B&D Forecast: 2023 Litigation Trends to Watch
Beveridge & Diamond’s litigators are involved in and track cases proceeding in courts around the U.S. We have experience with toxic torts, class actions, Superfund and site remediation, enforcement defense, regulatory challenges, and business and contract disputes. No matter the subject, B&D’s litigation practice stands ready to deploy our full resources to achieve the best results and meet our clients’ objectives.
We highlight below cases not yet decided and that have potentially significant outcomes and ramifications for current and potential clients. These cases take up an array of rules and doctrines that have significant implications for how industries, municipalities, governments, regulators, and even households will interact with environmental laws.
In this article, we review the following cases:
- What Constitutes Waters of the United States?—Sackett v. EPA
- Scope of Foreign Discovery in U.S.—In re Webuild S.P.A
- Limitations of Agency Authority—Bohon v. FERC
- Pesticide Review Under the FFDCA & FIFRA—Red River Valley Sugarbeet v. Regan & LULAC v. Regan
- Water Rights—Arizona v. Navajo Nation & Dept. of the Interior v. Navajo Nation
- Dormant Commerce Clause and Extraterritoriality—National Pork Producers Council v. Ross
- Federal Preemption for Greenhouse Gas Lawsuits—Suncor Energy v. Board of County Commissioners of Boulder County
- Petroleum Companies Face Penalties for Emissions, Releases—Environment Texas Citizen Lobby v. ExxonMobil Corp.
- Supreme Court May Clarify CERCLA Statute of Limitations—Georgia-Pacific Consumer Products LP v. NCR Corp.
- Constitutionality of Administrative Law Judges—SEC v. Cochran
What Constitutes Waters of the United States?—Sackett v. EPA
The Clean Water Act (CWA) provides protections for navigable waters in American territory, but the definition of “navigable” is not clear, and the U.S. Environmental Protection Agency (EPA) continues to bring CWA enforcement actions to protect partly dry environments.
- Case summary. Private landowners in Idaho, the Sackett family, sought to develop a residential lot near a lake and poured sand and gravel in a plot of land that constituted a wetland during part of the year. EPA initiated an enforcement action and required the landowners to remove the sand and gravel and remediate the wetland. Litigation followed, and the Supreme Court ruled that the Sacketts could sue the EPA in federal court to challenge the enforcement order. During that litigation, EPA rescinded its enforcement order.
- On appeal, the Ninth Circuit held that EPA had enforcement power over the partly dry land at issue, and permitted EPA to bring enforcement actions for such areas.
- Implications. Much of the United States’ territory—particularly in states west of the Mississippi River—is intermittently watery due to seasonal weather patterns, arid climates, geologic and soil composition, and topography. The Supreme Court has heard arguments and will soon rule on what test is appropriate for determining whether wetlands (even intermittent wetlands) are “waters of the United States” under the Clean Water Act.
Scope of Foreign Discovery in U.S.—In re Webuild S.P.A.
Case summary. In June 2022, the Supreme Court narrowed the scope of 28 U.S.C. § 1782, which allows litigants in some foreign proceedings to obtain discovery in the United States. The Supreme Court ruled that only a governmental or intergovernmental adjudicative body falls under the scope of Section 1782.
The Second Circuit is considering the new limits of Section 1782 for the first time this year. Specifically, the Second Circuit will consider whether an arbitration before an International Centre for Settlement of Investment Disputes tribunal qualified as a foreign or international tribunal for purposes of Section 1782. The District Court held that the Supreme Court’s 2022 decision did not provide a test for lower courts to apply in determining whether particular tribunals have the necessary authority to fall within the scope of Section 1782. This leaves room for circuits to create their own tests to determine “governmental authority.”
Implications. Depending on the outcome of the Second Circuit’s hearing, the case could severely limit which foreign or international tribunals can ask federal courts to order entities in their districts to turn over evidence to be used in proceedings such as arbitrations. Similar cases could also be brought in other circuits in an attempt to develop a broader test for “government authority.”
Limitations of Agency Authority—Bohon v. FERC
Case summary. The Supreme Court will consider whether a suit brought by several landowners claiming that the U.S. Federal Energy Regulatory Commission (FERC) unconstitutionally delegates eminent domain power to companies that build natural gas infrastructure can continue. The case comes as an appeal by the landowners after lower courts dismissed the case. The D.C. Circuit court found the Natural Gas Act clearly states that all challenges to FERC pipeline approvals must be made in the D.C. Circuit, not district court, where the landowners originally filed their claim.
Implications. If allowed to continue, the case could have important implications for more than just the natural gas industry. Petitioners in the case would ultimately like the Supreme Court to curtail FERC’s authority, as the Court has done in recent rulings against federal climate rules promulgated by EPA and vaccine mandates issued by the U.S. Occupational Safety and Health Administration (OSHA). In the EPA and OSHA cases, the Supreme Court found that Congress must clearly articulate when it wants federal agencies to address issues of vast economic and political significance. Petitioners argue that the same rationale must apply to FERC’s power to allow pipeline companies to take private land. Regardless of the outcome of the jurisdictional challenge, courts will likely continue to see constitutional challenges to agencies’ delegation authority.
