Published by the Environmental Law Section of the Virginia State Bar for its members

Environmental Law News CVolume XI, No. 3 Fall 2001

The End of theMigratory BirdRule: TheBeginning of theEnd of theAggregationTheory?Solid Waste Agencyof Northern CookCounty v. UnitedStates Army Corpsof Engineersby Jason Harrington, Class of 2002Washington and Lee University School of Law

Summary

In Solid Waste Agency of NorthernCook County v. United StatesArmy Corps of Engineers, 531

U.S. 159 (2001) (“SWANCC”), theUnited States Supreme Court deter-mined that it is unconstitutional forthe United States Army Corps ofEngineers (“the Corps”) to assertjurisdiction over isolated intrastatewaters based upon the so-called“Migratory Bird Rule.” The Courtdetermined that the Corp’s use ofsuch power conflicts with the tradi-tional right of a state to regulate itsown land and water use. Thus, theCorps’ authority is limited to watersthat have a significant nexus tointerstate commerce, which arenavigable waters and those waters

that are adjacent to navigablewaters. Importantly, however, theCourt did not diminish Congress’authority under the aggregation the-ory of the Commerce Clause. Underthis theory, Congress may stillretain power to regulate localizedactivities that affect the environ-ment, such as the use of isolatedintrastate waters, if such activitiesin aggregate have a substantial effectand significant nexus to interstatecommerce.

The Migratory Bird Rule

Congress passed the Clean WaterAct (“the Act”), 33 U.S.C § 1251 etseq. (1994) for the purpose ofrestoring and maintaining thechemical, physical, and biologicalintegrity of the nation’s waters.1

Section 404(a) of the Act gives theCorps authority to regulate the dis-charge of fill material into “naviga-ble waters.”2 The Corps may issue apermit to a person in order to allowthe discharge of material into navi-gable waters or deny a permit.3

The Act defines the term “navi-gable waters” as “the waters of theUnited States, including the territo-rial seas.”4 The Corps issued regula-tions defining “the waters of theUnited States” to include intrastatelakes, rivers, streams, wetlands,ponds, and other waters in whichthe use, degradation, or destructioncould affect interstate commerce.5

These regulations were designed tomore specifically identify and clari-

continued on page 3

Chair’s Corner

A nother active year for the Environmental Law Section isunderway, with several opportunities for your participa-tion. Our winter/spring program will offer a legislative

and regulatory update on environmental protection in Virginia.In addition, the Section will co-sponsor two programs on June14, 2002 at the Virginia State Bar Annual Meeting in VirginiaBeach. A joint effort with the Construction Law Section willaddress “sick” buildings and mold litigation, and a second pro-gram is under development with the Administrative LawSection. I hope you will consider participating in these events.Further details will be announced as they become available.

At the 2001 Annual Meeting, the Section co-sponsored asuccessful program with the Local Government Section, enti-

continued on page 2

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Environmental Law News

Environmental Law NewsVolume XI, No. 3

Fall 2001

Prepared by the staff ofEnvironmental Law Digest

Washington and Lee UniversitySchool of Law

Lexington, Virginia 24450

Editor-in-ChiefMaynard Sipe

Associate EditorRobert Test

Managing EditorJason Harrington

Articles EditorDavid Jensen

Case Review EditorJohn Piazza

Legislative EditorAnna Livingston

StaffMichael Adamson

Timothy BalloLesley BeamRyan Berry

Lester BrockMeitra FarhadiDuane GibsonAngela HeplerAngela JonesRyan Leonard

Sarah McGeorgeCasey Ratchford

Robert ScottLeslie Skiba

Susannah TripiAbigail WalshWilliam WestEric Whitaker

Faculty AdvisorProfessor Denis J. Brion

All statements, expressions, opinionsor comments appearing herein arethose of the by-lined authors or the

editors and are not necessarily those of the State Bar or the

Environmental Law Section.

tled “Pitfalls and Roadblocks:Environmental Challenges Fac-ing Virginia’s Local Govern-ments in Protecting and ServingTheir Citizens.” I would like tothank the speakers, Paul R.Thompson, Jr. of Woods, Rogers& Hazlegrove, P.L.C. Charles L.Williams of Gentry Locke Rakes& Moore; and Matthew L. Iwic-ki, now of Boeing Corporation,for their thoughtful and inform-ative presentations.

At the annual meeting, theSection elected Board membersto fill vacancies following expi-ration of the terms of Mary-Ellen Kendall and Dan J.Jordanger. On behalf of the Sec-tion, I would like to thank Mary-Ellen and Dan for their service,and welcome our new Boardmembers, Ellen F. Brown andManning “Chip” Gasch, Jr. I alsowish extend our deep apprecia-tion to Immediate Past ChairEdward A. Boling, and recentVice Chair Matt Iwicki for theireffective leadership last year.

Finally, we welcome to ourteam Maynard Sipe, editor-in-chief of Washington and Lee’sEnvironmental Law Digest. Heand his staff, who prepare theEnvironmental Law News for theSection, are interested in pub-lishing articles by Section mem-bers. If you are interested inbeing published in the Environ-mental Law News, please con-tact Maynard at sipem@wlu.edu.

Christopher D. Pomeroy

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The articles in this section areintended to provide analysis and dis-cussion of topics that may interestattorneys who practice in areas ofenvironmental law. The Environ-mental Law Digest welcomes sub-missions of appropriate articles.Suggestions of topics for articles andother comments are also welcomed.Please send any submissions or com-ments to the Environmental LawDigest at:

Environmental Law DigestWashington and Lee University

School of LawLexington, Virginia 24450

or by e-mail at:eld@wlu.edu

Articles

Table of ContentsThe End of the Migratory BirdRule: The Beginning of theEnd of the AggregationTheory? — Solid WasteAgency of Northern CookCounty v. United States Army Corps of Engineers. . 1

by Jason Harrington

New Student Editors forEnvironmental Law DigestSelected . . . . . . . . . . . . . . . 4

No to Non-Delegation in theClean Water Act — Whitmanv. American TruckingAssociations, Inc. . . . . . . . . 7

by John Piazza

Credits and Corrections forEnvironmental Law News,Spring 2001 . . . . . . . . . . . . 8

Case Digest . . . . . . . . . . . 10

Chair’s Cornercontinued from page 1

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Environmental Law News

fy the reach of the Corps’ authorityunder § 404(a), and not intended toalter or expand its jurisdiction.6

Contained within the regulationsis the Migratory Bird Rule. This rulerefers to a longstanding interpreta-tion by both the Corps and theUnited States EnvironmentalProtection Agency (“the EPA”) thattheir jurisdiction under § 404(a)extends to intrastate waters:

a. Which are or would be used ashabitat by birds protected bythe Migratory Bird Treaties; or

b. Which are or would be used ashabitat by migratory birdswhich cross state lines; or

c. Which are or would be used asa habitat for endangeredspecies; or

d. Used to irrigate crops sold ininterstate commerce.7

Overview of SWANCC

In SWANCC, the United StatesSupreme Court had to decidewhether the Corps could exert§ 404(a) jurisdiction over an aban-doned sand and gravel pit locatedsolely in northern Illinois because itprovided a habitat for migratorybirds.8 The Court defined “waters ofthe United States” differently fromthe regulations issued by the Corpsand the EPA.9 The Court stated thatit would not grant deference toadministrative agency interpreta-tion when such an analysis invokedthe outer limits of Congress’ powerby conflicting with a state’s tradi-tional right to regulate its own landand water use.10 The Court agreedwith the Corps’ original interpreta-tion of the Act in 1974, whichdefined navigable waters as, “thosewaters of the United States whichare subject to the ebb and flow ofthe tide and/or…are susceptible foruse for purposes of interstate or for-

eign commerce.”11 The Court fur-ther agreed that, “it is the waterbody’s capability of use by the pub-lic for purposes of transportation orcommerce that is the determinativefactor.”12

