State Trust Lands: Static Management and Shifting Value Perspectives

By

Erin Pounds*

States hold in trust some 46 million acres of land for purposes established by federal grants in statehood acts. These trust purposes remained largely unenforced until the early twentieth century when the United States Supreme Court, in Lassen v. Arizona Highway Department, interpreted the Arizona–New Mexico Enabling Act to impose strict management duties on the State. Even though no other statehood act included the detailed requirements contained in the Arizona–New Mexico Enabling Act, somewhat surprisingly, a number of state courts proceeded to interpret their statehood acts to impose similar restrictions. This Article examines the evolution of management restrictions imposed on federally granted state lands as a result of recent state trust land litigation. The Article concludes that devoting state trust land to activities at below market value—for example, grazing leases—violates the trust. On the other hand, managing trust lands for recreation and wildlife purposes does not necessarily violate the trust so long as these purposes generate the greatest revenue over the long run, and courts seem willing to defer to state decisions emphasizing long-term value over short-term economic gain.

I. Introduction

At statehood, the federal government granted lands to each state to manage for various purposes such as supporting public education and other important public institutions.[1] State trust lands now comprise approximately 46 million acres of land in twenty-four states, located primarily west of the Mississippi River.[2] States hold these lands in a perpetual, intergenerational trust to support a variety of beneficiaries, and it is the states’ responsibility to actively manage these lands for the benefit of the trust.[3] State trust lands are one of the most commonly overlooked categories of trust land.[4] Decisions regarding the use and disposition of these lands have greatly influenced the development of the United States, particularly in the western states, where land managers have leased many lands for grazing and agricultural uses.[5]

Early statehood grants of federal land issued under the General Land Ordinance of 1785[6] and the Northwest Ordinance of 1787[7] vaguely described the purposes of the grants.[8] Under these loosely worded grants, the states lost a large percentage of the granted lands due to decisions to sell the lands as rapidly as possible, often below market value, to encourage westward settlement and to support the early schools.[9] In response to these perceived misuses of the grants, Congress began placing more restrictive language in the statehood acts for those states admitted to the Union after 1850, particularly New Mexico and Arizona.[10] These new specifications included 1) directing the states to manage lands for income production, 2) proscribing the disposition of trust lands except when full value is received, and 3) often imposing procedural safeguards such as public notice and auction sales.[11]

The dominance of trust principles in the management of these lands did not become clear until after the Arizona and New Mexico accession in 1912, under the Arizona–New Mexico Enabling Act.[12] Arizona and New Mexico entered the Union under the same enabling act, which contained “uncharacteristically lengthy” management requirements by comparison to preceding enabling acts.[13] In 1966, the United States Supreme Court relied on the restrictive language in the Arizona–New Mexico Enabling Act in Lassen v. Arizona ex rel. Arizona Highway Department,[14] holding that the requirements in the Act established an enforceable trust relationship between the State and the intended beneficiaries of the land grant—the state school fund.[15] Lassen established the notion of a trust in state-managed federal land grants, and state courts from all over the West relied on the Supreme Court’s reasoning to find a trust in other statehood grant lands,[16] even in states whose enabling acts did not contain the restrictive language of the Arizona–New Mexico Enabling Act.[17]

As a result of this enforceable trust in statehood land grants, there has been a fair amount of litigation over whether state management of the trust lands satisfies the conditions established by the various statehood acts.[18] The Supreme Court’s Lassen decision raised several issues concerning natural resource management activities on state trust lands,[19] which have since included whether statehood acts require the state to obtain fair market value for natural resource management, and whether a state may take into account the long-term value of activities when making land management decisions.[20]

State trust lands historically have provided significant financial benefits from natural resources management, including oil, gas, mineral extraction, timber production, and grazing.[21] However, as extractive natural resource industries have declined, public valuation of open space, watershed protection, wildlife, and recreation has increased.[22] This change led to questions concerning trust land management, especially the value of traditional natural resource production activities, including their worth over the long term to trust beneficiaries and their effect on conservation.[23] Nevertheless, despite changing social, political, and environmental needs and conditions, state land management today continues largely in the same manner and for the same purpose as it has for the last century.[24] The static nature of state trust land management raises concerns as to whether state management can adapt to changing circumstances, including managing for long-term value instead of short-term income production, without violating the fiduciary duty owed under the trust.

This Article examines recent litigation over state trust land management and discusses the implications of these decisions for future management of the trust lands. Part II provides a brief history of the state trust lands, including the evolution of enabling act requirements. Part III looks at the specific requirements in the Arizona–New Mexico Enabling Act because the Supreme Court relied on this statute to establish a federal trust in state trust lands. Relying on the opinionof the Supreme Court, this Part examines the nature of the trust formed by these requirements, and includes a discussion of the role of trustees, beneficiaries, and the trust corpus. Part IV surveys recent state trust land litigation, including cases from Idaho, Arizona, Colorado, Montana, and New Mexico, which illustrates that courts have interpreted the fair market value requirement narrowly and that there has been a policy shift towards recognizing long-term values in trust land.

Part V concludes that case law indicates leasing lands for grazing at below market value violates the trust requirement that state managers demand fair market value for trust land in virtually all states. Finally, Part VI argues that the requirement that these lands be managed for income production does not necessarily prohibit management of state trust lands for recreation, wildlife, and wilderness values as long as the management produces the most income for the trust. However, the choice between managing for long-term values and short-term production is left to the management agencies, who are required only to show that they considered both uses when making management decisions.

