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Supreme Court To Hear Major Energy Law Federalism Case

As many scholars have noted (see here and here, for example), the Federal Power Act’s bright line jurisdictional split between “retail” sales of electricity (regulated by states) and “wholesale” sales (regulated by the Federal Energy Regulatory Commission) is untenable in the modern era. The interconnected nature of the electric grid – electricity flows freely throughout the nation - means that many activities at one level affect the other, and vice versa. The precise allocation of state and federal jurisdiction to regulate this modern network, however, remains unclear.

On Monday, the Supreme Court took a step toward providing that clarity, granting the petition for certiorari in FERC v. Electric Power Supply Association. This case squarely tests the split of authority between FERC and the states, as it is an appeal of a decision by a divided D.C. Circuit panel that held that, although “demand response” can impact the wholesale markets, it is exclusively a retail level matter beyond FERC’s jurisdiction. Demand response involves reductions in electricity demand in response to price signals or emergency conditions on the grid. In the wholesale energy markets, aggregated blocks of demand reductions can substitute for electricity generation. 

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Katrina Ruling Breaches Sovereign Immunity

Almost a decade after Hurricane Katrina, New Orleans-area residents are still trying to hold their government accountable for mistakes that allowed a monstrous flood to devastate their city. Last week, in a case called St. Bernard Parish v. United States, a federal judge helped their cause.

In a dispute involving a major navigation channel controlled by the Army Corps of Engineers, Judge Susan G. Braden of the United States Court of Federal Claims in Washington, D.C., found that the Corps’ negligence in maintaining that passage caused flooding of such consequence that it amounted to a “taking” of homeowners’ property under the federal constitution, thus requiring the payment of “just compensation.”

The facts behind the Katrina flood—perhaps the most expensive engineering failure in American history—are well known to experts. After Hurricane Katrina had passed over New Orleans, a series of levee breaches caused flooding to 80 percent of the city. Independent investigations blamed shoddy design and construction on the part of the Army Corps. A deteriorating navigation channel, the Mississippi River Gulf Outlet, or MR-GO (pronounced “Mr. Go”), also maintained by the Corps, amplified the damage by increasing the storm’s surge and funneling it toward the heart of the city. Four years after Katrina, MR-GO was finally de-authorized and closed. (See previous posts hereherehere, and here.)

Describing the MR-GO fiasco in a 2009 court ruling, the federal trial judge Stanwood Duval nearly blew a fuse. “It is the court’s opinion that the negligence of the Corps, in this instance by failing to maintain the MR-GO p

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GM and Its No Good, Very Bad Year

With the announcement that GM Chief Executive Officer Mary Barra received the outsized compensation of $16.2 million in 2014, what should have been a year of humiliation and soul-searching for that feckless automaker instead ended on a disturbingly self-satisfied note.  Purely from a public relations perspective, Barra worked hard for her money.  Appearing repentant, sincere, and downcast, she persuaded star-struck members of Congress that the company was committed to overhauling a culture characterized by what she called the “GM shrug,” loosely translated as avoiding individual accountability at all costs.  Even as she blinked in the television lights, GM fought bitter battles behind the scenes to block consumer damage cases and exploit corporate tax loopholes.

Largely on the basis of her political adeptness, Barra has been taking victory laps in the business press, hailed as the rare (female) CEO who has led her corporation out of a morass that could happen to anyone.  This performance and the accolades it inspired provide a troubling coda to what was a destructive year for American drivers.  Dubbed “the year of the recall,” automakers recalled an unprecedented 64 million vehicles ? about one in five cars on the road; GM led with 26 million of this total.

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The Horne Case and the Public Trust in Wildlife

Who could have imagined that the takings case of Horne v Department of Agriculture argued in the Supreme Court last week might portend revival of the doctrine of public trust ownership of wildlife?  But it might. Really.

The Horne case involves a claim that an arcane raisin-marketing program administered by the Department of Agriculture effects a taking by requiring raisin growers, in certain years, to turn over a portion of their crop to the government in order to keep raisin prices high.   While there are several issues presented and lurking in the case, the central question is whether takings claims based on government seizures or other “appropriations” of personal property are governed by a per se rule. The Petitioners’ case rests on persuading the Court to apply a per se rule because they declined, for better or for worse, to present an alternative takings claim resting on the multi-factor Penn Central analysis.  In the oral argument, a majority of the Court seemed persuaded that the raisin-marketing program was “ridiculous” and that some ground should be found for calling it a taking.

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The Merits of the Clean Power Plan Challenge: It all depends on Chevron

Further reflections on the April 16th Oral Argument in Murray v. EPA and West Virginia v. EPA

In an earlier blog entry, I predicted that the D.C. Circuit will refuse, on standard administrative law grounds, to consider the arguments of the petitioning states and coal and utility companies for overturning EPA’s proposed Clean Power Plant rule.  In short, a challenge to an on-going rulemaking is not ripe for judicial review until the agency issues its final rule.