The Court recognized thatCongress intended the phrase “nav-igable waters” to include somewaters that are not deemed “naviga-ble” under the typical understand-ing of the term.13 Such watersinclude wetlands and tributariesthat adjoin a navigable waterway.14

These waters have a significantnexus to navigable waters.15

Excluded from this definition areponds that are not connected toopen water.16 Isolated ponds areexcluded even if they serve as habi-tats for migratory birds.17 Thus, theCourt determined that wetlandsand tributaries abutting a navigablewaterway have a sufficient nexus tointerstate commerce, whereas iso-lated ponds lack a requisite connec-tion.

The Court stated that such a lim-itation of the word “navigable” isnecessary in order to avoid “seriousconstitutional problems.”18 Suchproblems arise because by exercis-ing § 404(a) jurisdiction over whol-ly isolated, intrastate watersthrough the Migratory Bird Rule,the Corps is infringing upon the tra-ditional role of a state to regulate itsown land and water use.19 TheCorps may only do so at the expresswill of Congress.20 By using the term“navigable” in the Act, Congress didnot give the Corps power to infringeupon an area of traditional stateconcern by regulating the use of iso-lated intrastate waters based solelyupon the Migratory Bird Rule.21

“Navigable” gives the Corps and theEPA jurisdiction over “waters thatwere or had been navigable in factor which could reasonably be madeso.”22 Otherwise, the term “naviga-ble” is rendered meaningless.23 The

Court focused upon 33 U.S.C.§ 1251(b), in which Congress recog-nized that the primary responsibili-ty for preventing, reducing, andeliminating pollution rests in thestates.24

Thus, because Congress did notexplicitly authorize the regulationof wholly intrastate, isolated waters,the Corps and the EPA no longerhave jurisdiction over waters mere-ly via the presence of migratorybirds. Rather, the Corps and theEPA may exert jurisdiction onlyover navigable waters and thosewaters adjacent to them.

Congressional Power via theAggregation Theory Unchanged

Congress has power via theCommerce Clause to regulate activ-ities that substantially affect inter-state commerce.25 The SeventhCircuit in SWANCC found that thepresence of migratory birds alonehad a substantial effect on inter-state commerce.26 The court men-tioned that throughout NorthAmerica, millions of people annual-ly spend more than a billion dollarson hunting, trapping, and observingmigratory birds.27 Thus, accordingto the Seventh Circuit, the cumula-tive loss of the habitats of migratorybirds has a very substantial effecton interstate commerce by limitingthese commercial activities.28

The Supreme Court’s decision inSWANCC did not reach the ques-tion of whether Congress itself hasthe authority under the CommerceClause to regulate isolated, non-navigable, intrastate waters.29

Congress’ authority in this matterstems from the aggregation theoryof the Commerce Clause. That theo-ry holds that Congress has the powerto regulate a completely intrastateactivity even if it has a minimaleffect on interstate commerce

continued on page 4

Migratory Bird Rulecontinued from page 1

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because the aggregate of all similaractions throughout the country has asignificant impact on interstate com-merce.30

The United States SupremeCourt first advanced the aggrega-tion theory in Wickard v. Filburn.31

In Wickard, the Court ruled thatthe Commerce Clause conferspower to Congress over a lonewheat farmer’s production of goodsnot intended for commerce butwholly for consumption on thefarm.32 The farmer urged that suchconsumption was local in characterand indirectly or trivially connectedto commerce.33 The Court statedthat even if the activity is local andmay not be regarded as commerce,it may still, whatever its nature, bereached by Congress if it exerts asubstantial economic effect oninterstate commerce.34 Commercein wheat is large and important.Consumption on the farm amountsto greater than 20 percent of aver-age production.35 That a farmer’sown contribution to the demand forwheat may be trivial by itself is notenough to remove the scope of fed-eral regulation from his contribu-tion. If taken together with that ofmany others similarly situated, thecontribution is far from trivial.36

A variety of federal statutes,including environmental and civilrights legislation, rely heavily on theaggregation doctrine for their consti-tutionality.37 The Court’s rulings thatsuch statutes are within the boundsof congressional Commerce Clausepower greatly expanded Congress’authority.

However, recent decisions havenarrowed this broad grant of power.In United States v. Lopez,38 theCourt determined that a federalstatute regulating guns within aschool zone was unconstitutionalbecause Congress acted outside the

New Student Editors forEnvironmental Law Digest Selected

The Environmental Law Digest at Washington and LeeUniversity School of Law is proud to announce its new editorialboard for the 2001-2002 school year. The new editors are:

Maynard Sipe, Editor-in-ChiefMaynard Sipe is a third-year student. Prior to attending lawschool, he worked for several years as a planner with theCounty of Albemarle. He attended the School ofArchitecture at the University of Virginia and received aB.A. in City Planning in 1990.

Robert Test, Associate EditorRobert Test is a third-year student. He graduated fromUniversity of Texas at Austin in 1999 with a B.A. in Biology.His interests in environmental law relate to risk assessmentand law & economics.

Jason Harrington, Managing EditorJason Harrington is a third-year student. He was a biologymajor at the State University of New York at Binghamtonand graduated in 1995. Upon graduation, he will join thefirm of Paul, Hastings, Janofsky & Walker, working in theirAtlanta office.

David Jensen, Articles EditorDavid Jensen is a second-year student. He graduated fromBrigham Young University in 1998 with a B.S. inEconomics. During this past summer, he worked for thefirm of Cozen O’Conner in his hometown of Seattle.

John Piazza, Case Review EditorJohn Piazza is a third-year student. Originally fromAtlanta, he attended Columbia College and received hisB.A. in Environmental Science in May 1999. This pastsummer, he worked for the Chesapeake Bay Foundation asa legal intern.

Anna Livingston, Legislative EditorAnna Livingston is a second-year student. Originally fromAlexandria, she graduated from Connecticut College in1998, with a B.A. in American History.

The Environmental Law Digest is a student-run organization atthe Washington and Lee University School of Law responsible forpreparation and editing of the content for the Environmental LawNews. �

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Environmental Law News

bounds of its commerce power.39 TheCourt determined that a criminalstatute by its terms has nothing to dowith “commerce” or any sort of eco-nomic enterprise.40 It is not within aclass of activities that arise out of orare connected with a commercialtransaction, which viewed in theaggregate, substantially affect inter-state commerce.41 Congress failed toshow a requisite nexus with inter-state commerce.42 Legislative find-ings that showed a substantial effecton interstate commerce were lack-ing.43 The Court reasoned that itwould be difficult to perceive of anylimitation on federal power if thestatute were upheld, even in areassuch as criminal law enforcement,family law, or education where stateshistorically are sovereign.44 Thus, theCourt essentially determined thatthe aggregation doctrine only appliesto economic or commercial activitiesthat have a sufficient nexus to inter-state commerce.

