies and members of Congress from coastal states pushing bills to erase the Court's ruling.

Secretary of the Interior contains echoes of old federal-state battles for control of coastal waters as well as fresher notes of conflict between Congress' responses to the environmental and energy crises of the 1970s. In 1953 Congress passed the Submerged Lands Act⁵ recognizing state jurisdiction over the waters and submerged lands of the three-mile wide territorial sea and federal jurisdiction over the adjacent nine-mile wide "contiguous zone." Along with fisheries, the most valuable resources of these areas are the oil and gas buried beneath them. The 1953 Outer Continental Shelf Lands Act (OCSLA) gave the Secretary of the Interior broad discretion in leasing the substantial energy resources of the offshore federal domain. In 1978 Congress rewrote the OCSLA,⁶ reducing the Secretary's discretion and building in measures to co-ordinate the leasing process with the many federal environmental review and protection statutes passed in the 1970s. Concern over the environmental effects of OCS leasing and other activities in and near the coastal zone began to crystallize around 1970, in part a feature of the general increase in environmental concern, in part a response to a disastrous 1969 oil spill from a drilling rig off Santa Barbara, California, which devastated wildlife and beaches. A result was the CZMA.

Congress passed the CZMA in 1972 to establish a co-operative federal-state program to protect the fragile and ecologically, aesthetically, and recreationally valuable resources [14 ELR 10162] of U.S. coasts from unmanaged development. The Act funded the preparation of state coastal zone management plans,⁷ which were to meet minimum federal standards.⁸ The plans were subject to approval by affected federal agencies.⁹

Approved plans control federal as well as state actions. Section 307(c)(1) requires agencies "conducting or supporting activities directly affecting the coastal zone" to act in a manner "which is, to the maximum extent practicable, consistent with approved state management plans."¹⁰ Section 307(c)(2) establishes a similar requirement for federal development projects in the coastal zone.¹¹ Section 307(c)(3) governs private actions requiring federal authorization. Applicants for federal "licenses or permits" (§ 307(c)(3)(A))¹² or for approval to explore or develop OCS oil and gas leases (§ 307(c)(3)(B))¹³ must certify the consistency of their activities with the approved state plan. States may block proposed permits or licenses under § 307(c)(3) by refusing to concur in the consistency determination, unless the Secretary of the Interior finds that the proposed activity is consistent with the purposes of the CZMA or is in the interests of national security.

Origins of the Dispute

The dispute in Secretary of the Interior v. California arose from the Carter Administration's efforts to implement the OCSLA, but was propelled forward by the expansion of OCS leasing under President Reagan's first Secretary of the Interior. On October 17, 1980 the Interior Department announced Lease Sale No. 53,¹⁴ covering 115 tracts off the central California coast, and invited California Governor Brown to submit recommendations under OCSLA § 19(a) on the "size, timing, and location" of the sale.¹⁵ National Oceanic and Atmospheric Administration (NOAA) regulations stated that "[f]ederal activities outside of the coastal zone (e.g., on excluded Federal lands, on the Outer Continental Shelf, or landward of the coastal zone) are subject to Federal agency review to determine whether they directly affect the coastal zone."¹⁶ The California Coastal Commission petitioned Interior, arguing that the proposed sale "directly affected" the state's coastal zone and therefore triggered § 307(c)(1) of the CZMA, but Secretary Andrus rejected the argument.¹⁷ Governor Brown's OCSLA § 19(a) recommendations echoed the concerns of the Coastal Commission and asked for deletion of tracts close to wildlife sanctuaries.¹⁸

With the change of administrations at the beginning of 1981, the conflict intensified. Newly appointed Interior Secretary Watt established a policy of expansive leasing and development of offshore oil and gas resources. The Secretary revised the lease sale notice on February 10, 1981, proposing to reopen northern California basins to leasing.¹⁹ After further objections from the California Coastal Commission the proposed sale was again restricted to the 115 tracts in the Santa Maria Basin, although the other tracts remained under consideration.

The CZMA issue concerned timing of consistency review. Californiiasought early review, fearing that after the sale of leases, for which the oil companies would pay millions of dollars, the momentum for development would be too strong to be resisted by the rather nebulous concept of consistency. Oil companies and the Interior Department, on the other hand, feared that a consistency determination concerning the large areas offered for leasing before there was much information on which areas were likely to be developed, would delay the process without shedding much if any light on the ultimate consistency issues.

