Michèle Ma Belle

Posted on July 19, 2018 by Robert Falk

Michèle B. Corash, one of our giants of environmental law and my dear friend, mentor, and partner retired from active practice earlier this year.  She, her unique persona, and her achievements are well known to many, while Michèle’s other, quieter accomplishments, deeds, and attributes are likely known to only a few.  Because “these are words that go together well,” I will discuss just a small handful of her better and lesser knowns below.

As almost all of you may know, Michèle proudly served as general counsel of the U.S. Environmental Protection Agency from 1979 to 1982.  Prior to that she served as deputy general counsel for the U.S. Department of Energy, and, previously, was a special assistant to the chairman of the Federal Trade Commission.  (Since we shared a common initial job description in our federal government careers, in working together for almost three decades, one of Michèle favorite things to say to keep me on my toes was “once a special assistant, always a special assistant.”) 

As general counsel, Michèle, among other things, helped EPA give birth to CERCLA, as well as regulations implementing key provisions of RCRA and many of our other fundamental environmental statutes.  While her participation in the reach of our environmental laws is likely her more significant accomplishment, on the other side of the equation, she also served on then-Vice President George H.W. Bush’s Regulatory Reform Task Force, where she helped steer its recommendations to avoid the type of unconscionable approaches that we unfortunately witness all too often being undertaken by the current Administration. 

In her subsequent career in private practice, Michèle was widely recognized as a leader and innovator in environmental law.  She received the highest rating for environmental lawyers from Chambers USA virtually every year, and Legal 500 USA repeatedly ranked Michèle as a Leading Lawyer in Environmental Litigation.   On a wider stage, Michèle was listed in the Expert Guides to the World’s Leading Lawyers – The Best of the Best, and here on the “left” coast, California Lawyer also cited Michèle as one of the “Best of the West.”  (Perhaps of more significance to her personally, is that Michèle’s work was also recognized by The Los Angeles and San Francisco Daily Journal as having the “widest impact and is changing an industry or the law or the society as a whole.”)   

As many of you know, beyond her accomplishments in practice, Michèle was a founding member of the American College of Environmental Law and served as its President in 2008-2009 (culminating in a fabulous and still-remarked upon party in her penthouse condominium with its 360° view of San Francisco).  Prior to that, Michèle served on the ABA’s Standing Committee on Environmental Law and (after assigning me as a junior associate to be her special assistant for organizing it), chaired its International Conference on Environmental Law in Pacific Rim Nations in Hong Kong in 1991. 

Somewhat lesser-knowns about Michèle include her tireless promotion of women and diversity in the legal profession, in the business world more generally, and particularly within our firm.  (In addition to parties for ACOEL and many others, Michèle hosted current and former women attorneys and summer associates at a very well attended annual dinner at her home.)  Michèle also serves as a fabulous mentor to her nieces (who she regularly brought to work on Take Your Daughter to Work Day) and as a godmother to several close friends’ children.  As added evidence of her boundless energy, she has also been a longtime patron of the opera and remains an active member of the Board of the San Francisco Symphony. 

Although I could go on (and on) and tell you, many other things about what a wonderful mentor and friend Michèle has been over the years, instead, I prefer to conclude this serenade with Mr. McCartney’s lyrics:

Michèle, ma belle
These are words that go together well
My Michèle

Michèle, ma belle
Sont les mots qui vont très bien ensemble
Très bien ensemble

I love you, I love you, I love you . . . .

Fear of Forward Looking Statements: Climate Reporting and the TCFD

Posted on July 18, 2018 by Christopher Davis

Risks relating to climate change are becoming increasingly material to companies in a broad range of sectors, to investors who own their shares, to banks that lend to them, to insurers that insure them, to communities where they operate, and to regional and global economies. Climate-related factors including energy transition from fossil fuels to renewables, extreme weather events and water scarcity are having increasing impacts. As a result, climate-related disclosure has become a hot topic, or should be, as companies are required by the Securities and Exchange Commission (SEC) and other regulators to disclose their material climate-related risks.

