Supreme Court Closes Term with Environmental Law Cases

U.S. Supreme Court

Correction: This article was updated on May 7 to correct the title for Husch Blackwell associate Joseph Diedrich.

The U.S. Supreme Court closed its 2020-2021 oral argument calendar by hearing disputes about hazardous waste cleanup on a U.S. Pacific island territory, the meaning of a word in a statute regulating biofuels content in gasoline, and a planned East Coast fossil fuels pipeline that would cross protected state lands.

Superfund Statute of Limitations

The week’s trio of environment-related disputes began with a longstanding battle over financial liability for a hazardous waste dump in Guam. The Navy established the Ordot Landfill on the island during World War II and, for about 30 years, deposited both chemicals and munitions that resulted in pollution of the Lonfit River and two tributaries.

In 1988, the Environmental Protection Agency used the nation’s Superfund law to designate the Navy as a party potentially responsible for the cleanup of the site. Some 14 years later, the U.S. government sued Guam under the Clean Water Act for violations at the site and then settled those claims with the territory. “The one thing that it resolved was the Clean Water Act penalties, which are statutory penalties that can add up,” Gregory Garre, a former U.S. solicitor general and partner at Latham & Watkins, argued for Guam. “But it didn’t resolve any liability with respect to a response action.”

Guam sued the Navy in 2017 for hazardous waste cleanup costs of about $160 million, about one-fifth of the territory’s annual budget. The lawsuit was dismissed by the U.S. Court of Appeals for the District of Columbia Circuit in February 2020. That court said the statute of limitations for the territory’s CERCLA claim expired in 2007. CERCLA is an acronym for the Superfund law.

While the case turns on the interpretation of a specific statute that starts the limitations period clock and the technicalities of the 2004 settlement, some justices appeared sympathetic to Guam’s plight. Justice Samuel Alito appeared to suggest that the federal government had treated it unfairly. “Guam’s argument in very simple terms is basically this: We’re a small island … and while we may have contributed to part of the problem with this dump, the Navy contributed quite a bit too,” Alito said. “But, in any event, all of this — the respective liability of Guam and the United States — should be adjudicated under CERCLA, where the United States could bear some of the costs. But the United States has cleverly proceeded against us under the Clean Water Act for the purpose of avoiding that.”

Pat Parenteau, a professor at Vermont Law School, is confident the court will pick up Alito’s prompt. “I think Guam wins,” he said, explaining that the court’s path may involve a decision that the Clean Water Act agreement  “did not trigger the three-year statute of limitations barring a claim for contribution under CERCLA.” “It would be grossly unfair to let the Navy off the hook for creating a Superfund site on this little island,” Parenteau said. “It’s an environmental justice issue.”

Numerous states and territories, including eight western states, filed an amicus curiae brief on behalf of Guam. The coalition urged the justices to consider that “military sites represent some of the largest and most severely contaminated sites in the country, accounting for millions of acres of polluted soil and water.” The brief’s authors, Edward Manibusan, attorney general of the Northern Mariana Islands and Joseph Diedrich, an associate in the Madison, Wisconsin, office of Husch Blackwell, wrote that almost 10% of Americans live “as close as 10 miles to an NPL-listed military site.”

Moreover, they argued, the contamination at these sites is particularly dangerous and difficult to clean up. “Comprised of myriad substances — from conventional industrial products like fuels and solvents, to unexploded ordnance, to napalm and Agent Orange — contamination at military sites often proves uniquely dangerous to human health,” Manibusan and Diedrich wrote. “It makes sense, then, that military NPL sites are among the most costly to remediate, with a daunting estimated price tag in the hundreds of billions of dollars.”

The case is Guam v. United States, No. 20-382.

Refinery Case Addresses Clean Air Act Word

On Tuesday the justices took up the question of whether small refineries are entitled to an unlimited liberation from compliance with biofuel-blending requirements imposed by the nation’s main air pollution law. The case turns on the meaning of one word in the Clean Air Act: “extension.”

Congress amended the Clean Air Act in 2005 to require that EPA issue regulations requiring that gasoline be composed of increasing amounts of renewable fuels, including ethanol and biodiesel fuel. The law also directed that EPA provide an exception until 2011 for small capacity refiners and authorized a two-year extension of the exemption beyond 2011 for refiners that would suffer a “disproportionate economic impact” if required to comply with the biofuels mandate.

In January 2020, the 10th U.S. Circuit Court of Appeals held that EPA could not extend the Renewable Fuels Standard for three small refineries. Two had earlier been granted exemptions, but they had expired before the new extension was granted. No exemption before 2017 had been granted to the third refinery. “Paired with the rest of the amended Clean Air Act,” wrote 10th Circuit Judge Mary Beck Briscoe, “common definitions of ‘extension’ mean that a small refinery which did not seek or receive an exemption in prior years is ineligible for an extension, because at that point there is nothing to prolong, enlarge, or add to.”

Some justices focused on the literal definition of the word “extension.” “If I were to lose — my electricity is turned off because I failed to pay a bill, then I paid it or I get a reprieve — is that an extension or a grace period?” Justice Clarence Thomas asked the refiners’ counsel, former U.S. assistant attorney general and Sidley Austin partner Peter Keisler. “It just seems really odd to read it that way.” Justice Stephen Breyer told Keisler that the section of the Clean Air Act at issue may mean the exemptions “phase out over time.”

