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