Type: Development Article

Vol. 52-2 Water Rights

Water Rights

Mississippi v. Tennessee: A Watershed Decision in State Water Rights

Introduction

            In Mississippi v. Tennessee,[1] the states of Mississippi and Tennessee disagreed about what rights each state had to the groundwater resources of the Middle Claiborne Aquifer. Mississippi filed an action against Tennessee and, in a novel argument, claimed that Tennessee’s pumping of the groundwater in the Aquifer amounted to a tortious taking of groundwater owned by Mississippi.[2] The United States Supreme Court held that Mississippi did not own the groundwater; rather, the Aquifer’s water resources were subject to equitable apportionment between the states.[3] 

Facts

The Middle Claiborne Aquifer is a large freshwater aquifer that underlies eight states, including Mississippi and Tennessee, both of which rely on this water resource daily.[4] Groundwater pumps draw water to the surface, where the water is transported to consumers.[5] The Aquifer is a main source of water for the City of Memphis which, through its utility, draws about 120 million gallons of water per day from Memphis’s more than 160 groundwater wells.[6] All of the wells are drilled straight down and located within Tennessee’s borders, but importantly, some are near the Tennessee-Mississippi border.[7]

Pumping groundwater creates a cone of depression that lowers water levels around the wells. This phenomenon can be controversial when the wells are close to state borders, because the wells—while themselves entirely within state borders—can lower water levels across state lines.[8] Here, Mississippi argued that the City of Memphis’s pumping activities “altered the historic flow of groundwater within the Middle Claiborne Aquifer.”[9] Specifically, Mississippi alleged that Memphis’s groundwater pumping substantially lowered water pressure and decreased groundwater drawdown in the parts of the Aquifer located in Mississippi near the Mississippi-Tennessee border.[10] Mississippi did acknowledge that 30–60 feet of water per year flowed naturally through the Aquifer from Mississippi to Tennessee, but Mississippi contended that Memphis’s pumping “substantially hastened this existing flow.”[11] As a result of the pumping in Tennessee, Mississippi asserted that it was forced to drill deeper wells “and use more electricity to pump water to the surface.”[12]

Rather than filing an original action seeking equitable apportionment—the usual judicial remedy for the apportionment of the shared water resource—Mississippi claimed that the doctrine did not apply because it had a sovereign ownership right to the groundwater beneath its borders.[13] Mississippi therefore sought leave to bring an original action against Tennessee on the basis that Memphis tortiously took “hundreds of billions of gallons of high-quality groundwater owned by Mississippi.”[14] Mississippi sought $615 million in damages.[15] Mississippi also contended that equitable apportionment does not apply to groundwater use.[16] 

Legal Background and Question

            Equitable apportionment is a judicial remedy that seeks to fairly allocate a shared water resource between two or more states, based on the idea that states have an equal right to reasonable use of shared water resources.[17] The United States Supreme Court has applied equitable apportionment to interstate rivers, streams, river basins, and in situations where groundwater pumping has affected the flow of interstate surface waters.[18] Since the Court had never answered the question of whether equitable apportionment applies to interstate aquifers, this case was a matter of first impression.[19] The question in this case, then, was whether equitable apportionment of an interstate aquifer is “‘sufficiently similar’ to past applications of the doctrine to warrant” the application of equitable apportionment.[20]

The Court’s Analysis

            The Court unanimously held that equitable apportionment of the Aquifer was sufficiently similar to past applications such that it warranted application in this case.[21] The Court asserted three primary reasons for its holding.

First, the Court noted that the Aquifer is multistate in character.[22] The Court had only applied equitable apportionment in the past to interstate water resources, and this case unquestionably involved an interstate water resource.[23] Mississippi did not contest the scientific consensus that the “‘Aquifer is a single hydrogeological unit’ spanning multiple states.”[24] 

Second, the Court observed that the groundwater in the aquifer “flows naturally between the states.”[25] This again rendered the aquifer similar to the Court’s past applications of equitable apportionment, which all involved water that flowed naturally across state boundaries.[26] Mississippi argued that the aquifer’s water flow was distinguishable from that of the past applications of equitable apportionment because the aquifer flows “extremely slow[ly].”[27] The Court remained unpersuaded, observing that it had applied equitable apportionment to water resources that sometimes run dry.[28] The Court also stressed that while the speed of the water’s flow may be slow, the volume of the water flowing totaled more than “35 million gallons of water per day, and over ten billion gallons per year.”[29] Thus, the speed at which the aquifer flows failed to distinguish the aquifer from the water resources to which the Court normally applied equitable apportionment.[30]

Lastly, the Court pointed out that the City of Memphis’s pumping activities affected the aquifer underneath Mississippi.[31] Pumping water from the aquifer within Tennessee’s borders reduces groundwater pressure and drawdown miles into Mississippi.[32] “Such interstate effects are a hallmark of [the Court’s] equitable apportionment cases.”[33] For the three reasons stated above, the Court held that the groundwater in the aquifer is subject to equitable apportionment.[34]

Mississippi insisted that it holds “sovereign ownership of all groundwater beneath its surface, so equitable apportionment ought not apply.”[35] The Court disagreed, explaining that while states own the land and waterbeds within their borders, this ownership does not extend to the “flowing interstate waters themselves.”[36] The Court also commented that if states could exercise jurisdiction over all of the groundwater underneath the state, then upstream states could pump aquifers dry and leave downstream states without water.[37]

Mississippi also urged that Tarrant Regional Water District v. Herrmann supported Mississippi’s argument that equitable apportionment should not apply.[38] In Tarrant, the Supreme Court interpreted a compact that two states had negotiated concerning the states’ rights to a water resource.[39] The Tarrant Court did not consider whether equitable apportionment applied in that case, because the dispute was solely governed by the contract.[40] Accordingly, the Court explained that Tarrant was inapposite.[41]

The Court recognized that Tarrant did support the rule that states “may not physically enter another to take water in the absence of an express agreement,” but that was not at issue here—the City of Memphis’s wells were undisputedly within Tennessee’s borders.[42] That some of the aquifer’s water began in Mississippi did not affect the analysis; just as river water may originate in another state, so too may groundwater.[43] While “[t]he origin of an interstate water resource may be relevant to the terms of an equitable apportionment . . . . that feature alone cannot place the resource outside the doctrine itself.”[44] Since Mississippi and Tennessee did not have a contractual agreement about their respective rights to the groundwater, and Tennessee was pumping water in its own state, no rule in Tarrant supported Mississippi’s argument that equitable apportionment should not apply.[45] 

In sum, the Court held that the groundwater in the Middle Claiborne Aquifer was subject to equitable apportionment because it the aquifer was sufficiently similar to the water resources that are customarily subject to equitable apportionment. The Court dismissed Mississippi’s complaint.[46]

Implications for State Water Rights

            As climate change prompts governments to pay closer attention to the use and conservation of water resources, this decision has important ramifications for state water rights. This case appears to stop states from attempting to pump important groundwater resources dry: If Mississippi were able to assert ownership over all of the groundwater within its state borders, then it is in Mississippi’s interest to use as much of that groundwater as possible, lest Tennessee endeavor to do the same. This, of course, would not be a conservation-conscious practice. Equitable apportionment aspires to ensure that states fairly share and preserve water resources. But as the Court noted in this case, states seeking judicial enforcement of equitable apportionment must show real and substantial injury, which is a high bar.[47]

            This ruling also may inspire states to adopt interstate compacts concerning groundwater resources. Because of the cost and difficulties involved in obtaining judicial enforcement of equitable apportionment, a proactive compact is an attractive option for states looking to secure long-term rights to interstate groundwater resources. Predictable judicial enforcement makes compacts reliable and financially prudent. Indeed, the Court in this case explicitly distinguished Tarrant on the grounds that Tarrant was a question of contractual interpretation.[48] The market forces underlying the negotiations of such compacts also give assurance that groundwater resources will be used efficiently by the states that are parties to the compact.

 

Graham Rex is a rising 3L from Raleigh, North Carolina. He studied Philosophy at the University of North Carolina-Wilmington, and he joined TELJ during his 1L year. Graham wants to practice nonprofit environmental law after law school and he is clerking at Earthjustice in Denver, Colorado this summer. 

 

Emily Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.

 

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

 

 

 

[1] Mississippi v. Tennessee, 142 S. Ct. 31 (2021).

[2] Id. at 38.

[3] Id. at 41.

[4] Id. at 36.

[5] Id.

[6] Id. at 37.

[7] Id.

[8] Id.

[9] Id.

[10] Id. at 38.

[11] Id. at 37.

[12] Id. (citing Complaint at ¶ 54(b), Mississippi v. Tennessee, 142 S. Ct. 31 (2021)).

[13] Id. at 40. 

[14] Id. at 38 (quoting Complaint at ¶ 23, Mississippi v. Tennessee, 142 S. Ct. 31 (2021)).

[15] Id. (citing Complaint at ¶¶ 55–56, Mississippi v. Tennessee, 142 S. Ct. 31 (2021)).

[16] Id. (citing Complaint at ¶ 49, Mississippi v. Tennessee, 142 S. Ct. 31 (2021)). Equitable apportionment seeks to divide rights to an interstate water resource fairly between states. The doctrine will be discussed in detail later in this essay.

[17] Id. at 39 (citing Colorado v. New Mexico, 459 U.S. 176, 183 (1982); Florida v. Georgia 141 S. Ct. 1175, 1180 (2021)).

[18] Id.

[19] Id.

[20] Id.

[21] Id.

[22] Id. at 39–40.

[23] Id.

[24] Id. at 40 (citing Report of Special Master at 20, Mississippi v. Tennessee, 142 S. Ct. 31 (2021)).

[25] Id.

[26] Id.

[27] Id. (quoting Exceptions Brief for Mississippi at 8, Mississippi v. Tennessee, 142 S. Ct. 31 (2021)).

[28] Id. (citing Kansas v. Colorado, 206 U.S. 46, 115 (1907)).

[29] Id. (citing Hearing Tr. 532–33, Mississippi v. Tennessee, 142 S. Ct. 31 (2021)).

[30] See id.

[31] Id.

[32] Id.

[33] Id. (citing Florida v. Georgia 141 S. Ct. 1175, 1180 (2021)).

[34] Id.

[35] Id.

[36] Id. (citing Wyoming v. Colorado, 259 U.S. 419, 464 (1922)).

[37] Id. at 41.

[38] Mississippi v. Tennessee, 142 S. Ct. at 41 (citing Tarrant Reg’l Water Dist. v. Herrmann, 569 U.S. 614 (2013).

[39] Id. (citing Tarrant, 569 U.S. at 627).

[40] Id. 

[41] Id.

[42] Id. (citing Joint Statement of Stipulated and Contested Facts at 106, Mississippi v. Tennessee, 142 S. Ct. 31 (2021)).

[43] Id. (citing Colorado v. New Mexico, 459 U.S. 176, 181, n.8 (1982); Idaho ex rel. Evans, 462 U.S. 1017, 1028, n.12 (1983)).

[44] Id.

[45] Id.

[46] The Court declined to decide whether Mississippi should be granted leave to file an amended complaint seeking equitable apportionment, because Mississippi never sought equitable apportionment. Id. Since Mississippi expressly rejected equitable apportionment in its pleadings, the Court could not assume that Mississippi would seek equitable apportionment. Id. (citing Complaint at ¶ 38, Mississippi v. Tennessee, 142 S. Ct. 31 (2021)). An equitable apportionment case would require consideration of more evidence, perhaps including “existing uses, the availability of alternatives, practical effects, and the costs and benefits to the states involved.” Id. An equitable apportionment claim might also require other parties to be joined, since other states also depend on the Aquifer’s water resources. Id. at 42. Lastly, a state pursuing equitable apportionment must prove a real and substantial injury. Id.

[47] See Mississippi v. Tennessee, 142 S. Ct. at 42 (citing Idaho ex rel. Evans, 462 U.S. 1017, 1028, n.12 (1983)).

[48] See id. at 41.

Vol. 52-2 Recent Publication

Recent Publication

Shalanda H. Baker, Anti-Resilience: A Roadmap for Transformational Justice within the Energy System, 54 Harv. C.R.-C.L. L. Rev. 1 (2019).

 

At the core of American legal efforts to advance notions of equity and justice within the environmental sphere lies the ‘environmental justice movement’. The environmental justice movement has evolved alongside the landmark American environmental statutes.[1] Initially a product of legal momentum in the 1960s, the major environmental statutes aspired to new balances between continued economic prosperity and the protection of the environment.[2] The National Environmental Policy Act (NEPA) and the innovative media-based statutes, including the Clean Air Act (CAA) and the Clean Water Act (CWA), were passed relatively swiftly and cohesively in this same early period.[3] 

            As scholars have detailed, initial aspirations to design this balance sought to remedy major equity concerns, including about the material distribution of environmental benefits and burdens.[4] These initial equity aspirations were powerfully informed by lenses of race and class.[5] Yet, these initial equity aspirations were, “ultimately, jettisoned”.[6] Instead, with apparent evidence of diminishing inequality and a growing interest in substantially deregulating major economic sectors, many equity dimensions were discounted.[7] 

            In response to these cuts and to the increasing criticism of arguably inequitably distributed environmental burdens, the US environmental justice movement has grown more prominent. Despite initially lacking major political power and a presence within elite circles, the environmental justice movement continues to advocate for the inclusion of policies to remedy what some activists see as concerning government endorsement of environmental oppression.[8] 

Thus, especially within energy infrastructure planning and the regulation of hazardous materials, the environmental justice movement remains a primary legal, political, and policy framework by which efforts to address environmental inequity are framed.[9] The movement has accordingly found some success—especially in liberal political efforts—incorporating equity concerns within new and existing regulations.[10]

            However, just as the movement persists, as does its struggle, and today parallel literature has developed on ‘energy justice’. The passage of major legal evolutions within environmental, energy, and, more recently, climate law, remains a deeply contested political atmosphere.[11] Increasingly divisive interest groups, political factions, and long-standing economic entrenchment threaten ‘advancement’ by any one movement.[12] Parties to disagreements are increasingly aware of energy law’s sweeping potential to determine economic goals, infrastructure policies, and the flow of financial benefits. This sweeping potential makes energy law-making deeply contested.

            It is in the context that a 2019 publication by Shalanda H. Baker—currently the deputy Director for Energy Justice and Secretary’s Advisor on Equity in the United States Department of Energy but, at the time of publication, Professor of Law, Public Policy and Urban Affairs at Northeastern University School of Law—contributes a theoretical perspective worth noting in the growing ‘energy justice’ literature. Baker’s central thesis revolves around a perspective of ‘anti-resilience’. This perspective develops from a creative argument. 

First, Baker notes that concepts of resilience are increasingly incorporated into energy transition and climate change law-making efforts and frameworks.[13] She traces the history of this incorporation, stemming from concepts of ecosystem resilience to external forces, and evolving into increasingly common sociological and legal formulations of resilience.[14] In these sociological and legal formulations, resilience becomes a “normative good” to be “sought after,” something which reflects a system’s, a community’s, or an infrastructure’s capacity to weather adverse forces and “bounce back” to its prior condition.[15] 

Yet, Baker argues, these subtle invocations of resilience concepts—growing within energy transition and climate change law-making—may inadvertently lead policymakers to “obfuscate” important questions regarding the state of energy-based inequity today.[16] Baker argues that when policymakers uncritically incorporate concepts of resilience as a normative good within legal strategies, they may fail to interrogate subtle dynamics of oppression in existing governance models.[17] In this view, concepts of resilience, while importantly reinforcing a need for strength and recovery potential in vulnerable components of society and infrastructure, nevertheless incorporate a certain acceptance of an arguably inequitable status quo. This status quo, in the energy justice movement’s view, does not exhibit an equitable distribution of benefits and burdens flowing from the ownership of energy resources.[18] In Baker’s view, then, resilience framing deserves greater scrutiny in contemporary law-making efforts. 

One of the most unique elements of Baker’s analysis is its invocation of a historical analysis recently developed within the ‘energy democracy’ movement.[19] In this historical perspective, while today most literature on energy transitions centers around contemporary transitions from fossil fuels to renewable energies, the energy democracy movement views today’s circumstances as one of a series of major industrial transitions.[20] Instead, efforts today to address climate change and manage energy transitions should, in this view, be significantly informed with the lessons of a precursor industrial energy transition, from the Transatlantic Slave Trade to industrialised fossil fuels.[21] 

In this historical reanalysis, the Transatlantic Slave Trade, especially as evolved in American plantation colonialism, saw the first industrial-scale transformations of matter—the “essence of energy”[22]—through the dominated extraction of labor from colored bodies. Using slave labor to transform land, slave economies facilitated race-based governance structures and the colonization of the American continent, thereby consolidating surplus wealth at unprecedented scales.[23] Yet, this view argues, when fossil fuel engineering began to displace slave labor, underlying race-based systems of governance were retained, themselves “resilient” to this initial energy transition.[24] Scholars such as Myles Lennon have argued that, in this way, “the colonial apparatus transformed energy—the ability to change matter—into a commoditized form that made certain lives not matter.”[25]

The central impetus of this perspective on energy justice, then, is to prevent the continuance today of allegedly oppression-based governance and economic models through the upcoming energy transitions to lower-carbon economies and energy infrastructure. In Baker’s view, energy policy represents a legal mechanism with potential to interrogate this alleged underlying dynamic.[26] Indeed, energy democracy activists treat energy policy as a mechanism for the legal reorganization of economic benefits related to energy-based wealth.[27] Energy democracy thus aspires to link “intersectional activism and the technocratic realm of electricity grids and markets.”[28]  Baker’s ultimate vision would see that communities will regain “some measure of control of the energy and environmental resources around them,” access “economic opportunities outside of the colonizing energy industries within their communities,” and incorporate local renewables “through a community-mediated mechanism that reflects the will of the people impacted by the energy system.”[29]

Through an analysis of state and federal energy policies and proceedings, including net metering policy, community energy policy, and Federal Energy Regulatory Commission proceedings on the role of resilience in the nation’s energy grids, Baker argues that such policies embody under-utilized opportunities to facilitate this transferal of energy-based wealth to under-resourced communities.[30] For Baker, such policies, when focused through a lens of “anti-oppression,” could play a prominent role in assisting communities that she describes as ‘sacrifice zones’, such as her hometown of Port Arthur, Texas, which in her view face disproportionate environmental burdens from fossil fuel infrastructure.[31] Baker views her work as “resisting the obfuscation” of entrenched inequity and “engaging in a politics” of transformation, thus positing a theoretical perspective with dimensions in arguably both a transformative politics and a radical epistemology.[32] 

Yet, Baker’s arguments are susceptible to substantial criticisms that may undermine the insight’s potential durability and effect within energy and climate law-making. In particular, as climate and energy policies remain a deeply contested territory, such “transformative” policies centered around an economic redistribution of energy’s benefits are likely to implicate deep veins of political contest, interest groups dynamics, industry trends, and constitutional matters. On the one hand, the movement’s aspiration for transformation risks asking for nothing less than equality of energy’s benefits across American society, and thus the movement may, for some, ask too much. On the other hand, insofar as the movement dreams of economic and political upward mobility largely while retaining today’s core economic and political structures, the movement may, for some, ask too little. Simultaneously, then, the imaginative nature of Baker’s vision arguably makes it politically unrealistic, while a hesitancy to envision an even more radical future may risk undermining, to some, the movement’s conceptual cohesion. Both criticisms may ultimately undermine the movement’s legitimacy, persuasiveness, and potential to achieve durable legal influence.

This acknowledged, there remains something important that readers can undoubtedly retain from Baker’s rigorous analytical exposition, regardless of whether readers agree with her ultimate positions. The recognition that concepts of resilience are often based in an attachment to an a priori state of affairs—which may be uncritically accepted as normatively good—provides policy makers with an additional encouragement to reflect on the values and assumptions guiding their strategies. In this light, Baker’s work makes a considerable contribution to the energy justice literature because it further attunes energy policy to matters of equity and justice—matters which, from many sides, are increasingly regarded as societally worthwhile. Whether through continued historical reflection, analysis of economic distributions, or novel conceptual policy arguments, the energy justice literature continues to provide a unique and interesting perspective on energy policy-making, especially its energy transition dimensions. 

Finally, possible connections to other parallel movements shaping American society, such as Black Lives Matter and renewables proliferation, may make it such that a vision to ‘democratize energy’ may find a foothold in the legal efforts of activists and technocrats alike. There is a deepening recognition that climate change places great legal pressure as much on administrative and property law as traditional environmental and energy law.[33] In this regard, energy policy’s sweeping potential makes it a possibility that climate-driven energy transition policy “traverses a diversity of hopeful terrain that makes it a better site for transformative politics” after all.[34] 

Like many components of energy policy today, though, much will depend on the real decisions made in upcoming years. To what extent Baker’s arguments will be incorporated into upcoming energy policy efforts is, thus, unknowable. Nevertheless, the article’s contribution to energy policy-making literature is rigorously articulated, thoughtfully advanced, and worth considered reflection.

 

Aaron Ramcharan is a J.D. Candidate, Class of 2022, The University of Texas School of Law and LL.M. Candidate in Global Environment and Climate Change Law, Class of 2022, University of Edinburgh Law School. Aaron joined TELJ in Fall 2020 and serves as Senior Editor. He was born in Edmonton, Alberta, Canada and studied Philosophy at Reed College in Portland, Oregon. After graduation, he will join Baker Botts LLP.

 

Josh Katz is a partner at Bickerstaff Heath Delgado Acosta LLP and represents public and private entities before agencies and in state and federal court in the areas of environmental law, municipal law, water rights, and utilities.

[1] Jedediah Purdy, ‘The Long Environmental Justice Movement’ 44 Ecology Law Quarterly 809, 812 (2018).

[2] Purdy, supra note 1, at 813.

[3] Purdy, supra note 1, at 812.

[4] Shalanda H. Baker, Anti-Resilience: A Roadmap for Transformational Justice within the Energy System 54 Harv. C.R.-C.L. L. Rev. 1, 13 (2019).

[5] Baker, supra note 4, at 13.