This examination of state trust law reveals: 1) the almost exclusive focus of state managers on income production has led to widespread violation of the fair market value requirement through grazing leases;[25] and 2) the recent decisions of several courts approve a shift away from management practices emphasizing immediate economic production and encouraging consideration of long-term management values.[26] This Article maintains that although courts increasingly conclude that issuing grazing leases below fair market value is a violation of the trust and consequently allow managers to consider long-term values in their management decisions, judicial review still affords managers too much discretion in their administration of trust lands. The result is that courts will not interfere with trust land management decisions if managers demonstrate consideration of the potential long-term benefits of leasing activities and no reliance in their decision making on impermissible factors, such as the benefit of leasing activities to the grazing industry.

II. A Brief History of State Trust Lands

The first of two pieces of legislation that allocated federal land grants to states in the western territories was the General Land Ordinance of 1785.[27] Under this land ordinance, which established the township system of laying out townships in grids, states held section 16 in every township in trust for the state schools.[28] In 1787, Congress passed the Northwest Ordinance, which established the procedure by which territories could become states and enter the Union.[29] The Northwest Ordinance of 1787 authorized Congress to pass an enabling act that would allow a territory to create a constitution.[30] Once both the territory and Congress approved a state constitution, the United States would make an offer to the new state and, if the state accepted, the new state became part of the Union.[31]

In 1803, Ohio became the first state to receive a grant of school trust lands.[32] In exchange for the grant, Ohio gave what has since been understood to be an honorary, but unenforceable, promise to use the school land grants for education.[33] Congress subsequently admitted Louisiana, Indiana, Mississippi, Illinois, Alabama, Missouri, and Arkansas in substantively the same manner as Ohio’s admittance.[34] Under these early trust land grants, a large amount “of the land and its potential benefit were lost due to incompetence, indirection, and corruption.”[35] Most of the loss was connected to states’ persistent decisions to sell the lands rapidly to encourage settlement and to fund schools.[36] The early land grants did not actually authorize sale of the state lands, but states found that leasing state trust lands was not an economically feasible choice because land in the new states was otherwise cheaply and widely available.[37] Both Congress and those states admitted later to the Union made gradual changes to the trust land grant process as a result of the perceived trust land mismanagement issues.[38]

When Congress admitted Michigan in 1837, a substantive change occurred in the trust land grant practice.[39] Michigan was the first state to strengthen its commitment to use the school trust land grants for education by including in its state constitution restrictions on the use of the revenues from the sale of school lands.[40] The Michigan Constitution also contained a provision requiring the State to place revenues from the sale of school lands into a permanent fund, which would hold the proceeds from the sale of school lands and provide a source for the operation and maintenance of the common schools.[41]

The next major change in the land grant process took place in 1875, when Congress passed the Colorado Enabling Act.[42] This was the first time “a federal enabling act included language requiring the establishment of a permanent fund for revenues derived from the school land grants.”[43] The effect of this language has been debated,[44] but in 1998 the Tenth Circuit held, in Branson School District RE–82 v. Romer (Branson),[45] that the conditions in the enabling act, including setting a minimum price for sale of the lands and limiting use of the income from the sale of the lands, “create[d] a fiduciary obligation for the state of Colorado to manage the school lands in trust for the benefit of the state’s common schools.”[46]

Although there remains some uncertainty as to whether the Colorado Enabling Act, and those enabling acts that followed, actually created a federal trust,[47] the Arizona–New Mexico Enabling clearly created a federal trust.[48] The Arizona–New Mexico Enabling Act not only contained the first express declaration by Congress that a state must hold school lands in trust,[49] but it also contained some of the most detailed and restrictive school land grant language.[50] The Act contained stipulations that 1) Arizona and New Mexico could not sell their trust lands at below market value, 2) trust lands could not be “leased, in whole or in part, except to the highest and best bidder at a public auction,” and 3) included specific procedures that Arizona and New Mexico had to follow when leasing or selling the lands.[51]

As Part II illustrated, the trust lands process evolved over time, with increased restrictions added as both Congress and the states learned from earlier mistakes in the admissions process.[52] However, as Part III shows, despite these differences in various statehood acts, courts have interpreted all statehood acts in a fairly uniform matter, reading all the trusts as subject to the same management requirements.[53]

III. The Trust Formed by the Arizona–New Mexico Enabling Act

The Arizona–New Mexico Enabling Act is central to any discussion of state trust lands for two reasons: 1) it is the most detailed and restrictive enabling act, and the only one to contain an express declaration that the lands are held in trust; and 2) despite its unique language in comparison to the other enabling acts, courts relied on its restrictive language to impose similar requirements on other states with far less restrictive enabling acts.[54] This Part explores the trust established by the Arizona–New Mexico Enabling Act, as well as the two Supreme Court decisions that became the authority upon which state courts relied heavily when interpreting their own state enabling acts.[55]

A. Elements of the Trust

A trust under which state trust lands are held is like any other trust, in that there are trustees, beneficiaries, and a trust corpus. The trustees of state trust lands are the state land offices, which act as managing trustees for the land and resources as well as the managers of the permanent funds.[56] Each state varies in how it organizes this management.[57] The beneficiaries of the trust are the people for whose benefit the trust property is held. Often the state trust lands support the common school fund.[58] For these lands, the beneficiaries are the public school system and public school students. The trust corpus of the state trust lands consists of two elements: 1) the federally granted lands and resources that remain in state ownership, and 2) the permanent funds established—often at statehood—to hold in trust the receipts from land sales and the leases of trust land resources.[59] Congress established the trust management system of state trust lands to fulfill three trust goals: 1) generate revenues for the beneficiary, 2) protect the corpus of the trust, and 3) make the assets of the trust productive.[60]

Recognition that the lands Congress granted under the statehood acts are held in trust is a fairly recent development.[61] State courts in the 1920s and 1930s did not interpret either the enabling acts or state constitutional provisions to establish land disposition requirements barring state agencies from using school lands for diverse state purposes.[62] However, two United States Supreme Court cases concluded that the Arizona–New Mexico Enabling Act established that statehood land grants are subject to trust requirements.[63]