The Decisions Below

On April 29, 1981 California filed suit to block the proposed sale, and environmental groups later later did the same.²⁰ Plaintiffs alleged violations of the CZMA, the OCSLA, the National Environmental Policy Act (NEPA),²¹ the Endangered Species Act (ESA),²² and the Marine Mammal Protection Act (MMPA).²³

The court dismissed the OCSLA, NEPA, ESA, and MMPA claims and ruled that the environmentalists lacked standing.²⁴ But it did not dismiss the CZMA claim. The court ruled that Interior had violated the CZMA by failing to prepare a consistency determination prior to holding the lease sale. The court voided the bids and leases resulting from the sale, enjoined Interior from taking any action concerning the tracts at issue until it complied with the CZMA, and directed Interior to conduct "all activities on these tracts in a manner consistent with California's Coastal Management Plan."²⁵

All parties appealed. In California v. Watt the Ninth Circuit upheld the district court's ruling on the applicability of § 307(c)(1), but pared back the relief awarded.²⁶ [14 ELR 10163] The Interior Department conceded on appeal that § 307(c)(1) applies at the lease sale stage, but argued that only effects "immediately authorized by a lease sale" were covered by the statute.²⁷ The Ninth Circuit rejected that argument, upholding the district court's factual finding that Lease Sale No. 53 would directly affect the coastal zone, and ruling that Interior must make a consistency determination. The court went on to rule that consistency "to the maximum extent practicable" with the state coastal zone management plan is a standard to be interpreted by the Department of the Interior, not the states, and suggested that the standard requires something less than full consistency.²⁸

The Decision of the Supreme Court

The Supreme Court reversed the Ninth Circuit. The Court ruled that OCS lease sales are not covered by § 307(c)(1) at all.²⁹ The Court added that it doubted that the CZMA, as enacted in 1972, applied to the OCS. Without specifically ruling that the district court's factual finding that Lease Sale No. 53 directly affects the coastal zone was erroneous, the Court did state that it was unpersuasive, because the fragmentation of the leasing process and the express requirement of consistency determinations prior to exploration or development make it impossible for the sale alone to affect the coastal zone.³⁰ The Court thus not only reversed the result in California v. Watt, it may have narrowed the potential for consistency review of other activities outside the coastal zone. However, it also left open the possibility of later limiting its holding to the narrower "does not directly affect" basis.

The Majority

The Court began its analysis in a footnote in which it stated that NOAA, in its interpretation of § 307(c)(1), "has walked a path of such tortured vacillation and indecision that no help is to be gained in that quarter."³¹ The Court ignored the fact that NOAA and the Interior Department agreed that § 307(c)(1) applies to lease sales.³² The agencies required review of proposed sales to determine whether they "directly affected" the coastal zone. What NOAA had vacillated on was whether OCS lease sales can and do directly affect the coastal zone and thus require consistency determinations as a matter of law or policy.³³

The majority examined the parties' alternative readings of the plain language of § 307(c)(1).³⁴ While it found both "superficially plausible," the Court found neither supported in the Act. It turned quickly to the legislative history.

In Congress' several tangles with the CZMA and related provisions of the OCSLA, the Court found clear guidance. The history of § 307(c)(1) itself, the Court found, "strongly suggests that OCS leasing, covered by neither the House nor the Senate version of § 307(c)(1), was also intended to be outside the coverage of the Conference's compromise."³⁵ The compromise dealt with the application of the consistency requirement to activities on federal lands within the coastal zone. The Senate had defined the zone to exclude federal lands, while the House had included them. The conference committee, without comment, adopted the Senate definition of coastal zone, but added the requirement that activities "directly affecting" the zone be subject to the consistency mandate. The Court concluded that the addition of "directly affecting" made more sense as part of this narrow compromise than as a dramatic broadening of the scope of consistency review, since the change received virtually no attention in the conference report or the subsequent floor debate.

The Court found confirmation for the "strong suggestion" that Congress intended a limited application of § 307(c)(1) in the history of several provisions that did not make it into the final version of the CZMA. The deleted provisions required that specified OCS activities be reconciled or coordinated with state coastal zone plans and management measures.³⁶ Among the explanations for deletion of these proposals were statements indicating that the CZMA was not intended to extend the reach of state authority beyond the three-mile jurisdictional limit.³⁷ The Court summed up the effect of the deletion of these provisions by noting that "[i]n light of the Conference Committee's further, systematic rejection of every other attempt to extend the reach of CZMA to the OCS, we are impelled to conclude that the 1972 Congress did not intend § 307(c)(1) to reach OCS lease sales."³⁸ In an accompanying note, the Court rejected respondents' arguments and the Ninth Circuit's conclusion, that four pieces of post-enactment legislative history dictated a contrary conclusion.³⁹

[14 ELR 10164]

The Court also rejected arguments relied on heavily by the Ninth Circuit that the broad purposes of the CZMA require application of the consistency requirement to OCS lease sales. Respondents argued that early review was critical to implementation of the CZMA's long-range planning mandate.⁴⁰ The Court disagreed, pointing out that both the Senate and House bills that were the foundation of the Act accomplished their purposes with § 307(c)(1) expressly limited to activities within the coastal zone.⁴¹

Legislative history aside, the very structure of § 307 suggested to the Court that § 307(c)(1) does not apply to OCS leasing at all; §§ 307(c)(1) and 307(c)(2) are limited to activities of the federal government, while § 307(c)(3) alone applies to federal authorization of private activities such as OCS leasing. Respondents had countered this argument in their briefs, noting that § 307(c)(3) deals only with the activities of the private lease or permit holder, not with the federal agency.⁴² In a lengthy footnote, the Court found that the legislative history made clear that § 307(c)(3) applies both to the federal license or permit issuer as well as to the private recipient.⁴³