In the wake of the 2015 Paris climate agreement, the Task Force on Climate-Related Financial Disclosures (TCFD) was created by the G20’s Financial Stability Board in 2016 to develop consistent, voluntary standards for companies, investors and insurers to report climate-related financial risks and opportunities. The task force was chaired by Michael Bloomberg, and comprised of 32 members from major global corporations, financial institutions, corporations, accounting firms, credit rating agencies and other organizations. The TCFD issued a final report presenting its Recommendations [insert link] for such disclosures in June 2017. The Recommendations have been endorsed by more than 250 companies, banks, institutional investors, insurers and other organizations.

The TCFD Recommendations focus on two kinds of financially material climate-related risks: transition (legal/policy, technology, market, reputation) and physical risks. They call for disclosures in four areas: (1) Governance of climate-related risks and opportunities, (2) Strategy for identifying and addressing climate-related impacts, (3)  Risk Management measures to assess and manage relevant risks, and (4) Metrics and Targets including reporting Scope 1, 2 and 3 greenhouse gas emissions and metrics and targets to measure and manage them.

While the TCFD Recommendations have garnered considerable attention and support, notably from institutional investors, relatively few companies have so far committed to report in accordance with the Recommendations. There are various reasons for this, including inertia, cost and advice from inside and outside counsel about the purported liability and competitive risks associated with the kinds of forward-looking statements called for by the Recommendations. Indeed, disclosures consistent with what the TCFD recommends would be much more substantive, revealing and useful than the generic boilerplate disclosures of climate and other environmental risks that commonly appear in SEC filings.

Corporate counsel often provide conservative advice on disclosures in SEC and other mandatory corporate financial reporting. Federal securities laws provide corporate issuers with safe harbors for forward looking statements (typically focused on projections of future financial results) where accompanied by meaningful cautionary statements. Also relevant here is the SEC’s 2010 “Guidance Regarding Disclosure Related to Climate Change,” which highlights mandatory reporting requirements under SEC Regulation S-K for financially material climate-related risks, including the impact of legislation or regulation, international accords, indirect consequences of regulation or business trends, and physical impacts.

While caution and risk aversion are hallmarks of typical legal advice, I would argue that good, thoughtful disclosures consistent with the TCFD Recommendations are likely to have a range of benefits to the disclosing companies, and limited risks. Doing the internal work across disparate corporate functions necessary to address the TCFD Recommendations will improve a company’s understanding and management of evolving climate-related risks and opportunities. Good, meaningful disclosures require homework that underpins good corporate governance, risk management and strategic planning. What gets measured gets managed, and the TCFD Recommendations call on companies to assess and manage climate risks and opportunities, and to report to stakeholders on how they are approaching these issues.

Companies responding in a timely and effective way to the accelerating economic and physical changes brought by climate change can be expected to have a competitive advantage over their peers that fail to do so. Likewise, companies that meaningfully and credibly disclose how they are responding to material climate risks and opportunities, as called for by the TCFD, should enjoy a competitive advantage over their competitors who do not. A range of stakeholders (including current and prospective customers and employees) are likely to respond more favorably to companies that make a good faith effort to comply with evolving best practice disclosure standards. The likelihood of being sued for securities fraud based on such well-grounded climate disclosure seems low. By contrast, the risks of successful claims of non-disclosure and misleading disclosure for companies that fail to meaningfully disclose climate-related risks affecting their business seem quite real, as suggested by the investigations of ExxonMobil’s climate-related disclosures. The market generally rewards leaders that, to paraphrase hockey great Wayne Gretsky, are skating to where the puck is going rather than where it has been, and are early responders to global megatrends like climate change.

ENVIRONMENTAL RIGHTS IN PENNSYLVANIA

Posted on July 13, 2018 by John Dernbach

One year ago—June 20, 2017—the Pennsylvania Supreme Court issued a landmark decision on constitutional environmental rights.  The case, Pennsylvania Environmental Defense Foundation v. Commonwealth (PEDF), has implications that will take decades to sort out, as subsequent litigation is making clear.  And it may contribute to re-imagining of environmental law.