B. Early Cases Recognizing the Trust

In Ervien v. United States,[64] New Mexico sought to use the trust land revenues to advertise the advantages of living in New Mexico to both settlers and investors.[65] In 1919, the United States filed suit to enforce the federal trust provision in the Arizona–New Mexico Enabling Act prohibiting the use of “money or thing[s] of value directly or indirectly derived therefrom, for any object other than that for which such particular lands . . . were granted or confirmed.”[66] The District Court of New Mexico found for the defendant Land Board Commissioner, holding that the Commissioner did not violate his fiduciary duties by using trust land revenues to finance the advertising campaign.[67] The United States appealed to the Eighth Circuit, which reversed on the ground that the Commissioner violated the narrow restrictions the Arizona–New Mexico Enabling Act imposed on the disposition of the funds from the trust lands.[68] The Supreme Court affirmed, holding that the Arizona–New Mexico Enabling Act prohibited New Mexico from spending trust funds on anything other than the identified beneficiaries, which in this case were the public school system and public schoolchildren.[69] Rejecting New Mexico’s argument that traditional trust principles allowed it to spend trust revenues prudently if the expenditures could reasonably bring more money into the trust, the Supreme Court held that the express trust language of the Arizona–New Mexico Enabling Act forbade such expenditures, even if they were prudent.[70] The Ervien decision established the practice of strictly interpreting the federal trust obligation, which ensuing courts have followed.[71]

In 1967, forty-eight years after Ervien, the Supreme Court, in Lassen, addressed Arizona’s practice of building highways over school trust lands without compensating the trust for the loss of the land occupied by the roads.[72] Lassen concerned a rule adopted by the Arizona Land Commissioner (Land Commissioner), which provided that the Arizona Highway Department (Highway Department) had to pay for any rights-of-way over state trust lands.[73] The Highway Department, seeking to prohibit application of the rule, argued that the highway added value to the lands and that there was a presumption that the value from the road enhancement outweighed the value of the land occupied by the road.[74] The case was brought against the Land Commissioner by the State of Arizona on behalf of the Highway Department as an original proceeding in the Supreme Court of Arizona.[75] The state supreme court agreed with the Highway Department that “it may be conclusively presumed that highways [built] across trust lands always enhance the value of the remaining trust lands in amounts at least equal to the values of the areas taken,” holding that the Land Commissioner had no authority to require payment by the Highway Department for right-of-ways over trust lands.[76] The United States Supreme Court reversed, rejecting the presumption and stating that in order to fulfill the purposes of the Arizona–New Mexico Enabling Act, the beneficiaries must receive the full benefit as granted under the Act.[77] The Court therefore ruled that the Highway Department had to pay the school trust fund the full value of the land that the newly constructed road now occupied, without considering the enhancement in value added to the affected parcel from the highway.[78]

The Lassen Court did not discuss the potential implications of the decision for states with enabling acts that contained less restrictive language. However, in a subsequent case, Papasan v. Allain,[79] the Court stated clearly that the determination of whether a trust existed in a particular state required a case-by-case analysis of the language of each state’s enabling act and constitution.[80] In Papasan, the Court considered a challenge brought by school officials and schoolchildren to dispositions of Mississippi’s school trust lands; the dispositions were an alleged breach of the trust because of disparity in the distribution of the funds among the school districts.[81] Although the Supreme Court decided the case on other grounds and declined to rule on whether the State of Mississippi was subject to a trust responsibility,[82] the Court noted in the opinion that the character of the trust grants differed noticeably between the states.[83] The Court observed that although the Arizona and New Mexico grants explicitly imposed a trust responsibility, earlier land grants imposed only “honorary” restrictions, and it was “not at all clear that the school lands grants to Mississippi created a binding trust.”[84]

However, following the Lassen decision, other state courts, especially in the West, started interpreting their own state’s enabling acts in an unusual way.[85] Instead of looking at the plain language of the individual state’s enabling act, as the Supreme Court did in Ervien and Lassen, the state courts interpreted the restrictions and language in the Arizona–New Mexico Enabling Act into their own states’ enabling acts.[86] One prominent example of a state applying the Lassen trust principles, rather than the specifics of its own enabling act, occurred in the Washington Supreme Court case, County of Skamania v. State (Skamania).[87]

At issue in Skamania was the Forest Products Industry Recovery Act,[88] a law the legislature enacted to excuse timber companies from paying fees they owed for trust land timber contracts.[89] Concerned that trust payments on timber contracts would harm the state’s economy, the State passed a bill canceling the contracts.[90] The trial court held that the Act was invalid as a breach of the State’s trustee duty of undivided loyalty to the trust beneficiaries, and the state supreme court granted direct review.[91] The Washington Supreme Court affirmed, holding that the Act violated the principle that the “state as trustee may not use trust assets to pursue other state goals,” since the primary purpose of the statute was to benefit the timber industry, and the state economy in general, at the expense of the trust beneficiaries.[92] Instead of basing its reasoning on state law, the state supreme court concluded that “[a]lthough Lassen involved a different enabling act, the principle of Lassen applies to Washington’s Enabling Act,”[93] and effectively incorporated the Arizona–New Mexico statehood bargain into Washington’s bargain.