[6] Baker, supra note 4, at 13.

[7] Purdy, supra note 1, at 824.

[8] Baker, supra note 4, at 14.

[9] Baker, supra note 4, at 14; Environmental Protection Agency, ‘Environmental Justice’ (2022), https://www.epa.gov/environmentaljustice (last accessed 20 April 2022).

[10] Kendra S. Sherman, Update on Environmental Justice Initiatives Under the Biden Administration, XII:116 National Law Review (8 Feb. 2022), https://www.natlawreview.com/article/update-environmental-justice-initiatives-under-biden-administration, (last accessed 20 April 2022).

[11] Leah Cardamore Stokes, Short Circuiting Policy: Interest Groups and the Battle Over Clean Energy and Climate Policy in the American States (Oxford University Press 2020) 4.

[12] Stokes, supra note 11, at 6.

[13] Baker, supra note 4, at 22.

[14] Baker, supra note 4, at 20.

[15] Baker, supra note 4, at 2.

[16] Baker, supra note 4, at 26.

[17] Baker, supra note 4, at 26.

[18] Baker, supra note 4, at 23.

[19] Baker, supra note 4, at 10.

[20] Myles Lennon, Decolonizing Energy: Black Lives Matter and Technoscientific Expertise Amid Solar Transitions, 30 Energy Research & Social Science 18, 24 (2017).

[21] Baker, supra note 4, at 11.

[22] Baker, supra note 4, at 11.

[23] Lennon, supra note 20, at 24.

[24] Lennon, supra note 20, at 25.

[25] Lennon, supra note 20, at 19.

[26] Baker, supra note 4, at 19.

[27] Baker, supra note 4, at 19, 26.

[28] Lennon, supra note 20, at 20.

[29] Baker, supra note 4, at 12.

[30] Baker, supra note 4, at 26–27, 31, 33.

[31] Baker, supra note 4, at 5, 9.

[32] Baker, supra note 4, at 6.

[33] Eric Biber, Law in the Anthropocene Epoch, 106 Georgetown L. J. 1, 4 (2017).

[34] Baker, supra note 4, at 13.

Vol. 52-2 Natural Resources & Land Use

Natural Resources & Land Use

Updates on Effect of County of Maui Decision on CWA Litigation

Introduction

            The Supreme Court’s 2020 opinion in County of Maui v. Hawaii Wildlife Fund communicated a material change in the interpretation of the Clean Water Act’s application to wastewater pollutants. This article reviews the Court’s holding, describes subsequent administrative actions, and reviews recent litigation applying the Court’s holding in lower courts.

County of Maui and Functional Equivalent Test

In 2020 the Supreme Court issued an opinion in County of Maui v. Hawaii Wildlife Fund to determine whether a permit from the EPA is required where a pollutant originating from a point source enters navigable waters via a non-point source.[1] In the case before the Court, a suit was brought for Clean Water Act violations against the County of Maui’s operation of a wastewater reclamation facility.[2] The city’s facility was pumping treated water (the pollutant) hundreds of feet underground into wells that traveled through groundwater into the Pacific Ocean, a navigable water.[3] The court was faced with the issue that a narrow reading of the statute establishes a loophole circumventing the intent of the statute, since groundwater eventually leads to navigable waters.[4] However, too broad of a reading would require permitting in many cases Congress did not intend the EPA to regulate.[5] The court ultimately held that a permit is required when there is a direct discharge or where there is the “functional equivalent of a direct discharge.”[6] To assist in determining whether a discharge is a functional equivalent the court laid out seven factors to be considered: “(1) transit time, (2) distance traveled, (3) the nature of the material through which the pollutant travels, (4) the extent to which the pollutant is diluted or chemically changed as it travels, (5) the amount of pollutant entering the navigable waters relative to the  amount of the pollutant that leaves the point source, (6) the manner by or area in which the pollutant enters the  navigable waters, (7) the degree to which the pollution (at that point) has maintained its specific identity.”[7] The Court noted that the first two factors of time and distance are likely to be the most important in a functional equivalent analysis.[8]

EPA Guidance Memorandums

On January 14th, 2021, the Trump administration issued a guidance memorandum on the County of Maui decision. This memorandum is not legally binding. It added an eighth factor: “the design and performance of the system or facility from which the pollutant is released.”[9].  The Biden administration then rescinded the guidance on September 15th, 2021, through another memorandum sent by EPA Assistant Administrator for the Office of Water, Radhika Fox.[10] The September memorandum found the January guidance’s addition of an eighth factor to be inconsistent with the Court’s opinion by introducing an inquiry into the intent of the accused polluter.[11] In addition, the September memorandum stated the EPA will engage in “site-specific, scientific-based evaluations” to determine if discharges meet the functional equivalent standard of County of Maui.[12]

County of Maui on Remand

Since County of Maui, cases involving the use of the functionally equivalent test it articulated have been fact-specific and often require the use of experts.[13] In County of Maui on remand, the District Court of Hawaii, determined that the county had violated the permit requirement of the Clean Water Act by meeting the functional equivalent standard.[14]  The facts the court found most persuasive were the short distance and transit time.[15] The distance was about half a mile from point source to the ocean.[16] The transit time from point source to the ocean had a minimum of 84 days and average of 14 to 16 months.[17] The court also noted no reconsideration was needed due to the inclusion an additional factor, the volume of the discharge, in its analysis.[18] The court did not give weight to the County’s argument that the nitrogen within the wastewater was diluted by the time it reached the ocean.[19] Instead of taking the county’s requested approach of measuring the nitrogen as the pollutant, the court considered the wastewater to be the pollutant.[20]

Conservation Law Found., Inc. v. Longwood Venues & Destinations, Inc. 

In the First Circuit, the Longwood litigation immediately felt the effects of County of Maui as it was remanded to comply with the Court’s ruling. The First Circuit vacated its November 2019 decision in Conservation Law Found., Inc. v. Longwood Venues & Destinations, Inc., and remanded it to be consistent with the County of Maui ruling[21]. The Longwood case on remand was never decided; it ultimate settled for $369,000 and a replacement of the wastewater treatment facility.[22]

Black Warrior River-Keeper, Inc. v. Drummond Co.

In Black Warrior River-Keeper, Inc. v. Drummond Co., the Alabama Northern District Court applied the County of Maui  functional equivalent test to discharges of acid mine drainage into the Locust Fork of the Black Warrior River to determine if Drummond required a permit.[23] The plaintiff bringing the case presented evidence showing “contaminated groundwater from the lower dam reaches the Locust Fork in as little as 1.5 to 4.4 days.”[24] In addition, the plaintiff was able to show a relatively short distance from the point source to the navigable water, due to the proximity of the lower dam and spillway to the Locust Fork.[25] The defendant Drummond presented no evidence to contradict this data provided by plaintiff.[26] Drummond unsuccessfully attempted to argue the volume of groundwater leaked from the site was an insignificant quantity and therefore would not require permitting.[27] The court granted the plaintiff summary judgment on the matter due to an inability to generate a genuine dispute on the time and distance factors of the County of Maui functional equivalent test.[28]

Cottonwood Env’t. L. Ctr. v. Big Sky Water & Sewer Dist.,

The Cottonwood Env’t. L. Ctr. v. Big Sky Water & Sewer Dist. case involves a scenario in which Big Sky District (defendant) collects treats water for treatment at its Water Resources Recovery Facility (“WRRF”), which is alleged to have polluted runoff flowing through a drain into the groundwater which then flows into the West Fork of the Gallatin River.[29] On February of 2022, the presiding judge in Cottonwood gave both parties several factual questions to be answered in thirty words or less to shed light on how the County of Maui factors apply to the case at hand.[30] After the responses to these questions were received the judge denied both parties’ motions for summary judgement as a question still exists as to whether the WRRF underdrain pipe contributes to the functional equivalent of a direct discharge.[31]

Parris v. 3M Co

The most recent case, Parris v. 3M Co is currently being decided in Georgia and is likely to hinge on the court’s ruling of whether the defendant (Trion) meets the functional equivalent test of County of Maui.[32] Still in the preliminary stages of litigation, Trion has yet to offer any explanation as to why their PFA discharges would not meet the functional equivalent test.[33] The opposing party has yet to produce any evidence, but alleges that Trion’s disposition of PFAs through the groundwater have entered Racoon Creek thereby violating the Clean Water Act.[34] The judge ruled against Trion’s motion to dismiss this matter.[35] As this case moves forward one can expect intense evidentiary discovery in line with similar County of Maui cases.

 

Jared Mezzatesta is a 3L from New Jersey. He studied Political Economy at the University of Michigan and is passionate about fair housing. He clerked for Weil Gotshal & Manges LLP. 

 

David Klein is a Principal of Lloyd Gosselink Rochelle & Townsend, P.C. and is the Chair of the Environmental and Natural Resources Law Section of the State Bar of Texas.  David represents public and private clients in water quality, water rights, water districts, and water utility service matters.

 

 

[1] Cnty. of Maui v. Haw. Wildlife Fund, 140 S. Ct. 1462, 1468 (2020). 

[2] Id. at 1469.

[3] Id.

[4] Id. at 1474-76.

[5] Id. at 1471-74.

[6] Cnty. of Maui v. Haw. Wildlife Fund, 140 S. Ct. 1462, 1476 (2020).

[7] Id. at 1476-77.

[8] Id. at 1476 .

[9] Env’t. Protection Agency, Recission of January 2021 Guidance Document, “Applying the Supreme Court’s County of Maui v. Hawaii Wildlife Fund Decision in the Clean Water Act Section 402 National Pollutant Discharge Elimination System Permit Program” (September 15, 2021) 

[10] Id.

[11] Id.

[12] Id. 

[13] Allen Matkins, The Still Murky Permitting Requirements Under the Clean Water Act after County of Maui Spawn Highly Fact-Intensive Inquiries, (Mar. 22, 2022) (https://www.jdsupra.com/legalnews/the-still-murky-permitting-requirements-3892744/)

[14] Hawai’i Wildlife Fund v. Cnty. of Maui, 2021 U.S. Dist. LEXIS 202010, *11 (D. Haw. Oct. 20, 2021) 

[15] Id.

[16] Id.

[17] Id.

[18] Id. at *3

[19] Id. at *35

[20] Id.

[21] Conservation L. Found., Inc. v. Longwood Venues & Destinations, Inc., 2020 U.S. App. LEXIS 40697 (1st Cir. Oct. 14, 2020).

[22] Brian Dowling, Cape Cod Resort Settles Green Group’s Clean Water Suit, Law 360 (February 18, 2021), https://www.law360.com/articles/1356425.

[23] Black Warrior River-Keeper, Inc. v. Drummond Co., 2022 U.S. Dist. LEXIS 6046 (N.D. Ala. Jan. 12, 2022).

[24] Id. at *17.

[25] Id. at *17-*18.

[26] Id. at *25.

[27] Id. 

[28] Id. at *26.

[29] Cottonwood Envtl. Law Ctr. v. Edwards., 2021 U.S. Dist. LEXIS 54922, *4 (D. Mont. March 23, 2021). 

[30] Cottonwood Envtl. Law Ctr. v. Big Sky Water & Sewer Dist., 2022 U.S. Dist. LEXIS 29774, *4-*8 (D. Mont. Feb. 18, 2022).

[31] Cottonwood Env’t Law Ctr. v. Edwards, No. 2:20-cv-00028-BU-BMM, 2022 U.S. Dist. LEXIS 58634, *13 (D. Mont. Mar. 30, 2022). 

[32] Parris v. 3M Co., 2022 U.S. Dist. LEXIS 60043 (N.D. Ga. Mar. 30, 2022).

[33] Id. at *43.

[34] Id. 

[35] Id. at *100.

Vol. 52-2 Waste

Waste

 

How the Law Regarding Fashion Waste is Developing

 

Waste in Fashion

When people think of environmental issues, they often first think of climate change. The fashion industry is often overlooked. However, the environmental footprint of fashion is gaining recognition around the world, starting in West Europe. 

“Fast fashion has become the dominant mode of production and consumption” in the fashion industry.[1] The industry consists of three stages: take (the harvesting of raw materials), make (the production of garments), and waste (the wearing and subsequent disposal of garments).[2] The waste generated can be split into two categories, “(1) pre-consumer wastes (such as fiber, yarn, and fabric processing wastes, in addition to the sewn product manufacturing wastes), and (2) post-consumer wastes or end-of-life clothing wastes (discarded at the end of clothes’ useful life).”[3] This waste includes unsold clothes and fabric chemical processing.[4] 

Clothing production and consumption has environmental impacts including land pollution due through fertilizer and pesticide use, water pollution resulting from clothing dyes, air pollution as a by product of the toxic gases that produced during manufacturing, marine pollution due to microfibers that are generated when washing clothes, and biodiversity loss due resulting from fabric particles polluting in the ocean.[5] 

It has been found that the “fashion industry emits 1.2 billion tons of greenhouse gases; releases half a million tons of microplastics into the sea, uses 132 million tons of coal, 900 million cubic meters of water, and a quarter of the world’s toxic chemicals.”[6] “130 billion garments are produced annually, of which 80 billion are sold, yet less than a single percent are recycled.”[7] Further, textile waste is a primary contributor to the rapid depletion of land-fill capacity.[8] The fashion industry effects not only 4% of global carbon emissions, but also impacts water resources, land pollution, and animal biodiversity loss. 

French Law

            France passed an anti-waste law in 2020 that bans designer clothes and luxury goods companies from that destroy unsold or returned items.[9] It requires “producers, importers and distributors, including online firms such as Amazon, to donate unsold non-food goods except those that post a health or safety risk.” [10] This law was put into effect on January 1, 2022.[11] One issue associated with the definition in the French Consumer Code is that the luxury brand’s biggest markets are in the U.S. and China, both of whom do not have bans. “In addition, the Consumer Code has been modified to strongly encourage sale without packaging (bags or other types or containers), or with reusable containers. Retail businesses with a sales area of more than 400 million in revenue, have an obligation to make reusable packaging available to consumers.” [12]

Further, France passed a carbon score law to introduce “mandatory labeling of goods and services.”[13] “According to a set of data released by L’Agence de la Transition é Cologique, the fashion industry is the second largest source of pollution in the world, with an average consumption of 2,700 liters of water per T-shirt (equivalent to 70 showers) and 11,000 liters of water per pair of jeans (equivalent to 285 showers).”[14] France‘s 2021 policy also establishes requirements for labeling and a ban on advertising relating to the marketing or promotion of fossil fuels starting in August 2022. [15] This policy attempts to prompt companies to provide more sustainable products by empowering consumers to make informed decisions regarding the impact of their purchases on the environment. 

France also enacted one of the world’s first laws regarding greenwashing. The law prohibits the inaccurate “use of any wording on a product, its packaging, or in advertising promoting a product or service, indicating that the product, service, or activity of the manufacturer is carbon-neutral or has no negative impact on the climate.”[16] It establishes a legal framework through which companies can be held accountable for misleading claims regarding environmental impacts. Fines can include up to “80% of the false promotional campaign cost, a correction on billboards or in the media, and a 30-day clarification on the company website.”[17] 

 

State of California

While the United States has yet to pass any legislation directed at the fashion industry’s impact on climate change, California and New York are beginning to indicate an interest in such regulation. Although not directed at the fashion industry’s environmental impact, California has recently enacted legislation designed to curb other harmful practices of the industry. California’s Senate Bill 62, the Garment Worker Protection Act, was signed into law on September 28, 2021. This bill was designed to cover up a loophole in AB 633, enacted in 1999, which “was praised for its aim to prevent wage theft in California’s sweatshop-infested garment industry, the home of the vast majority of garment manufacturing in the U.S.”[18] A major loophole was that it focused on individuals who have been damaged, “by failure of a garment manufacturer, jobber, contractor, or subcontractor to pay wages or benefits”; the acts of a retailer were exempt and that is how many companies were able to bypass the rule.[19] SB 62 states that all garment workers should earn an hourly wage, not less than applicable minimum wage, instead of what was in practice before, workers earning money for what each item of clothing they produce.[20] “A 2016 study by the UCLA Labor Center found that Southern California garment workers earned an average of $5.15 an hour, less than half the minimum wage at the time.”[21] The burden is now be shifted to brand guarantors, contractors, and garment manufacturers to show they did not violate wage laws.[22] 

This new law holds fashion brands legally responsible for the harm done for employees’ unpaid wages and for the manufacturing industry production in general. Garment worker working conditions in California are characterized as terrible. Tzul, a worker in California, described it by stating, “In the summer it’s like hell, and not to mention the steam from the iron is suffocating. It’s hard to describe how it is.”[23] Further, when COVID-19 was at its peak, the factory is full of workers who work in close quarters and cannot work from home. Not only does this law attempt to introduce more regulations on the fashion industry and hope to prevent excess production in manufacturing, but it helps workers’ rights and in recognizing humanity of the workers, “who helped build the fifth-largest economy of the world.”[24]

While not directed at the environmental impacts of the fashion industry, this legislation signals that the state of California is monitoring the industry and is willing to act to mitigate perceived harmful practices. This could foreshadow legislation similar to that recently enacted in France. 

 

State of New York 

            Assembly Bill A8352/S7428, Fashion Sustainability and Social Accountability Act (Fashion Act), was introduced in New York state on January 7, 2022. If passed by both the Senate and House, it “would require transparency of at least 50 percent of the goods sold from raw materials to shipping regarding their environmental impact.”[25] This would be the “first state in the country to pass legislation that will effectively hold the biggest brands in fashion to account for their role in climate change.”[26] The bill would require companies to disclose where they have the biggest social and environmental impact, make plans to reduce their environmental impact, and disclose their material production volumes.[27] Companies would have 12 months to comply with mapping the 50 percent of the goods sold, 18 months for impact disclosures and, if found to be in violation, would be fined up to 2 percent of their annual revenues.[28] These fines would go to a new Community Fund, used for environmental justice projects in New York, and the attorney general would publish an annual list of companies found to be noncompliant.[29] 

            This legislation reflects the first government regulation of the environmental impact of the fashion industry in the United States, and could serve as a model for other states to follow.

 

Assessment of Recent Regulatory Action  

California, New York, and France are major producers of clothing. A recent study assessing major national initiatives promoting sustainable fashion anticipates that the different bodies of legislation will have different results. New York State’s regulation is likely to have a large effect on waste treatment and use of secondary raw materials, and a moderate effect on reduction with the source (waste minimization), garment production, and garment design. [30] The California SB 62 bill is likely to have a large effect on garment production and is likely to have a moderate effect on reduction within the source (waste minimization).[31] The French law banning destruction of unsold clothing takes the tie for lead, likely to have large effect on waste treatment and reduction within the source (waste minimization) and likely to have a moderate effect on fashion consumption, garment design, and use of secondary raw materials.[32] Both the New York law and France’s law are likely to have a large effect on 2 out of 6 categories and are likely to have a moderate effect on 3 out of 6, with a total for both of moderate to large effects in 5/6 categories (California bill has a 2/6 moderate and large effect). 

 

Environmental Concerns and Ways to Help Make a Change

            Typically, the environmental impact of low-cost clothing is not felt at the location of purchase but the location of where the clothing is produced, buried, or incinerated.[33] 

            One way to make a change would be making the broad policy choice to impose a carbon tax on the industry. Conceptually, a carbon tax would be “specifically focused on the greenhouse gas emissions released into the air, establishing a direct connection between the tax and the damage to the environment.”[34] With respect to the fashion industry, such a policy would likely target, “the fashion corporations responsible for greenhouse gas emissions in their production process, rather than a tax applied directly on consumers, notwithstanding their carbon contribution.”[35] Such a policy would incentivize garment makers’ greater use of sustainable practices.

Consumers are the other half of the equation. A study by Sustainability noted that educational campaigns to reduce consumption, among various policy alternatives, are likely to the highest positive impact.[36] Once consumers are more educated on what shapes fashion waste, they are more likely to participate in campaigns such as the “pay up” campaign,[37] a successful consumer-driven campaign that was “created in response to the refusal of fashion corporations to pay textile factories for goods.”[38]  This refusal to pay occurred when the epidemic, COVID-19, hit Europe and the US. During this time is when fashion corporations chose to cancel pre-crisis orders, forcing “factories to incur 40 billion dollars in losses.”[39] “[T]hrough social media, many corporations have pledged to pay for orders…and returned to the factories a total of USD 27 billion.”[40]

Fashion regulation is in its infancy in the US, and, on a broader public level, fashion waste is an emerging environmental concern. For the most part, new laws are of relatively limited scope, applying only to certain companies. The New York bill, for instance, would apply to companies with at least “$100 million in sales annually to include luxury giants LVMH, Kering; American mass producers like PVH, fast-fashion behemoths H&M and Zara parent company Inditex and sports giants Nike and Puma.”[41]. The fashion industry lacks the targeted regulation of other industries with similar environmental footprints, such as chemicals manufacturing. While these two newer laws in the US and the ones in France are helpful, they are most remarkable for the fact that they reflect a new era of likely much larger legal landscape to manage the environmental impacts of the fashion industry, a landscape in which consumers are likely to play a significant role.

Claudia Gutierrez is a rising 3L from Harlingen, Texas. She attended the University of Texas at Rio Grande Valley and joined TELJ her first year of law school. She hopes to work in environmental law upon graduation and has been fascinated with environmental concerns about the sea level rise and increased temperatures in the RGV. Additionally, she will be interning with Save our Springs Alliance during the summer of 2022.

Amanda Halter is managing partner of the Houston office of the international law firm of Pillsbury Winthrop Shaw Pittman, a member of the firm’s Environmental & Natural Resources practice section and co-leader of the firm’s Crisis Management team. Amanda helps companies resolve environmental liabilities and negotiate compliance conditions, as well as manage financial and reputational losses associated with a crisis. Her experience includes a diverse array of environmental regulatory, litigation and crisis matters, including contamination investigations and remedial actions, natural resource damages assessments and claims, environment, health and safety compliance counseling, mass toxic tort actions, permitting and planning for large-scale industrial projects, and project impacts mitigation and restoration strategies. Amanda is a native of Houston, a graduate of Rice University and The University of Texas School of Law.