The Court’s federalism concernsmaterialized again in United Statesv. Morrison.45 In Morrison, theCourt struck down the civil remedyprovision of the Violence AgainstWomen Act as outside the bound-aries of Commerce Clause power.46

The Court held that Congress can-not regulate non-economic, crimi-nal conduct based solely on thatconduct’s aggregate effect on inter-state commerce.47 The Court ruledthat the Constitution mandates adistinction between what is trulylocal and what is truly national, andpolice power has always been theprovince of the States.48

Thus, recent decisions limitedCongress’ authority via the Com-merce Clause to commercial oreconomic transactions. Such trans-actions should have a substantialeffect on and significant nexus tointerstate commerce. Furthermore,such regulation should not intrudeinto the arena of traditional state

functions. Many legal analystsfeared a further reduction of con-gressional power in SWANCC.49

The SWANCC decision is impor-tant, not only for what it said, butfor what the Court did not decideregarding congressional commercepower via the aggregation theory.The Court did not interpret any con-stitutional limits upon congressionalpower. Detracting from Congress’commerce power via the aggregationtheory could greatly limit congres-sional authority. Re-evaluation anddiminution of congressional author-ity would endanger environmentallegislation that relies primarily onthe aggregation theory for its consti-tutionality. In fact, the Court men-tioned in SWANCC that the CleanWater Act is at the outer limits ofCongress’ power because of its con-flict with the States’ traditional taskof regulating their own land andwater use.50 However, the Court didnot rule on whether Congress lackedany power to regulate isolated pondsor lands within a state. Instead, itdetermined that the Corps hadacted outside of its delegatedauthority.51

Truly National v. Truly Local Concerns

Justice Stevens’ dissenting opin-ion in SWANCC argues that the Actdoes not encroach upon the tradi-tional state power over its landuse.52 Rather, it is an environmentalregulation that does not mandateparticular uses for land, butrequires only that, however the landis used, damage to the environmentis kept within prescribed limits.53

Justice Stevens notes that thestatute is not a land use code, but isa paradigm of environmental legis-lation.54 Such regulation is anaccepted exercise of federal power.55

The dissent then warns the majori-ty that limiting the power of the fed-

eral agencies would cripple the Act’sobjectives.56

The major purpose of the Act wasto establish a comprehensive federalpolicy for the elimination of waterpollution.57 It commanded federalagencies to give due regard toimprovements necessary for theconservation of waters for fish,aquatic life, wildlife, and recre-ation.58 The Corps’ mission includedprotecting water quality for aesthet-ic, health, recreational, and environ-mental uses.59 Thus, Congressexpanded the definition of navigablewaters to include all “waters of theUnited States.”60 The Act does notblur the difference between a purelylocal and a purely national prob-lem.61 Protecting migratory birds is atextbook example of a national prob-lem.62 Habitat destruction has bene-fits that are disproportionately local,but the costs are widely dispersedand often borne by citizens in otherstates.63 The power to regulate com-merce properly includes naturalresources that generate commerce.64

Migratory birds are such resources.65

Thus, federal regulation is appropri-ate and necessary.66

The Court may have implicitlyendorsed Stevens’ view by decliningto grant certiorari to Gibbs v.Babbitt.67 The Gibbs case con-cerned a Fish and Wildlife Service(“FWS”) regulation limiting the tak-ing of red wolves on private land.68

FWS authority for the regulationstems from Congress’ enactment ofthe Endangered Species Act.69 Thered wolf rule and other FWS regula-tions dealing with endangeredspecies have many of the sameland-use concerns inherent in theMigratory Bird Rule.70

The Fourth Circuit ruled thatthe taking of red wolves implicates avariety of commercial activities andis closely connected to severalinterstate markets.71 The regulationin question is also an integral part of

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the overall federal scheme to pro-tect, preserve, and rehabilitateendangered species, thereby con-serving valuable wildlife resourcesimportant to the welfare of ourcountry.72 Invalidating this provi-sion would call into question thehistoric power of the federal govern-ment to preserve scarce resourcesin one locality for the future benefitof all Americans.73 Thus, the FourthCircuit’s decision is consistent withJustice Stevens’ dissent in SWANCCthat environmental protection is afederal concern. The questionremains as to how much powerCongress possesses to regulate landand water use, when such regula-tion conflicts with the traditionalpower of states.

Conclusion

The Corps and the EPA no longerhave jurisdiction over nationalwaters merely because of the pres-ence of migratory birds. The Corpsand the EPA cannot exert controlover isolated, intrastate ponds. TheCorps and the EPA can exert juris-diction only over navigable watersand those waters adjacent to them.If the traditional rights of a state arein question, then agencies can actonly if Congress clearly grants suchauthority. Federal action thatimpinges upon the customarypurview of a state is beyond thescope of the Commerce Clause if itis not an economic or commercialendeavor. Questions remain as tothe extent of congressional com-merce power to regulate the envi-ronment in the face of traditionalstate concerns.

1 33 U.S.C. § 1251(a).2 33 U.S.C. § 1344(a).3 33 U.S.C. § 1344(a).4 33 U.S.C. § 1362(7).5 33 CFR § 328.3(a)(3) (1999).6 51 FED. REG. 41217 (1986).

7 51 FED. REG. 41217 (1986).8 531 U.S. 159, 162 (2001).9 Id. at 172-173.

10 Id. (Cf. Edward J. DeBartolo Corp. v.Florida Gulf Coast Building & Constr.Trades Council, 485 U.S. 568, 575 (1988);Chevron U.S.A., Inc. v. Natural Res.Defense Council, 467 U.S. 837, 842-44(1984)).

11 Id. at 166-167 (citing 33 CFR § 209.120).12 Id. at 166-167 (citing 33 CFR § 209.260(e)

(1)).13 Id. at 172-173.14 Id. (citing United States v. Riverside Bayview

Homes, Inc., 474 U.S. 121 (1985)).15 Id.16 Id.17 Id.18 Id. at 174.19 Id.20 Id.21 Id. at 170.22 Id. at 170-173.23 Id. at 170.24 Id. at 172-173.25 See Wickard v. Filburn, 317 U.S. 111

(1942); United States v. Lopez, 514 U.S.549 (1995).

26 Solid Waste Agency of N. Cook County v.United States Army Corps of Eng’rs, 191F.3d 845, 849 (1999).

27 Id.28 Id.29 531 U.S. 159, 172-173.30 Id. (citing Wickard v. Filburn, 317 U.S. 111

(1942)).31 317 U.S. 111 (1942).32 Id. at 119.33 Id. at 120.34 Id. at 125.35 Id. at 126-127.36 Id. at 127.37 See Jeffrey Ghannam, Serving Up Civil

Rights, ABA JOURNAL, Feb. 2001, at 46-48;Hughes v. Oklahoma, 441 U.S. 265 (1977);Heart of Atlanta Motel v. United States, 379U.S. 241 (1964); Katzenbach v. McClung,379 U.S. 294 (1964).