Almost a half century earlier—May 18, 1971—Pennsylvania voters adopted by a four-to-one margin an amendment to Article I of the state constitution, which is the state’s Declaration of Rights.  Section 27 provides:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.

Because Pennsylvania courts were concerned about its impact on development, and because the first two cases brought under Section 27 had weak facts, Pennsylvania’s Commonwealth Court in 1973 (Payne v. Kassab) articulated a three-part balancing test as a substitute for the text.  The test was easy to apply and, as a 2015 article shows, those seeking to vindicate environmental rights almost never won.  More fundamentally, the test had nothing to do with environmental rights, much less the text of Section 27. The Payne decision evinced the kind of judicial activism—or more precisely, judicial rewriting of the constitution—that the late Justice Antonin Scalia criticized.  But for more than 40 years, it was the law of Pennsylvania.

In PEDF, the petitioner challenged the state’s expenditure of hundreds of million dollars of funds from gas leasing on state forest land.  (Disclosure: I filed an amicus curiae brief in this case.)  PEDF argued that both state forests and the gas under them constituted “public natural resources” under Section 27, and that royalties and other money received from leasing must be spent to “conserve and maintain” those resources, and not used to balance the state’s budget.  A majority of the Supreme Court agreed.  In so doing, the Court held that the text of Section 27 is of primary importance in interpreting the Amendment, specifically setting aside the Payne v. Kassab balancing test.

The revitalization of Section 27 has led to a spate of environmental rights claims in litigation, much of it involving permits for shale gas drilling facilities and gas pipelines.  The Supreme Court appears to be charting a future course on Section 27 with caution.  In Gorsline v. Board of Supervisors of Fairfield Township (June 1, 2018), which was widely anticipated to further develop the law of Section 27, the Court instead decided the case based on the meaning of the township zoning ordinance.

A major outstanding question is what Section 27 means for day-to-day environmental permitting.  The large number of environmental statutes and regulations adopted and strengthened after 1971 provide much of the protection that Section 27 now also provides.  Here, Section 27 is most likely to make a difference when a litigant can demonstrate that the applicable regulatory program contains a significant gap (e.g., cumulative effects).

A broader question is what constitutional environmental rights can mean for environmental regulation as we know it, in which decisions are influenced by, and often based on, consideration of costs and benefits.  In Friends of Lackawanna v. Commonwealth, the Environmental Hearing Board (EHB), which hears appeals from decisions by the Pennsylvania Department of Environmental Protection, said in late 2017 that the people living near a landfill who are adversely affected by odors are not simply part of the costs and benefits calculus in municipal waste management; they have constitutional rights.   If DEP did not do a better job of protecting them, the EHB warned, it would.  And under the radar, I am told, the revitalization of Section 27 has caused some bad project proposals to quietly go away.

Widener University Commonwealth Law School has published a listing of available Section 27 resources with links. A lot is happening, and there is more to come.

CAFO Odors and the Ghost of William Aldred

Posted on July 10, 2018 by Susan Cooke

The number and size of concentrated animal feeding operations (CAFOs) have increased in recent years.  These operations keep large numbers of animals in a confined space and provide them with feed from offsite sources prior to their slaughter.  While generally viewed as cost efficient, CAFOs raise concerns about animal welfare and about their environmental impacts and effect on the health and quality of life for those living or working nearby.  Such concerns include the foul odors associated with the substantial quantities of animal waste that are generated, especially where such waste is discharged into pits and then flushed into open air lagoons.  The sludge in those lagoons sinks to the bottom and is periodically removed for land application and the liquid waste remaining at the top is sprayed as fertilizer onto adjacent fields.