Examining § 307(c)(3), the Court concluded that it does not require a consistency determination for OCS lease sales either. The original 1972 version of § 307(c)(3) required a consistency determination for "licenses or permits" for activities "affecting land or water uses in the coastal zone." The Court found the failure to mention "leases" significant, but quickly moved on to consider the 1976 amendments to § 307(c)(3), which explicitly addressed the leasing process. In those amendments, Congress rejected a proposal to add the term "lease" to § 307(c)(3). Instead, it added a new provision, § 307(c)(3)(B),⁴⁴ which requires applicants for licenses or permits to explore, produce, or develop oil or gas on the OCS first to demonstrate the consistency of their planned actions with the coastal plans of nearby states. Again, the Court concluded that this language excluded lease sales, although it noted that before the OCSLA was amended in 1978, a lease arguably authorized exploration and triggered the consistency requirement of § 307(c)(3)(B).⁴⁵ Since the sale at issue took place in 1981, the Court deemed the counter argument irrelevant.

The 1978 OCSLA amendments clearly resolved the scope of § 307(c)(3)(B), the Court concluded. Those amendments split the OCS leasing process into four discrete steps: planning, lease sales, exploration, and development or production. The first two require consultation with the states, the last two expressly require CZMA consistency determinations.⁴⁶ The Court found that these changes removed any doubt that a lease sale was a permit to explore or develop. Congress specified the relationship of each stage of the OCS leasing process to the CZMA and limited the formal consistency review to the last two steps.

At this point, the Court returned to the issue originally presented to it by the Ninth Circuit's decision — whether the proposed lease sale "directly affects" the California coastal zone. The sale alone would not, the Court concluded, since the later steps, which could have direct effects, were subject to consistency determinations and could be blocked if inconsistent.⁴⁷ The Court could have used this reasoning to overturn the factual finding below of direct effects. However, the organization of the opinion, the Court's statement that it based its decision on the geographical limits of § 307(c)(1), and its failure to address specifically the district court's factual finding of direct effects all support the conclusion that this reasoning is dictum.

The majority concluded by again recognizing and rejecting the policy arguments relied on heavily by the Ninth Circuit. It concluded that the argument that lease sales give the development process momentum in a specific area and may shape future energy production and distribution was no more persuasive than the counter argument that lack of data made pre-lease consistency determinations relatively meaningless. And both arguments raised policy considerations that Congress resolved. Prelease coordination with the states is something that the Interior Department "might be well advised to ensure," Justice O'Connor noted, but the Acts do not require it.⁴⁸

The Dissent

Justice Stevens wrote a dissent, subscribed to by three of his colleagues, that is so at odds with the Court's opinion that it comes as something of a surprise that they relied on the same statutory language, legislative history, and record below. The dissenters concluded that the plain language of § 307(c)(1) and its legislative history clearly lead to the conclusion that consistency applies to OCS lease sales. This result, they continued, is the only one consistent with the purposes of the CZMA, subsequent amendments, administrative interpretation, and the factual findings of the courts below.

The dissent found the plain language of § 307(c)(1) more informative than did the majority. It concluded that Congress must have intended to include activities on the OCS, because it unquestionably included activities outside the coastal zone (in the federal enclaves) and there is no basis for distinguishing those areas from the OCS in terms of their potential impact on the coastal zone.

As to the legislative history of § 307(c)(1), the dissent argued that the majority took a myopic view. Justice Stevens wrote that deletion of specific provisions extending the reach of the CZMA into the OCS was part of the compromise that produced the "directly affecting" language.⁴⁹

[14 ELR 10165]

At the close of its legislative history argument, the dissent attempted to refuse the Court's analysis of the administration interpretation of § 307(c)(1). It argued that while NOAA had "waffled" on the question of whether OCS leasing always directly affects the coastal zone, NOAA always interpreted § 307(c)(1) of the CZMA to apply to OCS lease sales.⁵⁰

While the Court found the respondents' statutory purpose arguments irrelevant, the dissent found them on point and persuasive. Justice Stevens read the statement of congressional findings in § 302 as a "preference for long range planning and for close cooperation between federal and state agencies in conducting or supporting activities that directly affect the coastal zone."⁵¹ Consistency determinations at the lease sale stage could help both the leasing program and the coastal management program.⁵²

The dissent next recounted at length the findings of the district court concerning the coastal zone effects of Lease Sale No. 53. It concluded that the lease sale is an appropriate point at which to consider such effects,⁵³ and that "the findings indicate some of those impacts will occur almost immediately, prior to review under the OCSLA, and can never be reviewed adequately if they are not reviewed now."⁵⁴

The dissent also disagreed with the majority on the significance of post-enactment legislative developments. The minority read the 1976 deletion of provisions explicitly including OCS leasing in the § 307(c)(3) consistency process as resulting from Congress' understanding that § 307(c)(1) already accomplished that end. The addition of § 307(c)(3)(B) was not evidence of Congress' conclusion that § 307 did not already apply to leasing, but a means of extending the consistency determination from the initial step in the leasing process to subsequen steps as well. Finally, turning to the 1978 amendments to the OCSLA, the minority argued that they too recognize the application of § 307(c)(1) to lease sales.⁵⁵

Observations

The divergence between the majority and dissenting opinions in Secretary of the Interior can perhaps best be understood by considering the practical effect of the ruling. The majority, although apparently making new law, caused no practical change in the Interior Department's review of OCS lease sales. Although Interior had applied § 307(c)(1) to its sales, the Department generally, if not always, decided that there were no direct effects and therefore no need for consistency determinations. The Ninth Circuit would have forced a change in this policy by ruling that lease sales do directly affect the coastal zone.