38 514 U.S. 549 (1995).39 Id. at 561.40 Id.41 Id.42 Id. at 562.43 Id. at 563.44 Id. at 564.45 529 U.S. 598 (2000).46 Id.47 Id. at 617.48 Id. at 618.49 See Jeffrey Ghannam, Serving Up Civil

Rights, ABA JOURNAL, Feb. 2001, at 46-48.50 Solid Waste Agency of N. Cook County,

531 U.S. at 172-173 (emphasis added).51 Id.52 Id. at 191 (Stevens, J., dissenting).53 Id.54 Id.55 Id.56 Id. at 190 (Stevens, J., dissenting).57 Id. at 196 (Stevens, J., dissenting).58 Id.59 Id. at 193 (Stevens, J., dissenting).60 Id. at 196 (Stevens, J., dissenting).61 Id. at 195 (Stevens, J., dissenting).62 Id. at 196 (Stevens, J., dissenting) (citing

Missouri v. Holland, 252 U.S. 416, 435(1920)).

63 Id.64 Id.65 Id.66 Id.67 214 F.3d 483 (4th Cir. 2000), cert. denied,

121 S. Ct. 1081 (2000).68 Id.69 Id. (citing 16 U.S.C. §§ 1531-44).70 See Gibbs v. Babbitt, 214 F.3d at 486-487.71 Id. at 492.72 Id.73 Id.

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No to Non-Delegation in theClean Air ActWhitman v.American TruckingAssociations, Inc.by John Piazza, Class of 2002Washington and Lee University School of Law

Summary

In Whitman v. American TruckingAss’ns., Inc.,1 the United StatesSupreme Court addressed chal-

lenges to final rules issued by theEnvironmental Protection Agency(“EPA”) revising national ambientair quality standards (“NAAQS”) forozone and particulate matter (“PM”).The Court’s findings are briefly sum-marized as follows. The Clean AirAct (“CAA”) prohibits the considera-tion of costs of implementation insetting NAAQS. There was no uncon-stitutional delegation of authoritywhen Congress delegated authority(through the CAA) to the EPA to setNAAQS at levels “requisite to protectpublic health.” EPA’s implementa-tion policy for revised ozone NAAQSin “nonattainment” areas was finalagency action, and the issue of thelegality of the NAAQS implementa-tion policy was ripe for review.Finally, though the Court must deferto EPA’s “reasonable interpretation”of silent and/or ambiguous provi-sions of the CAA, EPA’s interpreta-tion that nullified certain CAAprovisions was not reasonable.

Procedural History

EPA promulgated and issuedinterim and final rules revising theprimary and secondary NAAQS for

PM and ozone in July 1997.2 Pur-suant to 42 U.S.C. § 7607(b)(1),American Trucking Associations,Inc. (“ATA”) and its co-respondentsin No. 99-1257 challenged the finalrules in the United States Court ofAppeals for the District of Columbia.3

The Appeals Court held the EPA’sconstruction of the CAA to be anunconstitutional delegation of leg-islative power.4 The Court also heldthat (1) EPA’s choice of PM[10] asthe indicator for coarse particularmatter in the final rule was arbitraryand capricious;5 (2) the 1990 revi-sions to the CAA limited EPA’s abili-ty to enforce new ozone NAAQS;6

and (3) EPA must consider the possi-ble health effects of ozone whendetermining NAAQS.7 The courtrejected claims that: “§109(d) of theAct allows EPA to consider costs;that EPA should have considered theenvironmental damage likely toresult from the NAAQS’ financialimpact on the Abandoned MineReclamation Fund; that the NAAQSrevisions violated the National Envi-ronmental Policy Act (“NEPA”),Unfunded Mandates Reform Act(“UMRA”), and Regulatory Flexibili-ty Act (“RFA”).”8

The D.C. Circuit denied EPA’spetition for rehearing.9 The UnitedStates Supreme Court granted cer-tiorari to petitions filed by both theEPA and the ATA.10 Oral argumentswere heard on Election Day,November 7, 2000.

Consideration of Costs ofImplementation in SettingNAAQS

The Supreme Court roundlyrejected ATA’s argument that costs ofimplementation must be consideredby EPA when promulgating NAAQS.In making this decision, the Courtexpressly upheld the D.C. Circuitdecision in Lead Industries Ass’n.,

Inc. v. EPA.11 In that decision, theD.C. Circuit held that, “economicconsideration [may] play no part inthe promulgation of ambient airquality standards under Section109” of the CAA.12 The Court foundno language in § 109 of the CAA13

that supported ATA’s assertions thatcosts of implementation must beconsidered in the promulgation ofNAAQS.14 In addition, the Courtrejected respondents’ argument thatEPA must consider the health effectsrelated to the economic costs ofimplementing NAAQS.15 This is theso called “health-health argument.”It is based on the assumption thatthere are measurable countervailinghealth effects when industries arenegatively affected economically.The health-health argument requiresEPA to consider these countervailinghealth effects in order to “protect thepublic health” and, as a result, mustconsider the economic costs ofimplementation of NAAQS. Byrejecting this argument, the Courtmay very well have shut the door oneconomic cost analysis claims relat-ing to § 109 of the CAA.16

Justice Breyer issued a concur-ring opinion for this part of thedecision, disagreeing with themajority’s position that any author-ity the CAA grants to the EPA toconsider costs must be derived froma “clear” “textual commitment.”17

Justice Breyer advocated readingsilences or ambiguity in the lan-guage of regulatory statutes as pre-sumptively permitting certain typesof “rational regulation,” such as theconsideration of costs of compli-ance in setting NAAQS.18 However,in this case, Breyer interpreted thelegislative history, along with thestatute’s structure, to reflect a con-gressional decision not to grant EPAthe authority to consider costs insetting NAAQS.19

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Non-Delegation

The D.C. Circuit found that theEPA’s interpretation of § 109(b)(1) ofthe CAA constituted an unconstitu-tional delegation of legislativepower.20 The Supreme Court over-ruled this part of the Appeals Courtdecision. In doing so, the Court sidedwith the Solicitor General’s assertionthat § 109(b)(1) of the CAA requiresthat “for a discrete set of pollutantsand based on published air qualitycriteria that reflect the latest scien-tific knowledge, [the] EPA mustestablish uniform national standardsat a level that is requisite to protectpublic health from the adverseeffects of the pollutant in the ambi-ent air.”21 The Court agreed that req-uisite “means sufficient, but notmore than necessary.”22 In J.W.Hampton, Jr., & Co. v. UnitedStates, the Court stated that whenCongress confers decision-makingauthority on agencies, it must “laydown by legislative act an intelligibleprinciple to which the person orbody authorized to [act] is directedto conform.”23 The Court found thatCongress imposed sufficient limits

on EPA’s discretion in the Clean AirAct to satisfy the “intelligible princi-ple” criteria of non-delegation.24

Further, the Court noted that theconstitutional question in a non-del-egation challenge “is whether thestatute has delegated legislativepower to the agency.”25 Thus, theD.C. Circuit’s holding that EPA’s con-struction of the CAA violated non-delegation was erroneous. If a statuteimpermissibly delegates legislativepower, it is “internally contradicto-ry” for an agency to attempt to cor-rect that defect by restraining itsexercise of the delegated power.26

The area of non-delegation inquiry isthe statute itself, not the agency’sconstruction of the statute.