The anaerobic reaction that occurs during pit and lagoon storage of the waste over an extended time period is the primary generator of such odor, the primary constituents being ammonia and hydrogen sulfide.  Anaerobic digesters and other technologies can be employed to reduce odor generation, with some also producing gases for fuel.  However, the costs of installing and operating such equipment can be substantial, and there are no specific requirements at the federal level mandating odor control or limiting ammonia or hydrogen sulfide emissions from CAFO operations.  Indeed, even the reporting of animal waste air emissions under the federal Superfund law and under EPCRA (as interpreted by EPA) is precluded under the Fair Agricultural Reporting Method (FARM) Act signed into law by Congress in March 2018

While there is little regulation at the federal level, some states have imposed limits on hydrogen sulfide.  For example, California has a one hour average standard and Minnesota has a 30 minute standard for H2S.  In addition, a few states have instituted odor standards covering some CAFOs, including Colorado’s odor standard, which is based on an odor dilution factor, for swine CAFOs above a certain size (i.e., the odor must be eliminated by a specified amount of dilution).  While most local ordinances covering odors enjoin nuisances in general, some have adopted a dilution factor standard that is generally applicable, such as the ordinance adopted in Denver, Colorado and that adopted in South St. Paul, Minnesota.

Even where CAFOs are singled out for specific regulation by state, the dilution factor standard is not often used, probably because it is in essence subjective in nature and thus quite different from most environmental emission standards.  Instead, states have generally adopted a management plan approach coupled with registration and periodic inspections.  For example, the environmental regulations covering odor control at CAFOs in North Carolina, which has a number of swine CAFOs in the southeastern portion of the state, do not include a specific standard covering odor.  Instead, those regulations impose setback requirements and provide for state agency inspections, and they empower that agency to require preparation and modification of a best management plan if it determines that odor control is necessary.

Given the absence of a specific standard for judging CAFO emissions, some neighbors of CAFO operations have brought tort suits for nuisance to address odor concerns.  In one case decided this past April, a jury awarded $50 million in compensatory and punitive damages to 10 neighbors of a North Carolina hog farm.  The plaintiffs claimed that the truck noise associated with farm operations and the odor associated with lagoon storage of waste from its 4700 hogs and the spraying of lagoon liquid onto nearby fields created a nuisance.

Although the federal court reduced recovery to $3.25 million under punitive damage limits imposed under the North Carolina Right to Farm Law, agribusiness interests raised strong concerns about the damage award and within weeks the North Carolina legislature had passed amendments to the state Right to Farm Law to further restrict tort recovery for alleged nuisances from agricultural and forestry operations.  Although those amendments (in Senate Bill 711) were vetoed by Governor Roy Cooper on June 25, the veto was overridden by both houses before their month-end adjournment.

The amendments, which are similar to statutory language already enacted in Missouri for facilities engaged in crop and animal production, would limit compensation to property located within one half mile of the alleged source of a nuisance at an agricultural or forestry operation.  In addition, the suit would have to be filed within one year of the operation’s establishment or of a fundamental change (which wouldn’t include, among other things, a change in ownership or size) to that operation, with compensatory damages limited to a reduction in fair market value of the plaintiff’s property for a permanent nuisance and to diminution in fair rental value for a temporary nuisance.  While punitive damages are already capped at a specified multiple of compensatory damages, the amendments would limit them to instances where, during the previous three years, the operation had been the subject of a criminal conviction or civil enforcement action or of regulatory action taken by the state or federal government pursuant to a notice of violation.

Such limits on monetary recovery for nuisance may encourage plaintiffs to seek injunctive relief to abate odors from CAFO operations.  And tort suits for nuisance animal odors have a long history, as evidenced by William Aldred’s Case dating back to 1610 where the Court of King’s Bench held that Mr. Aldred, whose house was situated within 30 feet of a later constructed hog sty, had a right to obtain abatement of the foul odor emanating from that hog sty.

In recent years the injunction remedy in a nuisance action has sometimes been disfavored, as illustrated in the Boomer v. Atlantic Cement decision where monetary damages were awarded rather than injunctive relief for operation of a cement plant.  There the court weighed the (lower) cost of compensatory damages versus the (significantly higher) cost associated with installing abatement equipment or requiring plant shutdown.  However, it now appears that determining “entitlements” under an economic efficiency analysis, such as that described in the oft-cited Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, is undergoing more critical academic scrutiny.