Washington is not the only state where courts read the trust requirements of the Arizona–New Mexico Enabling Act into their own enabling act. For example, in Oklahoma Education Ass’n v. Nigh,[94] the Oklahoma Educational Association brought an original action in the Oklahoma Supreme Court against the Commissioners of the State Land Office, challenging the constitutionality of state statutes that provided for low-interest mortgage loans of school trust land funds to farmers and ranchers, and low-rental leases of trust lands to farmers and ranchers.[95] The court invalidated the statutes, concluding that they violated the trust under which Oklahoma holds those lands.[96] Although the court did discuss the Oklahoma Constitution and the Oklahoma Enabling Act[97] throughout its analysis, it cited to Lassen for the proposition that “[t]he State has an irrevocable duty, as Trustee, to manage the trust estate for the exclusive benefit of the beneficiaries, and return full value from the use and disposition of the trust property.”[98] Just like the court in Skamania, the Oklahoma Supreme Court interpreted Lassen to impose a trust in the granted lands, even though the Lassen decision was based on an interpretation of the Arizona–New Mexico Enabling Act.

The Utah Supreme Court also relied on Lassen to find the existence of a trust in National Parks & Conservation Ass’n v. Board of State Lands,[99] where the court considered whether the State properly approved an exchange of state school land with Garfield County. The County wanted State school land lying within Capitol Reef National Park to complete the paving of the Burr Trail, and it offered the State some income-producing lands that it owned in exchange for the school lands.[100] After the Board of State Lands voted to proceed with the land exchange, and the Division of State Lands and Forestry (Division) approved the exchange, the National Parks and Conservation Association (NPCA) filed a writ of review in the Utah Supreme Court, challenging the Division’s rulings on the grounds that the exchange violated its trust duties by refusing to give priority to “scenic, aesthetic, and recreational values.”[101]

The Utah Supreme Court affirmed the Division’s approval of the exchange, and rejected NPCA’s contention that school trust lands are impressed with a public trust that requires protection of their long-term environmental value for the benefit of the public at large.[102] The court held that the State administers State school trust lands as a trustee, and that the Division satisfied its primary objective “to maximize the monetary return of school trust lands” because the exchange would produce a monetary return for the school land trust.[103] Noting that the State acts as a trustee over State school lands, the court cited to Ervien and Lassen, as well as judicial decisions from states other than Arizona and New Mexico that relied on Lassen to find an express trust, including Skamania and Oklahoma Education Ass’n.[104]

Although the vast majority of states continue to rely on the reasoning in Lassen to find the existence of a trust in state school lands, several courts have reexamined the question of whether their enabling acts were explicit enough in their restrictions to create a trust. For example, in Branson, the Tenth Circuit, which affirmed the lower court’s dismissal of a challenge to an amendment to the state constitution, considered whether Colorado’s state trust lands were held in trust.[105] The court held that the language in the Colorado Enabling Act,[106] which provided that the lands were “granted to said State for the support of common schools,”[107] was insufficient to create a trust in isolation because it was no more specific than the language in the Michigan and Alabama land grants that were previously interpreted to create only ‘honorary’ obligations on the part of the states.[108] But the court observed that the Colorado Enabling Act also contained a series of specific restrictions on the State’s management and disposal of the lands, supplementary to the honorary obligation, and noted that the Act was the first act to include these types of restrictions.[109] The court decided that these additional restrictions were sufficient evidence of intent to create a trust because they identified specific duties that were obviously imposed to ensure that the lands would be used to further Congress’s “goal of providing a sound financial basis for the ‘support’ of the state’s common schools in perpetuity.”[110]

In 2000, two years after Branson, the Tenth Circuit revisited the extent of the trust obligation in District 22 United Mine Workers of America v. Utah (District 22).[111] In District 22, a group of miners challenged Utah’s use of 100,000 acres of trust land, which had been conveyed by the federal government for a state miners’ hospital,[112] and use of revenue from that land for the benefit of the general public instead of disabled miners.[113] The district court dismissed the case, finding that the lands were not held in trust.[114] The Tenth Circuit affirmed the lower court’s holding that no trust was created pursuant to the Utah Enabling Act,[115] but reversed the lower court’s holding that no trust was created by the Utah Constitution.[116] The court first examined Utah’s Enabling Act grant of 50,000 acres for the state miners’ hospital and held that this language, when taken alone, was insufficient to create a trust based on the previous interpretations of the Michigan and Alabama land grants.[117] The court also observed that, unlike the Colorado Enabling Act, the Utah Enabling Act did not place any explicit restrictions on the management of the lands, instead providing only that “‘the lands . . . shall be held, appropriated, and disposed of exclusively for the purposes herein mentioned, in such manner as the legislature’ may provide.”[118] Taking this language into consideration, the court ruled that the Utah Enabling Act had explicitly given the legislature full discretion over the management and disposal of these lands, and under general trust principles, this discretion “militates against the creation of a trust.”[119] Nonetheless, the court held that the explicit trust language in the Utah Constitution was sufficient to conclude that the lands were “held in trust pursuant to the Utah Constitution.”[120]

The Wyoming Supreme Court reached a similar conclusion three years later concerning the requirements of the Wyoming Enabling Act[121] in Riedel v. Anderson.[122] Riedel involved a challenge by an unsuccessful bidder to a state statute that granted the holder of an agricultural lease on state trust lands a preferential right to renew the lease.[123] Analyzing the evolution of the Wyoming Enabling Act in light of the Tenth Circuit’s decisions in Branson and District 22, the court noted that the Wyoming Enabling Act, while similar to the Colorado Enabling Act, was different in two important ways. First, it did not specify any minimum sales price for state trust lands;[124] and second, it expressly authorized the leasing of trust lands “in any manner the state legislature provides.”[125] The Wyoming Supreme Court held that the broad discretion extended to the Wyoming Legislature by this provision “militates against the creation of an express trust.”[126] The court reached the same conclusion after considering the land management requirements associated with the Wyoming Constitution.[127] But the court proceeded to find a trust pursuant to Wyoming state statutes, pointing to specific trust language in the 1997 amendments to the leasing statutes[128] and holding that “[t]he use of such explicit trust language . . . indicates the legislature’s intention that the land grant be subject to a trust.”[129] In light of these recent decisions in Utah and Wyoming, it appears that other western states may revisit their adoption of the trust doctrine with regard to the management and disposition of their state lands and potentially discover that their management restrictions under the trust doctrine are not as limiting as previously thought.[130]