In a concurring opinion, JusticeThomas agreed with the Court that§ 109 of the CAA contained an“intelligible principle” consistentwith the Court’s previous holdingson the issue of non-delegation.27

However, Justice Thomas expresseda willingness to address the constitu-tional validity of the “intelligibleprinciple” doctrine itself.28 Sincenone of the parties in this case had

addressed this issue, Justice Thomasreserved the right to address thisfundamental aspect of modern-daynon-delegation doctrine when amore appropriate circumstance pre-sented itself.29

In contrast, Justice Stevens’ con-curring opinion, with which JusticeSouter joined, advocated recognizingCongress’s enactment of § 109 of theClean Air Act as a constitutional del-egation of legislative power to theEPA.30 Justice Stevens argued thatthere is nothing inherently unconsti-tutional about a Congressional dele-gation of legislative power to anexecutive agency, so long as there isa sufficiently intelligible principlewithin the delegation.31

Implementation of NAAQS

The EPA argued that the Court ofAppeals lacked jurisdiction overEPA’s implementation policy forNAAQS,32 because the policy was notfinal agency action.33 In addition,EPA argued that the issue of imple-mentation was not ripe for review.34

The Court found that EPA’s imple-mentation policy constituted finalagency action under § 307 of theCAA.35 Though EPA facially claimedthat its implementation policy was“preliminary” and had no legal force,EPA declined to reconsider it, statingthat its earlier implementation deci-sion was conclusive.36 Furthermore,EPA had accepted comments prior toissuing the implementation policyand had published the policy in theFederal Register.37 These actionshelped convince the Court that EPA’simplementation policy constitutedfinal agency action.38

The Court also determined thatthe issue of implementation was ripefor review. In analyzing the ripenessissue, the Court determined that theissue was one of statutory interpreta-tion “that would not benefit fromfurther factual development.”39 In

Credits and Corrections forEnvironmental Law News, Spring 2001

“Rails-to-Trails After Presault: A Virginia Perspective” wasauthored by David Jensen, class of 2003, Washington and LeeUniversity School of Law.

Christopher Luttrell, who authored the article “Bragg v. Robertson— Section 404 of the Clean Water Act, and Mountaintop Removal:Where Do We Go from Here?” was a third-year student at Washingtonand Lee University School of Law. He graduated with the class of 2001.

The summaries of “2001 Select Environmental Bills Passed by theVirginia General Assembly and Approved by the Governor” were pre-pared by the following Environmental Law Digest staff members:Ryan Becker; Steve Brinker; John Piazza; Maynard Sipe; and RobertTest. They were edited by David R. DuBose, legislative editor. �

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addition, review would not interferewith further administrative action.40

In addition, the Court noted that thespecial judicial review provision ofthe CAA41 provided for “preenforce-ment review.”42 It then held that theeffects of the implementation issuemet the lower hardship standard ofthe special judicial review provisionof the CAA.43

Next, the Court looked to theCAA to determine whether Sub-part 144 or Subpart 245 of Part D,Title I applied to the revised ozoneNAAQS. “Subpart 1, §§ 7501-7509a,contains general nonattainment reg-ulations that pertain to every pollu-tant for which a NAAQS exists.”46

Subpart 2 contains rules specificallyaddressing ozone nonattainmentareas.47 The Court applied the two-part test formulated in ChevronU.S.A., Inc. v. Natural ResourcesDefense Council, Inc.48 to determinethis issue. Applying the first part ofthe test, the Court concluded thatthe statute was ambiguous concern-ing the applicability of Subparts 1and 2 to revised ozone NAAQS.49

Under the second step of the test,the Court found EPA’s interpretationof the statute to be unreasonable.50

The EPA argued that Subpart 1exclusively controlled classificationof ozone nonattainment areas in allinstances when areas were not incompliance in 1989.51 The Courtheld that Subpart 2 “unquestion-ably” provided for classification ofareas that became nonattainmentareas after 1989.52 At the same time,the Court conceded that Subpart 2contained “gaps” in its scheme ofclassifying ozone nonattainmentareas.53 Nevertheless, the Courtdetermined that the presence ofthese “gaps” did not justify EPA’s dis-regard of Subpart 2.54 EPA’s construc-tion of the interaction betweenSubpart 1 and Subpart 2 was not rea-sonable because the construction“completely nullified” clearly appli-cable provisions of Subpart 2.55 After

remand to the Court of Appeals, theEPA must develop a reasonableinterpretation of the ozone-nonat-tainment provisions.56

Conclusion

In the wake of this decision, itseems that cost of implementationand non-delegation challenges to theCAA have been put to rest. Both theSupreme Court and the AppealsCourt made clear that the EPA mustnot consider economic costs of com-pliance in promulgation and imple-mentation of NAAQS. In addition,the CAA does contain an “intelligibleprinciple with regard to the setting ofNAAQS by EPA,” and is not anunconstitutional delegation of leg-islative power. Finally, the EPA can-not construe Subparts 1 and 2 of PartD, Title I of the CAA in such a way asto nullify textually-applicable provi-sions limiting EPA’s discretion. As aresult, EPA must construct a reason-able interpretation of ozone nonat-tainment provisions, consistent withthe express statutory language ofSubpart 2.

1 121 S.Ct 903 (2001).2 See National Ambient Air QualityStandards for Particulate Matter, 62 FED.REG. 38,652 (1997); National Ambient AirQuality Standards for Ozone, 62 FED. REG.38,856 (1997).

3 Am. Trucking Ass’ns v. United States EPA,175 F.3d 1027 (D.C. Cir. 1999).

4 Id. at 1034.5 Id.6 Id.7 Id.8 Id.9 Opinion on Petition for Rehearing, 1999U.S. App. LEXIS 28109 (D.C. Cir. October29, 1999).

10 Whitman v. Am. Trucking Ass’ns, 175 F.3d1027 (D.C. Cir. 1999), cert. granted, 2000U.S. LEXIS 3577 (May 22, 2000).

11 647 F.2d 1130 (D.C. Cir. 1980).12 Id. at 1148.13 42 U.S.C. § 7409.14 Whitman v. Am. Trucking Ass’ns, 121 S.

Ct. 903, 911 (2001).

15 Id. at 909.16 See Id. at 910 (holding that “[cost of imple-

mentation] is both so indirectly related tothe public health and so full of potential forcanceling the conclusions drawn fromdirect health effects that it would surelyhave been expressly mentioned in [CAA]§§ 108 and 109”).