 

[1] Taylor Brydges, Closing the Loop on Take, Make, Waste: Investigating Circular Economy Practices in the Swedish Fashion Industry, J. of Cleaner Production, Feb. 2021, at 1.

[2] Id. 

[3] Rajkishore Nayak, Long Nguyen, Asis Patnaik, and Asimananda Khanadul, Fashion Waste Management Problem and Sustainability: A Developing Country Perspective, at 3-4 (2021).

[4] Id. at 6.

[5] Fashion Industry and its Negative Impacts on the Environment, ENVPK (June 26, 20201), https://www.envpk.com/fashion-industry-and-its-negative-impacts-on-the-environment/.   

[6] Metial Peleg Mizrachi and Alon Tal, Regulation for Promoting Sustainable, Fair and Circular Fashion sustainability 1 (Jan. 4, 2022). 

[7] Id. 

[8] Id. 

[9] Kim Willsher, Landmark French Law Will Stop Unsold Goods From Being Thrown Away, The Guardian (Jan. 30, 2020), https://www.theguardian.com/world/2020/jan/30/france-passes-landmark-law-to-stop-unsold-goods-being-thrown-away

[10] Id. 

[11]   A French Law Prohibits the Destruction of Unsold Goods, Now what? The Fashion Law, Feb. 11, 2022.

[12] Gregory Tulquois & Solène Albouy, France Introduces New Measures to Fight Waste – Significant Impact on Fashion Industry, DLA Piper (Dec. 17, 2021), https://www.dlapiper.com/en/uk/insights/publications/2021/12/law-a-la-mode-edition-

[13] Natalie Huet, France’s New Climate Law has Just Been Approved. So Why are Activists so Unimpressed? Euronews (Dec. 20, 2021), https://www.euronews.com/green/2021/07/20/france-s-new-climate-law-has-just-been-approved-so-why-are-activists-so-unimpressed.

[14] France Will Legislate to Require Clothing and Textiles to be Labeled with “Carbon Emission Score” (Apr. 6, 2021), https://www.sjfzxm.com/global/en/583056.html.

[15] Armelle Sandrin-Deforge Environmental Labels, Greenwashing, and Ecocide Tackled by France’s New Climate Law, Jones Day (Nov. 5, 2021), https://www.jdsupra.com/legalnews/environmental-labels-greenwashing-and-9579889/

[16] Id.

[17] Molly James, France Introduces One of the World’s First Greenwashing Laws, Communicate (Apr. 16, 2021), https://www.communicatemagazine.com/news/2021/france-introduces-one-of-the-world-s-first-greenwashing-laws/

[18] New California law Could Overhaul Abuse-Ridden Garment Manufacturing Sector, The Fashion Law (Sept. 29, 2021), https://www.thefashionlaw.com/california-passes-hourly-wage-mandate-in-a-movie-expected-to-overhaul-garment-manufacturing-sector/. 

[19] Id. 

[20] Id. 

[21] Suhauna Hussain Brittny, Wage Theft is a Problem for L.A. Garment Workers. A California Bill Aims to Fix it. Again, L.A. Times (Sept. 9, 2021), https://www.latimes.com/business/story/2021-09-03/sb-62-wage-theft-garment-industry-heads-to-vote.

[22] Id.

[23] Id. 

[24] New California law Could Overhaul Abuse-Ridden Garment Manufacturing Sector, The Fashion Law, Sept. 29, 2021 https://www.thefashionlaw.com/california-passes-hourly-wage-mandate-in-a-movie-expected-to-overhaul-garment-manufacturing-sector/.

[25] Roxanne Robinson, Fashion Industry Reacts to New York Sustainability Legislation That Could Upend Transparency Practices, Jan. 11, 2022 https://www.forbes.com/sites/roxannerobinson/2022/01/11/fashion-industry-reacts-to-new-york-sustainability-legislation-that-could-upend-transparency-practices. 

[26] Vanessa Friedman, New York Could Make History With a Fashion Sustainability Act, N.Y. Times, Jan. 7, 2022. https://www.nytimes.com/2022/01/07/style/new-york-fashion-sustainabilty-act.html. 

[27] Id. 

[28] Id.

[29] Id. 

[30] Mizrachi and Tal, supra note 6, at 9-10.

[31] Id. 

[32] Id.

[33] Id.

[34] Id. at 15.

[35] Id.

[36] Mizrachi and Tal, supra note 6, at 12-14.

[37] Id. at 23.

[38] Id. at 23.

[39] Id.

[40] Id. 

[41] Roxanne Robinson, Fashion Industry Reacts to New York Sustainability Legislation That Could Upend Transparency, Forbes (Jan. 11, 2022), https://www.forbes.com/sites/roxannerobinson/2022/01/11/fashion-industry-reacts-to-new-york-sustainability-legislation-that-could-upend-transparency-practices/?sh=65ba7ea239b3.

Vol. 52-1 Recent Publications

RECENT PUBLICATIONS

 

4°C

J.B. Ruhl* and Robin Kundis Craig

MINNESOTA LAW REVIEW VOLUME 106

May 2021

 

CLIMATE CHANGE POLICY—PRIORITIZING ADAPTATION

The impacts of climate change are upon us. Recent climate change policy discussion emphasizes adaptation, rather than mitigation. This shift reflects a sober recognition that avoiding 2 degrees (Celsius) of warming, a central goal of climate mitigation efforts, is highly unlikely given the amount of greenhouse gases already emitted and the continued growth of global emissions. Illustrating this point, the Intergovernmental Panel on Climate Change’s most recent (Sixth) Assessment concluded that under any scenario, whether or not global greenhouse gas emissions reach net negative, the global surface temperature will continue to increase until at least mid-century.  Global surface temperature will increase by at least 2 degrees Celsius during the 21st century unless deep reductions in greenhouse gas emissions occur within the next few decades.

While reducing greenhouse gases remains critical to staving off the worst effects of climate change, awareness that a changing climate is our present and future has given rise to more discussion and study of how to best adapt to the impacts of climate change and build climate resilience. Growing evidence, including the recently published IPCC report, show the range of disruptive impacts that varying levels of global temperature rise will bring.  IPCC data indicates that changes in the climate system become larger in direct relation to increasing global warming, including “increases in the frequency and intensity of hot extremes, marine heatwaves, heavy precipitation, agricultural and ecological droughts in some regions, and proportion of intense tropical cyclones, as well as reductions in Arctic sea ice, snow cover and permafrost.”

META ADAPTATION POLICY—BASELINE ASSUMPTIONS

The key issue of adaptation policy is how to best adapt to a changing climate. The answer to this question depends on determining the baseline assumptions of the scale and severity of climate impacts. This is why meta discussion of the proper adaptation response largely centers on the expected global temperature increase and the local or regional impacts that this temperature increase will bring. Obviously, the climate adaptation measures for 2 degrees of warming will be inadequate if the planet warms by 4 degrees. This concern for basing adaptation measures on inaccurate future temperature rises informs the recently published article, 4°C , written by J.B. Ruhl and Robin Kundis Craig.  Ruhl and Craig caution that adaptation measures based on the goal of limiting warming to 2 degrees are unworkable given that most peer-reviewed climate models now show that 2 degrees of warming will likely be exceeded this century.  While Ruhl and Craig still advocate for a mitigation strategy focused on limiting warming to 2 degrees, they urge policymakers to separately shape their adaptation policy plans based on 4 degrees of warming, at a minimum.  They call this  “dual-minded approach to climate change . . . necessary to simultaneously give the planet the best future possible (mitigation governance) while preparing humanity for the worst of the probable realities (adaptation governance).”

Ruhl and Craig pull together scientific studies to examine what a world of 4 degrees warming may look like. First, Ruhl and Craig note that the impacts of climate change with rising temperatures are nonlinear. By this, they mean that each increment of warming brings multiplying and accelerating impacts, and at some threshold, changes these changes become transformative—“fundamentally altering social-ecological systems into new states of being.”  To illustrate the nonlinearity of climate impacts as the planet warms, the authors cite a 2019 study that looked at 30 different climate change impacts and concluded, among other things, that “the global average chance of a major heat wave increases from 5% in 1981–2010 to 28% at 1.5 °C and 92% at 4°C[.]”

Drawing from studies of climate impacts, Ruhl and Craig suggest that the overlapping and interrelated changes to social-ecological systems at 4 degrees Celsius will result in an utterly new world. Water scarcity, food supply disruptions, increased flooding, loss of land mass to sea level rise, and longer and more intense wildfires are predictable impacts, but the uncertain severity and cascading effects raise added adaptation planning concerns. Increases in forest fires and even drought in low-lying coastal areas will result in the virtually assured mass-migration of human populations. Beyond this, water scarcity could lead to social conflict, meanwhile increased precipitation in areas would result in greater runoff that could overwhelm stormwater infrastructure and wastewater treatment facilities.

While severe impacts of climate change are assured with rising average temperatures, the scale and severity of these impacts and the corresponding human reaction to such effects makes climate adaptation inherently difficult. However, as Ruhl and Craig argue, this makes the need for more robust adaptation measures all the more imperative. In short, the policy goals of adaptation must meet the needs of what would be a significant shift of human populations and their support systems “northward and inward, while simultaneously preserving (or opening up) lands for agriculture, species habitat, and migration corridors.”

TRADITIONAL ADAPTATION APPROACH—THREE RS: RESISTANCE, RESILIENCE, RETREAT

The main thrust of Ruhl and Craig’s argument is that a shift in adaptation policy assumptions, commensurate with an expected 4 degrees of warming, will necessitate a shift in conventional climate adaptation policies.  Standard adaptation policy centers on a combination of the “Three Rs” — resistance, resilience, and retreat.  Ruhl and Craig note that this adaptation strategy, which primarily emphasizes resistance and resilience, is incremental and place-based adaptation.

Resistance—also known as protecting, defending, or fortifying—emphasizes building infrastructure to protect human communities.  Sea walls, which physicall resist stormwater surges amid rising sea levels, are a prominent resistance measure,. Resilience includes “social-ecological systems” that build resilience to climate change impacts like heat waves, like improving urban populations’ capacity to withstand heat waves.

Resilience policies, focused on adjustment and management of climate impacts, are designed to increase community capacity to cope with climate impacts where the impacts cannot be resisted or adequately mitigated.  Resilience measures can be wide-ranging. For example, resilience could include subsidizing greater air conditioning installation in older urban housing or, in rural, agrarian context, planting diverse, drought-resistant, crops.

Finally, where resistance or resilience efforts are not adequate, retreat involves leaving areas where the impacts cannot be combatted—think coastal communities leaving areas where sea level rise is unavoidable despite sea walls.  Or even where sea walls stop storm surge, the saltwater may intrude groundwater, impairing the drinking water supply of the community.

After surveying the science of the potential impacts of climate change in a world of 4-degree temperature increase, the authors state that the scope and intensity of these impacts will render the “Three Rs” insufficient to achieve adaptation.  Ruhl and Craig identify the relatively adjunct, secondary focus on adaptation to the primary concern of mitigation facilitated by the emphasis placed on incremental, “in situ” (in place) adaptation strategies like resilience and resistance. This climate policy of the past made sense when the political community hoped that limiting warming to 2 degrees, or even 1.5 degrees, seemed a workable mitigation goal. In light of an increased likelihood that warming will not be limited to 2 degrees, “future proofing” policies will likely be insufficient in many areas of high climate vulnerability.

ADAPTATION FOR 4 DEGREES OF WARMING: REDESIGN

Ruhl and Craig posit that the associated climate impacts of temperature rise beyond 2 degrees Celsius requires a fourth climate change adaptation policy strategy that focuses on “redesign.”  In short, the “redesign” approach emphasizes radical and sweeping measures to “reconfigure and relocate our nation’s population distribution, land uses, infrastructure, economic and production networks, natural resource management, and other social, ecological, and technological systems.”

This is a radical shift in adaptation policy, and the authors further define what a “redesign” policy is. First, they say it encompasses letting go of intact, in situ adaptation. This is a recognition that 4 degrees of warming will fundamentally alter climate systems and will often require populations to move. For example, while resistance and resilience strategies allow for keeping agriculture in situ but adapting drought-resistant crops or water-conserving irrigation techniques, redesign would likely mean relocating agricultural crop and livestock lands to areas more suitable for these activities in a transformed climate of 4 degree warming. The authors say that “redesign is about designing and facilitating–perhaps even requiring–the relocations and reconfigurations necessary for these adaptations to succeed.”

Second, and, as the authors suggest, more importantly, redesign requires a shift from the “inward-looking” state and local planning of the Three Rs to more “outward-looking,” inter-regional or national planning. This is because 4 degrees of warming will have differential regional impacts that will lead to population migration and require broad-scale planning to manage the acute regional risks that will undoubtedly impact other areas. This “outward-looking” planning allows for a more integrated response rather than disjointed, locally-dependent measures that are often characteristic of resistance and resilience policies.

    Recognizing the incredible challenge of actualizing an adaptation plan of this magnitude, Ruhl and Craig focus the last section of their article on how to conceptualize, plan, and implement redesign adaptation. In summary, the main discussion centers on implementation of redesign adaptation by looking at the high-level tools available to effectuate this broad-scale adaptation policy.

THE IMPLEMENTATION TOOLBOX: LAISSEZ FAIRE, PLANNING AND PROMPTING, AND PREEMPTION AND MANDATES

In the last section of their article, Ruhl and Craig pay special attention to how an adaptation strategy centering redesign policies can be planned and implemented. While recognizing the “gross simplification” of “reducing adaptation governance to three top-level modes,” Ruhl and Craig discuss and analyze Laissez Faire, Planning and Prompting, and Preemption and Mandates as the high-level tools for implementing a redesign adaptation policy. The authors note that all of these tools have their pros and cons and should be harnessed together to varying degrees to effectuate redesign adaptation policies that meet the challenges of 4 degrees of warming.

In fact, the authors suggest that the greatest challenge to governance of adaptation redesign is the disruptive and simultaneous changes that temperature increase will involve.  They specifically mention that some impacts, such as sea level rise, will be gradual and linear. These changes are easier to plan for in an adaptation context. But nonlinear changes, such as increased storm intensity, and cascading changes, such as human migration from triggering events, will assuredly be less predictable and difficult to respond to without prior anticipatory planning.  Therefore, all of the tools for implementing a comprehensive adaptation strategy must be harnessed.

Regarding laissez faire tools, the author’s note that “the normal forces of supply and demand may in fact work surprisingly well to push and pull adaptation to a 4°C United States in the right directions.”  They exemplify this by noting that the private insurance industry has been a good indicator of weighing the financial costs and benefits of in situ climate adaptation.  Planning and prodding involve using incentives and disincentives, such as tax subsidies, to motivate redesign adaptation.  Preemption and mandates are the most heavy-handed approach whereby government mandates would intervene to force redesign adaptation.

In looking at the tools, laissez faire is helpful in responding to linear change, but limited when responding to nonlinear changes that tend to be unpredictable. The private market relies on information and predictability, something that 4-degrees of warming will not foster. The article highlights the way that private insurance companies stopped insuring homes in areas vulnerable to Hurricanes and storm surges in the Gulf or wildfires in the West. Similarly, private insurance companies have given up insuring areas of high flood risk. Meanwhile, planning/prodding and preemption/mandates are necessary and effective when used in tandem to ensure that redesign adaptation policies are being adequately implemented in the areas most vulnerable to severe climate impacts. These are the tools most critical to planning for nonlinear and cascading change.

In essence, the article does not delve into overly specific or prescriptive laws to effectuate a redesign adaptation policy. Instead, the authors categorize the modes of change (linear, nonlinear, and cascade change) that 4 degrees of warming will bring on and the governance tools available to implement a redesign adaptation plan. In doing so, Ruhl and Craig provide a high-level conceptual framework for how to utilize these tools to implement redesign-focused adaptation plans that prepare for the massively complex and urgent changes that a world of 4-degrees of warming will likely bring.

 

Liam Veazey is a 3L from Dallas, Texas, who received his undergraduate degree from St. Francis College Brooklyn. He plans to practice as a public interest attorney in the substantive areas of environmental justice, housing, and community development. Immediately after law school, he will begin a public interest law fellowship at Legal Assistance of Western New York.

Josh Katz is a partner at Bickerstaff Heath Delgado Acosta LLP and represents public and private entities before agencies and in state and federal court in the areas of environmental law, municipal law, water rights, and utilities.

 

Vol. 52-1 Utilities

Utilities

 

Introduction

In February 2021, winter storm Uri swept from the Pacific Northwest to the East Coast, leaving many in southern states without basic resources like electricity and water.[1] Texas was especially hard-hit, due in part to its lack of winter-weather-capable infrastructure.[2] Two hundred and ten residents died as a result of the storm, due mostly to hypothermia.[3] Millions more lost power for multiple days.[4] Even at the disaster’s beginning, it was immediately clear to electric grid operators within the Energy Reliability Council of Texas (ERCOT) that electricity generation was failing and would be unable to meet soaring demand.[5] Operators ordered distribution companies to shed load, leading to controlled outages[6] that left almost 70% of ERCOT customers without power for an average of 42 hours during the storm.[7]

When state legislators reconvened after the storm, they clamored to pass a torrent of legislation in response to the spectacular failure of Texas’ primary electric grid. Many state politicians blamed renewable sources of energy for the grid’s failure, with a conservative news correspondent even claiming “it seems pretty clear that a reckless reliance on windmills is the cause of this disaster.”[8] Contrary to these claims, however, failures throughout the natural gas supply and generation chain were mostly to blame for the failure in electricity generation.[9] Despite this fact, the legislative response to the grid’s performance during the winter storm keeps one eye pointed toward renewable sources of energy and opens the door to financially penalizing these sources through rulemaking, while neglecting to remediate the issues that resulted in the failure of natural gas facilities and related supply issues. 

 

Renewables’ Performance During the Storm

            At the peak of the blackouts, the highest amount of unavailable electricity due to generator outages and underperformance was 52,037 megawatts (MW).[10] For comparison, ERCOT has an expected total peak capacity of about 78,000 MW,[11] meaning that during the worst part of the storm, only 33% of the grid capacity was available for use. While all sources of energy failed to some extent during the storm, ERCOT notes that thermal sources—including coal, natural gas, and nuclear—lost nearly twice as many gigawatts of power as renewables.[12] ERCOT had previously prepared a worst-case extreme winter scenario, in which it expected to lose 14,000 MW of thermal resources.[13] In reality, thermal outages were more than twice that high during Uri[14], while demand was also 10,000 MW higher than projected.[15] Meanwhile, renewable energy sources contributed to only 13% of the power outages[16] and, importantly, wind power had only been projected to make up about 7% of ERCOT’s winter grid capacity to begin with.[17] In a post-storm report, an independent director of the ERCOT board stated that “relative to expectations, renewables overperformed, and thermal plants underperformed during the crisis.”[18]

            The across-the-board failures of the grid were due to a lack of winterization, as all types of power generation were left susceptible to freezing.[19] The federal government had previously warned ERCOT about its lack of weatherization after significant blackouts on Super Bowl Sunday in 2011.[20] An analysis from federal agencies after the 2011 blackouts advised power producers and natural gas suppliers in Texas to winterize in order to prevent future weather-related blackouts.[21] Additionally, the report pointed out a regulatory blind spot that left grid operators not knowing what facilities to prioritize when shedding load.[22] Power operators and gas suppliers had the option to file paperwork designating themselves as critical infrastructure, yet many had failed to file the 2-page document.[23] Although the 2011 report urged Texas regulators to correct these problems, power producers and natural gas suppliers were both repeat offenders during winter storm Uri.[24]  Clearly, the state’s response to such warnings has been inadequate. Power companies have complained that low electricity prices provide no incentive to make such improvements, but new laws may finally push generators to make changes.[25] 

 

Legislative Response

            New law SB 3 stands out from a flurry of new legislation as the most significant bill impacting suppliers of renewable energy. This bill deals with ancillary services, which are additional power resources beyond those needed to meet real-time customer demand that act as insurance in case of an unexpected interruption to the grid. It is imperative that there is at least enough electricity supply to match demand at all times—if demand exceeds supply and causes the frequency of the grid to drop outside its operating range, it can cause physical damage to infrastructure and lead to a complete failure of the grid for weeks.[26] Ancillary services are an important counterpart to nondispatchable sources of energy, or sources that cannot be turned on and off at will. Because wind and solar generation are nondispatchable and variable by nature, ERCOT purchases ancillary services as a back-up in case they fail to generate as much power as expected.[27] Currently, the cost of ancillary services are distributed among consumers,[28] but SB 3, which became effective immediately upon signing on June 8, now shifts at least some of the burden to renewable energy providers.[29] 

            SB 3 amends the Texas Public Utility Regulatory Act (PURA) to require the Public Utility Commission of Texas (PUC) to determine whether existing ancillary services continue to meet the needs of the ERCOT market by reviewing existing services and their costs.[30] This amendment also requires ERCOT to modify the design, procurement, and cost allocation of ancillary services “in a manner consistent with cost-causation principles and on a non-discriminatory basis.”[31] Although this cost allocation appears sound, agencies promulgating such cost-causation principles will face challenges in defining them due to the highly variable nature of consumer demand and the intermittency of non-dispatchable wind and solar generation.[32] New rulemakings could shift the relative allocation of costs of ancillary services either to renewables or across multiple categories of generation, but ultimately the final cost decisions are placed on the regulators defining cost-causation principles.[33]

            The bill also requires the PUC to oversee ERCOT in determining the amount and type of ancillary services needed to ensure reliability during extreme heat or cold events and when intermittent sources of generation like wind and solar are low.[34] This review must be conducted at least annually.[35] ERCOT must procure such ancillary services on a competitive basis and ensure that they are dispatchable, reliable, and capable of continuous use during extreme weather in the season for which the service is procured.[36]

            Lastly, SB 3 requires the PUC to promulgate rules requiring most electricity generation providers to implement weatherization measures.[37] Furthermore, providers of generation that experience “repeated or major weather-related forced interruptions of service” must contract with third-parties to assess their weatherization efforts and must comply with any recommendations in such assessment if ordered to do so by the PUC.[38] This provision will impact both renewable and thermal generators.