The courts’ reliance on the Arizona–New Mexico Enabling Act requirements to impose the same trust duties on all state trust lands is noteworthy because the state courts have been willing to voluntarily impose stricter trust requirements on their trust lands, thus creating more uniformity in the treatment of these lands from state to state than would probably exist otherwise.[131] Reliance on the Arizona–New Mexico Enabling Act also raises questions concerning what procedures states must follow in the future should they want to alter the restrictions on their trust land. If the trust restrictions are self-imposed by the state constitution, then can a state alter these requirements without the federal government’s involvement?[132] Where a state court has incorporated the Arizona–New Mexico statehood bargain into its own state’s enabling act, it appears as though the Arizona–New Mexico Enabling Act would have to be altered as well—which would require a congressional amendment—unless the source of the trust is state law, as is the case in Colorado, Utah, and Wyoming.

It seems clear under the case law that state trust lands are all subject to similar trust requirements.[133] However, the types of management activities that satisfy these trust requirements are less clear, and there have been numerous challenges to the state management of state trust lands. Part IV surveys some of the recent state trust land litigation.

IV. Recent State Trust Land Litigation

This Part examines recent litigation relating to two trust land requirements articulated by the Lassen court: 1) the trustee must produce full market value from leases and sales; and 2) the trustee must manage the lands for maximum economic production. This Part considers whether courts have strictly enforced the former requirement, and whether the latter requirement preempts management of trust lands for preservation, recreation, and wildlife values.

A. Changing Management Through Constitutional Amendment

At issue in Branson was whether the voters of the State of Colorado could change the management principles guiding the State’s trusteeship of school trust lands without violating the terms of the trust established when Colorado entered the Union.[134] Prior to the 1998 amendments to the Colorado Constitution, it was the “duty of the . . . [b]oard . . . to provide for the location, protection, sale or other disposition . . . in such manner as will secure the maximum possible amount therefor,”[135] but the constitution neither contained any provisions relating to exploitation of trust land resources nor provided any other management guidance.[136] The 1997 amendments to the Colorado Constitution, which eliminated the previous economic maximization requirement, also required the land board to manage its land holdings “in order to produce reasonable and consistent income over time,” as well as adding a requirement that land stewardship principles should guide management of trust lands.[137] State school districts and public school students sought to enjoin enforcement and implementation of the amendment, arguing that the amendment was facially in conflict with Colorado’s fiduciary duties under its Colorado Enabling Act to manage the school lands “exclusively for the benefit of the ‘common schools.’”[138] The federal district court dismissed the suit,[139] and the plaintiffs appealed to the Tenth Circuit. The circuit court first determined that there was sufficient enumeration of duties in the Colorado Enabling Act to create a federal trust.[140] Once it determined that a federal trust existed, the court looked to whether the amendments violated the duties established by the enabling act, and concluded that they did not interfere with the three overriding principles set forth in the enabling act: 1) that the “common schools” shall be the “sole and exclusive beneficiary” of the trust lands, 2) that the only method for disposing of school lands shall be at a “public sale” with a minimum price, and 3) that the interest from the fund created by these land sales is “exclusively and ‘permanently’ dedicated to ‘the support of common schools.’”[141] Rejecting the challengers’ argument that the amendments changed the exclusive purpose of the school lands trust of generating maximum financial return, the court characterized the shift away from maximizing income and the added focus on ‘sound stewardship’ principles as “merely announc[ing] a new management approach . . . for achieving [the state’s] continuing obligation to manage the school lands for the support of the common schools.”[142] The Tenth Circuit upheld the 1997 amendments, recognizing that it was within the trustee’s discretion to determine that conserving the land’s natural resources for their long-term value, instead of exploiting the land’s resources over the short-term, was in the best interest of the common schools.[143]

The Branson decision is significant because it illustrates one way states may alter management priorities for trust lands. As long as amendments to the state constitutional provisions regulating trust land management do not conflict with those requirements imposed by the state’s enabling act, a state may change its management priorities. Branson is also noteworthy because the Tenth Circuit held that managing trust lands for preservation and conservation uses does not violate the trust duties as long as managers are not managing for preservation at the cost of the trust beneficiaries.[144] The Branson decision thus illustrates one way states may combat static management of trust lands.

B. Obtaining Fair Market Value for Grazing Leases

In Idaho Watersheds Project v. State Board of Land Commissioners (Idaho Watersheds),[145] an environmental group, Idaho Watersheds Project (IWP), submitted grazing lease applications to the Idaho Department of Lands for twenty-four expiring trust land leases.[146] The Department then made a recommendation to the Idaho Land Board (Board), which determined that the IWP was a ‘qualified applicant’ under state statutory criteria for only three of the leases for which it applied.[147] IWP was the high bidder on two of these parcels, but the Board chose not to lease the lands to IWP.[148] IWP filed suit, claiming that the state statute on which the Board relied in rejecting IWP’s bids violated the Idaho Constitution.[149]

Article IX of the Idaho Constitution stipulates that the objective of sales and leases of state trust lands is to “secure the maximum long term financial return to the institution to which granted.”[150] The statute that IWP alleged violated the Idaho Constitution directed the Board not only to focus on the financial benefit to schools, but also to consider the stability of the livestock industry, the effect on the state economy of ranchers going out of business, the effect on jobs, and the additional tax funds generated by the livestock industry.[151] These factors disadvantaged potential bidders like environmentalists, who might provide the maximum long-term financial return to the schools, but not to the State’s general economy or the livestock industry.[152] The lower courts upheld the statute’s constitutionality and dismissed the claim, but the Idaho Supreme Court reversed, ruling that the state statute violated the Idaho Constitution by attempting to promote not only funding for the schools, but also funding for the State generally through the leasing of the school trust lands.[153]

