The modern Supreme Court has repeatedly shown its willingness to challenge and upend government attempts at regulating the environment.[1] In two recent landmark cases, the Court imposed serious limitations on the EPA’s authority to regulate under the Clean Air Act[2] and Clean Water Act.[3] While addressing regulatory power under the Clean Air Act in West Virginia v. EPA, the Court revitalized the “major questions doctrine,” which has subsequently empowered sweeping judicial attempts to reel in environmental regulation.[4]

Amid these decisions, the landscape of environmental and administrative law is in a state of disarray. But just how far will the Court go to limit the government’s regulatory authority? Three of the cases selected by the Court to be heard this term indicate the Court’s eagerness to continue shaping the proper scope of government regulatory authority and may result in serious new limitations on efforts to regulate the environment.[5]

The three cases, Loper Bright Enterprises v. Raimondo, Sheetz v. County of El Dorado, and Securities and Exchange Commission v. Jarkesy, each present constitutional challenges to separate components of government regulatory authority.[6] Viewed together, the cases bring a multi-pronged constitutional assault on government regulation that could define this term as the most damaging to government regulatory authority in decades.

In Loper, the Court has been asked to formally overturn its decision in Chevron v. Natural Resources Defense Council, a case that created a strong presumption of deference for agency action.[7] Although some circuits continue to apply Chevron deference,[8] Loper may ultimately offer the equivalent of an overdue funeral for Chevron, as the once mighty precedent has been seldom cited in recent years.[9] It is worth noting that on October 13, the Court agreed to hear Relentless, Inc. v. U.S. Department of Commerce, which also asks the Court to overrule Chevron, and will serve as a companion case to Loper.[10]

In comparison, Sheetz focuses on regulatory takings.[11] This case centers around El Dorado County’s “traffic impact mitigation” (TIM) fee program. The TIM program currently requires certain private development projects to pay the county for publicly funded road updates required to service said projects. The Court will consider whether the two-part Nollan/Dolan standard should be applied to broad fee programs like the TIM program.[12] If applied, this standard would require legislatively-derived fee programs to contain an “essential nexus” to a legitimate government interest and that “rough proportionality” exists between the fees being exacted and the impact of the regulated development.[13] The practical challenges of tailoring such an exact standard to broad fee programs would almost certainly limit those programs’ ability to effectively regulate activities that harm the environment.

Lastly, as perhaps the most consequential of the cases on environmental enforcement and regulation, Jarkesy demands a deeper analysis. In this case, a hedge fund manager was the subject of a SEC investigation inquiring into the overestimation of assets and allegedly false claims made about the hedge funds that he managed.[14] After the SEC chose to proceed with its claims through an Administrative Law Judge (ALJ) rather than a jury trial, Jarkesy filed a series of constitutional challenges against the SEC.[15] In their opinion(s), the Court will assess whether 1)  SEC administrative enforcement proceedings seeking civil penalties violate the Seventh Amendment right to a jury trial; 2)  the statutory provisions authorizing SEC discretion to enforce securities laws administratively instead of judicially violate the non-delegation doctrine; and 3)  Congress violated Article II of the Constitution by granting for-cause removal protection to ALJs in agencies whose heads enjoy for-cause removal protection.[16]

Due to similarities between each agencies’ administrative enforcement apparatus, this challenge to the SEC threatens the very foundation of administrative enforcement at the EPA. Although it is unlikely that the Jarkesy decision will speak directly to the EPA’s administrative enforcement program, the modern Court has shown its willingness to reach beyond the facts at hand.[17] As such, the future of administrative enforcement under the major environmental statutes now hangs in the balance.

This term, in Jarkesy, Loper, and Sheetz, the Court has again been served an opportunity to radically alter the government’s regulatory authority. It cannot yet be said exactly what lasting effects this term will have on environmental regulation; however, one thing seems certain: the status quo will not remain for long.

 

[1] See generally West Virginia v. EPA, 142 S. Ct. 2587 (2022) (holding that Congress did not grant EPA authority to create emissions caps for power producers using a generation-shifting approach under authority of the Clean Power Plan); Sackett v. EPA, 598 U.S. 651 (2023) (holding that wetlands adjacent to “waters of the United States” are not covered under the Clean Water Act unless they can be defined as “waters of the United States,” even if they have a significant nexus to traditional navigable waters.)

[2] See West Virginia, 142 S. Ct. at 2616.

[3] See Sackett, 598 U.S. at 684.

[4] Evan C. Zoldan, The Fragility of State Regulation After West Virginia v. EPA, The Hill, (July 02, 2022), https://thehill.com/opinion/energy-environment/3544301-the-fragility-of-state-regulation-after-west-virginia-v-epa/.

[5] See Richard Frank, A(nother) California “Regulatory Takings” Case Heads to the Supreme Court, Legal Planet, (Oct. 10, 2023), https://legal-planet.org/2023/10/10/another-california-regulatory-takings-case-heads-to-the-supreme-court/.

[6] Id.

[7] Pamela King, Alex Hargrave, Rob Hotakainen, Supreme Court Grants Case That Could End Chevron Doctrine, E&E News, (May 1, 2023), https://www.eenews.net/articles/supreme-court-move-could-spell-doom-for-power-of-federal-regulators/.

[8] Pamela King, Supreme Court Takes Up Another Chevron Doctrine Fight, E&E News, (Oct. 13, 2023), https://www.eenews.net/articles/supreme-court-takes-up-another-chevron-doctrine-fight.

[9] Id.

[10] Amy Howe, Justices Grant Four New Cases, Including Chevron Companion Case, SCOTUSblog, (Oct. 13, 2023), https://www.scotusblog.com/2023/10/justices-grant-four-new-cases-including-chevron-companion-case/.

[11] Frank, supra note 5.

[12] Id.

[13] Debra Cassens Weiss, Could Construction-Permit Fees be Exempt From Takings Analysis? Supreme Court to Decide, ABA Journal, (Sep. 29, 2023), https://www.abajournal.com/news/article/when-are-construction-permit-fees-exempt-from-takings-analysis-supreme-court-to-decide.

[14] Jarkesy v. Securities and Exchange Commission, 34 F.4^th 446, 450 (5th Cir. 2022).

[15] Id.

[16] Brief for the Petitioner at 2, Securities and Exchange Commission v. Jarkesy, No. 22-859 (U.S. Aug. 28, 2023).

[17] Michael Waldman, A Regressive Supreme Court Turns Activist, Brennan Center for Justice, (May 22, 2023), https://www.brennancenter.org/our-work/research-reports/regressive-supreme-court-turns-activist.