Five Justices were unwilling to go along. They tended to focus on the leasing side of the equation, finding it already heavily encumbered with review procedures. They would not expand review without unambiguous guidance from Congress. The majority read great significance into Congress' failure to take several opportunities to mandate specific CZMA review of lease sales and ignored a host of hints that Congress had intended to require consistency determinations for the sales.

The dissent approached the issue from the CZMA side. From that perspective, the added review procedure did not look at all unreasonable. The dissent looked at the purposes and structure of the CZMA and found they only made sense if the ambiguities in the statute and legislative history were resolved in favor of a broader interpretation of § 307(c)(1).

That the majority included the states' rights champions on the Court (Justices O'Connor and Rehnquist), yet ruled to limit state involvement in OCS leasing, is something of a surprise. The result stands in contrast to that in Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Commission (PG & E).⁵⁶ In PG & E the Court held that California's nuclear power moratorium is not preempted by the Atomic Energy Act, finding room for a strong state role in a field decreed by Congress to be a federal domain. Perhaps the cases can be distinguished on the basis of the source of the state interests involved. In Secretary of the Interior the state role was entirely a creation of Congress; in PG & E it arose out of state sovereignty. In any event, it is clear that the federalism issue was not enough to swing Rehnquist or O'Connor over in favor of affirmance.

Implications

The Court's holding in Secretary of the Interior was narrow. It ruled that § 307(c)(1)'s consistency requirements do not apply to OCS oil and gas leasing. It added that, in any event, OCS lease sales do not "directly affect" the coastal zone, since the 1978 OCSLA amendments limited what could be done with a lease. The Court expressly stated that it was not deciding whether other activities outside the coastal zone and its federal enclaves it could trigger the consistency requirement. Moreover, the opinion leaves no doubt that a consistency determination is required before exploration or development under an OCS lease and that leases that fail the test can be cancelled. Nor did the Court endorse the leasing policies and procedures whose legal basis it upheld. Justice O'Connor concluded with an admonition that Interior "might be well advised" to consider consistency issues prior to holding lease sales.⁵⁷

While the Court's holding was narrow, the shadows of its reasoning fall across a broader expanse of law. The decision raises new questions about the extent to which the [14 ELR 10166] CZMA applies to federal activities outside the coastal zone. And the route the majority chose to follow left uncertainty in the meaning of the key terms in § 307(c)(1). Finally, while weakening § 307(c)(1), the Court may have strengthened the review provisions of § 307(c)(3)(B).

By basingits decision on the application of § 307(c)(1) to OCS lease sales upon a geographical limit, the Court raised questions about the provision's application to other OCS activities. It reasoned that § 307(c)(1) did not apply to activities of any sort on the OCS. It read in the legislative history Congress' intent to limit the scope of § 307(c)(1) to activities in the coastal zone and federal enclaves within that zone. Congress extended the reach of the CZMA beyond the three-mile limit only in 1976 when it added § 307(c)(3)(B), and to OCS leasing only in 1978 when it amended the OCSLA to require consistency determinations prior to exploration and development. This reasoning strongly suggests that federal agency activities outside the coastal zone are not covered. Indeed, the Court stated that "[e]very time it faced the issue in the CZMA debates, Congress deliberately and systematically insisted that no part of CZMA was to reach beyond the three mile territorial limit."⁵⁸

The Court's opinion raises questions about the application of § 307(c)(1) to a variety of federally authorized activities on the OCS. Are consistency determinations required for regional fishery management plans developed under the Magnuson Fishery Conservation and Management Act?⁵⁹ NOAA has required consistency determinations for the plans.⁶⁰ The plans, like OCS lease programs, are developed under authority of a federal statute establishing its own federal-state cooperative procedures. What about Environmental Protection Agency permits for incineration of hazardous wastes at sea? NOAA has taken the position⁶¹ that § 307(c)(3)(A) still is applicable.⁶² Are federal site designations for ocean dumping of toxic wastes or ocean mineral mining or the siting of energy facilities now exempt from consistency review? Are activities landward of the coastal zone that raise factual issues not present in Secretary of the Interior excluded from review? While the Court took care to state that its decision did not apply to these consistency issues, its broad statements about the limits of the 1972 CZMA could fuel challenges to consistency requirements in each of these contexts. For example, one commercial fishermen's organization is arguing that the regional plans should be exempted from § 307(c)(1) requirements under Secretary of the Interior.⁶³