According to the state supreme court, the plain language of the Idaho Constitution required leasing school trust lands to promote only funding for the schools.[154] By focusing on the general state economy and the Idaho livestock industry as well as schools in assessing the lease applications, the statute impermissibly diluted the constitutional requirement that the sale of trust lands provide the greatest long-term financial return to the common schools as the sole beneficiary of the trust.[155] The court, therefore, remanded the case to the Board, with orders to hold new auctions for the leases on which IWP had not been allowed to bid, and in 2000, the Board awarded IWP its first leases for state trust lands.[156]

The Idaho Supreme Court’s holding in Idaho Watersheds is noteworthy because the court narrowly interpreted the State’s duty as trustee and did not allow Idaho to consider other interests in its leasing decisions, reinforcing the concept that trust requirements are interpreted strictly. The State’s fiduciary duty under the trust is to only act in the best interest of the trust beneficiaries and it cannot consider the benefit to outside interests to justify awarding bids at below market value. The Idaho Watersheds decision is also significant because it ultimately led to IWP being awarded a former grazing lease to use for nongrazing purposes where it was the high bidder.

C. Considering High Bids from Environmental Interests

In Forest Guardians v. Wells,[157] an environmental group that was the highest bidder on three grazing leases on school trust lands filed suit after the Arizona State Land Commissioner (Commissioner) rejected their applications.[158] The Commissioner did so because under the state land classification scheme, nongrazing users—such as the environmentalists—had to bid on leases as commercial leases, not grazing leases, which cost far less than commercial leases.[159] The plaintiffs planned to retire the land from grazing during the ten-year lease term and, as a result, the Commissioner refused to consider their bids unless the plaintiffs sought reclassification of the property for commercial use, which would require the plaintiffs to pay much higher fees.[160] The Commissioner premised this denial on a conclusion that the state land classification system did not permit the issuance of grazing leases for the purpose of restoring the land.[161]

Both the superior court and the court of appeals affirmed the Commissioner’s denial of the bids. The courts ruled that the Commissioner did not violate his fiduciary duty by rejecting Forest Guardians’s applications because Forest Guardians’s intended restorative use of the land did not meet the land department’s criteria for a grazing lease and concluding that grazing leases could not be issued for the purposes of restoration.[162] But the Arizona Supreme Court reversed, holding that the Commissioner violated his fiduciary duties as trustee by rejecting Forest Guardians’s high bids and summarily refusing to even consider whether Forest Guardians’s offer was in the best interest of the trust.[163] Although recognizing that the land classification system “may be an aid to proper administration of the trust,” the court ruled that such a system “must conform to the core fiduciary trust duties imposed.”[164] Because Forest Guardians offered to pay more than the former grazing lessee, and its bid also had the potential to increase the value of the land for future grazing by letting it recover from previous grazing activities, the classification system could not provide a legitimate basis to reject Forest Guardians’s bid.[165] The court ruled that the Commissioner’s fiduciary duty required him at least to consider the environmentalists’ bids and to exercise a fact-based discretion to determine whether the bids advanced the interest of the trust and its beneficiaries.[166]

Following the Arizona Supreme Court’s decision vacating the Commissioner’s decision, the Arizona State Land Department (State Land Department) ruled that environmental groups can hold grazing leases and that “the Trust must consider a restorative use of the land when proposed by a high bidder.”[167] The State Land Department handed down an administrative decision that allowed Forest Guardians to compete fairly for a 162-acre grazing lease against the current lessee.[168] In 2003, after nearly six years of legal and administrative battles, the State Land Department awarded Forest Guardians—now WildEarth Guardians—the lease to the parcel with Forest Guardians paying $84.40 per animal unit month, nearly twice the amount offered by the rancher who formerly held the lease.[169]

The decision in Forest Guardians has important implications for the future of trust land management because it refused to allow land managers to use classification systems to deny grazing leases to nongrazing interests and it expressly recognized that restoration and preservation are legitimate uses of grazing land. However, the Arizona Supreme Court stopped short of imposing an affirmative duty on the Commissioner to accept Forest Guardians’s high bid, holding only that the Commissioner had to show at least consideration of whether the bid would be in the best interest of the trust.[170] In light of the Commissioner’s ensuing decision to lease the land to Forest Guardians, it appears land managers may be more willing to lease trust land to nongrazing interests when the leasing process is subjected to additional judicial scrutiny.

D. Strictly Enforcing the Duty to Obtain Full Market Value

In Montanans for the Responsible Use of the School Trust v. State ex rel. Board of Land Commissioners (Montanans for Responsible Use)[171] an advocacy group, Montanans for Responsible Use of the School Trust (Montrust), alleged that fourteen state statutes regulating leasing and activities on trust lands violated the Montana constitutional requirement of obtaining full market value for school trust lands.[172] The state district court permanently enjoined eleven of the fourteen total challenged statutes, ruling that those eleven statutes violated the trust requirements in the Montana Constitution, and the parties appealed to the Montana Supreme Court.[173] First, the supreme court agreed with Montrust that the State’s school trust lands were subject to the full market value requirement because of language in the Montana Enabling Act,[174] which is incorporated in Montana’s Constitution.[175] Montana’s constitutional provisions on trust land management limit the power of the legislature to dispose of state lands. One such limit is the constitutional trust requirement that land managers obtain full market value for trust lands.[176]

