UNITED STATES SUPREME COURT
- Before adjourning in late June, the U.S. Supreme Court announced that it will review a DC Circuit Court of Appeals decision regarding the Federal Vacancies Reform Act, which determines when nominees for agency positions can serve in those positions while their nominations are pending in the Senate. The case is NLRB v. Southwest General, and involves a controversy affecting that agency’s Acting General Counsel. Because of the lower court’s ruling, many administrative decisions were imperiled. It could also affect the actions of the Acting Deputy Administrator of Environmental Protection Agency (EPA).
- In the case of the United States Army Corps of Engineers v. Hawkes Co., Inc., decided May 31, 2016, the Court holds, in a unanimous ruling, that the Army Corps of Engineers’ Corps’ (Corps) “approved jurisdictional determinations” under its Clean Water Act (CWA) authority, are also final agency actions judicially reviewable under the Administrative Procedure Act (APA). The CWA prohibits the discharge of any pollutant into the “navigable waters of the United States” without a permit, and the Corps, during the time relevant to the case, writes the Chief Justice, has applied its regulatory definition of the “waters of the United States” to “over 270-to-300 million acres of swampy lands in the United States---including half of Alaska and an area the size of California in the lower 48 states.” The Court notes that it is often difficult to determine whether a particular piece of property contains waters of the United States, “but there are important consequences if it does.” The scope of this authority, the cost and length of the permit process, and the definitive nature of approved jurisdictional determinations persuaded the Court that the “finality” test of Bennett v. Spear, 520 U.S. 154 (1997), was satisfied, and therefore such agency actions are “final” for purposes of APA review. Justice Kennedy, whose concurring opinion in Rapanos v. United States, 531 U.S. 159 (2006), has had significant consequences for the recent regulatory redefinition of “Waters of the United States,” expressed some misgivings about the CWA. He notes that the “reach and systemic consequences of the CWA remain a cause for concern.”
- On June 20, 2016, the Court decided the case of Encino Motorcars, LLC v. Navarro, and vacated the ruling of the Ninth Circuit that had extended “Chevron deference” to a Department of Labor regulation that reversed the Department’s earlier policy without providing a reasoned explanation for the change.
FEDERAL COURTS OF APPEAL AND DISTRICT COURTS
D.C. CIRCUIT
Court of Appeals
- Lockheed Martin Corporation, one of the largest defense contractors in the United States, operated three California facilities that manufactured solid-propellant rockets for the U.S. Department of Defense pursuant to contracts subject to the Federal Acquisition Regulations. Substantial quantities of hazardous substances were released by the facilities over the years which resulted in extensive environmental contamination, especially groundwater pollution. In 2008, Lockheed filed a Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) Section 107 cost recovery lawsuit against the United States in 2008, seeking the recovery of its past and future costs to remediate these sites. The lawsuit was filed several years after the company began remediation activities at these sites. Both Lockheed and the United States have conceded that they are potentially responsible parties at these sites.
The Government in turn, filed a CERCLA contribution action against Lockheed, and this long and costly litigation resulted, which the DC Circuit may have finally brought to an end. The case is Lockheed Martin Corporation v. United States, decided August 19, 2016. The lower court, after an extensive trial, held that the equitable allocation for the past costs at these sites was NONE for the United States and 100 percent for Lockheed. Going forward, the court equitably allocated future response costs between Lockheed and the United States at each of these three sites, generally in a 75 percent to 25 percent range, with Lockheed being allocated the higher share. (The decision is reported at 35 F. Supp. 3d 92 (DDC 2014). The Court of Appeals affirmed this determination.
Because of Lockheed’s status as a government contractor with many ongoing contracts with the United States, Lockheed has already recovered nearly 80 percent of the past remediation costs as well as millions of dollars to reimburse Lockheed’s legal costs—something that is not permitted under CERCLA, but the government contracts allow these legal costs to be recovered. The government argued that all of this amounted to a double recovery that is forbidden by CERCLA Section 114, but the Court of Appeals rejected this argument, observing that by entering into these contracts and other agreements with Lockheed, “we are in no position to save the government from the consequences of its own conduct.”
- On August 5, 2016, the DC Circuit reviewed the complaints that the decisions of the U.S. Fish and Wildlife Service (Service) to issue permits to build a wind farm in Ohio violated provisions of National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA). The case is Union Neighbors United v. Jewell. The Court of Appeals held that the Service failed to comply with NEPA because its environmental impact statement (EIS) did not consider feasible alternatives that would have ensured that fewer numbers of the Indiana Bat, an ESA-protected species-were taken in the course of operating the wind farm. On the other hand, the Service’s interpretation of the ESA, as found in its handbook and policy statements, was entitled to at least “Skidmore deference.” The case was returned to the lower court for additional proceedings.
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