Another area of uncertainty left concerns rulings made by the Ninth Circuit but not addressed in the Court's opinion. The Ninth Circuit had construed "directly affecting" to mean setting in motion a chain of events of coastal management significance.⁶⁴ The Court declined to adopt a definition, since it ruled that § 307(c)(1) did not apply to OCS leasing. If the Court's decision is not read to limit § 307(c)(1) to activities within the coastal zone and federal enclaves, this question will be important. The other issue the Court left hanging was the meaning of "to the maximum extent practicable." The Ninth Circuit ruled that a state's plan does not take absolute precedence over the federally supported activity. It held that the Interior Department has the final say on whether the standard has been complied with, but did not specify the standard.⁶⁵ Again, the Court did not have to address this question, since it held that no consistency determination was required. Arguably, since the Court did not overrule the Ninth Circuit on this point, the lower court ruling has some continued vitality.

Finally, the Court appears to have strengthened the consistency requirements of § 307(c)(3)(B). First, the decision indicates that federal permit- or license-issuing agencies have an affirmative obligation to ensure that the private parties whose actions they authorize fulfill their consistency obligations.⁶⁶ Second, the Court emphasized the limited nature of the rights obtained by the OCS lease purchaser.⁶⁷ Whether the Court created new law on this subject is beyond the scope of this Comment, but the Court did provide ammunition for those seeking to ensure that the purchase of an OCS oil and gas lease would not imbue development with irresistible momentum. With the text of Secretary of the Interior in hand, opponents [14 ELR 10167] of lease development will have strong arguments that blocking development on consistency grounds is not an unconstitutional taking, even if the lease holder made a large investment in the lease; and that the government may not consider a lease holder's investments in deciding whether to approve development.

Reactions

The Supreme Court's decision in Secretary of the Interior provoked an immediate critical reaction from environmental groups and the coastal states' congressional deletations. Bills to erase the Court's decision were introduced in both the House and Senate. The proposed legislation would not only reinstate the law is interpreted by the Ninth Circuit, but would strengthen the CZMA consistency requirement. At the same time that the congressional debate is beginning, Interior Secretary Clark is revamping the Department's OCS leasing policies and might defuse the continuing political crisis.

The House bill, H.R. 4589, was introduced less than two weeks after the Court ruled.⁶⁸ The bill would amend § 307(c)(1) by renumbering the current provision as § 307(c)(1)(A) and amending it is specify that federally supported activities, "whether within, or landward or seaward of, the coastal zone" are covered. A new § 307(c)(1)(B) would define an activity that "directly affects the coastal zone" as one that:

(i) produces identifiable physical, biological, social or economic consequences in the coastal zone; or

(ii) initiates a chain of events likely to result in any of such consequences.

The bill essentially combines the two definitions urged by the parties as alternatives in their briefs to the Supreme Court.⁶⁹ New § 307(c)(1)(C) would define "the maximum extent practicable" as mandating consistency unless that would require violation of federal law, or would be barred by "unforeseen circumstances."⁷⁰ Arguably, the new § 307(c)(1)(C) would be a more limited standard than the rather general one outlined by the Ninth Circuit, although the "unforeseen circumstances" exemption could be applied quite broadly.

The Senate bill, S. 2324,⁷¹ introduced a month later than its House counterpart, has one significant difference. It offers a more precise measure of "to the maximum extent practicable," requiring full consistency except where declared national emergencies, national security, or federal law requires deviation from the coastal zone plan.⁷²

The proposed legislation was reviewed at hearings held by the Oceanography Subcommittee of the House Merchant Marine and Fisheries Committee on March 27, 1984 and the Senate Commerce, Science, and Transportation Committee on March 28. Environmental groups and state agencies offered vigorous support,⁷³ while affected industries and federal agencies argued strongly against passage.⁷⁴

[14 ELR 10168]

Whether H.R. 4589 and S. 2324 make progress may depend on the success of Secretary Clark's efforts to reduce the political opposition to the Interior Department's leasing programs. The Secretary has renounced a number of policies that helped bring about the lawsuit. After the decision, Secretary Clark quickly announced changes in the leasing process: areawide leasing will continue, but the Department will try to identify the precise areas of interest to allow earlier assessment of environmental and coastal impacts and will give the states earlier notice.⁷⁵ Secretary Clark also reportedly "isn't likely" to hold Lease Sale No. 53 until "after the November elections."⁷⁶ On the other hand, the administration will implement the decision: NOAA announced that it will delete its regulations requiring determination of whether OCS lease sales "directly affect" the coastal zone.⁷⁷

The final results of California v. Watt have not yet been determined. The plaintiffs appear to have won a policy victory. The case probably contributed to the departure of Secretary Watt and the revision of his OCS leasing policies. But the policies might be as easily changed again after the 1984 presidential election. The defendants won a legal victory. OCS lease sales are not subject to consistency review or even the limited "directly affecting" test previously required by NOAA. But the breadth of the Court's reasoning and the residual political support for application of the CZMA early in the OCS leasing process may result in amendments to the CZMA undoing the Supreme Court victory. At least the dispute, which is essential one of policy, is now in the hands of Congress, the branch of government arguably best suited to resolving such conflicts.