Moreover, animal welfare advocates, as well as those concerned about environmental justice or greenhouse gas emissions, and perhaps even property rights advocates, may add their own voices in support of the injunctive remedy option for stopping or curtailing CAFO operations.  If so, then the right of a landowner to quiet (and unscented) enjoyment of his or her property through an injunction, as enunciated by the King’s Bench more than 400 years ago, may prove to be the most effective remedy for those seeking to curtail CAFO odor emissions.

From Nairobi to Havana - the Initiatives of the International Pro Bono Committee

Posted on July 9, 2018 by James Bruen

A real world impact of the ACOEL comes, in part, from its international pro bono initiatives. The International Pro Bono Committee reports here on the status of these initiatives. They are generally driven by the 28 members of this committee. Geographically-oriented initiatives are managed by Committee vice chair David Farer (Cuba), Tracy Hester (India) and Jim Bruen (Africa).

Africa 

ACOEL has executed a Memorandum of Understanding (MOU) with the African Wildlife Foundation (AWF) to provide legal support to a series of wildlife and other natural resource protection initiatives. By mutual agreement, we have begun our collaboration with work in three of the eight areas of AWF-proposed collaboration. 

Through our standard staffing process (described in the “Reminder…” at the end of this blog), ACOEL Fellows Virginia Robbins and James Bruen have entered into individual pro bono engagement agreements with the AWF. To date, these engagement agreements provide for us (a) to participate in practical “on-the-job” training in Nairobi for prosecutors selected from Kenya, Tanzania, Uganda, Zimbabwe, Mozambique and South Africa; and (b) to assist AWF in setting up a new cooperative mutual-assistance association between these Prosecutors. Tracy Hester may also participate in a third task of providing advice and training on a new canine wildlife crime detection program.  Ginny Robbins and Jim Bruen may travel to Nairobi for the on-the-job training program as early as the end of July or early August 2018.  This schedule may slip further as it has done repeatedly in the past because of election unrest and scheduling issues controlled by the Kenyan government, but AWF seems ready to go. 

Cuba 

After 2016 and 2017 trips to Cuba, involving meetings with Cuban environmental and other officials involving Eileen Millett, David Farer, Mary Ellen Ternes and me, as well as speeches by David Farer and Mary Ellen Ternes at the prestigious annual scientific and technical forum, ACOEL and the University of Havana are now in the process of executing the College’s standard MOU to open opportunities for Fellows to teach US environmental law and related topics at the law faculty of the University of Havana.  ACOEL is also revising a proposed MOU to open opportunities for collaboration (to be negotiated) between individual Fellows and the Institute of Ecology, a part of CITMA, the Cuban equivalent of the US EPA. 

India

Through the efforts of Tracy Hester, he and I – on behalf of ACOEL -- have begun discussions with retired India Supreme Court Justice (and retired India Green Tribunal Chairperson) Swatanter Kumar to open pro bono opportunities for Fellows to work in India and, eventually, perhaps Pakistan, Bangladesh and Bhutan. The ACOEL Executive Committee has approved our selection of, and proposing MOUs with, qualified and underserved Indian environmental clients.  These discussions are ongoing.

Haiti

Through the efforts of Jimmy May, Tracy Hester and others, ACOEL has traveled to Haiti and completed discussions with Aristide University to allow interested Fellows to provide lectures on US environmental law to university law students.  The committee has not yet finalized arrangements for these lectures or posted these opportunities for review by the Fellows, because continuing civil unrest may compromise the safety of our participating Fellows and because governmental instability has fostered conditions which make the vitality of the rule of law uncertain. 

China

Through the contacts of Robert Percival (and after I joined Bob and his students on a great trip to China), ACOEL entered into a MOU with NRDC/Beijing. With a good number of  Fellows participating, we thereafter implemented a very effective pro bono program in China during 2014 and 2015. In 2016, China established a new law discouraging organizations like ours from conducting pro bono or other NGO work in China. Conditions may have improved just a bit since then. We are in communication with Bob and with Fellow Scott Fulton (who is also President of the Environmental Law Institute), to ascertain whether now is the time to attempt a renewal of our China pro bono work.