            As a separate matter, SB 1281 requires ERCOT to assess the grid’s reliability in possible extreme weather scenarios every other year. These assessments will consider the impacts of both thermal and renewable generation and recommend transmission projects that will increase the reliability of the grid.[39] 

Proposed Railroad Commission (RRC) rulemakings stemming from recent legislation would require facilities all along the natural gas supply chain to file critical infrastructure paperwork or else face a penalty of $2,500.[40] This rule differs from the previous system, under which facilities that wished to be designated as critical were merely encouraged to submit such paperwork on their own initiative.[41] While affected operators would now be required to file critical infrastructure paperwork, they would retain the option to either designate themselves as critical or simply pay $150 and declare they are opting out of the designation if they are not equipped to operate during a weather emergency.[42] Facing the costs of weatherization to ensure operability in weather emergencies, it may be more economical for some facilities along the natural gas supply chain to opt out of the critical designation and allow themselves to be shed during power shortages.  

 

Problem Solved?

            The mere fact of legislative focus on ancillary services seems to imply that ERCOT’s current level of reliance on non-dispatchable sources like wind and solar is what caused the massive outages during winter storm Uri. In light of this political framing, agencies may choose to allocate a high proportion of ancillary service costs to renewable generators, potentially impacting the growth of the renewable market and in turn limiting the amount of renewable generation the grid relies on. The implication that even low reliance on renewables leads to outages is contrary to the truth that renewable sources overperformed during Uri as compared to expectations while thermal sources drastically underperformed even worst-case scenario projections. 

Because a lack of weatherization is to blame for the gross underperformance of all types of generation during Uri, procuring additional ancillary services is likely not enough to prevent future outages. Even with more such services waiting in the wings, they will not serve their purpose as reliable safeguards if they are not properly weatherized. Priority should be placed on building the resiliency of primary sources of generation rather than on procuring a greater number of equally vulnerable sources. The natural gas supply and generation chain is in most urgent need of weatherization as it makes up the majority of ERCOT’s electricity mix and has proven to be susceptible to extreme cold. While renewable sources also need weatherization, spotlighting them in the conversation distracts from the pressing need to weatherize the thermal sources that provide most of Texas’ electricity. 

Pending rulemakings will determine the extent to which generators will be required to weatherize beyond what market forces acting alone have called for. Proposed rules from the RRC would allow natural gas suppliers to sidestep weatherization by simply opting out of a critical infrastructure designation. The RRC has long been criticized for its intimate ties to the oil and gas industry; recently, the Commission used a list of nominees hand-selected by industry leaders to appoint 4 of its 5 seats to the Texas Energy Reliability Council.[43] It is perhaps then unsurprising that rules proposed thus far by the RRC do little to impose greater regulation or mandate weatherization. 

Only time will tell whether new rules’ resiliency standards combined with ERCOT’s biannual projections of extreme weather events will be adequate to prepare grid operators to manage the next major storm or draught. In analyzing why engineers made bad decisions that led to the Challenger explosion, Astronaut Alan Sheppard said “it’s the human element. I suggest that there’s a complacency there that comes from success.”[44] Perhaps Uri was a wake-up call to Texas’ comfortably complacent energy market. The next storm will reveal whether this session’s slate of legislation answered it sufficiently. 

 

Alessandra Papa is a 2L studying energy and environmental law. As TELJ’s Symposium Director, she produced the 2022 Symposium on Legal System Changes to Address Climate Change and the Energy Transition in conjunction with the Texas Bar’s ENRLS. She has also been selected to serve as Editor-in-Chief of Volume 53. Alessandra grew up in Fort Worth, Texas and received a B.S. in Geography from Texas A&M. Her background in geoscience informs her legal studies and she looks forward to a career advocating for renewable energy.

 

Alisha Mehta is an attorney in the Environmental and Legislative section of Jackson Walker’s Austin office. She focuses on permitting and water matters, including real estate developers and special utility districts and counsels clients on transactional and regulatory issues before the Public Utility Commission of Texas.

 

[1] Theresa Machemer, How Winter Storm Uri Impacted the United States, Smithsonian Magazine: Smart News (Feb. 19, 2021), https://www.smithsonianmag.com/smart-news/how-winter-storm-uri-has-impacted-us-180977055/.

[2] Id. 

[3] Tex. Dep’t of State Health Servs., Winter Storm-Related Deaths – July 13, 2021, Tex. Dep’t Health & Human Services: News Updates (Oct. 29, 2021), https://dshs.texas.gov/news/updates.shtm#wn.

[4] Machemer, supra note 1.

[5] Peter Cramton, Lessons From the 2021 Texas Electricity Crisis, Peter Cramton: Papers 2 (Sept. 6, 2021), http://www.cramton.umd.edu/papers2020-2024/cramton-lessons-from-the-2021-texas-electricity-crisis.pdf 

[6] Id.

[7] Neelam Bohra, Almost 70% of ERCOT Customers Lost Power During Winter Storm, Study Finds, The Tex. Trib.: Winter Storm 2021 (Mar. 29, 2021), https://www.texastribune.org/2021/03/29/texas-power-outage-ERCOT/.

[8] Aaron Rupar, Fox News Turns Winter Storm Uri Into a Cudgel to Own the Libs, Vox (Feb. 17, 2021, 3:25 PM EST), https://www.vox.com/2021/2/17/22287469/fox-news-winter-storm-uri-windmills-ercot-greg-abbott-hannity-carlson (quoting Tucker Carlson).

[9] Cramton, supra note 5, at 1.

[10] ERCOT, Update to April 6, 2021 Preliminary Report on Causes of Generator Outages and Derates During the February 2021 Extreme Cold Weather Event, Ercot Public 8 (Apr. 27, 2021), http://www.ercot.com/content/wcm /lists/226521/ERCOT_Winter_Storm_Generator_Outages_By_Cause_Updated_Report_4.27.21.pdf 

[11] ERCOT, Quick Facts, ERCOT 1 (Feb. 2018) http://www.ercot.com/content/wcm/lists/144926/ERCOT_Quick_ Facts_2518.pdf 

[12] Katie Shepherd, Rick Perry Says Texans Would Accept Even Longer Power Outages ‘To Keep the Federal Government Out of Their Business’, The Wash. Post (Feb. 18, 2021, 2:09 AM EST), https://www.washingtonpost.com/nation/2021/02/17/texas-abbott-wind-turbines-outages/.

[13] Cramton, supra note 5, at 1.

[14] Id. at 2.

[15] Cramton, supra note 5, at 8. 

[16] Shepherd, supra note 12.

[17] Dionne Searcey, No, Wind Farms Aren’t the Main Cause of the Texas Blackouts, The N.Y. Times (May 3, 2021), https://www.nytimes.com/2021/02/17/climate/texas-blackouts-disinformation.html.

[18] Cramton, supra note 5, at 8. 

[19] Id. at 18.

[20] James Osborne Et Al., Texas Grid Fails to Weatherize, Repeats Mistake Feds Cited 10 Years Ago, Houston Chronicle (Feb. 17, 2021, 2:25 PM), https://www.houstonchronicle.com/business/energy/article/Texas-grid-again-faces-scrutiny-over-cold-15955392.php.

[21] Jeffrey Ball, The Texas Blackout Is the Story of a Disaster Foretold, Texas Monthly (Feb. 9, 2021), https://www.texasmonthly.com/news-politics/texas-blackout-preventable/.

[22] Jay Root, Et Al., This Simple Paperwork Blunder Left Texans Cold During the Deadly Freeze, Houston Chronicle (Mar 18, 2021, 1:31 PM), https://www.houstonchronicle.com/politics/texas/article/Simple-paperwork-blunder-Texans-cold-winter-storm-16032163.php 

[23] Id.

[24]Neena Satija & Aaron Gregg, Ten Years Ago, 241 Texas Power Plants Couldn’t Take the Cold. Dozens of them Failed Again This Year., The Wash. Post (Mar 6, 2021, 9:55 AM),  https://www.washingtonpost.com/nation/ 2021/03/06/texas-power-plants/ 

[25] Osborn, supra note 20. 

[26] Matt Largey, Texas’ Power Grid Was 4 Minutes and 37 Seconds Away from Collapsing. Here’s How it Happened., KUT Austin (Feb. 24, 2021, 3:09 PM CST), https://www.kut.org/energy-environment/2021-02-24/texas-power-grid-was-4-minutes-and-37-seconds-away-from-collapsing-heres-how-it-happened.

[27] S. Res. Ctr., Bill Analysis, Tex. S. 87(R)-87R8893 JXC-F (Tex. 2021), https://capitol.texas.gov/tlodocs/87R/analysis/html/SB01278I.htm. 

[28] Id. 

[29] Shawn Mulcahy & Erin Douglas, Sweeping Legislation to Overhaul State’s Electricity Market in Response to Winter Storm Heads to Texas House After Senate’s Unanimous Approval, The Tex. Trib.: Tex. Legislature 2021 (Mar. 29, 2021, 7:00 PM CST), https://www.texastribune.org/2021/03/29/texas-senate-electricity-power/.

[30] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0

[31] Id. 

[32] Herman K. Trabish, ‘A Terrible Idea’: Texas Legislators Fight Over Renewables’ Role in Power Crisis, Aiming to Avert a Repeat, Utility Dive: Deep Dive (May 17, 2021), https://www.utilitydive.com/news/a-terrible-idea-fight-over-renewables-role-in-texas-february-power-cri/599842/.

[33] Id. 

[34] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0

[35] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0 (amending Utility Code § 39.159(b)(2)). )

[36] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0 (amending Utility Code §§ 39.159(b)(3) and 39.159(c)(1)). SB 3, amends utility code § 39.159 (b)(3) and (c)(1)

[37] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0 (amending Utility Code § 35.0021(b))

[38] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0 (amending Utility Code § 35.0021(d-e))

[39] S.B. 3, 87 Leg. (Tx. 2021), https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB01281F.pdf#navpanes=0 

[40] Texas Proposed Gas Regulations for Critical Infrastructure, RCP (Oct. 2021), https://rcp.com/texas-proposed-gas-regulations-for-critical-infrastructure/ 

[41] Root, supra note 22.

[42] Texas Proposed Gas Regulations for Critical Infrastructure, RCP (Oct. 2021), https://rcp.com/texas-proposed-gas-regulations-for-critical-infrastructure/

[43] Erin Douglas, Oil Industry Helped Handpick Members of Texas Advisory Group for Electric Grid Reliability, Emails Show,  The Tex. Trib. (Oct. 21, 2021, 4:00 AM), https://www.texastribune.org/2021/10/21/texas-railroad-commission-power-grid-council/ 

[44] Osborne, supra note 20.

Vol. 52-1 Waste

Waste

 

Natural Resource Damages: Grasping at the Value of Nature

 

How much money is a river worth? Some would find such a question laughable.  In conceptualizing the issue, at first, seemingly countless factors flow forth like a tidal wave. One must account for the organisms and people dependent on the river, its impact on surrounding ecosystems, recreational value, even sentimentality and hopes to pass on the resource to the next generation; and how does one even go about quantifying those values in the first place. Arriving at a real answer seems hopeless. If this impractical question were truly hypothetical, perhaps laughing would be the correct reaction; however, the legal concept and statutory claim of Natural Resource Damages (NRDs) forces such conceptual impracticality into the practical world of litigation, where the stakes involve real injured resources and shrinking pocketbooks. 

This article analyzes the framework of the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, NRDs and four of the leading methodologies used to assess them, to examine the philosophies and preferences underlying the valuation of natural resources in this context. The first part of the article explains, in basic terms, the framework of CERCLA’s NRDs and the tripartite conception of natural resource value. The second part analyzes four of the leading methodologies used under CERCLA to assess NRDs and how they attempt to account for each type of value of an injured natural resource. The third part makes observations about the current system of assessing NRDs and what the system reveals about the law’s conception of nature.

The CERCLA NRD Framework and the Three Values of Natural Resources

            Under CERCLA, otherwise known as Superfund, parties responsible for a release or threatened release of contaminants resulting in damage to natural resources within the public trust are responsible for compensating the public for the restoration of injured resources and the provision of services following cleanup.[1] Following remediation of hazardous substances at a given site, NRDs go into effect if there is “injury to, destruction of, or loss of natural resources” within the public trust.[2] Natural resources are defined as “land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by” a state, local, or foreign government, the United States, or an Indian tribe.”[3] These entities are known as trustees, and they are charged with assessing injury to natural resources and restoring injured natural resources or services lost due to a release or threat of release.[4] Under CERCLA, the trustees may recover NRDs from potentially responsible parties (PRPs) through of suit or negotiation.[5] Before recovery, the trustees must perform a natural resource damage assessment (NRDA) in order to quantify the injury and damages, i.e., the cost of to restore the injured resources or the services they provided.[6] 

            The standard conception of natural resource value    includes three general types: use value, existence value, and intrinsic value.[7] Use value refers to the value that humans derive from the natural resource by using it for practical ends such as hunting and fishing, or the ecological services provided by the resources such as service in the food web.[8] Existence value is the value that resources have to humans aside from use, such as the desire to pass on the resources to future generations.[9] It encompasses the general idea that there are reasons why humans would want natural resources to exist even if they knew they would never directly interact with them.[10] Intrinsic value is the value that the resources have completely apart from humanity[11]. This is the idea that nature has a value in itself, just by virtue of being alive or otherwise part of the natural world.[12]

            Each type covers its own portion of the natural resource’s value and has its own strengths and weaknesses in application. Use value is perhaps the most straightforward, as judging how much a resource is used is at least quantifiable in theory. Still, it can be difficult to assign specific values to such use.[13] On the other hand, existence value is, even conceptually, very difficult both to quantify and value accurately. Most agree that nature they will never see is still valuable.[14] Perhaps they would like to keep the option to travelling there open, even if they never do, or to bequeath the natural resources they will never experience to a future generation. However, any monetary value placed on these desires will be speculative.[15] 

Lastly, intrinsic value is difficult in concept and near-impossible in application.[16] There is not even widespread acceptance of the concept, much less inclusion within a valuation methodology.[17] Intrinsic value is different from the other two in that it is the only one that is non-anthropocentric. It may seem attractive to recognize moral rights in nature to those who care for the environment, but the application of such rights in resource valuation is far from practical. It is not unheard of for the law to consider intrinsic value; such a principle is accounted for in the Endangered Species Act, for example.[18] However, it is much easier to assign value to an obscure endangered animal than it is to assign a specific monetary value to it. In fact, monetary value seems essentially antithetical to the idea of intrinsic value, as it can only quantify how valuable something is to the person spending it. Thus, while each type of value is represented in varying ways in assessing natural resource damages, intrinsic value only gets incidental representation, if at all, for this reason.

The Department of the Interior has promulgated regulations for conducing NRD assessments.[19] If a trustee complies with the Department of the Interior (DOI) Regulations, it is entitled to a rebuttable presumption in its favor in any administrative or judicial proceeding.[20] Though following the regulations is not mandatory, the benefit of the presumption makes the regulations a worthwhile starting point for examining the typical NRDA methodology. The DOI Regulations focus on use value, but there is an opportunity to include non-use values, which encompass existence values but not intrinsic value.[21] The regulations provide for a default methodology and an allowance for alternative methods in the event that a standard method is not appropriate.[22] 

Four Principal CERCLA Methodologies

The default restoration methodology in the DOI Regulations involves replacing the natural resources themselves to reach an equivalent level of natural resource services. The philosophy behind the default restoration methodology is elegantly practical: avoid the problem of valuing natural resources in dollars by assessing restoration costs. For example, instead of valuing injured wetlands, restoration methodology looks at the cost to restore or replace the same wetlands. Under the DOI Regulations, damages for restoration includes the cost necessary to restore the natural resources to the point where they can provide the level of services they provided before the injury or the acquisition new resources that provide the same services.[23] Thus, a monetary value is reached by simply assessing the cost of restoring what was originally there. This method is generally known as “service-to-service scaling.”[24] To be sure, restoring or replacing natural resource services is neither simple nor exact in practice.[25] Restoring natural resources involves inherent and intricate considerations concerning homeostasis and environmental interconnectivity.[26] Furthermore, the baseline that NRDs seek to restore is a naturally dynamic level, which makes the objective a moving target. In theory, however, it is as exact as possible, as it accounts, in definite terms, for a return of precisely what was lost, whether or not such a promise is possible. 

Thus, if the method was exacted perfectly, it would, theoretically, account for the use and existence values, while also incidentally serving intrinsic value to some extent. With the resource’s services restored to their same level before the release of some harmful waste, the use may continue as would normally occur. Similarly, the resource will exist as it did before, so existence value is accounted for. Intrinsic value, however, encounters two issues. Firstly, in cases where replacement is utilized, those who view all life and natural resources as non-fungible might not be satisfied. They might view the practice of replacing natural resources as on par with a parent replacing their child’s dead goldfish with another from the pet store. Even if a supposed equivalent is acquired, it will never truly be the same again. Also, some might be wary of heavy human intervention into complex and interconnected ecosystems, taking the view that once humans have impacted an ecosystem, such damage cannot simply be undone by more human intervention.[27] Therefore, service-to-service scaling, even in theory alone, is not the perfect encapsulation of every value of natural resources; however, it certainly comes the closest of the leading valuation methods.

Service-to-service restoration, though, will not always be the correct solution in every case due to excessive complexity or cost. Thus, the authorized official acting on behalf of the trustee is required to develop a reasonable number of possible valuation alternatives that meet the same need of restoring or replacing the natural resource’s services or acquiring equivalent natural resources.[28] Trustees are free to develop their alternative methods as long as they meet certain factors set out by the DOI.[29] After service-to-service scaling, the three most prominent methodologies are (1) market valuation, (2) behavioral use valuation, and (3) contingent valuation.[30] Such methods are not mutually exclusive, as long as values are not double counted, so trustees are free to carefully combine different methodologies to account for different values.[31] These approaches, however, are primarily monetary, and as such, they begin to extend into abstraction. In departing from the theoretical precision of service-to-service scaling, these methods struggle much more in accurately accounting for each value of the natural resources.

Market valuation is based on an assessment of what the resources would be worth on the free market.[32] In some instances, the court may consult a price list; for example, when valuing certain species of fish, prices can be acquired from commercial hatcheries.[33] Alternatively, courts may account for lost property value.[34] This method is attractive for the practicality of its implementation, as ascertaining market values is simple to execute. It is not always a workable framework, nor is it guaranteed to be inclusive of all the resource’s value, but it provides definite numbers, which are easy to apply. 

Under market valuation, use value would generally be accounted for as long as the payout is put to use in restoring the resource’s services and making them available for use. It is meant to be a metric by which to gauge use in terms of consumption, and it undoubtedly accomplishes this narrow task efficiently, whether or not it does so accurately. Existence value is  generally not reflected. It could theoretically be accounted for insofar as the market reflects willingness to pay for the resource’s value to consumers apart from direct use. Common sense dictates, though, that prices from fish hatcheries or land valuation are surely based on use value, with very little, if any, existence value being accounted for. People are willing to pay for land or fish because they have value insofar as they can come to be owned by them. Thus, a desire to obtain would be more appropriately associated with use value.

Furthermore, intrinsic value, even if it were provided for under the DOI Regulations, could not be included within market value in any meaningful way. A methodology hinging on supply and demand generally would not incorporate intrinsic values, as consumer willingness to spend is often considered to have its foundation in its value to the consumer. Oliver Putnam, who published Sundry Topics of Political Economy in 1834 wrote, “things may possess utility, but unless they are objects of exchange, they have no value.”[35]  If value to the consumer is the only metric, then non-anthropocentric intrinsic value cannot be included. It seems generally unlikely, for example, that consumers would willingly pay more for fish from a hatchery with the thought in their mind that they are somehow better honoring those fishes’ intrinsic value by paying a higher price. Returning to the goldfish analogy, to the proponent of the intrinsic value of natural resources, using market value would be akin to handing the grieving child a $10 bill, the going rate for goldfish at the pet store. Though practical where possible, market valuation can seem rather cold in the way it systematically focuses only on a very basic conception use value.

Behavioral use valuation is similarly focused on use but is based on actual use by people. It is held up as one of the best ways to judge demand for use value.[36] A common form of behavioral use valuation is the estimated costs of what visitors would have spent to use the resource, which is known as “travel cost valuation.”[37] The strength of this method is that it can rely on verifiable behavior in the standard use of the natural resource, but as a result, it only takes into account the resource’s use value.[38] Furthermore, even the use value can be inaccurate, as costs such as travel time are not accounted for.[39] Neither existence value nor intrinsic value can be included for similar reasons to those in market value. By definition, the only metric of the valuation in behavioral use is how much humans use the resource.[40] Thus, for those seeking a repair of non-use value, behavioral use valuation within the goldfish analogy would be akin to the parent asking how much the child truly interacted with his now deceased goldfish and giving him cash proportionally to the time spent with it.

            Perhaps the most controversial example of a restoration alternative is contingent valuation.[41] Contingent valuation works by simply asking people how much a natural resource should cost. Thus, one could conduct a survey and ask a version of the original question posed in this article: “How much would you pay to preserve this river?”[42] Surveys consist of first, a description of the source and method of payment to be used for buying improvements, then questions to gauge the participant’s willingness to pay, and lastly, questions about their demographic characteristics.[43] This method is practically very simple to execute, for you are guaranteed a numerical answer without the need complicated calculations, but the theory behind it is riddled with potential for inaccuracy. The evidentiary rigor of asking simple hypotheticals seems on par with a middle schooler’s game of “would-you-rather.” Answers are guaranteed to be heavily subjective, and even then, studies indicate that such attitudes do not accurately predict behavior.[44] Thus, it could not match the theoretical consistency of service-to-service scaling.

