Confusion permeates the public arena as to what the U.S. Supreme Court recently did – and didn’t do – by ruling in favor of the Muscogee (Creek) Nation, a federally recognized Native American tribe, and against the state in McGirt v. Oklahoma. Not since a grinning incumbent President Harry S. Truman hoisted The Chicago Daily Tribune’s “Dewey Defeats Truman” special edition on Nov. 3, 1948 – proclaiming his “loss” to New York Gov. Thomas E. Dewey – have so many commentators missed what really happened and why it matters.
On Aug. 3, 2020, a split Fifth Circuit plunged federal aquaculture regulation into murky waters. The United States is a minor aquaculture producer, ranked 17th in 2017 on a global scale – but it is the leading importer of fish and fishery products. According to the National Oceanic and Atmospheric Administration (NOAA), by weight, approximately 90% of the seafood eaten in the United States comes from abroad, over half of it from aquaculture. Part of why the United States has been a minor producer is because domestic aquaculture projects have historically been relegated to state-controlled waters and operations like inland recirculating aquaculture systems. Ocean waters between three and 200 miles offshore are under federal control and have previously been unavailable for farming because of concerns about its effect on wild fisheries and ecosystems. While the United States might be a minor producer, its aquaculture projects are still subject to a complex and evolving regulatory scheme, often navigating permitting and operational requirements imposed by multiple state and federal agencies. With respect to the region at issue in Gulf Fishermens Association et al. v. National Marine Fisheries Service et al., the Gulf of Mexico’s aquaculture currently focuses on stock enhancement, food production, research, and restoration efforts of species including oysters, clams, shrimp, assorted finfish, and algae.
In 1976, the Magnuson-Stevens Fishery Conservation and Management Act (the Magnuson-Stevens Act) was passed in response to overfishing concerns and in an attempt to preserve the nation’s fisheries. In 2009, the Gulf of Mexico Fishery Management Council (comprised of Alabama, Florida, Louisiana, Mississippi, and Texas) created an aquaculture regulatory plan. In 2016, the National Marine Fisheries Service (the NMFS, a division of NOAA) finalized this “comprehensive regulatory plan,” which it claimed was designed to develop an “environmentally sound and economically sustainable aquaculture fishery in Federal waters of the Gulf” (the Final Rule). See 81 Fed Reg. 1762 (Jan. 13, 2016). The Final Rule was the first attempt by the NMFS or any of their eight Regional Fishery Management Councils to regulate aquaculture under the Magnuson-Stevens Act, and the Final Rule would allow for a maximum annual production of 64 million pounds of seafood in the Gulf – equal to the previous average annual yield of all marine species in the Gulf except medhaden and shrimp. Plaintiffs brought suit in 2016, concerned that the Final Rule’s expansion of seafood production would harm traditional fishing grounds, reduce prices of wild fish, subject wild fish to disease, and pollute open waters with chemicals and artificial nutrients.
The Fifth Circuit held that because the Magnuson-Stevens Act “neither says nor suggests that the agency may regulate aquaculture,” the NMFS may not do so. To reach this conclusion, the court applied the two-step test established in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). Step one of Chevron deference requires courts to ask whether Congress has directly spoken to the precise question at issue and, if the statute is silent or ambiguous, then proceed to step two: questioning whether the agency’s construction is permissible. According to the Fifth Circuit, NMFS failed step one of the test because the Magnuson-Stevens Act “unambiguously precludes the agency from creating an aquaculture regime” and therefore it affirmed the district court’s 2018 ruling that the Final Rule exceeded the agency’s statutory authority and held that “[i]f anyone is to expand the forty-year-old Magnuson-Stevens Act to reach aquaculture for the first time, it must be Congress.” Problematically, Congress has made several attempts to pass offshore aquaculture legislation, including bills in the 109th, 110th, 111th, 112th, and 115th Congress, none of which were enacted. In the 116th Congress, no comprehensive aquaculture legislation has been introduced, though several bills have been introduced that are related to offshore aquaculture and aquaculture generally, including the Keep Finfish Free Act of 2019 (H.R. 2467), the Commercial Fishing and Aquaculture Protection Act of 2019 (S. 2209), the Prevention of Escapement of Genetically Altered Salmon to the United States Act (H.R. 1105) and the Shellfish Aquaculture Improvement Act of 2019 (H.R. 2425).