EPA, after President Joe Biden was inaugurated, changed its position in the case and urged the court to affirm the 10th Circuit decision. A coalition of seven states, led by Wyoming, filed a brief in support of the refineries. Eight other states filed a brief on behalf of the Renewable Fuels Association, which challenged EPA’s grant of the refinery exemptions. Five of them are midwestern states in which agriculture plays a central role in the economy.

Parenteau said the case does not involve high environmental stakes, though it does implicate the nation’s damaging reliance on corn as a biofuel. “Corn ethanol is a net loser for the climate and the environment,” he said. “We will need sustainable carbon neutral biofuels as part of an overall climate mitigation strategy, but converting food crops is not the answer.”

The case is HollyFrontier Cheyenne Refining LLC v. Renewable Fuels Association, No. 20-472.

Pipelines and Protected Lands

The last of the three cases, argued Wednesday, centers on the condemnation of publicly owned conserved land for the proposed PennEast natural gas pipeline. The 116-mile-long project would cross numerous waterways, including the Delaware River and damage a large number of wetlands.

PennEast Pipeline Co. was granted eminent domain authority by the Federal Energy Regulatory Commission to acquire land desired for the pipeline from uncooperative sellers. The company subsequently used that authority, which was granted it under the 1930s federal Natural Gas Act, to attempt seizure of 49 state-owned and state-controlled parcels, including easements, in New Jersey. In 2019 the 3rd U.S. Circuit Court of Appeals blocked the condemnations on grounds that the 11th Amendment to the Constitution gives states sovereign immunity from eminent domain actions initiated by private entities.

Before the Supreme Court, New Jersey argued that it has spent about $1 billion to preserve the lands desired by the pipeline builder for agriculture, conservation and recreation. The company’s lawyers, on the other hand, urged the court in a brief to consider that, were New Jersey’s arguments to prevail, the natural gas industry’s 80-year-old routine would be disrupted and create “a road map for converting state lands — including beds of rivers that form state boundaries — into barriers to pipeline development.”

At oral argument, the pipeline builder’s lawyer, former solicitor general Paul Clement, mounted an originalist theme. “Long before the framing, it was clear that eminent domain was an essential element of sovereignty and that private parties could be deputized to exercise that power for infrastructure projects,” he said. Chief Justice John Roberts immediately pressed Clement on that point, asking for historical examples and indicating his discomfort with the idea of state sovereignty being subjected to the whim of a corporation.

Breyer asked Clement to explain how Congress had abrogated sovereign immunity in the Natural Gas Act, a query to which the Kirkland & Ellis partner responded by asserting that states cannot have immunity from eminent domain. “No sovereign has ever had a sovereign immunity defense to an eminent-domain proceeding by the superior sovereign, ever, in the history of the world,” he said. Justice Neil Gorsuch asked whether the pipeline company, based in Delaware, is a citizen of another state and, therefore, barred from suing New Jersey in federal court. Clement disputed that framing before Justice Amy Barrett, when her turn to question came, appeared unswayed by his historical arguments. “I don’t see any historical support for the proposition that a state could be sued by a private party, you know, standing in the stead – the private party standing in the stead of the federal government’s eminent-domain power,” she said.

The Justice Department sided with PennEast Pipeline Co. in the case, despite President Joe Biden’s earlier decision to withdraw a permit granted to the Keystone XL pipeline project in the midwest. Edwin Kneedler, a lawyer in the Office of the Solicitor General, argued that the eminent domain power of the national government “indisputably extends to state-owned property” and that “it has been established since before the founding that the sovereign’s right of eminent domain includes the power to authorize private entities to exercise that right for roads, canals, and other infrastructure projects.”

Jeremy Feigenbaum, New Jersey’s state solicitor, disputed Clement’s argument that the original intent of the Constitution was that private parties could condemn state land. “The only way to justify this private site against the state is to provide evidence of founding era consent,” he said. “But condemnation lawsuits against non-consenting states were unheard of at the framing.” Alito asked whether the Garden State was too concerned about the formality of the plaintiff’s identity, while Breyer said that he worried that New Jersey’s argument, if adopted decades ago, would have prevented the construction of energy infrastructure in wide swaths of the nation. Justice Sonia Sotomayor secured an important point when she asked why New Jersey’s arguments that the Natural Gas Act could not delegate the takings power against a state had not been considered by the Supreme Court earlier in history. “It wasn’t crystal-clear until 1996. . . that Congress lacked the authority to subject states to private suit under that power,” Feigenbaum said.

Parenteau said he thinks the outcome of the PennEast pipeline case is hard to predict. There were, he explained, “no clear signals from the oral argument.” Parenteau noted that, from the perspective of climate policy, “having eminent domain authority to facilitate the deployment of renewables will be critical to achieving the Biden goals of 50% reduction in emissions by 2030 and net zero by 2050.” He said that Congress can enact legislation, if it desired, to limit the use of condemnation authority by private entities to that objective and not for fossil fuel facilities. “I doubt we’d ever see that,” he remarked.”

The case is PennEast Pipeline Co. v. New Jersey, No. 19-1039.

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