17 Id. at 921 (Breyer, J., concurring).18 Id.19 Id. at 922 (Breyer, J., concurring).20 Am. Trucking Ass’ns v. United States EPA,

175 F.3d 1027, 1034 (D.C. Cir. 1999).21 Whitman, 121 S. Ct. at 912 (emphasis

added).22 Id.23 276 U.S. 394, 409 (1928).24 Whitman, 121 S. Ct. at 913.25 Id. at 912 (emphasis added).26 Id.27 Id. at 919 (Thomas J., concurring).28 Id. at 920 (Thomas J., concurring).29 Id. 30 Id. at 920 (Stevens J., concurring).31 Id. at 921 (Stevens J., concurring).32 National Ambient Air Quality Standards, 62

FED.REG. 38421 (1997).33 Whitman, 121 S. Ct. at 914.34 Id.35 Id. at 915.36 Id. at 914.37 Id. at 914-915.38 Id.39 Id. at 915 (quoting Harrison v. PPG Indus.,

Inc., 446 U.S. 578, 586 (1980)).40 Id. at 915-916.41 42 U.S.C. § 7607(b).42 Whitman, 121 S. Ct. at 916.43 42 U.S.C. § 7607(b).44 42 U.S.C. §§ 7501-7509a.45 42 U.S.C. §§ 7511-7511f.46 Whitman, 121 S. Ct. at 914.47 Id.48 467 U.S. 867 (1984).49 Whitman, 121 S. Ct. at 918.50 Id. at 916.51 Id. at 917.52 Id.53 Id. at 918.54 Id.55 Id. at 918-919.56 Id. at 919.

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damages. Petitioners claimed thatWashington’s BAP standardsinvaded areas long occupied bythe federal government andimposed unique requirements inan area that mandated nationaluniformity. Petitioners furtherargued that allowing states toimpose differing regulatoryregimes on tanker operationswould defeat the goal of nationalgovernments to develop effectiveinternational environmental andsafety standards.

The district court rejectedIntertanko’s arguments andupheld the state regulations.Intertanko appealed, and theUnited States intervened on itsbehalf, contending that the dis-trict court’s ruling failed to givesufficient weight to the substan-tial foreign affairs interests of thefederal government. The NinthCircuit held that the state couldenforce its laws, except for thelaw requiring vessels to installcertain navigation and towingequipment.

In reversing and remandingthe decision of the NinthCircuit, the Supreme Courtheld that: (1) the Oil PollutionAct (“OPA”), 33 U.S.C.A.§ 2718(a)(c), did not affect thepreemptive impact of the Portsand Waterways Safety Act(“PWSA”), 33 U.S.C.A. § 1221,and its regulations; (2) Title I ofthe PWSA allows a state to regu-late its ports and waterwaysprovided the regulation is basedon peculiarities of local watersthat call for special precaution-ary measures; (3) under Title IIof the PWSA, only the federal

government may regulate thedesign, construction, alteration,repair, maintenance, operation,equipping, personnel qualifica-tion, and manning of tankervessels; and (4) the PWSA pre-empted Washington’s tankerregulations regarding generalnavigation watch procedures,English language skills, training,and casualty reporting.

The Supreme Court reviewedthis case under the framework ofRay v. Atlantic Richfield, 435 U.S.151 (1978). The Court statedthat the purpose of the savingsclause in Title I of the OPA is topreserve state laws that establishliability rules and financialrequirements relating to oilspills. Locke, 529 U.S. at 105.The Court declined to give broadeffect to savings clauses where todo so would upset the carefulregulatory scheme establishedby federal law. The Ray Courtstated that the relevant inquiryfor Title I preemption is whetherthe Coast Guard has promulgat-ed its own requirement or hasdecided to impose no suchrequirement. Ray, 435 U.S. at171-172. The Ray Court furtherexplained that Title I of thePWSSA preserved state authori-ty to regulate the peculiarities oflocal waters if no conflict withfederal regulatory determina-tions existed. Ray, 435 U.S. at168. The Court also reaffirmedRay’s holding that under Title IIof the PWSA, only the federalgovernment may regulate the“design, construction, alteration,repair, maintenance, operation,equipping, personnel qualifica-

United StatesSupreme Court

Supreme Court Upholds FederalPreemption of State Laws Under the Ports andWaterways Safety Act

United States v. Locke, 529 U.S. 89 (2000)

by Meitra Farhadi, Class of 2002Washington and Lee UniversitySchool of Law

The International Associationof Independent Tanker Owners(“Intertanko”), a trade associa-tion of oil tanker operators,sought declaratory and injunctiverelief from regulations promulgat-ed by the state of Washington.The regulations provided andenforced the best achievable pro-tection (“BAP”) from oil spill

CaseDigest

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tion, and manning” of tankervessels. Locke, 529 U.S. at 111.Allowing for state laws in thisarea “would frustrate the con-gressional desire of achievinguniform, international stan-dards.” Ray, 435 U.S. at 160.

In light of the prior holdings,the Court determined that feder-al law preempted Washingtonregulations regarding generalnavigation watch procedures,English language skills, training,and casualty reporting. Locke,529 U.S. at 116. The Courtremanded the remaining Wash-ington regulations to the lowercourts in order to develop thefactual record.

United StatesCourt ofAppeals

Injury Requirements for Standing Under the Clean Water Act

Friends of the Earth, Inc. v.Gaston Copper RecyclingCorp., 204 F.3d 149 (4th Cir. 2000)

by Autumn Hwang, Class of 2002Washington and Lee University School of Law

Friends of the Earth (“FOE”)and Citizens Local Environmen-tal Action Network (“CLEAN”)

brought an action under theClean Water Act (“CWA”), 33U.S.C. §§ 1251-2387 againstGaston Copper Recycling Corpo-ration (“Gaston Copper”). Wil-son Shealy, a member of CLEAN,claimed that the Gaston Copperfacility located four milesupstream from his lake releasedpollutants that caused his familyto reduce the use of their lake.The United States District Courtfor the District of South Carolinaheld that Shealy and CLEANlacked standing to sue becausethey failed to prove injury infact. The United States FourthCircuit Court of Appealsreversed and remanded the casefor determination of whetherGaston Copper discharged pollu-tants exceeding permitted limits.

The CWA proscribes limits onthe amount of pollutants a pointsource may discharge. The CWAdoes not require proof of injuryto the environment, but ratherproof that the statutory limit of apoint source discharge wasexceeded. Under § 402 of theCWA, the National PollutantDischarge Elimination System(NPDES) was established toauthorize the issuance of per-mits for the discharge of pollu-tants. NPDES permit holders arerequired to comply with effluentlimitations in such permits aswell as requirements for moni-toring, testing, and reporting.The CWA also allows citizens tosue NPDES permit holders whohave allegedly violated their per-mits. Citizens may sue forinjunctive relief and civil penal-ties payable to the United StatesTreasury. A citizen is defined as

“a person or persons having aninterest in which is or may beadversely affected.” 33 U.S.C.§ 1365(g).

The Fourth Circuit deter-mined that the plaintiffs present-ed enough evidence to establishan Article III case or controversyand therefore had standing tobring suit under the CWA. Theplaintiffs submitted GastonCopper’s discharge monitoringreports that allegedly showed 300violations of the company’sNPDES permit limits. NumerousEPA studies and expert testimonyon the adverse health and envi-ronmental effects of the pollu-tants were also included. Shealy,as a member of CLEAN, demon-strated injury-in-fact by produc-ing evidence showing that hislegally protected interest in usinghis lake for fishing and swimminghad been injured or threatenedby Gaston Copper’s actions.