Further muddying the waters, while the Fifth Circuit appeal was pending, the U.S. Environmental Protection Agency stepped in to issue draft permits under the Clean Water Act to an offshore aquaculture project that, if completed, would be the first in federal waters of the contiguous United States. Then in May 2020, the Trump administration issued an executive order designed to encourage large-scale fish farming. The order included several components, including a provision permitting finfish aquaculture “in marine and coastal waters out to the limit of the territorial sea and in ocean waters beyond the territorial sea within the exclusive economic zone of the United States.” The executive order also designated NOAA as the lead agency for shepherding applications for aquaculture projects in federally controlled waters and the U.S. Army Corps of Engineers as the agency tasked with drafting nationwide permits.
The continued absence of a governance system for regulating offshore aquaculture creates inconsistencies and obstacles to the industry’s development. At present, the aquaculture permitting process is complex and lengthy, creating uncertainty and resulting in challenges for both investment and ongoing operations. Even where states provide regulations, the states’ waters only reach three miles offshore, creating two voids in the current scheme: consistency for U.S. coastal operations and potential to farm beyond the three-mile boundary. Reconciling the executive order with the Fifth Circuit’s decision, not to mention sorting out regulatory responsibilities among states, Regional Fishery Management Councils, and multiple federal agencies, may result in continuing litigation.
For the aquaculture industry these unanswered logistical questions make for increased uncertainty and may make onshore operations an easier option in the short term. Innovative indoor aquaculture operations continue to develop across the United States, and while these operations are still subject to permitting requirements, the regulatory landscape may be more certain than for coastal operations. While scalability for this developing area of AgTech may still present some uncharted territory, until a federal solution settles the waters, offshore aquaculture remains turbulent.
As of 20 July 2020, Phase 1 of the UK’s Industrial Energy Transformation Fund (IETF) is open for applications for grants, according to the Department for Business, Energy and Industrial Strategy (BEIS).
The IETF, announced in the UK’s 2018 autumn budget, is designed to assist the transition of high energy use businesses into a lower carbon future economy. £289 million of the IETF’s total £315 million fund is available to businesses in England, Wales and Northern Ireland, with the remaining £26 million allocated to Scotland for use in a separate programme (details of which are expected to be published later in 2020).
The £289 million allocated to England, Wales and Northern Ireland will be invested in two phases:
- Phase 1 (which, as noted above, opened on 20 July 2020) with up to £30 million of funding to be managed by Innovate UK, a public body established by the UK government to drive business innovation; and
- Phase 2 (which will launch in 2021) to allocate the remainder of the fund.
Phase 1 of the IETF is open to:
- organisations within the manufacturing Standard Industrial Classification (SIC) codes 10-33; and
- data centres.
Industrial businesses of any size can apply, either on their own or in collaboration with other organisations. The lead applicant must operate at an eligible site in England, Wales or Northern Ireland.
Applicants must be eligible to receive state aid under the applicable European Union state aid rules at the time it is confirmed they will receive funding from the IETF.
Read my full GT Alert by clicking here.
On July 30, Sens. Cory Booker (D-NJ), Kamala Harris (D-CA), and Tammy Duckworth (D-IL) unveiled the “The Environmental Justice for All Act.”
The bill proposes a finding that communities of color, low-income communities, tribal communities, and other vulnerable populations, such as children, elderly, and persons with disabilities, are disproportionately burdened by environmental hazards. The premise of the bill is that all people have a right to breathe clean air, drink clean water, and live free of dangerous levels of environmental pollution, irrespective of their race, national origin, or income level.
If passed, the bill would authorize regulators to consider cumulative impacts in permitting decisions under the Clean Air Act and the Clean Water Act; authorize $75 million to support projects to address environmental and public health issues; require greater community involvement in agency decision making; and amend the Civil Rights Act to allow private citizens and organizations that experience discrimination in environmental programs to seek legal remedies.