Peru

The National Judicial College contacted John Cruden and me last month to ask whether our Fellows would be interested in joining the faculty of a summer 2018 program in Peru to speak about “lessons learned” in the US about the practical enforcement of environmental laws. We reported this inquiry to the our committee and to the College’s Executive Committee and received enthusiastic interest. However, our follow-up communications to the Peruvians, through the National Judicial College, revealed that the judiciary there had run low on funding for the time being. But the Peruvians and the National Judicial College promised to come back to us on this when the initiative revives in the future.

A Reminder of How the We Open Opportunities for Fellows

Our committee actively (a) pursues and identifies qualified international pro bono clients, (b) negotiates standard form Memoranda of Understanding with them, (c) obtains a list of desired pro bono projects from each client, (d) advertises those projects to the ACOEL membership, (e) obtains the curricula vitae of interested Fellows, (f) sends those CVs to the prospective international pro bono client and (g) allows that client to select the Fellow(s) with whom it wants to work. The client and the individual Fellow then enter into individual pro bono engagement agreements. The ACOEL is NOT a party to any of those engagements. The ACOEL is solely a clearinghouse to match underserved clients with interested ACOEL Fellows.  The ACOEL does not practice law or provide legal advice to the international clients. The ACOEL does not contribute funds or provide loans or any other form of financial assistance to international clients. The ACOEL does not monitor the work of its Fellows in undertaking the work agreed to in their individual engagements with the international clients. But the ACOEL is delighted to receive reports of Fellows who have raved about the fun they have had, and the satisfaction they have received, in participating in these “give back” efforts.

Still No Judicial Remedy For Climate Change — Don’t Expect Advocates To Stop Trying

Posted on July 3, 2018 by Seth Jaffe

On June 25th, Judge William Alsup dismissed the public nuisance case brought by the City of Oakland and the State of California against five major oil companies.  The suit sought payment of damages into a fund to be used for necessary adaptation expenditures to deal with sea level rise.  

Why did he dismiss the case?  Simple.  The courts are not the right forum in which to address the problems of climate change.  The more complicated answer?  Because AEP v. Connecticut held that the Clean Air Act displaces federal common law claims for greenhouse gas emissions in the United States and because claims with respect to sales by the defendants outside of the United States could not be addressed by a U.S. court without violating the presumption against giving extraterritorial effect to U.S. laws.

Here, plaintiffs seek to impose liability on five companies for their production and sale of fossil fuels worldwide. These claims — through which plaintiffs request billions of dollars to abate the localized effects of an inherently global phenomenon — undoubtedly implicate the interests of countless governments, both foreign and domestic. The challenged conduct is, as far as the complaints allege, lawful in every nation. And, as the United States aptly notes, many foreign governments actively support the very activities targeted by plaintiffs’ claims. Nevertheless, plaintiffs would have a single judge or jury in California impose an abatement fund as a result of such overseas behavior. Because this relief would effectively allow plaintiffs to govern conduct and control energy policy on foreign soil, we must exercise great caution.

This order fully accepts the vast scientific consensus that the combustion of fossil fuels has materially increased atmospheric carbon dioxide levels, which in turn has increased the median temperature of the planet and accelerated sea level rise. But questions of how to appropriately balance these worldwide negatives against the worldwide positives of the energy itself, and of how to allocate the pluses and minuses among the nations of the world, demand the expertise of our environmental agencies, our diplomats, our Executive, and at least the Senate.  Nuisance suits in various United States judicial districts regarding conduct worldwide are far less likely to solve the problem and, indeed, could interfere with reaching a worldwide consensus.

I couldn’t have said it better myself.  I’ve always thought that these types of suits are not the way to address climate change.  I’ve recently acknowledged that, if the current administration continues to rely on fake news to formulate its position on climate change, courts at some point might conclude that the exigencies of the situation require them to act.  For now, we haven’t reached that point, and I hope we never do.