The district court had requiredthe plaintiffs to present furtherevidence showing (1) the chemi-cal content of the waterways(2) increases in the salinity of thewaterways and (3) any changes inthe ecosystem of the waterways.The Fourth Circuit noted thathowever that the United StatesSupreme Court does not requiresuch proof of environmentalharm. Id. at 159. The courtobserved that in Friends of Earth,Inc. v. Laidlaw EnvironmentalServices (TOC), Inc., an effect on“recreational, aesthetic, and eco-nomic interest” is a cognizableinjury for purposes of standing.528 U.S. 167, 184 (2000).Therefore, injury-in-fact may be

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proven with affidavits from sever-al citizens stating that theyreduced their use of a waterwaybecause of a reasonable fear andconcern of pollution. Friends ofthe Earth, 204 F.3d at 160.

Traceability is another ele-ment of the Article III standingrequirement. The court alsoruled that the plaintiffs hadshown the claimed injury wasfairly traceable to the defendant’salleged illegal action. A plaintiff isonly required to show that thepollutants discharged by thedefendant are capable of causingor contributing to the kinds ofinjuries alleged in the geographicarea at issue. The evidenceoffered by the plaintiffs showedthat the chemicals discharged byGaston Copper produce environ-mental degradation. Id. at 161.

Finally, the court stated thatjudicial action could redress theclaimed injuries. Injunctive reliefwould remedy the plaintiffs’alleged injuries by preventingGaston Copper from further vio-lating its permit. Id. at 162.

Requirements for Joint Owner Status forPollution Allowancesunder the Clean Air Act

Ormet Primary AluminumCorp. v. Ohio Power Co., 207 F.3d 687 (4th Cir. 2000).

Appellant, Ormet Primary Alu-minum Corporation (“Ormet”),

originally brought suit under theClean Air Act (“the Act”) againstOhio Power Company (“OhioPower”) to obtain rights toeighty-nine percent of the pollu-tion emission allowances allocat-ed by the EnvironmentalProtection Agency (EPA) to OhioPower’s Kammer Generating Sta-tion near Moundsville, West Vir-ginia. Ormet claimed thatbecause of its contractualarrangements with Ohio Power(the “Power Agreement”), itbecame a joint owner of the gen-erating station under the Act andwas therefore entitled to a pro-portionate amount of the pollu-tion allowances. Ormet arguedthat it purchased power from theKammer Generating Stationunder a life-of-the-unit contractu-al arrangement as codified by42 U.S.C. § 7651a(27) and wastherefore entitled to pollutionallowances under the Act. Thedistrict court entered summaryjudgment against Ormet.

The Fourth Circuit used afour-part test to determine if apower sales agreement makesthe customer a joint ownerunder the Act. In order forOrmet to qualify as a jointowner, the following conditionsmust be met: 1) Ormet musthave reserved or been entitled toreceive a specified amount ofpercentage of capacity and asso-ciated energy; 2) the energymust be generated by a specifiedgenerating unit or units; 3) theagreement must require Ormetto pay “its proportional amount”of the total costs of the specifiedunit or units; and 4) the arrange-ment must be for a substantial

length of time relative to the lifeof the unit as specified in theAct. Id. at 690.

First, the court ruled that thePower Agreement, although pro-viding for a range of allowableenergy usage rather than a spe-cific amount, could be read tosatisfy the first criterion of itstest because Ormet’s powerusage remained constant at536,000 kilowatts. Id. at 691.

However, the court deter-mined that the Power Agreementdid not satisfy the second prongof the test. The power reserva-tion in the Power Agreementprovided that the power deliv-ered to Ormet could be generat-ed anywhere in the Ohio PowerSystem and did not require thatthe power delivered to Ormet begenerated only at the Kammerfacility. Accordingly, the PowerAgreement did not satisfy thecourt’s second requirement thatthe power be generated by aspecified unit or units. Id. at 692.

The court also found thatOrmet did not pay a proportion-ate share of the Kammer facili-ty’s total costs, thus failing thethird prong. Ormet’s cost shareof operating the Kammer unitsdid not vary in proportion to itsreservation of energy and did notbear a consistent relation to thetotal costs incurred by OhioPower in operating the Kammerunits. Id. at 693.

Regarding the fourth prong,the court did not address thedurational requirements becausethe power reservation in thePower Agreement had already

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failed two of the required fourelements.

Because Ormet did notreserve energy from the Kammergenerating units and did not paya proportional amount of thecosts of operating those units,the court held that Ormet’sPower Agreement did not entitleit to a share of the pollutionemissions allowances issued tothe Kammer plant under the Act.Id. at 694.

Sidecasting of Dredged MaterialRequires a Permit Underthe Clean Water Act

United States v. Deaton, 209 F.3d 331 (4th Cir.2000)

In 1988, James Deaton pur-chased a parcel of land inWicomico County, Maryland, onthe condition that it would besuitable for developing a smallresidential subdivision. Deatonlater discovered that he would beunable to obtain a sewage dis-posal permit because the groundwater levels were unacceptablyhigh. In order to correct theproblem, Deaton sought to havea drainage ditch dug through theproperty. Although advised bythe County Soil ConservationService that the site containedpossible wetlands and mayrequire a permit to excavate,Deaton hired a contractor to diga 1,240-foot ditch across theproperty. Upon learning of the

possible Clean Water Act(“CWA”) violations, the U.S.Army Corps of Engineers(“Corps”) inspected the site andconcluded that it contained wet-lands that were protected underthe CWA. The Corps immediate-ly issued a stop work order. TheUnited States brought a civilaction and alleged that thedefendants violated §§ 301 and404 of the CWA, 33 U.S.C.§§ 1311, 1344, by sidecastingdredged material into a wetlandwhile digging a drainage ditch.

The district court originallygranted partial summary judg-ment to the government, holdingthat any wetlands on the proper-ty were subject to the CWA andthat sidecasting excavated mate-rial into the wetlands was a dis-charge of a pollutant under theCWA. However, after an en bancpanel in the Fourth Circuit splitover the issue of whether side-casting was a discharge of a pollu-tant in United States v. Wilson,133 F.3d 251 (4th Cir. 1997), thedistrict court reconsidered andvacated its award of partial sum-mary judgment for the govern-ment and granted summaryjudgment in favor of the Deatons.

On appeal, the Fourth Circuitexamined the issue of whetherthe deposit of material dredgedfrom a wetland back into thesame wetland, known as side-casting, constitutes the dis-charge of a pollutant under theCWA. The court rejected thedefendants’ argument that soildredged from the wetland is nota discharge of a pollutant since

there is no new material deposit-ed in the wetland.