Pesticide Review Under the FFDCA & FIFRA—Red River Valley Sugarbeet v. Regan & LULAC v. Regan
On December 15, 2022, the United States Court of Appeals for the Eighth Circuit heard argument in the Red River Valley cases, punctuating years of litigation and regulatory action involving the interplay between two of the federal statutes under which EPA regulates pesticides.
- Case summary. Petitioner agricultural groups whose members use the pesticide chlorpyrifos and a company licensed by EPA to sell that pesticide are challenging EPA’s actions in the wake of another high-profile case decided by the Ninth Circuit in 2021. In LULAC v. Regan (also known as LULAC II), the Ninth Circuit issued a decision ordering EPA to act within 60 days of the mandate, either to revoke all tolerances for the pesticide chlorpyrifos or to modify the tolerances and simultaneously make the required safety finding under the Federal Food, Drug and Cosmetic Act (FFDCA). The Court also ordered EPA to “correspondingly modify or cancel related FIFRA [Federal Insecticide, Fungicide and Rodenticide Act] registrations for food use in a timely fashion.” EPA regulates pesticides under both statutes and actions under one are to be harmonized with the other. Both have exacting safety standards: the FFDCA uses a “reasonable certainty of no harm” standard and FIFRA uses a “no unreasonable adverse effects standard.” Notably, FIFRA takes into account benefits and provides more procedural protections to those who wish to maintain licenses to sell the products. Presumably this is one of the reasons the LULAC litigants chose to proceed under the FFDCA rather than FIFRA.
- In response to the Ninth Circuit’s Order, EPA issued a final rule under the FFDCA revoking all chlorpyrifos tolerances. 86 Fed. Reg. 48315 (August 30, 2021). Six months later it published a Final Order Denying Objections, Requests for Hearings, and Requests for a Stay of the August 2021 Final Tolerance Rule. 87 Fed. Reg. 11,222 (Feb. 28, 2022). Nearly ten months after that, EPA issued a notice of intent to cancel (NOIC) registrations for products containing the pesticide chlorpyrifos under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA).
- Implications. Petitioners in the Red River case are challenging the breadth of EPA’s decision, which they argue was inconsistent with the administrative record and, at the very least, swept in tolerances that should not have been revoked under the FFDCA and registrations that should not have been canceled under FIFRA. The Eighth Circuit’s decision on the merits and the remedy are being closely watched by those interested in administrative law principles, those interested in a science-based pesticide regulatory process, and those seeking access to chlorpyrifos in particular.
Water Rights—Arizona v. Navajo Nation & Dept. of the Interior v. Navajo Nation
Case summary. In a case that could have significant ramifications for water use beyond tribal lands, the Supreme Court heard two cases regarding the government’s obligations to plan for the Navajo Nation’s water needs. The Navajo Nation argues that the government has violated its trust obligations set forth by its treaties and the 1908 case Winters v. United States, which held that whenever Congress sets aside land for a tribe it also promises to provide sufficient water necessary to fulfill the tribe’s purpose.
The 1922 Colorado River Compact apportions equal amounts of water to seven states along the river: Colorado, New Mexico, Utah, Wyoming, Arizona, California, and Nevada. Tribes were left out of negotiations. While the compact states that it does not affect the federal government’s responsibility to tribes, it does not define that responsibility.
Implications. Justices from both the conservative and liberal wings of the Court appeared to be receptive to the Nation’s arguments that its water rights were never upheld by treaty or adjudicated in federal court because it has been left out of lawsuits pertaining to these rights. A ruling in favor of the Nation could invite similar suits from other tribes, especially in the Southwest, where water resources are stretched thin due to ongoing drought conditions. A ruling in favor of the Nation could put further stress on the Colorado River basin and limit the amount of water available for other users, including municipalities.
Dormant Commerce Clause and Extraterritoriality—National Pork Producers Council v. Ross
Case summary. Pork producers challenged a California farm animal welfare law, Proposition 12, on the basis that it forces pervasive changes to the farming practices commonly utilized by the integrated nationwide pork industry. The California law would prohibit the sale of uncooked pork in California when the seller knows or should know the meat comes from breeding pigs housed “in a cruel manner”—i.e., sows must be raised conditions more humane than typically found in factory farms in California and other pork-producing states. The Supreme Court heard oral arguments on October 11, 2022 and has not yet published its opinion.
Implications. This case has potential ramifications that stretch far beyond the pork industry issues at the heart of the underlying suit. The Supreme Court and amici curiae have used this case to address how individual states—particularly populous states like California, Texas, New York, and Florida—might impose their moral views on other states. Keen observers have warned that the Supreme Court’s decision may prompt states to align along ideological and political lines, pitting neighboring states against each other.
Federal Preemption for Greenhouse Gas Lawsuits—Suncor Energy v. Board of County Commissioners of Boulder County
Case summary. Colorado local governments filed state law trespass and nuisance claims against petroleum and coal companies for alleged harms arising from climate change exacerbated by greenhouse gas emissions. The Tenth Circuit Court of Appeals denied the plaintiffs relief on jurisdictional grounds, holding that there was no basis for federal officer removal and, as such, their state law claims could not proceed in federal court.