            Yet, for all these critical issues, contingent valuation does have a unique advantage over the other methodologies: it is apparently the only method available to directly quantify non-use values, to the extent that such values can be accounted for within the ambit of CERCLA NRD compensation.[45] The other methods almost certainly do not account for non-use value, and if they do, it is only included incidentally. Contingent valuation, however, allows survey respondents to indicate a value based on their own choice of metric. Thus, if respondents do value a resource beyond what they would pay to use it themselves, they may indicate for themselves how much that value means to them in monetary terms. Furthermore, contingent valuation perhaps comes the closest to being able to include intrinsic value in theory, even if it still does not truly accomplish the task. One who recognizes the intrinsic value of nature could set their personal prices higher than use and existence value to account for it. However, the fact that the DOI regulations do not include intrinsic value within contingent valuation methodology not only hinders such an idea, but also points to an area that may be beyond the reach of the underlying statute.[46] Nonetheless, despite its inconsistent nature, contingent valuation is the best and perhaps only well understood method to explicitly include non-use values within the valuation. 

Observations and Implications from the CERCLA Methodologies

            Three observations emerge from this survey of valuation methodologies. First, each methodology has a varying level of theoretical soundness in assessing damages, from service-to-service scaling at the high end to contingent valuation on the low end. Second, every methodology’s practical accuracy in accounting for resource value is subject to significant questions. The multitude of factors underpinning such a valuation makes it nearly impossible to value natural resources perfectly, not to mention anything of the extent to which such methodologies are sufficient to satisfy a trustee’s evidentiary burden in court. Service-to-service is difficult to implement perfectly; market and behavioral use do not even accurately predict use value; and contingent valuation is, arguably, completely speculative. Third, intrinsic valuation remains unaccounted for across all methodologies, likely by design.

            What do these observations reveal, then, for this relatively narrow but important area of the law? This analysis shows that the DOI regulations contain a significant range of options for valuing natural resources, and these options demonstrate a range of philosophies and preferences concerning natural resource valuation. First, service-to-service scaling is, in theory, a workable default, for it seeks to avoid the problem of abstract monetary valuation. However, the regulations, by including alternatives, acknowledge that this method will not function best in all cases despite its theoretical soundness. Thus, it seems that the regulations are willing to sacrifice theoretical consistency for ease of implementation in some cases. Such ease can, at some point, overcome the practical difficulties with a methodology. 

Also, in terms of alternative methodologies, the regulations do not distinguish between those methods with high or low theoretical consistency as long as they meet the factors listed in the regulations.[47] Perhaps past the most theoretically sound methodology, trustees are allowed their pick to best fit their situation and preferences, though of course to get to restoration, resolution must either be achieved via settlement (i.e., the responsible parties have to agree) or by trial (trustees must bear burden of proof). The mere inclusion of contingent valuation, however, suggests that despite the debate surrounding the method, the DOI deemed that there was a need to account for non-use values through the availability of a discrete methodology. Thus, if trustees so desire, they may opt to try to account for non-use values, with the caveat above that achieving actual restoration with such values explicitly accounted for will turn on either settlement (agreement) or a favorable judgment (meeting evidentiary burden).

            A last important observation is that intrinsic value is entirely omitted from the DOI Regulations. This fact is rather unsurprising since the non-anthropocentric nature of the value makes it nearly impossible to account for from a human perspective. Intrinsic value also seems to go beyond the typical purview of civil claims for damages. However, this omission does mean that if such value of natural resources does exist, it can never be accounted for under the current system. Though the DOI Regulations purport to cover all of a resource’s value, if intrinsic value does exist or is not valued, it risks being lost any time natural resources are injured.

            The NRDA process inherently involves questions about the concept of value itself. The law has risen to meet this challenge with a set of crude but, ultimately, functional methodologies. Indeed, this is not a new challenge for law, which is regularly challenged with ascribing value to such nebulous concepts as pain and suffering and the loss of human life. The willingness to rely on the public either sitting in the jury box in tort claims or responding to contingent valuation surveys for NRDAs could reveal either humility or bewilderment on the part of the legal system. Yet, the very existence of NRDs and acceptance of more abstract methodologies shows willingness to try to value nature fully. Even if the numbers will not always square with a metaphysical value of each resource, the law seems to aim for taking as many steps toward restoration of the resources in public trust as possible. Perhaps the state of the law, policy, and practice of NRD is not yet enough to fully value nature, not only for its services to humanity, but in and of itself; hopefully, though, as humanity’s understanding of the natural environment ever grows, so too will the number of those steps taken towards conceptualizing and recognizing the full value of the natural world.

 

            Christian Green is a 2L from Brownsville, Texas. He attended the University of Notre Dame and joined TELJ during his first year of law school. Christian has long been interested in the field of environmental law and will be interning with the Texas Commission on Environmental Quality during the summer of 2022.

 

            Amanda Halter is managing partner of the Houston office of the international law firm of Pillsbury Winthrop Shaw Pittman, a member of the firm’s Environmental & Natural Resources practice section and co-leader of the firm’s Crisis Management team. Amanda helps companies resolve environmental liabilities and negotiate compliance conditions, as well as manage financial and reputational losses associated with a crisis. Her experience includes a diverse array of environmental regulatory, litigation and crisis matters, including contamination investigations and remedial actions, natural resource damages assessments and claims, environment, health and safety compliance counseling, mass toxic tort actions, permitting and planning for large-scale industrial projects, and project impacts mitigation and restoration strategies. Amanda is a native of Houston, a gr

 

[1] Natural Resource Damages: A Primer, U. S. Env’t Prot. Agency (last visited Oct. 26, 2021), https://www.epa.gov/superfund/natural-resource-damages-primer [hereinafter EPA Primer].

[2] 42 U.S.C. § 9607(a)(4)(c).

[3] 42 U.S.C. § 9601(16).

[4] EPA Primer. 

[5] Id.

[6]Id.

[7] Frank B. Cross, Natural Resource Damage Valuation, 42 Vand. L. Rev. 269, 280–81 (1989) [hereinafter Natural Resource Damage Valuation].

[8] Id.

[9] Id. at 285. 

[10] Id.

[11] Id. at 292-93

[12] Natural Resource Damage Valuation, supra note 7, at 293. 

[13] See Id. at 281–83

[14] Id. at 286.

[15] See Id. at 289.

[16] See Id. at 292.

[17] See Id. at 292–94.

[18] See Zygmunt J.B. Plater, In the Wake of the Snail Darter: An Environmental Law Paradigm and its Consequences, 19 U. Mich. J.L. Reform 805, 824–25 (1986).

[19] 43 C.F.R.§ 11 (2008) [hereinafter DOI Regulations].

[20] 42 U.S.C. § 9607(f)(2)(C) (2018).

[21] 43 C.F.R. § 11.83(c)(1) (2008).

[22] 43 C.F.R. § 11.82 (2008).  

 

[23] 43 C.F.R. § 11.80(b) (2008).

[24] Habitat Equivalency Analysis, NOAA (last visited Oct. 30, 2021) https://darrp.noaa.gov/economics/habitat-equivalency-analysis.

[25] Natural Resource Damage Valuation, supra note 7, at 4332–33

[26] Id.

[27] See Id. at 333–34.

[28] 43 C.F.R. § 11.82(a) (2008).

[29] 43 C.F.R. § 11.82(d) (2008).

[30] Natural Resource Damage Valuation, supra note 7, at 297–98; see C.F.R. § 11.83(c)(2) (2008).

[31] 43 C.F.R. § 11.83(c)(2) (2008).

[32] Natural Resource Damage Valuation, supra, note 7, at 302.

[33] Id.

[34] Id.

[35] George M. Armstrong, Jr., From the Fetishism of Commodities to the Regulated Market: The Rise and Decline of Property, 82 Nw. U.L. Rev. 79, 91 (1987).

[36] Patrick H. Zaepfel, The Reauthorization of CERCLA NRDs: A Proposal for a Reformulated and Rational Federal Program, 8 Vill. Env’t. L.J. 359, 396 (1997).

[37] Id.

[38] Id.

[39] Id.

[40] See Natural Resource Damage Valuation, supra note 7, at 312–13.

[41] Miriam Montesinos, It May Be Silly, But It’s An Answer: The Need To Accept Contingent Valuation Methodology In Natural Resource Damage Assessments, 26 Ecology L.Q. 48, 52–53 (1999) [hereinafter The Need to Accept Contingent Valuation].

[42] See Natural Resource Damage Valuation, supra note 7. at 315.

[43] The Need to Accept Contingent Valuation, supra note 41, at 52–52.

[44] See Natural Resource Damage Valuation, supra note 7, at at 315.

[45] The Need to Accept Contingent Valuation, supra note 41, at 50–51.

[46] See 43 C.F.R. § 11.83(c)(2)(vii) (2008).

[47] 43 C.F.R. § 11.83(a)(4) (2008).

Vol. 52-1 Water Quality

Water Quality

 

Recission of Guidance Memorandum on County of Maui, Hawaii v. Hawaii Wildlife Fund

 

Background 

The Clean Water Act (“CWA”)[1] establishes the statutory structure for regulating the discharge of pollutants to the waters of the United States and setting surface water quality standards.[2] The National Pollutant Discharge Elimination System (“NPDES”)[3] permit program, created by the CWA in 1972, addresses water pollution by regulating point sources that discharge pollutants to the waters of the United States.[4] Under the program, the discharge of pollutants from a point source into a water of the United States is unlawful and prohibited unless an NPDES permit is authorized.[5]

Typically, an NPDES permit will specify an acceptable level of a pollutant or pollutant parameter in a discharge.[6] The decision whether to seek and obtain NPDES permit coverage resides with the owners or operators of facilities or systems; however, the failure to obtain coverage prior to a discharge exposes the owner or operator to potential civil or criminal enforcement and court orders mandating compliance with CWA permitting requirements.[7] 

 

County of Maui, Hawaii v. Hawaii Wildlife Fund

Until 2020, federal courts were divided on the question of whether a discharge of a pollutant subject to the CWA occurs when a pollutant is released from a point source and subsequently moves through groundwater, a nonpoint source,[8] before reaching a navigable water in the United States.[9] In other words, the issue was whether a CWA NPDES permit may be required for releases of pollutants from a point source that reach a jurisdictional water through groundwater.[10] 

In 2012, several environmental groups brought action against the County of Maui alleging that the county violated the CWA by discharging a pollutant to navigable waters without the required NPDES permit.[11] The county’s wastewater reclamation facility pumped treated sewage water into the ground through wells from which effluent traveled through groundwater to the Pacific Ocean.[12] The district court found that the county’s actions required an NPDES permit, since the pollution’s “path to the ocean is clearly ascertainable” from Maui’s wells into groundwater and to the ocean.[13] The Ninth Circuit court affirmed the decision on February 1, 2018, stating that pollutants coming from the wells were “fairly traceable from the point source to a navigable water” and that the CWA “does not require the point source itself convey the pollutants directly into the navigable water.”[14] 

In 2018, the County of Maui petitioned the U.S. Supreme Court for certiorari review, which was granted.[15] During oral arguments before the Court in November 2019, an attorney with the U.S. Department of Justice argued based on the Environmental Protection Agency’s (EPA) “Interpretive Statement on Application of the Clean Water Act National Pollutant Discharge Elimination System Program to Release of Pollutants From a Point Source to Groundwater” that “all releases of pollutants to groundwater” are excluded from the scope of the permitting program, “even where pollutants are conveyed to jurisdictional surface waters via groundwater.”[16] The Court rejected the interpretation the EPA articulated in the statement and delivered an opinion on this issue in County of Maui, Hawaii v. Hawaii Wildlife Fund.[17]

In its April 2020 decision, the Court explicitly rejected the Ninth Circuit court’s overly broad “fairly traceable test,” and held that an NPDES permit is required for a discharge of pollutants from a point source that reaches navigable waters after traveling through groundwater either when there is a direct discharge from a point source into navigable waters, or “if the addition of the pollutants through groundwater is the functional equivalent of a direct discharge from the point source into navigable waters.”[18] In other words, County of Maui clarified that an NPDES permit is required for a subset of discharges of pollutants that reach a water of the United States through groundwater—those that are the “functional equivalent” of direct discharges to jurisdictional waters.[19] 

The Court’s opinion cited seven factors to consider when determining whether an indirect discharge will require NPDES coverage because it is “functionally equivalent” to a direct discharge, including: (1) the transit time of a pollutant to a navigable water, (2) the distance a pollutant travelled to a navigable water, (3) the nature of the material through which the pollutant travels, (4) the extent to which the pollutant is diluted or chemically changed as it travels, (5) the amount of pollutant entering the navigable water relative to the amount of the pollutant leaves the point source and is discharged into groundwater, (6) the manner by or area in which the pollutant enters the navigable water, and (7) the degree to which the pollutant at that point has maintained its specific identity when it reaches the navigable water.”[20] 

 

Guidance Memorandum

Following the Court’s decision, the EPA issued a guidance document near the end of President Trump’s administration on January 14, 2021, entitled “Applying the Supreme Court’s County of Maui v. Hawaii Wildlife Fund Decision in the Clean Water Act Section 402 National Pollutant Discharge Elimination System Permit Program,” which explained how to apply the Court’s decision.[21] The guidance only addressed discharges of pollutants that reach waters of the United States through groundwater and clarified the CWA permitting requirements for the indirect water pollution on a case by case basis.[22] The previous administration’s guidance placed the “functional equivalent” analysis into context within the existing NPDES permitting framework and identified an additional factor for authorities to consider when evaluating whether and how to perform a “functional equivalent” analysis: “the design and performance of the system or facility from which the pollutant is released.”[23] 

The EPA derived this additional factor from the NPDES permit application forms that contain inquiries concerning design and performance that are routinely considered by permitting authorities in the administration of the NPDES permit program.[24] EPA interpreted language in County of Maui to support the idea that the composition and concentration of discharges of pollutants directly from a pipe or other discernible, confined, and discrete conveyance into a water of the United States with little or no intervening treatment or attenuation often differed significantly from the composition and concentration of discharges of pollutants into a system that is engineered, designed, and operated to treat or attenuate pollutants or uses the surface or subsurface to treat, provide uptake of, or retain pollutants.[25] 

The addition of this factor skewed the “functional equivalent” analysis in a way that could reduce the number of discharges requiring a NPDES permit, thereby diminishing clean water protections.[26] Under the guidance, EPA decided that facilities were less likely to be the “functional equivalent” of a direct discharge for the following reasons: if they are designed and perform with a storage, treatment or containment system such as a septic system, cesspool or settling pond, if they are operating as a runoff management system, such as with stormwater controls, infiltration or evaporation systems or other green infrastructure, or if they operate water reuse, recycling or groundwater recharge facilities.[27] In other words, this means a release is less likely to be the “functional equivalent” of a discharge if it came from a facility or system that was designed not to release pollutants, but to store, contain, or treat them.[28]

Ultimately, under the guidance, if a system was designed to avoid discharges, and generally did so, that would weigh against a CWA violation even if there were some leaks into groundwater that eventually connected with a jurisdictional water.[29] Thus, the guidance had been derided by environmental organizations as creating loopholes for dischargers to evade CWA permitting requirements.[30]

 

Recission of Guidance Memorandum 

Upon taking office, President Biden signed Executive Order 13990 titled, “Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” directing the EPA to “immediately review all existing regulations, orders, guidance documents, policies, and any other similar agency actions” of the previous administration and to suspend, revise, or rescind those agency actions that “do not protect our public health and the environment.”[31] Although a guidance document does not have the force and effect of law and does not bind the public in any way, through the issuance of one, the EPA intends to provide clarity to the public regarding existing requirements under the law or EPA policies.[32] Pursuant to this Executive Order, EPA conducted a review of the County of Maui guidance document.[33] 

After reviewing the guidance document, EPA’s Office of Water issued a memorandum rescinding the guidance document on September 15, 2021, which was sent to the EPA Regions and Water Division Directors.[34] The EPA explained that in addition to the input from the agency workgroup established to evaluate the guidance, the decision to rescind the guidance was informed by meetings with a broad range of stakeholders, who found that the guidance was inconsistent with EPA’s authority to limit pollution discharges to jurisdictional waters.[35] With this action, EPA is preserving longstanding clean water protections.[36]

The document was rescinded for two primary reasons—substantive flaws and the lack of sufficient interagency consideration.[37] First, the agency is rescinding the guidance based on determining that the additional “design and performance” factor, is inconsistent with the CWA and the Supreme Court decision in County of Maui, because “the additional factor introduces an element of intent that is not reflected in or consistent with the County of Maui decision.” [38] Second, “the guidance was issued without proper deliberation within EPA or with [their] federal partners.”[39]

The withdrawal will likely expand the number of discharges to groundwater that EPA finds are the “functional equivalent of a direct discharge from a point source into navigable waters” and therefore require a CWA permit.[40] The implication for rescinding this guidance document is that even if some design facilities or wastewater systems to avoid discharges, they still could face CWA liability for even small leaks of pollutants into groundwater that eventually connects to a navigable water.[41] The EPA’s Press Office issued a news release in which it indicated that the CWA and a straightforward application of the Supreme Court’s decision provide important protections for the nation’s water by ensuring that discharges of pollutants to groundwater that reach surface waters are appropriately regulated.[42] This action will help protect water quality in lakes, streams, wetlands, and other waterbodies.[43] 

The EPA also reiterated its position that the focus of the Court’s decision in County of Maui is on whether a permit is required to protect surface waters, and not to protect or regulate groundwater itself. [44] Therefore, the existence of a state groundwater protection program that may regulate a discharge does not obviate the need for NPDES permitting authorities to apply the “functional equivalent” factors that the Supreme Court identified in determining whether a discharge from a point source through groundwater that reaches jurisdictional surface water requires an NPDES permit.[45] Such language appears to be intended to address claims made by industry on-going litigation that discharges subject to regulation under state groundwater programs categorically that do not require NPDES permit.[46] Although the analysis will not extend to the state groundwater protection programs for this reason, the recission ultimately indicates that the new administration will take a broader view than the prior administration as to when discharges into groundwater are the “functional equivalent” of a discharge directly into a navigable water.[47]

 

Conclusion

The EPA stated that it is “evaluating appropriate next steps to follow the recission” of the guidance.[48] In the interim, consistent with past practice and informed by the guiding principles and factors specified by the Supreme Court in County of Maui, EPA will continue to apply site-specific, science-based evaluations to determine whether a discharge from a point source through groundwater that reaches jurisdictional surface water is a “functional equivalent” of a direct discharge and therefore requires a permit under the CWA.[49] Moreover, for the time being, it will continue to make NPDES determinations on a case-by-case basis, which had long been agency practice prior to the issuance of the County of Maui decision.[50] EPA is committed to working with its state co-regulators, Tribes, and local partners to better protect water quality that is essential to public health and thriving ecosystems.[51]

 

Niha Ali is a 3L at Texas Law and has been a part of TELJ since the Fall of 2019. She grew up in Katy, Texas and completed her undergraduate education in Philosophy with a Business minor at the University of Texas at Austin.

 

David Klein is a Principal of Lloyd Gosselink Rochelle & Townsend, P.C. and is the Chair of the Environmental and Natural Resources Law Section of the State Bar of Texas.  David represents public and private clients in water quality, water rights, water districts, and water utility service matters.

 

[1] 33 U.S.C. §§ 1251–1387 (1972).

[2] Summary of the Clean Water Act, U.S. Env’t. Prot. Agency, https://www.epa.gov/laws-regulations/summary-clean-water-act (last updated Oct. 22, 2021). 

[3] 33 U.S.C. § 1342 (1972).

[4] About NPDES, U.S. Env’t. Prot. Agency, https://www.epa.gov/npdes/about-npdes (last updated May 28, 2021).

[5] NPDES Permit Basics, U.S. Env’t. Prot. Agency, https://www.epa.gov/npdes/npdes-permit-basics (last updated Sept. 28, 2021).

[6] Id.

[7] Id.

[8] Basic Information about Nonpoint Source (NPS) Pollution, U.S. Env’t. Prot. Agency, https://www.epa.gov/nps/basic-information-about-nonpoint-source-nps-pollution (last updated July 08, 2021).

[9] See Hawaii Wildlife Fund v. Cnty. of Maui, 886 F.3d 737 (9th Cir. 2018) (discharges through groundwater are subject to CWA permitting where they are fairly traceable to the point source and more than de minimis); See also Upstate Forever v. Kinder Morgan Energy Partners, 887 F. 3d 637 (4th Cir. 2018) (discharges must have a direct hydrological connection between ground water and navigable waters to state a claim under CWA); See also Ky. Waterways All. v. Ky. Util. Co., 905 F.3d 925, 940 (6th Cir. 2018) (discharges through groundwater are excluded from the CWA’s permitting requirements).

[10] Cnty. of Maui, Hawaii v. Hawaii Wildlife Fund, 140 S. Ct. 1462, 1469 (2020).

[11] Id. at 1469.

[12] Id. at 1465, 1469.

[13] Hawaii Wildlife Fund v. Cty. of Maui, Hawaii, 24 F.Supp.3d 980, 998 (D. Haw. 2014).

[14] Hawaii Wildlife Fund v. Cty. of Maui, Hawaii, 886 F.3d 737, 749 (9th Cir. 2018) (emphasis added).

[15] Cnty. of Maui, 140 S. Ct. at 1469–1470.

[16] 84 Fed. Reg. 16,810, 16,811 (Apr. 23, 2019) (emphasis added).

[17] Cnty. of Maui, 140 S. Ct. at 1465, 1473–1475.

[18] Id. at 1468, 1470, 1476–77 (emphasis added).

[19] Id. at 1468, 1477.

[20] Id. at 1476–77.

[21] 86 Fed. Reg. 6, 321 (Jan. 21, 2021).

[22] Id.

[23] Id.

[24] Id. See e.g., 40 C.F.R. 122.21; NPDES Applications and Forms–EPA Applications, U.S. Env’t. Prot. Agency, https://www.epa.gov/npdes/npdes-application-forms (last updated Apr. 27, 2021).

[25] 86 Fed. Reg. 6,321 (Jan. 21, 2021); Cty. of Maui, 140 S. Ct. at 1476 (“[w]hether pollutants that arrive at navigable waters after traveling though groundwater are ‘from’ a point source depends upon how similar to (or different from) the particular discharge is to a direct discharge”).

[26] 86 Fed. Reg. 6,321 (Jan. 21, 2021).

