Administrative and Environmental Law Cases Decided During the U.S. Supreme Court’s 2017-2018 Term

by Pillsbury - Gravel2Gavel Construction & Real Estate Law

Unlike other Terms, only a handful of cases addressed administrative and environmental law issues in the U.S. Supreme Court’s 2017-2018 Term. However, the next Term of the Court promises to be more active in these areas.

  • On January 22, 2018, the Court issued a unanimous opinion in the Clean Water Act (CWA) case, Nat’l Assoc. of Mfrs. v. Dep’t of Defense, holding that the plain language of the CWA requires the appeal of the Environmental Protection Agency’s (EPA) redefinition of “waters of the United States” (WOTUS Rule) must be heard first in the federal district courts. Whereas all appeals of most EPA CWA effluent limitation rules must be heard in the federal Courts of Appeals, Congress chose not to do this with respect to this definitional rule.

The Court points out that reviews in the Courts of Appeals must take place within 120 days of the rule’s promulgation, but any review of a rule in the federal district court must take place within 6 years of the date the claim accrues.

The Sixth Circuit was without jurisdiction over this direct appeal.

The Court also notes (in Justice Sotomayor’s opinion) that the administrative actions regarding the WOTUS rule issued by the new administration did not moot this appeal.

  • Texas v. New Mexico, decided March 5, 2018, is a water rights dispute, which is controlled by the Rio Grande Compact. Texas brought this original action against New Mexico, alleging that New Mexico had violated the Compact. The U.S. sought to intervene, but the Special Master selected by the Court filed a report recommending that the request of the U.S. be denied. However, the Court, in a unanimous decision written by Justice Gorsuch, held that the special interests protected by the U.S. were sufficiently strong to permit the Government to intervene.
  • A controversy regarding the Fair Labor Standards Act (FLSA), in Encino Motor Cars, LLC v. Navarro, has been the subject of two separate rulings by the Court. The immediate issue is whether automobile dealers’ service advisors are exempt from the overtime pay provisions of the FLSA. On April 2, 2018, the Court, in a 5 to 4 decision, held that the FLSA, when properly construed, exempts these employees from the overtime pay provisions. The applicability of the exemption has been variously interpreted by numerous Presidential administrations.In the first case, decided in 2016, the Court held that the U.S. Court of Appeals for the Ninth Circuit was mistaken when it deferred to the Department of Labor’s interpretation in a 2011 rule because the rule itself was invalid. The case was remanded to the Ninth Circuit, which again held that service advisors were subject to the law’s overtime provisions. The Court again reversed the Court of Appeals, because, in the view of the majority, the Court of Appeals has clearly misinterpreted the FLSA. The dissenting Justices simply disagreed with the majority’s approach to the statute.
  • In the case of Jesner, et al. v. Arab Bank, PLC, decided on April 24, 2018, the Court held, in an opinion written by Justice Kennedy, that foreign corporations cannot be sued in U.S. federal courts under the Alien Tort Statute (ATS). The petitioners filed this lawsuit claiming that the terrorist acts committed abroad which inflicted damage and suffering upon them, were caused by or facilitated by the actions of a foreign corporation, the Arab Bank.This was an appeal from the U.S. Court of Appeals for the Second Circuit which, relying on its earlier decision in Kiobel v. Royal Dutch Petroleum, held that foreign corporations may not be sued in U.S. Courts under the ATS, in particular, that the ATS does not apply to alleged international-law violations by corporations.Justice Kennedy determined that the law of nations does not now impose liability on corporations for human rights abuses, and the majority was not inclined to create a new private right of action out of a venerable statute when the Congress has been reluctant to take that action. Until lately, the ATS was limited to actions in tort affecting only natural persons. Justice Sotomayor filed a strong dissent, arguing that “the text, history and purpose of the ATS plainly support the conclusion that corporations may be held liable.”
  • In an “anti-commandeering” ruling, Murphy v. NCAA, et al., the Court holds, in a 6 to 2 ruling issued on May 4, 2018, that the provisions of the Professional and Amateur Sports Protection Act, codified at 28 U.S.C. § 3702, which prohibits states from authorizing by law sports gambling enterprises, was unconstitutional because it violates what has come to be known as the “anti-commandeering rule”.This judge-made rule results from the Court’s understanding of the Tenth Amendment to the U.S. Constitution, which has been interpreted to prohibit the federal government from issuing direct orders to the state legislatures by commanding and compelling these independent constitutional bodies to pass legislation to enact a federal regulatory program. Otherwise, the state legislatures would be subject to the direct control of the Congress. With the decision in Murphy, the limits to the power of the Congress in such matters have now been more clearly delineated.
  • In a decision written by Justice Kagan, the Court holds, in the case of Lucia v. SEC, that the agency’s Administrative Law Judges, who are selected by the Securities and Exchange Commission (SEC) staff and not by the SEC, are nevertheless “officers” and not agency employees, and they are subject to the Appointments Clause of the Constitution. As a result, the SEC’s enforcement case against Raymond Lucia was heard and decided by an Administrative Law Judge (ALJ) serving without a constitutional appointment.To cure this constitutional error, Lucia must be provided with a new hearing presided over by a properly appointed ALJ or the SEC itself. Justice Breyer, in his concurring opinion, suggests that this may not be the result with respect to the decisions of other ALJs serving in other federal agencies, but surely the possibility exists.Justice Breyer expressed some misgivings about this decision, and he concludes his opinion with these words:“The Court’s decision to address the Appointments Clause question separately form the constitutional removal question is problematic. By considering each question in isolation, the Court risks (should the Court later extend Free Enterprise Fund) unravelling, step-by-step, the foundations of the Federal Government’s administrative adjudication system as it has existed for decades, and perhaps the merit-based civil-service system in general. And the Court risks doing so without considering the potential consequence.”
  • In March 2017, the Ninth Circuit affirmed the lower court’s ruling in U.S. v. State of Washington, that the State of Washington, in building and maintaining culverts that interfered with the Nineteenth Century treaties with several Indian tribes, and violated those treaties, which impelled the lower court to issue an injunction ordering the State to correct its “offending culverts.” The Court agreed to hear the State’s appeal, but on June 11, 2018, with Justice Kennedy’s deciding not to take part in the case, the Ninth Circuit’s ruling was affirmed by an equally divided court.
  • Florida v. Georgia, decided June 27, 2018, is another original action filed in the Court, in which one state complains of a neighboring state’s use of water jointly shared by the litigating states. The Special Master appointed by the Court to review the claims of both states submitted a Report recommending that the Court dismiss Florida’s complaint. In a 5 to 4 decision, Justice Breyer held that the Special Master erred in applying too strict a standard against Florida, before the necessary facts had been gathered, assembled and reviewed regarding the controversy.
  • Finally, there was an interesting concurrence by Justice Kennedy in an immigration case. In Pereira v. Sessions, decided on June 21, 2018, Justice Kennedy called for a re-examination of the lower courts’ widespread application of “Chevron Deference” doctrine and practice in administrative law controversies. Justice Kennedy stated that, “The type of reflexive deference exhibited in some of these cases [cited by Justice Kennedy] is troubling…It seems necessary and appropriate to reconsider, in an appropriate case, the premises that underlie Chevron and how the courts have implemented that decision”.