The Supreme Court will consider 1) whether federal common law necessarily and exclusively governs claims alleging harms from global (or interstate) greenhouse gas emissions, and 2) whether federal courts have jurisdiction over claims governed by federal common law but that are framed as state law claims. The Supreme Court asked the Office of the Solicitor General to submit a brief addressing the United States’ position in October 2022. The Solicitor General recently submitted a brief asking the justices to reject the certiorari petition, saying circuit courts have correctly determined that such claims are not a matter of federal law.
Implications. This case could have major implications for how the Supreme Court, as currently constituted, may allow climate change-related cases to proceed. The current legal frameworks for plaintiffs and interested parties to file suit over alleged damages (actual or imminent) from climate change have not yielded success for the plaintiffs. Most cases are dismissed for lack of standing, failure to state a claim, or on jurisdictional grounds. The oral arguments in this case may provide insight into how the Supreme Court may seek to balance states’ interests, national or global climate concerns, and the energy demands of the 21st Century.
Petroleum Companies Face Penalties for Emissions, Releases—Environment Texas Citizen Lobby v. ExxonMobil Corp.
Case summary. In a case that has gone back and forth between the Southern District of Texas and the Fifth Circuit Court of Appeals since 2010, environmental groups seek to affirm an award of penalties in a Clean Air Act (CAA) citizen suit based on emissions generated from Exxon’s facilities in Baytown, Texas. A 2014 bench trial seeking $641 million resulted in judgment in Exxon’s favor, and, since then has been appealed and remanded several times.
In August 2022, a Fifth Circuit panel upheld the district court’s rulings that the plaintiffs were injured-in-fact, that traceability analyses supported findings that Exxon caused damages, and that three factors weighed in favor of a penalty against Exxon. Exxon requested a rehearing with the full Fifth Circuit, and, in February 2023, the circuit judges agreed to rehear arguments on the merits of the case.
Implications. The Fifth Circuit may seek to establish or change rules concerning how CAA citizen suits against the petroleum industry for past and ongoing greenhouse gas emissions and other releases into the atmosphere can proceed. How the court ultimately rules will likely reverberate in courts around the country. Plaintiffs’ success could upend the trend of courts denying relief and lead to more aggressive citizen suit advocacy, and defendants’ success could add more headwinds to plaintiffs seeking to prevail on merits. If the court vacates the penalties and awards after rehearing, there is a substantial likelihood that the plaintiffs will file a petition for certiorari to the Supreme Court.
Supreme Court May Clarify CERCLA Statute of Limitations—Georgia-Pacific Consumer Products LP v. NCR Corp.
- Case summary. The Supreme Court docketed a case arising from a Sixth Circuit Court of Appeals decision holding that a “bare declaratory judgment” on liability triggered the statute of limitations to run for any subsequent CERCLA Section 113(g) recovery action for a Potentially Responsible Party (PRP). The Petitioner alleges it was not afforded proper notice from the trial court that an appealable issue was finally adjudicated because the opinion at issue was short and arguably lacked specificity. The Sixth Circuit rejected this argument, finding the PRP “received the responsibility to pay for ‘as-yet-unfinished’ remedial work” from a 1998 declaratory judgment. Georgia-Pacific Consumer Products LP v. NCR Corp., 32 F.4th 534, 546 (6th Cir. 2022).
- Implications. Although this matter appears to be a simple test of civil procedure rules, the Supreme Court may take up the case to clarify the processes and prerogatives of PRPs sued for contribution to a Superfund site. The Supreme Court has previously taken an expansive view of what constitutes a colorable claim against a PRP. Often, de minimis or de micromis PRPs expend substantial legal fees fighting over relatively minor contributions to Superfund sites. The Supreme Court has not addressed this issue in several years, and the composition of the Court has changed dramatically.
Constitutionality of Administrative Law Judges—SEC v. Cochran
The Securities and Exchange Commission (SEC) employs many Administrative Law Judges (ALJs) who enjoy multiple layers of “for-cause” removal protections. In the wake of the Supreme Court’s decision in Lucia v. SEC, in which the Court ruled that ALJs are appointed executive officers of the U.S. under the Constitution’s Appointments Clause, the question remains whether the “for-cause” protections violate the President’s power to strip the SEC’s ALJs of their posts without cause.
Case summary. This case presents a potential battle concerning the power of the Presidency, the Unitary Executive doctrine, and the function of Article II (as opposed to Article III) judges sitting in federal offices. The conservative majority of the Supreme Court have differing views on the limits of executive powers, including staffing decisions for appointed officers.
Implications. A Supreme Court ruling that the President can remove SEC ALJs without cause may trigger questions about the protections afforded to other agencies’ ALJs. This could create a mess within federal agencies as new administrations may attempt to “clean house” and hire like-minded ALJs so as to avoid inheriting and being forced to retain tenured ALJs from previous administrations.
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