The first statute considered by the Montana Supreme Court concerned historic right-of-ways.[177] The statute specified the amounts the Department of Natural Resources (Department) should charge from an applicant to satisfy fair market value, but these values were based on the median values for the classifications of land in 1972, and had never been updated as of the commencement of this suit.[178] The district court had held that this statute violated the trust requirement that the State collect fair market value for trust lands.[179] The state supreme court affirmed the lower court, ruling that the statutory language, which gave no discretion to the department and required it to use 1972 values,[180] violated the constitutional trust requirement to obtain fair market value.[181]

The next statute the Montana Supreme Court considered involved authorization of firewood permits for timber on trust lands.[182] The district court held that the statute violated the trust because it did not discriminate between commercially valuable timber and noncommercially valuable timber, allowing the State to give away commercially valuable timber.[183] The Supreme Court of Montana affirmed, holding that the statute violated both the trust’s mandate that full market value be received for school trust lands and the trust duty of undivided loyalty.[184]

The third statute the state supreme court evaluated allowed former leaseholders up to sixty days to remove moveable improvements from state trust lands without incurring a charge for storing their improvements on the land after the lease expired.[185] The district court upheld this statute because “it was reasonably necessary for the Department to allow the former lessee some extra time to remove improvements.”[186] But the Montana Supreme Court reversed, concluding that this statute violated the trust because it denied the beneficiaries the full benefit of the trust lands by allowing former leaseholders to continue to use the land for storage without paying for the privilege.[187]

The Montanans for Responsible Use decision is important as an example of a court giving an exacting interpretation to the state’s trust requirement to obtain full market value for the trust. The case illustrates the extent to which courts can impose limitations on state management regulations to ensure that beneficiaries receive the full benefit of the trust. In light of this decision, any action by the state that allows for use of state trust land or state trust land resources without full market value compensation invites a challenge based on the state’s trust obligations.

E. Managing Trust Lands for Long-Term Values

In Koepnick v. Arizona State Land Department,[188] a rancher–lessee of trust lands challenged a decision by the State Land Commissioner to reclassify the lessee’s state trust land lease from agricultural to commercial in order to lease the land for nongrazing purposes.[189] One of the Arizona state statutes governing the administration of the trust lands required the Commissioner to classify and appraise state trust lands for the purpose of sale, of lease, or to grant right-of-ways.[190] The Commissioner based his decision to reclassify the parcel on its location in an area experiencing significant commercial and residential development.[191] In his opinion, reclassification of the land best served the interests of the trust by generating more money, since commercial lessees pay a much higher fee.[192]

The trial court upheld an order of the Arizona Land Board of Appeals that affirmed the decision by the Commissioner to reclassify the lease.[193] The Arizona Court of Appeals affirmed, ruling that the Commissioner had the discretion to consider alternate future uses of the state land.[194] The court of appeals also held that it would not be an abuse of discretion if the Commissioner decided to forego immediate revenue from the current lessee in order to obtain the long-term benefits flowing from employing state school trust land in uses of higher value, including preservation uses.[195] The court stated that as trustee of the trust land, the Arizona State Land Department had to maximize school trust land revenue.[196] But immediate revenue was not the sole consideration; it was only one of the factors that the Commissioner may consider when making management decisions.[197]

The Koepnick decision is significant because it reflects a changed approach in trust land management. In the past, land managers believed that the economic maximization requirement the trust imposed on management activities obligated managers to lease land to those activities generating the greatest amount of immediate revenue.[198] Koepnick makes clear that immediate revenue is just part of the consideration, allowing land managers to take into account long-term benefits from preserving the land for future uses.

V. The Full Market Value Requirement and Grazing Leases

Courts have uniformly recognized one primary requirement imposed on state trust lands: land managers must demand fair market value for trust lands.[199] Courts have enforced this requirement through enabling acts or state constitutions, in a variety of contexts, including the issuance of right-of-ways and the issuance of firewood permits.[200] Despite widespread recognition of this trust requirement, land managers continue to issue grazing leases on state trust lands at below fair market value.[201] Issuing grazing leases at below market value now seems to be a violation of the trust duties, but neither state managers nor the courts have enforced the requirement uniformly due to a historic practice of using trust lands for ranching.[202]

The historic significance of ranching in the formation of western land management policy is widely recognized.[203] By the 1920s, policymakers recognized that the arid lands composing the majority of the western lands were suited for only one purpose: grazing livestock.[204] Grazing still dominates a large portion of state-owned land in the western states, even though revenue from grazing leases does not contribute significantly to state grant funds, since the lessees are paying below fair market value.[205] In many cases the grazing is impairing the long-term sustainability of the trust lands, thereby reducing the future earning potential of the trust lands as well.[206]

In light of cases like Lassen and Montanans for Responsible Use,[207] in which courts have interpreted the fair market value requirement strictly and enforced the requirement where the beneficiary was not receiving the full benefit of the trust, grazing leases issued below fair market value violate the trust. In the past, state managers defended below-market grazing leases by arguing that, given the nature of the land, grazing leases were the only way to provide a stable long-term source of income.[208] However, since several courts have now held that immediate revenues are not the sole consideration of trust decisions, land managers may no longer be able to successfully use this defense.[209] Growing acceptance of other nontraditional uses of trust lands, including recreation and preservation, provide other options that may produce stable long-term income from trust lands without degrading the land in the same manner as grazing.[210]

Land managers may be unwilling to impose fair market value on grazing leases of their own volition because the practice of issuing grazing leases below market price is so engrained that land managers may not view it as a violation of the trust. Public choice political theory predicts that the grazing industry, as a well-organized and narrowly focused political interest group, has an advantage in the bidding context; the industry can lobby elected legislators—who require economic resources to maintain their positions—and the land managing agencies that enjoy considerable regulatory power, but depend on the legislature for political and budgetary resources.[211] All these parties have rational incentives to continue the practice of issuing grazing leases on state trust lands at below-market value, even if the general public desires a different result. Strong political presence from the grazing community, which will surely protest any move to raise grazing lease fees, could serve as a deterrent to any proactive role by state managers to start charging fair market value for grazing leases.[212] However, the courts can and should enforce the fair market value requirement as applied to grazing leases,[213] ending the longstanding historic practice allowed by land managers in violation of the trust duty.