The Dutch Government Also Doesn’t Like Citizen Climate Litigation

Posted on July 3, 2018 by Seth Jaffe

As a follow-up to my earlier post about the dismissal of public nuisance claims brought by the City of Oakland and the State of California against five oil majors concerning their contribution to climate change, I note that ClimateWire (subscription required) is reporting that the Dutch government is appealing a court order that would require it to cut carbon emissions by 25 percent by 2030. 

The Dutch case is more similar to the Oregon children’s suit than Oakland litigation, because the Oregon case, like the Dutch case, is against the government, seeking further regulation, rather than against private parties, seeking damages.  All of these cases, though, present some of the same concerns regarding whether courts are the right place to make climate policy, as noted by the Dutch government spokesman, quoted in ClimateWire:

We also believe that renewable energy should be increased and CO2 emissions should be reduced, so this is really about something else: It’s about how the judge has intervened in something that’s [called] democracy, and actually democracy has been sidelined.

It would be nice if democracy could show a greater capacity for addressing climate change, but I still agree that sidelining democracy is rarely a good thing.  Of course, there are good scientific reasons why democracies don’t do so well at dealing with climate change.  Appeals to the courts may be unavoidable.

Florida Gets A “Do-Over”

Posted on July 2, 2018 by Karen Crawford

Florida v. Georgia, 585 U.S. ____ (2018), Slip Opinion No. 142, June 27, 2018

On June 27, in a 5-4 decision the U.S. Supreme Court (SCOTUS or the Court) rejected the Special Master’s conclusion that the Court could provide no relief to Florida for its claims of harm from Georgia’s upstream water usage from the Flint River, ultimately affecting downstream flow in the Apalachicola-Chattahoochee-Flint River basin, a basin affected by operations of a dam and lake by the U.S. Army Corps of Engineers (Corps).  SCOTUS reserved judgement on the ultimate outcome of the case, and sent the case back to the Special Master for further consideration with specific direction as to the additional factual findings it considered necessary to decide this case.

Citing several historical decisions by the U.S. Supreme Court in equitable apportionment disputes over water rights between neighboring states, the Court characterizes the following guiding principles to be used in deciding such cases:

1.    The states possess an equal right to make a reasonable use of the waters in question.

2.    When confronted with competing claims to interstate water, the Court’s effort is to secure equitable apportionment, without quibbling over formulas.

3.    Given sovereign status and equal dignity, a complaining state’s burden is much greater than the burden ordinarily shouldered by a private party seeking an injunction, requiring a demonstration by “a clear and convincing evidence” that it has suffered a “threatened invasion of rights” that is “of serious magnitude.”

Once the Court finds the complaining State has met this burden, the Court must determine whether the State has shown it has not only some “technical right,” but a right with a “corresponding benefit” as a precondition to any equitable apportionment.  If so, then the Court will seek to arrive at a  just and equitable apportionment of an interstate stream, by considering all relevant factors, because equitable apportionment is flexible and should weigh all relevant factors by examining extensive and specific factual findings to properly apply the doctrine of equitable apportionment.  To do this, the Court has observed it must consider physical and climatic conditions, the consumptive uses in the several sections of the rivers at issue, the character of return flows, the extent of established uses, the availability of storage water/capacity, the practical effect of wasteful uses on downstream area, and the benefit to downstream areas against the damage to upstream areas if a limitation is imposed. 

In this case, however, the Court stated the Master instead made several assumptions regarding what should be key findings of fact, including that 1) Florida has suffered harm from decreased water flow into the subject basin, 2) Florida had shown that Georgia has taken too much water, and 3) inequitable use by Georgia had caused injury to Florida.  These assumptions were found by the Court to stop short of providing the necessary findings of fact required to decide the case.  As a result, all Parties agreed that the recommendation of the Special Master turned on one single, discrete issue --whether Florida has shown that a cap on Georgia’s consumption would address its injury if the decree did not bind the Corps as well.