1. 14 ELR 20129 (U.S. Jan. 11, 1984).

2. 16 U.S.C. §§ 1451-1464, ELR STAT. 41701-04:5.

3. 16 U.S.C. § 1456(c)(1), ELR STAT. 41704.

4. 683 F.2d 1253, 12 ELR 21083 (9th Cir. 1982), rev'd sub nom. Secretary of the Interior v. California, 14 ELR 20129 (U.S. Jan. 11, 1984).

5. 43 U.S.C. §§ 1301-1315, ELR STAT. 42451-55.

6. 43 U.S.C. §§ 1331-1356, ELR STAT. 42451-86. For a general discussion of the evolution and implementation of the OCSLA, see R. G. HILDRETH & R. W. JOHNSON, OCEAN AND COASTAL LAW 243 (1983).

7. CZMA § 305, 16 U.S.C. § 1454, ELR STAT. 41702.

8. CZMA § 306, 16 U.S.C. § 1455, ELR STAT. 41703.

9. CZMA § 306(c)(1), 16 U.S.C. § 1455(c)(1), ELR STAT. 41703.

10. 16 U.S.C. § 1456(c)(1), ELR STAT. 41704.

11. 16 U.S.C. § 1456(c)(2), ELR STAT. 41704.

12. 16 U.S.C. § 1456(c)(3)(A), ELR STAT. 41704.

13. 16 U.S.C. § 1456(c)(3)(B), ELR STAT. 41704.

14. In 1977 Interior had requested information on the potential for oil and gas development off the California coast from energy companies, environmental groups, state and local governments, and other interested parties. After evaluating the returns Interior selected 243 out of 2,036 tracts for further study and prepared an environmental impact statement. At the conclusion of this analysis, Interior further limited the candidates for leasing to 115 tracts in the Santa Maria Basin off the stretch of California coast running from Santa Barbara on the south to Point Sur on the north. Secretary of the Interior, 14 ELR at 20130.

15. 43 U.S.C. § 1345(a), ELR STAT. 42464.

16. Secretary of the Interior, 14 ELR at 20141, quoting from 15 C.F.R. § 960.33(c).

17. Secretary of the Interior, 14 ELR at 20130. The Coastal Commission's concern was that certain tracts were located within 12 miles of state sanctuaries for endangered sea otters.

18. Id.

19. Id.

20. Id.

21. 42 U.S.C. §§ 4322-4361, ELR STAT. 41009.

22. 16 U.S.C. §§ 1531-1543, ELR STAT. 41825.

23. 16 U.S.C. §§ 1361-1407, ELR STAT. 41815.

24. California v. Watt, 520 F. Supp. 1359 (C.D. Cal. 1981), aff'd, 683 F.2d 1253, 12 ELR 21083 (9th Cir. 1982), rev'd sub nom. Secretary of the Interior v. California, 14 ELR 20129 (U.S. Jan. 11, 1984).

25. 520 F. Supp. at 1389.

26. California v. Watt, 683 F.2d 1253, 12 ELR 21083 (9th Cir. 1982), rev'd sub nom. Secretary of the Interior v. California, 14 ELR 20129 (U.S. Jan. 11, 1984).

27. 683 F.2d at 1260, 12 ELR at 21087. For a detailed discussion of the Ninth Circuit decision, see Comment, CZMA Consistency and OCS Leasing: Supreme Court to Review California v. Watt, 13 ELR 10261 (1983).

28. 683 F.2d at 1264, 12 ELR at 21089.

29. Secretary of the Interior, 14 ELR at 20132-33.

30. Id. at 20136-37.

31. Id. at 20131 n.6.

32. As the dissent pointed out, NOAA regulations require such review and Interior conceded before the Ninth Circuit that the CZMA also requires it. See Secretary of the Interior, 14 ELR at 20141 n.18, and California v. Watt, 683 F.2d at 1260, 12 ELR at 21087.

33. Secretary of the Interior, 14 ELR at 20131 n.6. This may be the reason why the dissent relegates this facially strong argument to a footnote as well. Id. at 20141 n.18.

34. "Interior contends that 'directly affecting' means '[h]av[ing] a [d]irect, [i]dentifiable [i]mpact on [t]he [c]oastal [z]one.' Brief for Federal Petitioners 20. Respondents insist that the phrase means '[i]nitiat[ing] a [s]eries of [e]vents of [c]oastal [m]anagement [c]onsequence.' Brief for Respondents State of California, et al. 10." Id. at 20131.

35. Id. at 20132.

36. Section § 313 of the House-passed bill would have required a federal management system for the contiguous zone related to the state coastal zone plans, and §§ 312(b) and 312(c) would have extended state coastal marine sanctuaries into the OCS region. Congress also rejected Senator Boggs' proposed amendment to the Senate-passed bill, which would have required EPA review and state approval for construction beyond the territorial sea, and § 316(c)(1) of the Senate bill, which would have authorized a study of the impact of OCS oil and gas development on the coastal zone. Id. at 20132-33.