The same bill, H.R. 5986, was introduced in the House earlier this year by Rep. Grijalva (D-AZ). Considering that the recent NEPA re-write eliminates agency responsibility to consider cumulative impacts, the chance of passage of these bills is slim (See July 20 E2 Law Blog Post). However, the Coronavirus Disease 2019 (COVID-19) pandemic has brought a new focus on environmental justice and how multiple routes of environmental exposure compound health impacts within communities of color, resulting in a higher mortality rate among people of color who contract COVID-19. As such, environmental justice issues may well remain a priority for Democrat leadership in the U.S. House and Senate.
On July 27, 2020, the U.S. Department of Justice (DOJ) issued a policy memorandum designed to stay the federal government’s hand in enforcing the Clean Water Act where states have initiated a civil judicial penalty proceeding under analogous state laws on the same core of operative facts.
The policy, “Civil Enforcement Discretion in Certain Clean Water Act Matters Involving Prior State Proceedings,” relies heavily on principles of federalism and efficiency – and the DOJ-wide policy against “piling-on” – to limit the reach of federal government enforcement. The memo notes that the statute explicitly precludes federal administrative enforcement where the state has taken administrative enforcement under comparable state authorities. But the statute is silent regarding any preclusive effect of state judicial action.
As a matter of long-standing practice, the federal government has approached over-filing cautiously, with many, if not most, federal civil judicial enforcement actions under the Clean Water Act proceeding with states as co-plaintiffs – or with, at least, express state blessing.
But as a result of the new policy, federal civil judicial enforcement under the Clean Water Act can proceed only with the express written approval of the Assistant Attorney General for Environmental & Natural Resources Division that may be granted only in exceptional circumstances, including where failure to act would result in an unfair windfall to defendants or the inability to protect an important federal interest not adequately protected by state action.
The guidance marks the latest in a series of federal executive branch attempts to limit the reach of the Clean Water Act, including last Spring’s “interpretative statement” from the U.S. Environmental Protection Agency (EPA) that pollutant discharges to groundwater are never subject to Clean Water Act jurisdiction. (See GT Alert, “Contradicting the Department of Justice, EPA Changes Stance on Groundwater Discharges.”) In May 2020, the U.S. Supreme Court rejected that position in County of Maui, Hawaii v. Hawaii Wildlife Fund, __ U.S. __ (2020), where it held that permits are required for discharges from a point source that travel through the “functional equivalent” of a conveyance through groundwater before reaching a jurisdictional, navigable “water of the United States.”
On July 16, 2020, the Federal Energy Regulatory Commission (FERC or the Commission) approved a Final Rule revising the Commission’s regulations implementing the Public Utility Regulatory Policies Act of 1978 (PURPA) (See a prior GT Alert for more details on PURPA and FERC’s overhaul). The Final Rule will take effect 120 days after its publication in the Federal Register.
PURPA, among other things, requires electric utilities – private and public – to purchase power from certain cogeneration facilities and small power producers that are QFs under the statute.
When FERC released the Notice of Proposed Rulemaking (NOPR) in September 2019, it said that the proposed changes were intended to continue encouraging development of Qualifying Facilities (QFs), described further below, while addressing concerns regarding how the current regulations work in today’s competitive wholesale power markets. The NOPR proposed to revise the Commission’s regulations implementing sections 201 and 210 of PURPA and incorporated the record of a FERC 2016 technical conference addressing issues involving PURPA’s implementation.
Read our full GT Alert by clicking here.
On July 15, 2020, President Trump’s administration finalized a significant overhaul of the regulations governing the administration of the National Environmental Policy Act (NEPA). In January 2020, when the regulatory overhaul was announced, we observed that rolling back 50 years of precedent in an administrative action could trigger judicial challenges to the rule and result in greater regulatory uncertainty for federal projects. The final rule, while making some relatively minor modifications, hews closely to its original terms, and does little to satisfy potential challengers. Continue Reading
The Department of Justice, in the last year, has altered its guidance related to supplemental environmental projects (SEPs), first prohibiting their use in settlements with state and local governments, then extending that prohibition to settlements with private parties. The Department of Justice is now targeting settlements that include similar projects agreed to by two private parties.