But whether I am wrong or not, the court will surely reach the merits sooner or later, either now, or after the inevitable new lawsuit is filed when the rule is finalized.  What is clear, however, is that there is just no way of escaping administrative law in this case.  Like the jurisdictional issue, the merits would also seem to turn on a question of administrative law, that of the permissible scope of the familiar Chevron doctrine that directs a court to defer to an agency’s reasonable construction of an ambiguous statutory provision. 

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Workers Are Safer at Work, But Not as Safe as They Could and Should Be

The Bureau of Labor Statistics (BLS) has reported that the occupational fatality rate of 3.3 deaths per 100,000 workers for 2013 was the lowest reported rate since the BLS started using its current tracking methodology in 2006.  That’s good news, but we’ve got a very long way to go still. The simple truth is that workers are not as safe as they could and should be. Although the fatality rate is down, there were still 4,585 occupational fatalities in 2013. 

The principal method for making workers safer is regulation and enforcement by the Occupational Health & Safety Administration. While about 40 percent of the deaths resulted from motor vehicle-related accidents, which is outside of OSHA’s regulatory authority, OSHA has tried to address the job risks within its jurisdiction by targeting the most dangerous industries and imposing the maximum penalties in appropriate cases. No doubt these efforts have resulted in the reported fatality reductions. To do better, however, OSHA faces a number of challenges.  

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Remember the Gulf Walrus! One Big Lesson from the BP Oil Spill

Nearly five years ago, BP introduced a flippered mammal Americans never knew we had: the Gulf Walrus! If you don’t know the story, you should, because the tale of the Gulf Walrus tells you everything you need to know about what was wrong with deepwater drilling back in 2010, and worse, still is. 

The story goes like this: After the Deepwater Horizon oil rig exploded, leaving 11 workers dead and a gusher of oil billowing a mile under the sea, a watchdog group called the Public Employees for Environmental Responsibility unearthed the regional oil spill response plan BP had submitted to the Department of Interior as part of the process to begin drilling. The document was riddled with omissions, errors, and implausible assumptions. There was no plan for a failed “blowout preventer,” no plan for oil reaching the coast, no plan for oil-soaked turtles and birds.  But, BP’s regional plan did pay lip service to such “Sensitive Biological Resources” as “Sea Lions, Seals, Sea Otters [and] Walruses.” The media howled. Congressional hearings were held. And in New Orleans, “Save the Gulf Walrus” t-shirts sold like fried oysters. What had happened, it turned out, was that BP had been so eager to gets its rig in the water, that it had cribbed from an earlier plan intended for Arctic drilling. No one had bothered to change the details, and the Department of Interior was happy to give its rubber stamp of approval. And thus an imaginary, large-flippered, sea mammal was born.

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Urban Parks and the Public Trust Doctrine: A Pending New York Lawsuit and Its Implications

Urban parks are a much-prized resource. They provide city dwellers with safe places to relax, walk their dogs, supervise their children at play, plant gardens, contemplate nature, pursue recreational activities, and escape the multiple stresses of urban life. At the same time, however, particularly in prosperous cities where open land is scarce and real estate values are high and growing ever-higher, some urban parks are under threat. Where they feel they can find legal avenues to do so, developers who wish to acquire land on which to construct new structures for private use often target parcels of parkland for purchased and development.

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The First Earth Day and Current Political Gridlock

Forty-five years ago I joined hundreds of people in Fairmont Park in Philadelphia for the first Earth Day.  The sad state of the environment on that day was all too apparent.  The Cuyahoga River in Cleveland was so polluted that it caught on fire the year before.   The 1969 Santa Barbara oil spill is still the third largest oil spill in American history. The air pollution in America’s cities – palpable air – had reached epidemic proportions.  Rachael Carson’s book, Silent Spring, detailing the adverse impact of toxic chemicals on the environment was eight years old, having been read by hundreds of thousands of people. 

In today’s gridlocked political environment, it is worth asking whether Earth Day still provides any lessons for the continuing struggle to protect the environment.

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The Importance of the Murray Energy Case and Administrative Procedure

Last week, the D.C. Circuit heard oral argument on a highly unusual attempt to short-circuit EPA’s rulemaking process for greenhouse gas regulation of existing power plants.  Despite statutory and constitutional hurdles to premature litigation, the petitioners—the coal-fired industry and coal-producing states—argued that the importance of the proposed rule justifies court intervention.

The rule’s importance is precisely why it is critical that the agency complete the administrative process.

That industry groups will file lawsuits over EPA’s greenhouse gas initiatives is unremarkable.  After all, litigation is to be expected:  frequently, both the regulated community and public interest groups challenge major environmental rules.  Nor is it unusual that interested parties may attempt to hijack a regulatory policy before a rule is finalized.  Scholars have documented (for example, here, here, and here) the many contacts between agencies and regulated industries that occur at various stages of a rules’ development.  What is more, contacts—from any interested party—are perfectly legal provided the agency discloses anything it relies on in support of the rule.  Congressional pressure and Presidential direction may also be brought to bear on agencies during their decisionmaking processes.

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