[27] Id.

[28] Id.

[29] 86 Fed. Reg. 53,653 (Sept. 28, 2021).

[30] EPA Rescinds Maui Guidance, Raises New Questions on NPDES Implementation, Nat’l Ass’n of Clean Water   Agencies (Sept. 22, 2021), https://www.nacwa.org/news-publications/clean-water-current-archives/clean-water-current/2021/09/22/epa-rescinds-maui-guidance-raises-new-questions-on-npdes-implementation [hereinafter NACWA]. 

[31] Exec. Order 13,990, 86 Fed. Reg. 7,037 (Jan. 25, 2021).

[32] EPA Guidance Documents, U.S. Env’t. Prot. Agency, https://www.epa.gov/guidance (last updated May 11, 2021).

[33] 86 Fed. Reg. 6, 321 (Jan. 21, 2021). 

[34] 86 Fed. Reg. 53,653 (Sept. 28, 2021).

[35] Id.; U.S. EPA Press Office, EPA Rescinds Previous Administration’s Guidance on Clean Water Act Permit Requirements, U.S. Env’t. Prot. Agency (Sept. 16, 2021), https://www.epa.gov/newsreleases/epa-rescinds-previous-administrations-guidance-clean-water-act-permit-requirements.

[36] Id. 

[37] 86 Fed. Reg. 53,653 (Sept. 28, 2021).

[38] Id.

[39] Id.

[40] EPA Withdraws Trump-era Guidance on When Groundwater Releases Require Clean Water Act Permits, J.D. Supra (Sept. 20, 2021), https://www.jdsupra.com/legalnews/epa-withdraws-trump-era-guidance-on-3442536/. 

[41] Todd Neely, EPA Rescinds CWA Groundwater Guidance, DTN (Sept. 24, 2021), https://www.dtnpf.com/agriculture/web/ag/news/world-policy/article/2021/09/24/epa-action-groundwater-guidance-act.

[42] U.S. EPA Press Office, supra note 35.

[43] Id.

[44] 86 Fed. Reg. 53,653 (Sept. 28, 2021).

[45] Id.

[46] NACWA, supra note 30.

[47] Neely, supra note 41.

[48] 86 Fed. Reg. 53,653 (Sept. 28, 2021).

[49] Id.

[50] Cnty. of Maui, 140 S. Ct. at 1465.

[51] 86 Fed. Reg. 53,653 (Sept. 28, 2021).

Vol. 52-1 Federal Casenote

Federal Casenote 

United States Fish and Wildlife Services et. al. v. Sierra Club, Inc.

 Background 

This case arose when the Sierra Club submitted Freedom of Information Act (FOIA) requests for records concerning consultations between the United States Environmental Protection Agency (EPA), and the U.S. Fish and Wildlife Service and National Marine Fisheries Services (together, the Services).[1] The primary document considered by the Court’s decision is a “draft biological opinion” prepared by the Services’ staff pertaining to EPA’s proposal concerning “cooling water intake structures.”[2]

Between 2011 and 2013, EPA promulgated a proposed rule regarding “cooling water intake structures” to minimize potential harm to marine animals that are protected under the Endangered Species Act (ESA).[3] The Services’ prepared a “draft biological opinion” that determined the 2013 rule would still jeopardize the animal populations at risk.[4] As such, decisionmakers at the Services’ determined that more consultation and work with the EPA was necessary to develop a sufficient proposal.[5] Following this, the EPA abandoned its initial 2013 rule and began development on a new proposed rule, which was finalized in 2014.[6] There was never an official draft or final opinion issued on EPA’s 2013 proposal.

Sierra Club sued the Services and claimed that the Services’ invocation of the deliberative process privilege was a way of shielding their draft opinions that ultimately expressed their final view on EPA’s 2013 rule.[7] The Ninth Circuit affirmed, agreeing with Sierra Club’s argument.[8] Judge Wallace dissented on the Ninth Circuit’s opining that “the drafts were part of the ongoing consultation process,” and protected by the privilege which is relevant to the Court’s decision here.[9] 

Court’s Analysis 

The Court began its analysis with the purpose of the deliberative process privilege. Specifically, the Court established that the deliberative process privilege exists to encourage candid discussions between agencies, resulting in an improved decision-making process, and to prevent agencies from operating under a microscope.[10] It follows that the deliberative process privilege must protect documents that are indeed deliberative and pending. The privilege, however, does not extend to a final decision, as the deliberations are complete at that point.[11]

            The fact that a document is not followed by any further drafts or deliberations does not, alone, make the document itself a final document because “[s]ometimes a proposal dies on the vine.”[12] This is what happened with the Services’ “draft biological opinion” on the EPA’s 2013 rule–it died on the vine.[13] In making this determination, the court pointed to various factors regarding the Services’ “draft biological opinion” on EPA’s 2013 proposed rule.

First, and most importantly, the Court pointed to the fact that the Services’ never formally approved or adopted the opinion, nor did they send the EPA their opinion on the proposed 2013 rule as is typical practice when for draft and final biological opinions.[14] The Court actually pointed to this as a further indication that the “draft biological opinion” at question in this case was more likely a “draft of a draft” because of the Services’ internal determination that further work needed to be done before even issuing a draft opinion.[15]

Next, the Services and the EPA had an agreement to allow for further changes following the circulation of the “draft biological opinion” to the EPA.[16] Because the drafts were allowed to change following EPA’s opportunity to comment, then the “draft biological opinion” could not have exhibited the agencies’ final decision on the matter and as such, was deliberative.[17]

Moreover, in determining the finality of an opinion, courts must examine whether the opinion led to any “direct and appreciable legal consequences” as is a necessary result of an agency’s final opinion on a matter—the practical consequences of a decision is not indicative of an opinion’s finality.[18] Here, there were no legal consequences of the Services’ internally, unapproved draft opinion—nothing from the draft opinion made its way into practice either at the Services or at the EPA, nor was either agency tied to anything within the draft opinion.

The Court confirms, nonetheless, that agencies cannot simply “stamp every document ‘draft,’” to protect their decisions, because the inquiry that the courts make is a functional inquiry rather than a formal one.[19]  In other words, the court will have to examine the facts of each individual case to make a determination as to whether or not a “draft” opinion is indeed considered by the agency to be “draft,” or if it is rather a final opinion and thereby not protected by the deliberative process privilege. The Court does not indicate how future courts should make this determination. 

 Implications of the Decision 

The Supreme Court’s decision broadens the scope of what is considered a “draft” document for the purposes of applying the deliberative process privilege. However, the Court left the scope of the decision rather open-ended, meaning that it will come down to the district and appellate courts to determine what documents fall under the exclusion. In turn, this will likely lead to circuit splits in how to treat certain kinds of documents under deliberative process privilege. Following such a split, forum-shopping may arise as a concern.

As the Court indicated in the decision, courts will have to examine exactly how an agency treats a document to see if it reflects its final view on the subject in question and if the document results in any appreciable change to the legal requirements or actions of an agency. For example, a proposed rule that an agency informally adopts that alters how the agency responds to a situation could be seen as final, even if there was no “final opinion” issued concerning the adoption of the new rule. 

This will likely result in an increased strain on the judiciary, requiring a case-by-case review and determination as to whether a document is indeed a “draft” and thus protected by the deliberative process privilege or if the agency treated the document as final by publishing the rule or by enforcing the changes required by the rule, and, as such, not protected.

            Regardless, the decision provides agencies with more freedom in their use of the deliberative process privilege to protect draft work product. This could very likely increase internal deliberations within agencies and increase the candor of intra-agency discussions regarding forthcoming rules or decisions. Furthermore, agencies may be more willing to increase their solicitation of public comments and input since internal deliberations on such comments will be protected, even when pulling together a draft opinion in response to public comments. However, as the Sierra Club suggested, this is a double-edged sword as this increased candor and usage of the deliberative process privilege could result in government agencies being less forthcoming in working with non-agency groups.[20] This is especially true if an opinion results in the abandonment of the proposed rule and further intra-agency deliberations, as in the case of the proposed rules in US Fish and Wildlife v. Sierra Club.

 

Amy Rodriguez is an Assistant Attorney General for the State of Texas. Her work centers on counseling state agencies on prosecution and defense litigation strategy. She is a 2017 graduate of the University of Texas School of Law.

Evan Kudler is a 2L who joined TELJ in his fall 1L year. He is from El Dorado Hills, California and studied Economics at the University of California, Santa Barbara for undergrad. Before coming to law school, he worked at Pacific Gas & Electric Company in San Francisco working on the decarbonization effort of the electricity sector. He will be joining Baker Botts Environmental litigation group this summer before he goes off to get his LLM in Global Environment and Climate Change Law at the University of Edinburgh in the fall. He hopes to focus his work on the intersection between environmental justice and climate change.

 [1] U.S. Fish and Wildlife Service et. Al. v. Sierra Club, Inc., 141 S. Ct. 777, 784-85 (2021) [hereinafter “US Fish and Wildlife”].

[2] Id. at 785.

[3] Id. at 784.

[4] Id.

[5] Id.

[6] US Fish and Wildlife, supra note 1, at 784.

[7] Id.  at 785.

[8] Id. (holding that the “draft biological opinions…represented the Services’ final opinion that the EPA’s 2013 proposed rule was likely to have an adverse effect on certain endangered species.”).

[9] Id.

[10] See id.; see also Department of Interior v. Klamath Water Us­ers Protective Assn., 532 U. S. 1, 8 (2001) (determining in relevant part that “officials will not communicate candidly among themselves if each remark is a potential item of discovery and front page news.”).

[11] US Fish and Wildlife, supra note 1, at 786.

[12] Id. “[Dying] on the vine” simply means that the rule was neither denied or approved, and, for the case herein, the Services did not officially adopt an opinion nor was an opinion issued to EPA on EPA’s proposed 2013 rule.

[13] Id. at 788

[14] Id.

[15] Id.

[16] US Fish and Wildlife, supra note 1, at 787.

[17] Id.

[18] Bennett v. Spear, 520 U.S. 154, 170, 178 (1997) (holding that a final biological opinion “leads to direct and appreciable legal consequences…[when it] alters the legal regime to which the action agency is subject.”).

[19] US Fish and Wildlife, supra note 1, at 788.

[20] Sierra Club warns that there is a risk of agencies overusing the term “draft” for purposes of protecting internal deliberations, even if the agency practically intends for such an opinion to be a final decision.

Vol. 52-1 Water Rights

Water Rights

Brazos River Auth. v. City of Houston, 628 S.W.3d 920 (Tex. App.—Austin 2021, pet. filed)

 Background 

This case arose over a dispute from the right to construct and operate a reservoir on Allens Creek.[1] The City of Houston sued the State of Texas and the Brazos River Authority (“BRA”), seeking to block the implementation of a new law that would force the City to sell its water rights in the proposed Allens Creek Reservoir to the BRA for up to $23 million by the end of 2021.[2] Specifically, the site of the proposed reservoir is a tract of about 9,5000 acres located in Austin County near the confluence of Allens Creek and the Brazos River.[3] This site was designated “a site of unique value for the construction of a dam and reservoir on Allens Creek” and “that construction and development of the Allens Creek Reservoir project” would be “in the public interest and would constitute a beneficial use of the water.”[4]

For over two decades, the City and the BRA have jointly held a water-appropriation permit authorizing them to construct the reservoir and to use the impounded water.[5] In 2019, however, the Texas State Legislature passed House Bill (H.B.) 2846, which instructed Houston to enter into a contractual agreement with the BRA to transfer its entire interest in the proposed reservoir, including its permit rights, to the Authority.[6] H.B. 2846 was intended to encourage development of the reservoir by transferring the City’s entire interest in the reservoir and all rights to the BRA.[7]

        Houston responded by suing the State of Texas and the BRA, asserting that H.B. 2846 is invalid on multiple grounds.[8] The district court granted declaratory relief, finding that H.B. 2846 is “unconstitutional, void, and unenforceable” because it violates the Texas Constitution’s prohibition of retroactive laws, local or special laws, and the forced sale of government property.[9] In a separate order, the district court sustained Houston’s evidentiary objections in part and overruled them in part.[10] The State and the BRA appealed the decision.[11]

 The Third Court of Appeals’ Decision and Discussion

The Texas Third District Court of Appeals upheld the lower court’s decision to protect the City of Houston’s interest in the unbuilt reservoir by striking down a state law and declaring it unconstitutionally retroactive based on its impairment of Houston’s water rights.[12]  

First, the appellate court discussed why H.B. 2846, as a later-enacted and more specific statute, controls regardless of a conflict with the Local Government Code.[13] Next, the court examined the constitutional challenges to H.B. 2846 and elaborated on its conclusion that there was a failure to demonstrate an overriding public interest in violating the water rights of the City in the unbuilt reservoir.[14] Despite a presumption that the statute was valid, the court construed H.B. 2846 “as a whole” to determine that it had retroactive effect.[15] Thus, the analysis turned to whether the law was unconstitutionally retroactive.[16]

The City argued the law is unconstitutional in part because it violates prohibitions on retroactive laws and on forced sales of municipal property that have a public use.[17] On the other hand, the BRA argued that H.B. 2846 is in the public interest because it is necessary to discharge the legislature’s constitutional duty to conserve the state’s natural resources.[18] In its decision, the appellate court relied on the three-factor test established in a 2010 Texas Supreme Court decision, Robinson v. Crown Cork & Seal Co., to review whether a statute violates the state’s constitutional prohibition on retroactive laws under the following factors: (1) the nature and strength of the public interest served by the statute; (2) the nature of the prior right violated by the statute; and (3) the extent of the impairment.[19]

Although the court agreed that constructing the reservoir is in the public interest, concerns regarding the law remain unaddressed and, according to the majority, “nothing in the record supports a conclusion that H.B. 2846 resolves these concerns.”[20] The conclusion is bolstered by the fact that H.B. 2846 itself does little to advance construction of the reservoir without further action from the Legislature or the Commission.[21] Ultimately, the majority determined the legislature lacked justification to retroactively apply the state statute to Houston’s interest in the unbuilt reservoir because the legislation served a minimal public interest while having a significant impact on Houston’s settled property rights.[22] Therefore, even though H.B. 2846 could serve a compelling interest, the court concluded the statute was unconstitutionally retroactive in balancing the law’s “purpose against the nature of the prior right and the extent to which the statute impairs that right.”[23]

In affirming the trial court’s judgment and granting declaratory relief, the court found H.B. 2846 to be “unconstitutional, void, and unenforceable.”[24] However, dissenting Justice Melissa Goodwin said that the legislature’s action should carry a presumed constitutionality and require Houston to demonstrate the need to strike down the law.[25] Justice Goodwin points to the City of Houston’s failure to do so, and questioned Houston’s proof of its vested water rights in the reservoir because it received permits for the project’s development decades earlier but failed to move forward on construction.[26] Additionally, although Justice Goodwin admits to the questionable policy reasons behind the legislation, her dissent notes that the law’s constitutionality should be evaluated, rather than its policy.[27]

Implications of the Decision

This court’s decision restores the City of Houston’s interest in the Allens Creek reservoir project and affirms the state prohibition against retroactive statutes. This decision appears to be an obstacle to the legislature’s ability to take away rights and property from a city and transfer those interests to another governmental entity. This decision could be used in the future to prevent the legislature from using its powers to require the involuntary transfer of property from a city to another governmental entity. The court’s application also reinforces the Robinson factor test established by the Texas Supreme Court and provides insight into the courts’ decision-making process on issues involving the constitutionality of retroactive statutes.[28]

It remains to be seen how durable this finding, and its implications, will be—the State of Texas and the BRA filed petitions for review with the Texas Supreme Court on October 15, 2021.

Carlo Lipson is a second-year student at the University of Texas School of Law. He joined TELJ in the Spring of his 1L year, and has enjoyed being a part of the journal and learning about the many current environmental law issues and policies. Carlo is from San Francisco, attended undergrad at the Claremont Colleges outside of Los Angeles, and is planning to return to California after law school.

Emily Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.           

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

 

[1] Brazos River Auth. v. City of Houston, 628 S.W.3d 920 (Tex. App.—Austin 2021, pet. filed).

[2] Id. at 925.

[3] Id. at 923.

[4] Id.; Act of May 22, 1999, 76th Leg., R.S., ch. 1291, § 1.01, 1999 Tex. Gen. Laws 4426, 4426 (S.B. 1593).

[5] Brazos River Auth., 628 S.W.3d at 922.

[6] See id.; See Act of May 16, 2019, 86th Leg., R.S., ch. 380, § 1, 2019 Tex. Gen. Laws 688, 688 (H.B. 2846).

[7] Brazos River Auth., 628 S.W.3d at 924.

[8] Id. at 925.

[9] Id. at 922.

[10] Id. at 925.

[11] Id.

[12] Id. at 936.

[13] Id. at 927; See Tex. Loc. Gov’t Code Ann. §§ 272.001(a), 552.020 (West 2019).

[14] Brazos River Auth., 628 S.W.3d at 936.

[15] Id. at 928.

[16] Id.

[17] See id. at 928.

[18] See Tex. Const. art. XVI, § 59(a); See Brazos River Auth., 628 S.W.3d at 929.

[19] Id. at 929; see Robinson v. Crown Cork & Seal Co., 335 S.W.3d 126, 145 (Tex. 2010).

[20] Brazos River Auth., 628 S.W.3d at 930.

[21] Id. at 931

[22] Id. at 936.

[23] See id. at 931.

[24] Id. at 936.

[25] See id. at 937.

[26] Id. at 930.

[27] See id. at 945.

[28] See id. at 929.

Vol. 52-1 Natural Resources & Land Use

Natural Resources & Land Use

NPS Responses to Overcrowding in National Parks Post-Lockdown

 Introduction          

            As the federal government and states have loosened COVID-19 lockdown restrictions and allowed greater opportunity for recreation, National Parks (Parks) have become increasingly inundated with visitors. The National Parks Service (NPS) has reported severe congestion in many of the nation’s most popular Parks, echoed by major news outlets and Park visitors.[1] This overcrowding has done more than just diminish the experience of visitors—it has harmed the Parks’ natural resources.[2] NPS has implemented a reservation system, capped the number of visitors and cars allowed in each Park, and levied additional fees, but these policies have not been uniformly applied and overcrowding remains an issue.[3] 

            The actions taken by NPS over the last year to minimize overcrowding raise concerns over the potential conflict with NPS’s legal mandate under the National Parks Service Organic Act (Organic Act) and its ability to levy additional fees under the Federal Land Recreation Enhancement Act (FLREA). 

 Overcrowding National Parks – Before, During, and After Lockdown

            Even before the pandemic, Parks were frequently overcrowded to the detriment of both recreation and conservation.[4] In 2019 alone, over 327.5 million people visited the nation’s 400 Parks, marking a 2.9% increase from 2018.[5] That is consistent with the relatively steady increase in visitation over NPS’s lifespan.[6] This continued growth compounds the concerns of scholars, who have described visitation rates as intolerably high as early as 2009.[7]  

            During the COVID lockdown, starting in March 2020, most Parks closed through the end of April, with many staying closed over the summer as well.[8] These closures decreased visitation by more than 100 million compared to 2019, with varied drops depending on each State’s lockdown guidelines. [9] Nevertheless, most of the Parks that saw a precipitous drop in visitation saw their attendance return to 2019 levels or higher by Fall of 2020.[10] Nearly half of all recreational visitors in 2020 were concentrated in the nation’s top twenty-three most popular Parks, forecasting the overcrowding that has become the norm for Parks in 2021.[11]

            While the 2021 visitation statistics for all Parks are unavailable (NPS attributes the delay to the pandemic) there have been widespread reports of overcrowding and a few targeted statistics about visitation increases in select Parks.[12] In early June, an NPS spokesperson warned that NPS was “anticipating one of [their] busiest summers ever in the most popular destination—Nationals Parks[.]”[13] This prediction has proven accurate. As the superintendent of the Grand Teton National Park noted in late August, “[e]very month except one has been record setting in terms of visitation numbers since the August before.”[14] The nation’s most popular Parks like Acadia, Grand Canyon, Joshua Tree, and Yellowstone, are bearing the brunt of this surge and the damage that comes with it.[15] 

            The high concentration of visitors at these Parks have pushed NPS to attempt to diffuse recreational visitors over the other 400 Parks in America.[16] Encouragement, however, has not been enough to solve overcrowding. NPS has also taken direct measures to curtail access to the Parks with the highest congestion. NPS has instituted reservation systems on recreation.gov to cap the amount of daily visitors and balance visitation over the course of the day.[17] Some Park administrators, rather than implement a reservation system, simply set a cap for either the number of people or the number of cars allowed in the Park or particular areas.[18] In some cases, NPS has instituted additional fees to bring motor vehicles onto Park grounds or to roam backcountry areas.[19] 

 Legality of NPS Responses

            According to NPS’s legal mandate under the Organic Act, the Service “shall promote and regulate” use of the Parks “to conserve the scenery, natural and historic objects, and wildlife . . .  and to provide for the enjoyment of the scenery, natural and historic objects, and wild life in such manner and by such means as will leave them unimpaired for the enjoyment of future generations.”[20] This language has commonly been read to create dichotomous goals for NPS: to promote the public’s recreational enjoyment of the Parks and to leave the Parks unimpaired for future generations.[21] These goals have occasionally conflicted, most notably regarding the use of motorized vehicles on Park grounds.[22] Where enjoyment of the Parks has clashed with NPS’s requirement to preserve the Parks’ relatively unimpaired condition for future generations, NPS has repeatedly attempted to balance the two concerns, resulting in legal challenges to NPS decisions.[23]

            NPS and the courts have clarified that while both promoting recreation and preserving natural resources must be accounted for in NPS decisions, the latter takes supremacy.[24] As long as NPS considers promoting enjoyment of the Parks, courts grant broad deference to enact policies that limit the impairment of natural resources.[25] Given this broad deference, it is unlikely that the reservation systems or visitor caps would be deemed arbitrary and capricious since these decisions are meant to limit overcrowding. Furthermore, as balancing the visitor rates across all Parks will decrease congestion, improve views, and decrease noise pollution, doing so should also promote the enjoyment of the Parks for all recreation visitors.[26]

            The fee increases, on the other hand, will be subject to the FLREA’s requirements. As long as the Park in question follows the procedure for increasing a fee outlined by the FLREA, the increase will likely not be found arbitrary and capricious.[27] Under the FLREA, Parks interested in levying additional fees must “provide the public with opportunities to participate in the development of or changing of a recreation fee.”[28] Although an “opportunit[y] to participate” is not defined in the statute, NPS has an internal (albeit non-binding) fee-collection manual that details the steps a Park needs to follow.[29] In the case of a fee increase at the Great Smokey Mountains National Park, undergoing a notice and comment period, coupled with direct notice to chambers of commerce and public officials, satisfied the FLREA.[30] As such, as long as any Park interested in a fee increase satisfactorily “provide[s] the public with opportunities to participate[,]” in the same vein as the Great Smoky Mountains National Park, then the fee increase will likely not be ruled arbitrary and capricious.