Under prior guidance, parties settling with the United States could undertake SEPs, which are community-benefiting projects that relate in some way to the environmental harm caused by the settling party. Such projects previously served to reduce penalty payments and provided settling parties with flexibility in reaching an agreement.
Sierra Club and DTE are parties to a consent decree with DOJ. The consent decree requires DTE to pay a penalty amount and undertake pollution-reducing projects at its coal-fired power plants. DOJ moved to enter that consent decree earlier this year. In June, Sierra Club moved to enter – or have notice taken by the court if approval is not required – a separate agreement between Sierra Club and DTE. That agreement commits DTE to fund $2 million worth of community-based environmental projects in the area, carry out an energy efficiency and reduction project, undertake certain measures related to a bus replacement project required under the consent decree, and retire certain power plants. Sierra Club argues that this is a separate agreement – which releases DTE from claims made by Sierra Club – that does not require court approval.
DOJ objects to this separate agreement, arguing that (1) judicial review of the separate agreement is required; (2) Sierra Club may not second guess the United States’ enforcement discretion; (3) mitigation relief is limited to a narrow exception under the Clean Air Act, which is not satisfied in this agreement; and (4) the mitigation relief is really a penalty, and because that money is not deposited into the Treasury it violates the Miscellaneous Receipts Act. That last argument underpins DOJ’s reasoning for its recent prohibition of SEPs. In addition, DOJ argues that Sierra Club lacks standing to obtain this additional relief because Sierra Club has not demonstrated how these projects will remedy harms caused by DTE’s air pollution.
DOJ’s recent guidance has made clear that it will not allow any SEPs in settlements in which the United States is a party. Its actions here demonstrate that it will work to ensure that citizen plaintiffs are unable to extract such relief in other ways. Whether the court agrees with DOJ remains to be seen.
A curious appellate court decision has Pennsylvania environmental law practitioners scratching their heads about the status of certain waterways.
No, we do not reference the U.S. Supreme Court’s latest Clean Water Act decision in County of Maui, Hawaii v. Hawaii Wildlife Fund, __ U.S. __ (2020) from May, where six of the nine justices held that
permits are required for discharges from a point source that travel through the “functional equivalent” of a conveyance through groundwater before reaching a jurisdictional, navigable “water of the United States.”
Rather, we refer to the June 12 decision by the Pennsylvania Commonwealth Court in Beishline v. Department of Environmental Protection, __ A.3d __ (Pa. Commw. Ct. 2020). And instead of opining as to which waters are subject to regulation—after all, in Pennsylvania all waters, surface and ground, navigable and nonnavigable, are “waters of the commonwealth” under the state’s Clean Streams Law—the Commonwealth Court considered the issue of navigability in assessing private party water ownership rights.
I review this decision in my column for this month’s The Legal Intelligencer supplement, Pa. Law Weekly. Read more from “Navigability: It’s Not Just for the Federal Clean Water Act Anymore” by clicking here.
“Configuration of terrain is an aid to the army. Analyzing the enemy, taking control of victory, estimating ravines and defiles, the distant and near, is the Tao of the superior general.” Sun-tzu, The Art of War 214 (Ralph D. Sawyer trans., Westview Press 1994).
While the use of Sun-tzu’s strategy dramatizes a litigator’s role, the principles apply. Where and how a litigation takes place matters. Consequently, parties will seek the advantages of the terrains and respective configurations. This will include considerations of the procedural and evidentiary rules applied by each and their resources, speed, required disclosures, and more.
Defendants seeking a federal forum in actions involving radiological allegations should carefully consider whether the Price-Anderson Act confers federal jurisdiction. Under the Price-Anderson Act, allegations regarding a “nuclear incident” can change the dynamic where forum selection is concerned. In these circumstances, a defendant struggling for a different terrain should look to the act, which is legislation designed to establish a federal system of insurance and limited liability for nuclear incidents.
Evaluating and seizing the terrain where a legal battle will be waged is the Tao of the litigator.
Read more from our article, “Price-Anderson Act Removal of Litigation Involving a ‘Nuclear Incident’” in the Summer 2020 issue of the American Bar Association’s “Environmental & Energy Litigation” Committee newsletter by clicking here.