Cases to Watch Next Term:

  • Weyerhauser Co. v. U.S. Fish and Wildlife Service. The Court will be reviewing a case from the Fifth Circuit which limns the extent to which the Endangered Species Act can be interpreted to designate and protect the critical habitat of an endangered and protected species which has not been present on the affected land for many years. The species is the “dusky gopher frog”, now residing in Mississippi and the Service believes that thousands of acres of private land located in Louisiana qualifies as a critical habitat. 
  • Virginia Uranium, Inc. v. Warren. The Court will review the decision of the Fourth Circuit which held that the Atomic Energy Act does not preempt Virginias’s state statutory ban on uranium mining on non-federal lands in Virginia.
  • One important case which the Court has not yet decided to review: Atlantic Richfield Company v. Christian, et al. The Montana Supreme Court held that Superfund’s or Comprehensive Environmental Response, Compensation, and Liability Act of 1980’s (CERCLA)’s pre-enforcement bar on cleanup remedies does not preempt state litigation seeking a faster and more comprehensive cleanup when the EPA is in the midst of negotiating the scope of the cleanup.

Finally, Judge Brett M. Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit has been nominated by the President to succeed Associate Justice Anthony M. Kennedy on the Court. Judge Kavanaugh, a graduate of the Yale Law School and a former law clerk to Justice Kennedy, has served on the District of Columbia Circuit Court since May 30, 2006, where he has written more than 300 opinions.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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