Conclusion

            Overcrowding remains a serious concern at National Parks which, given the increasing rate of visitors over the last thirty years, will remain a concern unless NPS fundamentally changes the way it regulates visitation. The implementation of reservation systems, hard caps on visitors, and additional fees are all important steps, but more are necessary. 

            To further encourage Americans to visit some of the lesser-known and visited Parks, Congress recently allocated approximately $1.7 billion to NPS over the next five years to repair and modernize the transit systems in and around Parks.[31] Furthermore, in 2021, the Department of the Interior will invest $1.6 billion to “address critical deferred maintenance projects and improve transportation and recreation infrastructure in national parks . . . ” alongside other public land projects.[32] In theory, these repairs will provide visitors better access to the parks and other public lands, reducing emissions and congestion in some of the most visited parks.[33] Whether this will be enough to functionally alleviate some of the issues associated with NPS’s estimated $12 billion repair backlog remains to be seen.[34]

Adam Greiner is a third-year law student at the University of Texas School of Law. Before coming to Texas, Adam went to undergrad in his home state of Virginia at the College of William and Mary, where he studied History and Global Business. Adam has been a staff editor for the Texas Environmental Law Journal since the beginning of his second year, and is interested in working in mass tort and complex commercial litigation after he graduates.

Francesca Eick is an Associate with Baker Botts in Austin. Ms. Eick’s practice focuses on regulatory compliance, permitting, litigation, and transactions involving environmental, land use, natural resource, and energy issues. Ms. Eick has advised public and private clients on matters relating to a range of environmental statutes including the Clean Water Act (CWA), the Endangered Species Act (ESA), the Clean Air Act (CAA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

 [1] See, e.g., Brody Ford, National Parks Are So Crowded That Congress Is Getting Involved, Bloomberg, July 29, 2021, https://www.bloomberg.com/news/articles/2021-07-29/national-parks-are-so-crowded-that-congress-is-getting-involved; Allison Pohle, National Parks Are Overcrowded and Closing Their Gates, Wall St. J., June, 13, 2021,   https://www.wsj.com/articles/national-parks-are-overcrowded-and-closing-their-gates-11623582002; Khristopher J. Brooks, After a Year of Pining, Visitors are Overcrowding National Parks like Yellowstone and Yosemite, CBS News, June 18, 2021, https://www.cbsnews.com/news/national-parks-overcrowding-yellowstone-yosemite/. 

[2] See Kyle Paoletta, Give the People What They Clearly Need: More National Parks, N.Y. Times, August 28, 2021, https://www.nytimes.com/2021/08/28/opinion/national-park-nature.html (quoting Cameron Stoley, superintendent of Yellowstone National Park, on the effect of the spike in visitation post-lockdown: “You put a million more people a year in Yellowstone — what does that mean when you’re emptying 2,000 garbage cans five times a day instead of three?” he said. “What does a million more people flushing toilets five times a day do to wastewater?”). 

[3] Benjamin Beddoes, Shenandoah National Park Looks to Address Overcrowding, WHSV, (Oct. 15, 2021, 5:18 PM), https://www.whsv.com/2021/10/15/shenandoah-national-park-looks-address-overcrowding/ (quoting Shenandoah National Park’s superintendent on overcrowding at Old Rag mountain hiking trails: “[w]hat we would like to do is set a cap of 800 people a day, see how that works out[]”).

[4] Andrew R. Chow, National Parks Are Getting Trashed During COVID-19, Endangering Surrounding Communities, TIMES, (July 22, 2020 3:19 PM), https://time.com/5869788/national-parks-covid-19/.; National Parks Service, Visitation Numbers, Feb. 25, 20221, https://www.nps.gov/aboutus/visitation-numbers.htm.

[5] Visitation Numbers, supra note 4.

[6] Id. 

[7]  See Id.; (327,516,619 – 285,579,941) and (41,936,678 ¸ 327,516,619 * 100); Richard J. Ansson, Jr. & Dalton L. Hooks, Jr., Protecting and Preserving Our National Parks in the Twenty First Century, 62 Mont. L. Rev. 213, 214 (2001) (arguing the need for large scale reform to cope with the increasing overcrowding problem at National Parks); Richard J. Ansson, Funding Our National Parks in the 21st Century: Will We Be Able to Preserve and Protect Our Embattled National Parks?, 11 Fordham Envtl. L. J. 1, 2 (1999) (Noting the increasing problem of overcrowding at National Parks, suggesting increased funding to NPS).

[8] Abraham J. Miller-Rushing et al., COVID-19 Pandemic Impacts on Conservation Research, Management, and Public Engagement in US National Parks, 257 Biological Conservation 1, 3 May 2021.

[9] Id.

[10] Id. at 4. 

[11]Visitation Numbers, supra note 4.; Mai Tran, ‘It’s Not Sustainable’: Overcrowding is Changing the Soul of US National Parks, The Guardian, Sept. 10, 2021, https://www.theguardian.com/environment/2021/sep/10/

overcrowding-changing-us-national-parks. 

[12] Pohle, supra note 1.; Brooks, supra note 1.; Paoletta, supra note 2.

[13] Brooks, supra note 1.

[14] Paoletta, supra note 2.

[15] Id.

[16] Alicia Johnson, US National Parks are Overcrowded – Here’s What Experts Say to do Instead, Lonely Planet, (June 25, 2021), https://www.lonelyplanet.com/articles/overcrowding-at-us-national-parks.

[17] Greg Iacurci, National Parks are Booming. That May Ruin Your Next Trip, CNBC, (Aug. 22, 2021 8:00 AM), https://www.cnbc.com/2021/08/22/national-parks-are-booming-that-may-ruin-your-next-trip.html.

[18] Michael Charboneau, All the Major Closures and Restrictions at National Parks Due to COVID-19, Men’s J., https://www.mensjournal.com/adventure/national-parks-closures-covid-19/.

[19] National Parks Service, Entrance Fees by Park, Sept. 28, 2021, 

https://www.nps.gov/aboutus/entrance-fee-prices.htm.; National Parks Service, 2021 User Fees Increase Proposal, Sept. 27, 2021, https://www.nps.gov/shen/planyourvisit/2021-user-fees-increase-proposal.htm (detailing fee increase proposal for sake of public comment period for Shenandoah National Park). 

[20] 54 U.S.C.A. § 100101.

[21] See S. Forest Watch, Inc. v. Jewell, 817 F.3d 965, 972 (6th Cir. 2016)

[22] See, e.g., Bluewater Network v. Salazar, 721 F. Supp. 2d 7, 21 (D.D.C. 2010) (granting in part plaintiff’s challenge to the reintroduction of jetskis to two national parks); S. Utah Wilderness All. v. Dabney, 222 F.3d 819, 821 (10th Cir. 2000) (holding that NPS’s final rule barring the use of motorized vehicles in a portion of the Canyonlands National Park was based on a permissible construction of the Organic Act).  

[23] See, e.g., Wilkins v. Sec’y of Interior, 995 F.2d 850, 853 (8th Cir. 1993) (finding NPS’s decision to remove wild horses from Ozark River National Parks to not be arbitrary and capricious as they relied on evidence that the horses’ continued presence would potentially impair the perpetuation of the Park’s natural resources.). 

[24] See S. Utah Wilderness All. v. Nat’l Park Serv., 387 F. Supp. 2d 1178, 1183, 1199 (D. Utah 2005).

[25] Id. at 1194.

[26] See Tran, supra note 11. 

[27] See S. Forest Watch, 817 F.3d at 970-74.

[29] S. Forest Watch, 817 F.3d at 972.

[30] Id.

[31] Infrastructure Investment and Jobs Act of 2021, H.R. 3684, 117th Cong. § 11101(3)(B)(ii) (2021).   

[32] Department of the Interior, Interior Invests $1.6 Billion to Improve Infrastructure on Public Lands and Tribal Schools, Apr. 4, 2021, https://www.doi.gov/news/interior-invests-16-billion-improve-infrastructure-public-lands-and-tribal-schools (funding made possible by the National Parks and Public Land Legacy Restoration Fund established in 2020 by the Great American Outdoors Act).

[33] Id.; National Parks Conservation Association, Congress Passes Bipartisan Infrastructure Bill to Help Build Back and Strengthen National Parks and Communities, Nov. 5, 2021, https://www.npca.org/articles/3002-congress-passes-bipartisan-infrastructure-bill-to-help-build-back-and. 

[34] Marcia Argust, Cost of Unaddressed National Parks Repairs Grows to Nearly $12 Billion, Pew Trusts, (Apr. 9, 2019, 7:11 AM),   https://www.pewtrusts.org/en/research-and-analysis/articles/2019/04/09/cost-of-unaddressed-national-park-repairs-grows

Vol. 51-2 Water Quality

Water Quality

Citizens Using the Courts to Enforce Zero Discharge Limits for Plastic Pellets

In the last decade, a surge of cheap shale gas has driven growth in the domestic plastics industry.[1] Shale gas is one of plastic’s key ingredients, and Texas produces 23% of the national total.[2] Texas, Louisiana, and Oklahoma have seen an influx of plastics manufacturers.[3] New plants are being built across an area deemed “Cancer Alley,” raising concerns about further pollutants.[4] Citizen suits concerning waterborne, plastic pellets have set a low bar for proving plastic contamination in effluent emissions. These decisions have effectively enforced a plastic-pellets zero-discharge limit under the Clean Water Act (CWA), and state agencies are following along.

In 2019, the District Court for Southern District of Texas issued a declaratory judgment finding that a Formosa Plastics facility violated a CWA permit issued by the Texas Commission on Environmental Quality (TCEQ).[5] TCEQ has the authority to issue Texas pollutant discharge permits, referred to as Texas Pollutant Discharge Elimination System (TPDES) permits.[6] In San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corporation, the TPDES permit at issue prohibited the discharge of floating solids “in other than trace amounts.”[7] The plaintiffs, a group of citizens and an NGO, alleged that the permitted facility had been discharging plastic pellets and powder that exceeded that limit.[8]

The court looked to the Webster’s Dictionary definition of “trace,” essentially determining it meant “barely discernible.”[9] The court also referred to an expert witness’s “trace amount” interpretation as contaminants that are “‘not easily identifiable in the environment . . . very difficult to detect . . .  and often take[] advanced instrumentation to concentrate them for analysis.’”[10] The court’s trace amount interpretation essentially means that any plastic a person could see or collect was excessive and violated the permit. To meet this standard, the plaintiffs submitted “photographs, videos, and 30 containers containing 2,428 samples of plastics in gallon zip lock bags and plastic bottles of plastic pellets.”[11] The court relied on this to find that the plastic discharges were beyond trace amounts, violating the TPDES permit and damaging the affected area’s recreational, aesthetic, and economic value.[12] Formosa was required to pay $50 million to improve technologies for preventing plastics in wastewater and fund offsetting environmental projects.[13]

This case suggests an emerging zero-discharge standard for waterborne plastic. Under the “trace amounts” interpretation accepted by the court, any person can show a CWA violation by simply hauling bags of collected plastic into court. If the plastic is able to be collected with human hands and be seen with human eyes, then it is not “barely discernible.” It does not take as much volume for solid plastic to have these qualities as required for a liquid or particulate contaminant. While the Texas Administrative Code demands a scientific process for measuring a water body’s toxicity, radioactivity, temperature, PH, or bacterial health, measuring the water’s physical plastic amount seems to be a blunt tool. Plastic pellet manufacturers, formers, and transporters should be aware of the enforcement potential if a single pellet in the water can be seen or collected.

However, this does not mean that the court’s interpretation exceeds regulators’ current goals. As the court pointed out, the TCEQ conducts visual inspections of water to determine whether discharges exceed “trace amounts.”[14] The Texas Administrative Code’s Chapter 37 sets out aesthetic parameters for surface water, mandating that water be “essentially free of floating debris[,] . . . suspended solids[, and] . . . settleable solids.”[15] TCEQ gave a presentation at the Surface Water Quality Advisory Workgroup meeting on June 29, 2020, clarifying that none of the 155 TPDES permits for plastic pellet manufacturers authorized any amount of plastic pellets to be discharged into receiving waters.[16] The agency has proposed measures to clarify this prohibition including updating the Texas Administrative Code’s Chapter 37 to explicitly prohibit plastics’ discharge, update wastewater permits, and require a set of Best Management Practices for handling plastics.[17]

Decisions like Formosa are not themselves driving administrative change, but are a signal that citizen groups are using litigation to stop plastic pollution more quickly than administrative or legislative solutions are formalized. Eliminating waterborne plastics is a growing priority for citizen groups and legislators. The Save Our Seas 2.0 Act (SOS Act) was signed on December 18, 2020, and focuses on marine ecosystems’ contamination and plastic ingestion by marine fauna.[18] The Break Free From Plastic Pollution Act (BFPPA) was introduced on March 25, 2021, with the goal to “shift the burden of cleanup to the corporations that produced the plastic[] . . . .”[19] Whether these legislative efforts will bring about meaningful change remains to be seen, as the SOS Act has been criticized for its measured approach and the BFPPA has failed to garner bipartisan support.[20] Whatever their outcome, they will move slower than many activists prefer, making the courts the most expedient battleground to stop plastic pollution.

The Formosa ruling may have invited a surge in CWA citizen suits over plastic contamination. Citizen groups have recognized that standards such as “trace amounts” require less plastic-contamination scientific evidence than discharge limits on other contaminants. Individually-collected waterborne plastics may become the preferred method of proof against plastic manufacturers. A District of South Carolina pending case affirmed that the plaintiffs have standing partially based on a similar production of plastic pellet bags.[21] In 2020, Formosa Plastics faced a permit challenge where the plaintiff citizen group cited the individually collected plastic in San Antonio to evidence a misconduct pattern.[22]

Now, in 2021, Formosa is facing a public challenge by environmental justice groups to stop the construction of a $9.4 billion complex in Baton Rouge, Louisiana’s, “Cancer Alley.”[23] The case emboldening local activism was not accidental. Following the decision, the plaintiff activists drove the plastic pellets that had been used as evidence to Baton Rouge.[24] The activists placed the pellet boxes outside the homes of four chemical industry lobbyists with notes reading “we have delivered this package . . . as a reminder—Louisiana does not need any more pollution, plastics, or otherwise.”[25]

David Klein is a Principal of Lloyd Gosselink Rochelle & Townsend, P.C. and is the Chair of the Environmental and Natural Resources Law Section of the State Bar of Texas.  David represents public and private clients in water quality, water rights, water districts, and water utility service matters.

Graham H. Pough is a second-year student at The University of Texas School of Law and Senior Editor of the Texas Environmental Law Journal.

 

[1] Steven Mufson, Huge Plastics Plant Faces Calls for Environmental Justice, Stiff Economic Headwinds, The Wash. Post (Apr. 19, 2021), https://www.washingtonpost.com/climate-environment/2021/04/19/huge-plastics-plant-faces-calls-environmental-justice-stiff-economic-headwinds/.

[2] Frequently Asked Questions (FAQs) Which states consume and produce the most natural gas?, U.S. Energy Info. Admin., https://www.eia.gov/tools/faqs/faq.php?id=46&t=8 (last visited May 4, 2021).

[3] See Dan Glaun, The Plastic Industry is Growing During COVID. Recycling? Not So Much, Austin PBS (Feb. 17, 2021), https://www.pbs.org/wgbh/frontline/article/the-plastic-industry-is-growing-during-covid-recycling-not-so-much/; see also Jamie Smith Hopkins, Minuscule Pellets Keep Escaping Plastic Manufacturing Sites, Part of a Bigger Dilemma: How Can We Fix Plastic Waste Problems Amid a Production Boom?, The Ctr. for Pub. Integrity (June 13, 2019), https://publicintegrity.org/environment/pollution/pushing-plastic/as-the-world-grapples-with-plastic-the-u-s-makes-more-of-it-a-lot-more/.

[4] Mufson, supra note 1.

[5] San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corp., 2019 WL 2716544, at *26 (S.D. Tex. June 27, 2019).

[6] Tex. Water Code § 26.027.

[7] Formosa, 2019 WL 2716544 at *3.

[8] Id.

[9] Id. at *7.

[10] Id. at *8 (quoting an expert witness).

[11] Id. at *11.

[12] Id. at *10.

[13] Port Wells & Ellen Gilmer, Formosa Settles Plastic Pellet Water Suit for $50 Million, Bloomberg Law (Oct. 15, 2019), https://news.bloomberglaw.com/environment-and-energy/formosa-settles-plastic-pellet-water-suit-for-50-million.

[14] Formosa, 2019 WL 2716544 at *3.

[15] 30 Tex. Admin. Code §307.4(b)(2)–(3).

[16] TCEQ Surface Water Quality Standards Advisory Work Group Meeting, Tex. Commission on Env’t Quality 10 (2020), https://www.tceq.texas.gov/assets/public/permitting/waterquality/standards/2021revision/ips-stakeholder-meeting-6-30-2020-2.pptx.

[17] Id.

[18] See generally Save Our Seas 2.0 Act, Pub. L. No. 116-224, 134 Stat. 1072 (2020) (“To improve efforts to combat marine debris, and for other purposes.”).

[19] Merkley, Lowenthal Lead Introduction of Congress’ most Comprehensive Plan to Protect Americans’ Health From Growing Plastic Pollution Crisis, Jeff Merkley U. S. Senator for Or. (Mar. 25, 2021), https://www.merkley.senate.gov/news/press-releases/merkley-lowenthal-lead-introduction-of-congress-most-comprehensive-plan-to-protect-americans-health-from-growing-plastic-pollution-crisis-2021.

[20] Greta Moran, The House Just Passed Another “Save Our Seas” Act. Here’s Why It Won’t., The Intercept (Oct. 7, 2020), https://theintercept.com/2020/10/07/save-our-seas-bill-plastics-pollution/.

[21] Charleston Waterkeeper v. Frontier Logistics, LP, 488 F.Supp.3d 240, 253 (D.S.C. Sept. 21, 2020).

[22] Plaintiffs’ Motion for Summary Judgment at 15, Center for Biological Diversity v. U.S. Army Corps of Engineers, WL 6041625 (D.D.C. 2020).

[23] Mufson, supra note 1.

[24] Id.

[25] Id.

Vol. 51-2 Water Rights & Utilities

Water Rights & Utilities

Delivery Credit of Evaporated Water: Texas v. New Mexico

Introduction

On December 14, 2020, the United States Supreme Court resolved a six-year-long deliver-credit dispute under the Pecos River Compact between Texas and New Mexico.