The Court determined that the Master’s conclusion that Florida failed to meet its burden because it did not present “clear and convincing evidence” that its injuries could be redressed by a decree capping Georgia’s upstream water consumption if that decree does not also bind the Corps, was too strict a standard to apply to redressability at this point in the case.  The Court determined that the Special Master had not defined the approximate amount of water that must flow into the Apalachicola River in order for Florida to receive a significant benefit from a cap on Georgia’s use of the Flint River waters, and that unless and until that necessary fact was established, Florida needed only to show that, applying the principles of “flexibility” and “approximation”, it is likely to prove it is possible for the Court to fashion such a decree. 

The Court determined that further findings are needed on all of the evidentiary issues underlying the Master’s assumptions before the Master’s conclusion that Florida failed to meet its initial burden of demonstrating that the Court can eventually fashion an effective equitable decree could be reached and supported.  The Court stated that “to require “clear and convincing evidence” about the workability of a decree before the Court or a Special Master has a view about likely harms and likely amelioration is, at least in this case, to put the cart before the horse.”  The Court addressed here only that Florida had made a legally sufficient showing as to the possibility of fashioning an effective remedial decree, thereby meeting its burden.

The lengthy dissent ultimately agreed with the Special Master’s conclusion that the Corps would not change its operations during droughts if the Court capped Georgia’s water use, and thus Florida would not benefit during droughts.  Further, the dissent argued there was no need to remand the case for further findings by the Special Master as the evidentiary findings ultimately rest with the Court.  But the majority opinion discusses the differences of view as to interpretation of the facts related to estimated water flows, further emphasizing the complex nature of these cases.  The dissent suggests that giving Florida another bite at the apple was unlikely to produce additional evidence to affect the outcome and would be unfair to Georgia.  Ultimately, the dissent appears to agree that the Master’s ordinary balance-of-harms analysis was sufficient, and he applied that test. 

Also, this blogger found the majority’s “Chevron-like” discussion of the deference that should be given to the Special Master’s findings interesting but a bit disturbing in that the Court cited a precedent that those findings “deserve respect and a tacit presumption of correctness.”   The Court’s division over today’s decision turned on both the correctness of the findings by the Special Master and whether he had correctly applied the applicable precedents to sufficient findings.  A clear disagreement is articulated by the majority and dissenting opinions surrounding the factual evidence related to whether the amount of water that would flow to Florida during drought conditions would ultimately be increased by a cap on Georgia’s water use from the Flint River.  The answer to this question turns on the behavior of the Corps in both storing the resulting additional water, then releasing that additional stored water from Lake Seminole during drought conditions.

Interestingly, in addressing Florida’s exceptions to the Master’s evidentiary determinations, the Court discussed the consequences of the United States’ declining to waive sovereign immunity from suit in this case at its outset.  An early motion by Georgia to dismiss Florida’s complaint on the grounds that the United States was a necessary party was denied as the Special Master concluded at that time that a decree binding the Corps might not prove necessary.  Ultimately, however, the Report of the Special Master was based on the conclusion that a decree binding the Corps was necessary to redress the injury to Florida.  The Court’s analysis of the evidence indicated that, since the cap on Georgia’s consumption was upstream of the Corps-operated dam and lake, the cap could effectively result in more water storage and more water that could be released to the Apalachicola River reaching Florida in both non-drought and drought conditions.  It also disagreed with the Master’s conclusion that effective relief was rendered impermissibly “uncertain” given the Corps’ revised Master Manual and its documented commitment that it will “work to accommodate any determinations or obligations the Court sets forth if a final decree equitably apportioning the basin’s waters proves justified in this case” and take such a decree into consideration in appropriate operational adjustments to the Master Manual, if applicable. 

Again, the Supreme Court stressed that Florida will ultimately be entitled to a decree only if it is shown that “the benefits of the [apportionment] substantially outweigh the harm that might result.”

For those keeping score on certain of these issues and looking for clues as to “life after Kennedy”, Justice Breyer penned the majority opinion, joined by Roberts, Kennedy, Ginsburg and Sotomayor.  Justice Thomas wrote the dissent, joined by Alito, Kagan, and Gorsuch.