The court first pointed outthat the CWA defines the dis-charge of a pollutant to mean“any addition of any pollutant tonavigable waters from any pointsource” and that dredged spoil isincluded in the definition of apollutant. Deaton, 209 F.3d at335. The court determined thatonce material is removed fromthe wetland it becomes dredgedspoil. Id. at 335. The court rea-soned that Congress, in decidingto classify dredged spoil as a pol-lutant, had determined that plainsoil, once excavated from thewaters of the United States, couldnot be deposited into wetlandswithout causing harm to theenvironment. In the court’s esti-mation, there is no differencebetween depositing soil dredgedfrom a distant site and redeposit-ing soil from the same site. Id. at335. Congress believed that wet-lands play a vital role in trappingand removing pollutants beforethey reach open bodies of water.When a wetland is dredged andthe dredged soil is returned tothe wetland, there is potential fortrapped pollutants to be releasedinto open waters. That dangerexists both when off site fill mate-rial is brought in and on-sitematerial is re-deposited. Id. at336. Therefore, based on itsunderstanding of Congress’ pur-pose behind the CWA, the FourthCircuit held that sidecasting con-stitutes the discharge of a pollu-tant within the meaning of theCWA and requires a permitunder the CWA. Id. at 337.

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Federal EndangeredSpecies Regulation Upheld UnderCommerce Clause

Gibbs v. Babbitt, 214 F.3d 483 (4th Cir. 2000)cert. denied 531 U.S. 1145(2001)

by Robert Test, Class of 2002Washington and Lee University School of Law

Richard Mann, a North Car-olina rancher, shot a red wolfafter fearing that it would harmhis cattle. Mann subsequentlywas prosecuted under 50 C.F.R.§ 17.84(c)(1998), a federal regu-lation governing experimentalpopulations of animals like thered wolf, which had been intro-duced into North Carolina.Mann, along with other individu-als and counties, challenged theregulation, alleging the federalgovernment unconstitutionallyexceeded its authority under theCommerce Clause in protectingred wolves on private land. Thedistrict court upheld the federalregulation, and the Fourth Cir-cuit affirmed the district court’sfindings.

The central issue before theFourth Circuit was whether thespecies protection provision ofthe regulation regulated econom-ic and commercial activity undercurrent Commerce Clause caselaw. Under the third prong ofUnited States v. Lopez, 514 U.S.549 (1995), “Congress’ interstatecommerce authority includes the

power to regulate those activi-ties, which viewed in the aggre-gate, have a substantial relationto interstate commerce.” Lopez,514 U.S. at 558. The court con-cluded that under the thirdprong, the protection of endan-gered species bore a substantialrelation to interstate commerceand conferred power uponCongress to regulate the animalspecies. Gibbs, 214 F.3d at 492.

Specifically, the court deter-mined that the red wolf affectedtourism since people would regu-larly travel to view and studysuch wolves. Second, the regula-tions governing red wolves estab-lished a scientific researchcomponent that translated intojobs on a national scale. Third,the regulation anticipated thepossibility of a revitalized inter-state fur pelt trade. Fourth, redwolves affected interstate mar-kets for agricultural productsand livestock due to their preda-tory threat. The court also notedthat the red wolf was a wandererthat could potentially end up onprivate land.

The court determined that theregulation also could be upheldas “an essential part of a largerregulation of economic activity,in which the regulatory schemecould be undercut unless theintrastate activity were regulat-ed.” Gibbs, 214 F.3d at 497 (cit-ing Lopez, 514 U.S. at 561). Thecourt concluded that the “sub-stantial effect” on interstate com-merce was the danger of theextinction of the species and thepurpose of the statute was to pre-vent such extinction. Gibbs, 214

F.3d at 498. Therefore, overturn-ing the statute would directlycompromise Congress’ broaderscheme based upon years ofresearch and compounded envi-ronmental legislation. The courtemphasized judicial deference toCongress since it could useexpertise and experience to bal-ance the harm between landown-ers and red wolves better than ajudicial entity.

Next, the court resolvedwhether its Commerce Clausedetermination offended thenotion of federalism and statesovereignty. Although historicalcase law emphasized state powerover natural resources andwildlife, modern case law dele-gates more responsibility to thefederal government in light of thecomprehensiveness of environ-mental concerns. Id. at 499. Thecourt also rejected the plaintiffs’police power argument, whichasserted that regulation of privateland infringes upon the states’traditional power to regulate landuse. The federal government inprevious decades had taken amore active role in conservingspecies and protecting the envi-ronment through statutes. Mod-ern case law upholds such power.Id. at 500.

The court further substantiat-ed its findings predicated uponthe unique nature of the envi-ronment. First, individual stateregulation of environmentalissues was impractical sinceeach state would have the incen-tive to relax its environmentallaws in order to incur short-termeconomic gain in a “race to the

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bottom.” Second, there was aneed for national uniformity inenvironmental laws to preventconfusion among the issues andset an organized agenda thatultimately would succeed. Id. at501-502.

Virginia Court of Appeals

DEQ’s Determinationthat Oil Company Not Entitled toReimbursement Upheld

Holtzman Oil Corp. v. Commonwealth, 32 Va. App. 532, 529 S.E.2d 333 (Va. Ct. App. 2000)

The Holtzman Oil Corpora-tion (“Holtzman Oil”) appealedthe Department of Environmen-tal Quality’s (DEQ) denial of itsrequest for reimbursement fromthe Petroleum Storage TankFund (“Tank Fund”) for clean upcosts incurred in removal ofunderground storage tanks. Thecircuit court affirmed the DEQ’sdecision and Holtzman Oilappealed. The Virginia Court ofAppeals held that DEQ’s deter-mination that the company wasnot entitled to reimbursementwas consistent with applicableregulations, was supported by

evidence in the record, and wasnot arbitrary and capricious.

In November 1993, HoltzmanOil notified DEQ of its intent toremove underground storagetanks from a gas station.Holtzman Oil then excavatedapproximately 2,900 tons of soiland incinerated it at a cost of$140,705. The incineration wasdone without prior notice to theDEQ. Holtzman Oil then made aformal request in 1995 for reim-bursement from the Tank Fundfor the clean-up costs underVirginia Code § 62.1-44.34:11claiming that the removal of thecontaminated soil constituted an“abatement activity.” The DEQdenied the request for reim-bursement explaining thatHoltzman Oil excavated the soilwithout approval by its regionaloffice. Regulations require theDEQ to determine whether theactivities submitted for reim-bursement were approved orwould have been approved hadthey been timely presented tothe DEQ for consideration. TheDEQ concluded that the soilexcavation was not a necessarycorrection activity and thereforewas not approvable for reim-bursement. The circuit courtaffirmed the DEQ’s decision,concluding that it could not“substitute [its] judgement” forthe “factual determination[s]”by the “agency officials.” Id. at337, 32 Va. App. at 539.

The Court of Appeals firstexplained the applicable stan-dard of review under the Vir-ginia Administrative ProcedureAct found at Virginia Code

§ 9–6.14:17. Where the issueconcerns an agency decisionbased on the proper applicationof its expert discretion, thereviewing court will not substi-tute its own independent judg-ment for that of the agency.Instead, it will reverse the agencydecision only if that decision wasarbitrary and capricious. Thefactual determinations of theDEQ found that: Holtzman Oil’sactions were not necessary toremedy hazards posed by con-taminated soils; neither the soilexcavation nor the subsequentdisposal activity were necessarycorrective action activities; andthe DEQ would not haveapproved the abatement measureeven had they been timely noti-fied. The court, in refusing tosubstitute its own judgement forthese factual determinations,affirmed.

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