The Court held that New Mexico’s motion seeking delivery credit was timely.[1] On the merits, it held that New Mexico is entitled to the delivery credit of evaporated water stored at the request of Texas.[2]

The Pecos River Compact

The Pecos River originates in New Mexico and flows south into Texas, emptying into the Rio Grande River.[3] To equitably apportion the Pecos River’s water use, Texas and New Mexico signed the Pecos River Compact in 1948,[4] and, one year later, Congress approved the Compact to “‘provide for the equitable division’” and “‘remove causes of present and future controversies.’”[5] The Compact determines the amount of water that New Mexico has to deliver to Texas annually using an inflow-outflow method.[6] After some early disputes, in 1987 the Supreme Court issued a decree setting out the states’ rights and appointed a disinterested River Master to make the calculations.[7] Later, the Court integrated the River Master’s Manual as part of its amended decree and required the River Master to abide by the Manual when making the calculations.[8]

The Current Dispute

The current case’s dispute is rooted in a tropical storm that caused heavy rainfall in the Pecos River Basin in the fall of 2014.[9] The rain filled Red Bluff Reservoir in West Texas, just south of the New Mexico border.[10] In November, Texas’s Pecos River Commissioner wrote to his counterpart in New Mexico, requesting that New Mexico store Texas’ portion of the flow until Red Bluff Reservoir was ready to take it.[11] The New Mexico commissioner agreed and explained that the water “belongs to Texas” and that “‘[e]vaporative losses . . . should thus be borne by Texas’”.[12] Before the correspondence, the Bureau of Reclamation ordered New Mexico to hold the water in the Brantley Reservoir for safety concerns.[13] The flow was finally released to Texas in August 2015 and significant water had evaporated.[14]

The River Master did not calculate the water loss in his preliminary report but outlined a procedure for resolving this dispute.[15] According to the procedure, either state could file a motion to the River Master if they could not reach an agreement on a joint proposal.[16] In 2018, New Mexico filed a motion because negotiations between the states eventually broke down.[17] The River Master granted delivery credit for New Mexico, and Texas quickly moved for Supreme Court review, invoking the Court’s original jurisdiction.[18]

The Arguments of Texas and New Mexico

Texas argued that New Mexico forfeited the right to object to the River Master’s 2015 calculations by failing to follow the Manual’s deadlines, and that the River Master lacked authority to retroactively modify past reports without both states’ consent.[19] Texas claimed that the River Master erred in applying equitable tolling and in permitting New Mexico’s untimely request because the Manual deadlines are jurisdictional.[20]

Texas also argued that only limited circumstances under the Compact allow apportionment of evaporative losses occurring in New Mexico: under Article VI, the water is “unappropriated floodwater” or under Article XII, for consumptive use by the federal government when storing water “for use in” Texas.[21] Texas reasoned that because the water was not constructively held for use in Texas, Article XII does not apply.[22] Because the River Master decided the water was not unappropriated floodwater, Article VI does not apply.[23]

New Mexico argued that the equities weigh heavily in New Mexico’s favor.[24] It alleged that because the Court had “inherent authority to manage its amended decree” and the River Master’s authority was derived directly from the Court, he was empowered to take actions necessary to fulfill his duties, including adjusting deadlines and adopting procedures to address novel accounting issues.[25] A narrow interpretation of the River Master’s functions would defeat both the purpose for which the River Master was appointed and the Compact’s aim to promote interstate comity.[26] New Mexico argued that its motion was timely because it relied on the River Master’s devised procedure.[27] New Mexico further argued that “the plain language of the Compact, Amended Decree, and Manual” required Texas to bear the loss, and the record supported the River Master’s determination.[28] It framed the remedy it sought as a “one-time credit,” which was not a retroactive modification of the Manual but a correct application of equitable tolling doctrine.[29]

The Court’s Decision

The Court agreed with the River Master’s determination and denied Texas’s motion for review.[30] The Court disagreed with Texas’s first argument that the request was untimely.[31] It reasoned that because Texas had not objected to the River Master’s negotiation procedure, “it cannot run away from the procedure it agree[d] to.”[32] The Court ruled that the amended decree’s objections’ deadlines are not jurisdictional.[33]

On the merits, the Court agreed with New Mexico and the United States that the water was stored in New Mexico at Texas’s request.[34] The Court looked at the text of § C.5 of the Manual, which states:

If a quantity of the Texas allocation is stored in facilities constructed in New Mexico at the request of Texas, then . . . this quantity will be reduced by the amount of reservoir losses attributable to its storage, and, when released for delivery to Texas, the quantity released less channel losses is to be delivered by New Mexico at the New Mexico-Texas state line.[35]

The Court found that the stored water was part of the “Texas allocation” because the water would have flowed across the state line and counted toward Texas’s allocation but for the storage at Texas’s request.[36] The Court also found that New Mexico stored the water, clarifying § C.5 does not purport to define “stored” any way other than its ordinary meaning. The Court further found that Texas made the storage request.[37] In conclusion, the Court held that the text of § C.5 and the record evidence of the states’ correspondence established that the delivery credit should be granted to New Mexico.[38]

Justice Alito concurred in part and dissented in part.[39] He agreed that New Mexico did not forfeit any objection to the 2014 report but thought the River Master did not have the authority to change the amended decree.[40] He would have vacated and remanded the case because the relevance of Texas’s request for storage and New Mexico’s agreement with that request was unclear.[41]

Conclusion

The Court based its judgment on the Manual’s text and the correspondence between the Texas and New Mexico Pecos River Commissioners. It left some questions unaddressed. In the footnotes, the Court listed aspects of the River Master’s decision that were left unaddressed, which limited the case’s precedential value:[42] The Court did not reach the question of whether the River Master will have the authority to alter the amended decree. As Justice Alito pointed out, this may be inviting future problems. Moreover, the Court did not rule either on issues related to “unappropriated floodwaters” in the Complaint’s Article III or “consumptive use of water by the United States” in Article XII, leaving the interpretation of specific Compact terms open.

The case’s precedential value was further limited by the fact that a River Master was involved. For cases without the appointment of a River Master, the case does not provide much guidance for water-right lawyers.

Emily Willms Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

Zhu Wen is a second-year student at The University of Texas School of Law and Staff Editor of the Texas Environmental Law Journal.

 

[1] Texas v. New Mexico, 141 S. Ct. 509, 514–15 (2020).

[2] Id. at 516.

[3] Id. at 512.

[4]Pecos River Compact, Office of the State Eng’r, https://www.ose.state.nm.us/Compacts/Pecos/isc_pecosCompact.php (last visited May 3, 2021).

[5] Texas v. New Mexico, 141 S. Ct. at 512.

[6] Id.

[7] Texas v. New Mexico, 482 U.S. 124, 137(1987).

[8] Texas v. New Mexico, 485 U.S. 388, 381 (1988).

[9] Texas v. New Mexico, 141 S. Ct. at 513.

[10] Id.

[11] Id.

[12] Id.

[13] Id. at 516.

[14] Id. at 513.

[15] Id.

[16] Id.

[17] Id. at 514.

[18] Id. at 514.

[19]Motion for Review of River Master’s Final Determination at 16, Texas v. New Mexico, 141 S. Ct. 509, 513 (2020).

[20] Id. at 20.

[21] Id. at 27.

[22] Id.

[23] Id.

[24] State of New Mexico’s Response to Texas’s Motion for Review of River Master’s Final Determination at 15, Texas v. New Mexico, 141 S. Ct. 509, 513 (2020).

[25] Id. at 19.

[26] Id.

[27] Id. at 33.

[28] Id. at 34.

[29] Id. at 27.

[30] Texas v. New Mexico, 141 S. Ct. 509, 512 (2020).

[31] Id. at 514–15.

[32] Id. at 515.

[33] Id.

[34] Id.

[35] Id. at 513 (emphasis in original).

[36] Id. at 515.

[37] Id. at 156.

[38] Id.

[39] Id.

[40] Id.

[41] Id.

[42] Id.

 

Vol. 51-2 Washington Update

Washington Update

Affordable Clean Energy Rule Vacated by the D.C. Circuit and What Could Be Next Under the Biden Administration

Introduction

President Biden campaigned on reforming the United States’ approach to addressing climate change. The “Biden Plan” includes, among other things, a goal to “ensure the U.S. achieves a 100% clean energy economy and reaches net-zero emissions by no later than 2050.”[1]

On President Biden’s first day in office, he issued numerous climate-related executive orders and took executive actions to advance this goal. As a result, the U.S. rejoined the Paris climate agreement,[2] federal agencies are required review all new and proposed Trump regulatory changes,[3] the Keystone XL pipeline permit was revoked[4], and oil and gas leasing in the Arctic National Wildlife Refuge was paused.[5]

While these executive orders could be implemented immediately, President Biden is likely to push for new legislation and engage in new rulemaking. In particular, President Biden is expected to address President Barack Obama’s Clean Power Plan (CPP) and President Donald Trump’s intended CPP replacement—the Affordable Clean Energy Rule (ACE Rule), which the U.S. Court of Appeals for the D.C. Circuit recently struck down.

ACE Rule as a Replacement to the Clean Power Plan

In 2015, the Obama Administration enacted the CPP to regulate power plants’ greenhouse gas (GHG) emissions.[6] Deriving its authority from the Clean Air Act’s Section 111(d), the CPP established budgets (or targets) for each state’s GHG emissions generation and directed each to develop GHG emissions-reduction plans statewide.[7] The CPP effectively required each state to create plans that would phase out coal from power plants and increase renewable energy generation. The goal was to decrease the power sector’s emissions so that 2030’s emissions are 32% less than 2005’s emissions.[8]

The plan faced legal challenges almost immediately after it was unveiled. These challenges were consolidated in a case brought before the D.C. Circuit. In February 2016, during the pendency of the case’s appeal, the Supreme Court issued an order that stayed the CPP’s implementation, pending a decision on the merits by the D.C. Circuit.[9] President Trump was elected before the D.C. Circuit could rule, and his administration replaced the CPP with the ACE Rule.

The ACE Rule emphasized a much narrower reading of the CAA’s authority. The Rule, finalized in June 2019, also repealed the CPP on the grounds that it unlawfully required states “to consider emission reductions through generation shifting,” like moving generation away from coal.[10] Instead, the ACE Rule emphasized heat rate improvements (or efficiency improvements) that could be achieved “inside the fence” of each regulated electric generating unit.[11]

Just prior to President Biden’s inauguration, the D.C. Circuit vacated the ACE Rule and its plan to relax power plants’ GHG emissions’ restrictions.[12] The Court called the ACE Rule a “fundamental misconstruction” of the CAA,[13] and rejected the Trump Administration’s narrow reading of its statutory authority as “not supported by the text, let alone plainly and unambiguously required by it.”[14]

Specifically, the Court rejected the Trump Administration’s CAA interpretation that Section 111(d) constrained emissions reduction methods to site-specific, inside-the-fence locations (i.e., “at and to the source”).[15] Instead, the Court reasoned that “Congress imposed no limits on the types of measures the EPA may consider beyond three additional criteria: cost, any non-air quality health and environmental impacts, and energy requirements.”[16]

Importantly, on February 22, 2021, the D.C. Circuit granted EPA’s request to partially stay its decision as it applied to the Trump EPA’s CPP repeal.[17] As a result, the CPP did not immediately go back into effect, leaving a clear path for the Biden EPA to develop a new rule limiting power plants’ GHG emissions.

A former Obama Administration legal counsel, Jody Freeman, called the ruling a “massive win” and argued that Biden “could go on the offense” immediately in crafting a new power plant plan.[18]

Potential Next Steps for the Biden Administration

The vacating of the ACE Rule grants the Biden administration an opportunity to develop a new regulatory structure to address the power industry’s GHG emissions. So long as the D.C. Circuit decision is upheld, the Biden Administration is not required to go through the extensive regulatory process of repealing the ACE Rule.

The Biden administration has indicated that it does not intend to revive the CPP.[19] During Biden’s EPA Administrator nominee’s, Michael Regan, confirmation hearings, Mr. Regan testified that the EPA would draw on the lessons from the CPP and ACE Rules, and that the current lack of an existing standard “‘presents a significant opportunity for the [EPA] to take a clean slate and look at how [to]] best move forward.”[20] At the time of this development’s drafting, the Biden Administration had not set forward a regulatory or legislative plan to address GHG emissions from power plants, though one is certainly expected during the President’s term.

Potential Obstacles to the Biden Administration

Though the D.C. Circuit struck down the ACE Rule, the Rule may not be entirely finished. Its proponents can mount challenges to prolong its life. Among their options, the litigants could petition for panel reconsideration of remedy or petition for rehearing en banc. Following the D.C. Circuit’s final decision on these appeals, the litigants could also appeal to the U.S. Supreme Court. These appeals’ outcomes may allow the ACE Rule to remain in place pending resolution of the hearing.

Conclusion

Regardless of whichever path the Biden Administration may take in replacing the CCP and ACE Rule, one outcome is certain: there will be continued legal battles. Any replacement rule issued by the Biden administration, even if accounting for legal concerns previously articulated by CPP opponents, will still likely be subject to extensive legal challenges in the D.C. Circuit, and if necessary, before the Supreme Court.

Jacob Arechiga is a Special Counsel in Duane Morris LLP’s Austin, Texas, office. His practice is focused on complex commercial matters, particularly those in the energy and electric power industries.

Matthew T. Goldstein is a third-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.

 

[1] The Biden Plan for a Clean Energy Revolution and Environmental Justice, Joe Biden, https://joebiden.com/climate-plan/ (last visited May 1, 2021).

[2] See Statement on Acceptance of the Paris Agreement on Climate Change on Behalf of the United States, Daily Comp. Pres. Doc. (2021).

[3] See Exec. Order No. 13990, 86 Fed. Reg. 7037 (Jan. 20, 2021).

[4] Id.

[5] Id.

[6] See U.S. Env’t Prot. Agency, Overview of the Clean Power Plan: Cutting Carbon Pollution from Power Plants 3 (2021), https://archive.epa.gov/epa/cleanpowerplan/fact-sheet-overview-clean-power-plan.html.

[7] Id.

[8] Id.

[9] West Virginia v. Env’t Prot. Agency, Order in Pending Case, 15A773 (Feb. 9, 2016).

[10] Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions From Existing Electric Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations (“ACE Rule”), Final Rule, 84 Fed. Reg. 32,520, 32,523-32,524 (July 8, 2019).

[11] U.S. Env’t Prot. Agency, Fact Sheet: Overview of the Final ACE Rule 1, https://www.epa.gov/sites/production/files/2019-06/documents/bser_and_eg_fact_sheet_6.18.19_final.pdf .

[12] Am. Lung Ass’n v. Env’t. Prot. Agency, 985 F.3d 914, 930 (D.C. Cir. 2021).

[13] Id.

[14] Id. at 951.

[15] Id. at 945.

[16] Id. at 946.

[17] Order, Am. Lung Ass’n v. Env’t Prot. Agency, No. 19-1140, 2021 U.S. App. LEXIS 1333 (D.C. Cir. Feb. 22, 2021).

[18] Lisa Friedman, Court Voids a ‘Tortured’ Trump Climate Rollback, The New York Times (Jan. 19, 2021), https://www.nytimes.com/2021/01/19/climate/trump-climate-change.html.

[19] Jean Chemnick, Biden won’t revive Obama’s Clean Power Plan. So Now What?, E&E News (Feb. 9, 2021), https://www.eenews.net/stories/1063724547.

[20] Id.

Vol 51-2 State Casenote

State Casenote

Lyle v. Midway Solar, L.L.C., 08-19-00216-CV, 2020 WL 7769632 (Tex. App.—El Paso Dec. 30, 2020, pet. filed)

Introduction

On December 30, 2020, the Eighth Court of Appeals in, El Paso, Texas, affirmed in part, reversed in part, and remanded a district court’s decision granting Midway Solar, L.L.C. and Gary Drgac’s motions for partial summary judgment.[1] Because the mineral estate owners had no plans to develop the estate, the court ruled that the breach of contract ach and trespass claims were not ripe for review.[2] Additionally, it determined that certain waiver agreements clouded these owners’ title.[3]

Background

The Lyles owned a portion of an undeveloped mineral estate located on a 315-acre land tract (Section 14).[4] Their ownership derived from a 1948 deed, in which the tract’s owners transferred surface ownership to a third party while reserving the mineral interest to themselves.[5] The Lyles had never leased their interest to a developer and had no plans to develop the mineral estate themselves.[6] When the case was heard, Gary Drgac owned Section 14’s surface rights and had no interest in the mineral estate.[7] In October 2015, Drgac entered into a lease with Midway Solar, L.L.C., allowing it to build a solar energy facility on a portion of Section 14 and other adjoining tracts of land in which he had an ownership interest.[8] Midway later obtained waiver agreements from the mineral interest owners in the adjoining tracts.[9] These waivers relinquished the owners’ rights to use the leased areas’ surface for mineral exploration, and while some agreements purported that the owner had mineral rights in Section 14, no owner actually did.[10] Midway subsequently corrected this error and attached a “Disclaimer of Interest” to all of the waivers.[11]

After the solar facility’s construction, the Lyles sued Midway, Drgac, and the surface waiver signers, alleging breach of contract and trespass, and seeking a declaration quieting title in their mineral estate.[12] They sought damages for the trespass and breach of contract claims for the diminished value of their mineral estate as well as an injunction to remove the facility portions that were encroaching on their mineral interest and easement rights.[13] The trial court granted Midway and Drgac’s partial summary judgment motions as to the quiet title, breach of contract, and trespass claims.[14] The Lyles appealed.

The Trespass and Breach of Contract Claims

The court’s analysis started with the question of whether the accommodation doctrine applied.[15] The court explained that the accommodation doctrine was meant to balance mineral estate owners’ and surface estate owners’ rights when the estates have been severed by conveyance.[16] Quoting the Texas Supreme Court, it stated that the doctrine “holds that the ‘mineral and surface estates must exercise their respective rights with due regard for the other’s,’ and has in general provided a ‘sound and workable basis’ for resolving conflicts between ownership interests.”[17] However, the court also made clear that because Texas public policy favors freedom of contract, the accommodation doctrine will not apply to cases in which the express deed or contract terms determines the parties’ rights.[18] Taking both the interests of balancing respective owners’ rights and freedom of contract into account, the court articulated that “when the parties’ deed or contract is silent or unclear on the parties’ respective rights, or when there is substantial disagreement regarding the parties’ intent in the terms used in a deed, the accommodation doctrine will be applied.”[19]

The Lyles argued that the accommodation doctrine should not apply, pointing to a deed provision they claimed expressly described the parties’ rights.[20] The provision provided that “[g]rantors further reserve unto themselves . . . the right to such use of the surface estate . . . as may be usual, necessary or convenient in the use and enjoyment of the oil, gas, and general mineral estate . . . .”[21] Conceding that courts have found the terms “necessary” and “convenient” too imprecise to prevent the accommodation doctrine’s application, the Lyles argued that the word “usual” expressed the grantor’s intent to reserve the right to use vertical drilling—the usual drilling method at the time the deed was signed.[22] The court rejected this argument. First, it pointed out that the deed did not use the term “usual” in the specific context of drilling methods. Second, it noted that the deed did not make clear whether the term was intended to apply to the methods of extracting minerals at the time it was signed (1948) as those methods might evolve over time.[23] Because of this, the court reasoned that there was “room for substantial disagreement as to what the grantors meant in using that term.”[24]

After determining the accommodation doctrine applied, the court considered what it deemed to be the centerpiece of the dispute: the question of whether the Lyles must have been currently using or planning to use the surface of their estate for mineral development in order for their claim to be ripe for review.[25] The Lyle’s argued that because they had already suffered damages as a result of Midway’s solar facility construction—namely, a decrease in the mineral estate’s value—their claims were ripe for review.[26] In response, Midway claimed their facility’s interference with the mineral estate was only potential, and argued that until there is actual interference, the Lyles could not unilaterally dictate the surface’s use.[27]

The court ultimately decides that the question of whether Midway must accommodate the Lyles’ potential property use before they actually seek to use it is not directly addressed by prior case law.[28] Instead, the court suggests that “the answer to that question lies in a proposition of logic, as much as one of law.”[29] As the court formulated it, the Lyles had the surface-use right, but only as an adjunct to their mineral estate.[30] If they exercise this right to develop the minerals, then Midway must yield to the extent required by the accommodation doctrine.[31] If this right is not exercised, then there is nothing for Midway to accommodate.[32] Put more succinctly, “until the Lyles seek to develop their minerals, Midway owes no duty to the Lyles respecting the surface usage.”[33] The court implied that any other result would lead to damages that were too speculative, as the damages calculation based on a diminution of the mineral estate’s value could vary significantly depending on when the Lyles attempted to develop or market the estate.[34] While the court conceded that such a calculation may become necessary once the Lyles attempt to develop the estate, it stressed that “[t]here is simply no logic in allowing trespass damages today for a mineral estate that may never be developed.”[35]

Quiet Title Claims

The Lyles also argued that the surface waiver agreements Midway obtained from the adjacent-land-tracts mineral owners created a cloud on their title. They claimed that because the agreements purported to relinquish the right to use Section 14’s surface for mineral developments, they implied that they held such rights.[36] The Lyles thus sought a judgment declaring the waivers invalid and void.[37] In response, Midway argued that the waivers did not create a cloud on the Lyle’s title, and even if they did, Midway removed the cloud by correcting some of the waivers and adding a Disclaimer of Interest to all.[38]

In rendering its judgment, the court split the waiver agreements into three categories. In the first, the mineral owners stated that they owned a mineral interest in certain lands described by Midway’s leases; these leases covered Section 14.[39] Because the owners claimed an interest in Section 14 that they did not have—the invalidity of which could only be discerned by extraneous documents’ use—the court ruled that the agreements cast a cloud on the Lyles’ title.[40]

The second category consisted of agreements that stated the mineral owners “had interests under some portion of or all of” the lands described in the Midway leases.[41] Because an exhibit attached to the agreements expressly stated that the mineral owners had interests only in lands not including Section 14, the court ruled that these waivers did not constitute a cloud on the Lyles’ title.[42]

The third set of waivers was comprised of agreements essentially the same as those in the second category, except no exhibit clarifying the owners’ interests was attached.[43] Though Midway eventually altered these agreements by crossing out references to Section 14, the court found that these agreements still cloud the Lyles’ title because none of these alterations were done in accordance with the Property Code.[44]

According to the court, Midway’s filing of the Disclaimer of Interest did not prevent any of the agreements from clouding the Lyles’ title.[45] The Disclaimer only stated that the agreements did not grant Midway any mineral-estate-development rights under Section 14 because it was the mineral owners who purported to claim an interest in Section 14 rather than Midway.[46] The court concluded that the Disclaimer of Interest did not correct the problem.[47]

Conclusion

The appeals court concluded that the trial court did not err in granting summary judgment on the trespass and breach of contract claims, but that its dismissal should have been made without prejudice.[48] Additionally, the court determined that the trial court erred in granting summary judgment to Midway and Drgac on the Lyles’ claim for quiet title as it pertained to certain waiver agreements but did not err in granting the same as it pertained to others.[49]

Stacie M. Dowell is associate counsel for the Trinity River Authority of Texas and works on a wide variety of legal issues spanning contract, employment, business, property, and water law.

Samuel G. Dreggors is a third-year student at The University of Texas School of Law and Staff Editor of the Texas Environmental Law Journal.

 

[1] Lyle v. Midway Solar, L.L.C., No. 08-19-00216-CV, 2020 WL 7769632 at *1 (Tex. App.—El Paso Dec. 30, 2020, pet. filed).

[2] Id. at *12.

[3] Id. at *13–*15.

[4] Id. at *1.

[5] Id.

[6] Id.

[7] Id.

[8] Id. at *2.

[9] Id. at *3.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id. at *3–*5.

[15] Id. at *6.

[16] Id.

[17] Id. (quoting Coyote Lake Ranch, L.L.C., v. City of Lubbock, 498 S.W.3d 61, 63 (Tex. 2016)). 

[18] Id. at *7.

[19] Id.

[20] Id. at *7.

[21] Id.

[22] Id. at *7–*8.

[23] Id. at *8.

[24] Id.

[25] Id. at *9.

[26] Id.

[27] Id. at *11.

[28] Id.

[29] Id.

[30] Id.

[31] Id.

[32] Id.

[33] Id.

[34] Id.

[35] Id.

[36] Id.

[37] Id. at *12.

[38] Id.

[39] Id. at *13.

[40] Id.

[41] Id. at *14.

[42] Id.

[43] Id.

[44] Id. at *14–*15.

[45] Id. at *15.

[46] Id.

[47] Id.

[48] Id. at *16.

[49] Id.