37. Id.

38. Id. at 20133-34.

39. A 1976 Senate report on CZMA amendments, a House report on 1978 amendments to the OCSLA, and 1980 House and Senate reports on CZMA amendments all stated that the consistency requirement of § 307(c)(1) applied to OCS lease sales. The Court found the reports unreliable, stating that "these subsequent committee interpretations of CZMA, written four or more years after CZMA was passed, are of little help in ascertaining the intent of Congress when CZMA § 307(c)(1) was passed in 1972." Id. at 20134 n.15.

40. Brief for Respondents at 8-10, Secretary of the Interior v. California, 14 ELR 20129 (U.S. Jan. 11, 1984).

41. Secretary of the Interior, 14 ELR at 20134.

42. Brief for Respondents at 27-30, Secretary of the Interior v. California, 14 ELR 20129 (U.S. Jan. 11, 1984).

43. Secretary of the Interior, 14 ELR at 20134 n.16.

44. Id. at 20135.

45. Id.

46. Id. at 20135-36.

47. Id. at 20136-37.

48. Id. at 20137.

49. Id. at 20139. The Court rejected this argument, stating that "it is fanciful to suggest that the conferees intended the 'directly affecting' language of § 307(c)(1) to substitute for the House § 313's specific and considerably more detailed language." Id. at 20133.

50. Id. at 20141 n.18.

51. Id. at 20140.

52. Id. at 20140-41. The early consistency determination obviously is a boon to coastal zone management. Justice Stevens pointed out that it assists the leasing process as well, by identifying tracts unlikely to pass consistency review before bidders waste time and money on them.

53. Id. at 20142.

54. Id. The majority treated the lease as completely severable from exploration and development and stated that "[b]oth sides concede that the preliminary exploration itself has no significant effect on the coastal zone." Id. at 20131.

55. The dissent's arguments about the 1976 amendments to the CZMA and the 1978 amendments to the OCSLA rely heavily on legislative history indicating that Congress thought § 307(c)(1) already applied to OCS lease sales. Id. at 20143-44.

56. __ U.S. __, 103 S. Ct. 1713, 13 ELR 20519 (1983).

57. Secretary of the Interior, 14 ELR at 20137.

58. Id. at 20132. See also John K. Van De Kamp, Attorney General, State of California, Testimony before the Oceanography Subcomm. of the House Comm. on Merchant Marine and Fisheries, 98th Cong., 2d Sess. 6 (Mar. 7, 1982) ("Although the question presented to the Court was limited to OCS lease sales, the manner in which the Court answered that question leaves no doubt that all federal activities on the OCS are exempt from the consistency requirements of section 307(c)(1).").

59. 16 U.S.C. §§ 1801-1882, ELR STAT 41839-50.

60. See Memorandum from William C. Brewer, Jr., General Counsel of NOAA, to Robert Knecht, Robert W. Schoning, and David H. Wallace (June 3, 1977); NOAA Administrator's Letter No. 37, "Interrelationship of the Magnuson Act and the Coastal Zone Management Act" (Nov. 24, 1982), cited in Eldon V. C. Greenberg, Testimony on behalf of the Southeastern Fisheries Ass'n, Inc. Regarding H.R. 4589, Presented to the Subcomm. on Oceanography of the House Comm. on Merchant Marine and Fisheries, 98th Cong. 2d Sess. 7 n.5 (Mar. 27, 1984) [hereinafter cited as Greenberg testimony].

61. Letter from Robert McManus, NOAA General Counsel, to Charles Graddick, Alabama Attorney General (Feb. 1, 1984) ("It is my opinion … that activities … permitted by EPA under the Ocean Dumping Act are subject to … [§] 307(c)(3)(A) of the CZMA.").

62. The decision also raises a question about the scope of § 307(c)(3)(A). If, as the Court seems to have concluded, the 1972 CZMA consistency provisions were intended to be limited to activities in the coastal zone and federal enclaves, then § 307(c)(3)(A) (the original (c)(3)) was also so limited.

63. See Greenberg testimony, supra note 60, at 8-10. Florida has challenged consistency determinations prepared for the regional fishery management plan applicable to waters off that state. Florida's state fishing regulations, incorporated into the state's coastal zone management plan, differ significantly from the rules in the regional plan. The Southeastern Fisheries Association testified that it interpreted Secretary of the Interior to "quiet" the Florida litigation." Id. at 10.

64. California v. Watt, 683 F.2d at 1260, 12 ELR at 21087.

65. Id. at 1264, 12 ELR at 21089.

66. OCSLA §§ 5(a), 18 & 19, 43 U.S.C. §§ 1334(a), 1344 & 1345, ELR STAT. 42457, 42463-64. See also HILDRETH & JOHNSON, supra note 6, at 252-54.

67. In Secretary of the Interior, the Court characterized the lease as a very limited piece of property:

Lease purchasers acquire the right to conduct only limited "preliminary" activities on the OCS — geophysical and other surveys that do not involve seabed penetrations greater than 300 feet and that do not result in any significant environmental impacts …. [B]y purchasing a lease … the lessee acquires only a priority in submitting plans to conduct those activities. If these plans, when ultimately submitted, are disapproved, no further exploration or development is permitted.

14 ELR at 21036.

68. H.R. 4589, 98th Cong., 2d Sess. (1984).The bill was introduced January 23, 1984 and was cosponsored by Representatives D'Amours (D-N.H.), Panetta (D-Cal.), Studds (D-Mass.), McKernan (R-Me.), Levine (D-Cal.), and Boxer (D-Cal.)

69. See supra note 34.

70. The bill requires full consistency unless

(i) the conduct or support of the activity in that manner is prohibited by Federal law; or

(ii) a circumstance arising after a management plan is approved, and unforeseen at the time of approval, presents a substantial obstacle to the achievement by the agency of full consistency in conducting or supporting the activity.

H.R. 4589, 98th Cong., 2d Sess. (1984).

71. S. 2324, 98th Cong., 2d Sess. (1984). The Senate bill was introduced February 22, 1984 and cosponsored by Senators Packwood (R-Or.), Hollings (D-S.C.), Weicker (D-Conn.), Kennedy (D-Mass.), Hawkins (R-Fla.), Cranston (D-Cal.), Lautenberg (D-N.J.), Hart (D-Colo.), Humphrey (R-N.H.), Chiles (D-Fla.), Inouye (D-Hawaii), Tsongas (D-Mass.), Pell (D-R.I.), Riegle (D-Mich.), and Roth (R-Del.).

72. The Senate bill uses essentially the same language as the House bill to eliminate the geographical limitation on § 307(c)(1) and to define "directly affecting." The exceptions to the consistency requirement are more specific; the Federal activity must be

(i) undertaken to counter the immediate effects of a declared national emergency;

(ii) necessary for reasons of national security; or

(iii) required by any provision of a Federal law which prevents consistency with any provision of an approved State coastal zone management program.

S. 2324, 98th Cong., 2d Sess. (1984).

73. For example, the Natural Resources Defense Council, Inc., Coast Alliance, Sierra Club, and National Audubon Society submitted joint testimony stating that "[w]e strongly support this bill because it would overturn the recent decision of the United States Supreme Court (Secretary of Interior v. California) which threatens to undermine the structure of the Coastal Zone Management Act (CZMA) and the important protections this Act affords our nation's coastal resources." Sarah Chasis, Lynne Edgerton, Testimony of the Natural Resources Defense Council, Inc. et al. before the Subcomm. on Oceanography of the House Merchant Marine and Fisheries Comm. on H.R. 4589, 98th Cong., 2d Sess. (Mar. 27, 1984) [All testimony cited in this note and note 74 was presented before the Oceanography Subcommittee on March 27, 1984]. See also Testimony of Kevin Crowley, Deputy General Counsel, Florida Department of Natural Resources, at 1 (Expressing "Florida's strong support of the Coastal Zone Management Act (CZMA) Amendments in House Bill 4589 and Florida's concerns relating to the potential adverse effects of" Secretary of the Interior); Testimony of John K. Van De Kamp, Attorney General, State of California, at 1-2 ("The opinion of the Supreme Court has seriously weakened the promise Congress made to the states [in the CZMA]. The scope of section 307(c)(1) has been severely reduced and there is now uncertainty about the ability of state coastal programs to manage the coastal zone effectively").

74. See Greenberg testimony, supra note 60; E. Edward Bruce, Covington & Burling, Testimony on behalf of the American Petroleum Inst. and Western Oil & Gas Ass'n, at 1 ("API and WOGA oppose the enactment of this bill for the following reasons: … the bill would extend to the States some undefined measure of control over Outer Continental Shelf (OCS) leasing in derogation of long-standing federal rights. This transfer of control would retard OCS energy development at a time when there is a critical need to find new domestic sources of oil and gas …. the amendment is certain to breed litigation over OCS leasing …. the amendments are not necessary to assure consultation between the federal government and the States."); Thomas K. Kane, Simple Wire and Cable Company, Testimony on behalf of the National Ocean Industries Ass'n, at 4 ("we see no need to amend the Coastal Zone Management Act to make lease sales themselves subject to state consistency determination. States have numerous opportunities to be heard and to influence the outcome of federal decisions"); Testimony of John V. Byrne, Administrator, NOAA, at 2 [hereinafter cited as Byrne testimony] ("NOAA opposes the proposed legislation. We believe the bill has the potential to elevate coastal state interests above national interests in relation to OCS development and to hinder the balanced development and conservation of the coastal zone"); Testimony of William D. Bettenberg, Director, Minerals Management Service, Department of the Interior, at 1 ("We have reviewed the specific provisions of H.R. 4589. We find the bill to be a bad idea and strongly oppose it. The bill is unnecessary, ill-advised, and represents a piecemeal approach to a complex issue.")

Interior Secretary Clark reportedly would ask President Reagan to veto the proposed OCS legislation. Wash. Post, Apr. 3, 1984, at A11.

75. Wash. Post, Jan. 13, 1984, at A1.

76. Wall St. J., Mar. 2, 1984, at 6.

77. See Byrne testimony, supra note 74, at 8.