As illustrated in Idaho Watersheds and Forest Guardians, courts have not yet been willing to order land managers to accept the high bids from environmental interests on grazing leases.[214] However, in those two cases, the courts prohibited land managers from using the benefits to the overall state economy from issuing grazing leases or a land classification system to justify denying bids to conservation groups that placed the highest bids.[215] Although the courts did not place an affirmative duty on land managers to accept the high bids in these cases, the courts did rule that the land managers had to show at least some consideration of whether the leases would be in the best interest of the trust, without considering outside interests, such as the general economy of the state and the grazing industry. Ultimately, the land managers issued grazing leases to environmental groups, which suggests that land managers may be more amenable to issuing grazing leases to such groups after the bid selection process fails increased judicial scrutiny.[216] As environmental groups continue to bid on grazing leases and are able to outbid grazing interests, there may be a shift away from the practice of issuing grazing leases on trust lands at below market value.

VI. Economic Maximization and Managing for Long-Term Values

In light of changing social values, one emerging concern is whether management of state trust lands for activities such as preservation, recreation, and wildlife violates the trust duty to maximize economic returns. Recent case law suggests that management for long-term values, such as sustainability, does not violate the trust as long as it will ultimately maximize economic production.[217] As discussed in Part IV, multiple courts have held that land managers may take into account the long-term benefits of management activities, and that short-term economic profit is not the sole consideration in management decisions.[218] Where managers can reasonably conclude that management activities that promote sustainability will generate more profit in the long term than will short-term uses like grazing and agriculture, there is no violation of the trust duty.

It is also apparent that the courts grant land managers broad discretion in determining the potential long-term value of management decisions. For example, in Forest Guardians, although the Arizona Supreme Court held that the Commissioner violated his trust duty by failing to even consider a bid by a group that wanted to manage the land for nongrazing purposes,[219] the court stopped short of imposing an affirmative duty on the Commissioner to accept the nongrazing high bid.[220] Managing trust lands for uses like recreation and preservation does not violate the trust duty as long as the manager ensures that the permitted use both provides adequate revenue for the present beneficiaries and generates the maximum revenue in the long term.[221] Ultimately, the land manager has broad discretion to decide whether to allow these types of management activities. However, as the outcomes of Idaho Watersheds and Forest Guardians illustrate, challenges to land managers’ decisions may impose certain limits on that discretion through judicial scrutiny of the bid selection process.[222]

States managing their trust lands for long-term values may attempt to limit the discretion the courts afford land managers by following the Colorado approach.[223] Colorado voters approved an amendment to the state constitution—the amendment subsequently upheld in Branson[224]—that changed the language of the trust land provisions to require management to observe stewardship principles.[225] States also have the option of reexamining the source of the trust and concluding, like Utah and Wyoming did, that the trust under which they hold their lands is less restrictive than the trust imposed by the Arizona–New Mexico Enabling Act.[226]

VII. Conclusion

The largest percentage of federally granted state trust lands exists in the West.[227] Despite the abundance of these lands, they are often overlooked.[228] Understanding the state lands trust is difficult due to the fact that each state acquired its statehood lands under different enabling acts,[229] which included different levels of restrictions on the management of state lands, and some states have added their own restrictions in the state constitutions.[230] But courts have simplified understanding the nature of the trust by reading the Arizona–New Mexico Enabling Act—by far the most limiting enabling act—into many other enabling acts,[231] and treating state trust lands as subject to similar trust restrictions.[232] Even though several courts have determined that state enabling acts did not establish a federal trust,[233] these courts still ruled that the lands were held under trust requirements imposed either by the state constitution or by statute.[234]

Although states hold trust lands under generally recognized trust requirements, confusion persists regarding which management activities satisfied the trust requirements, and many state management decisions have been judicially challenged. In recent years, two requirements arose frequently due to this litigation: 1) the land managers must demand fair market value for use of the trust lands, so that the beneficiaries receive the full benefit of the trust lands;[235] and 2) managers must manage the lands for economic production.[236] The case law indicates that courts have interpreted the fair market value requirement strictly, requiring that land managers obtain the full value of the benefit for the trust, even where third parties may be removing commercial timber from trust land or storing moveable improvements on the land without paying for the privilege.[237] The case law also indicates that although the Arizona–New Mexico Enabling Act requires trust lands to be managed for maximum economic production, this requirement does not necessarily mean state trustees must pursue immediate economic production.[238]

In light of the case law, the current practice of issuing grazing leases on state trust lands at below fair market value is a violation of the trust requirement that trustees demand fair market value for the use of the trust lands, and the courts are likely to continue to enjoin leases issued at below fair market value. Moreover, managing the trust lands for long-term values, including recreation and conservation, is not necessarily a violation of the trust if these activities produce adequate revenue for the present beneficiaries and greater income in the long-term than the traditional activity of grazing.[239] Thus far, state courts have granted land managers fairly broad discretion over management activities and economic production; however, the Idaho Watersheds and Forest Guardians decisions illustrate situations where courts have concluded that land managers relied on impermissible factors when making land management decisions.[240] Although the courts recognized the land managers’ discretion to hold the lease auctions, in both instances the land managers ultimately leased the lands to the high bidding conservation groups.[241] As environmental groups continue to bid on grazing leases, and are able to challenge land managers’ decisions in court, the additional scrutiny that litigation places on trust land management decisions may lead to a departure from the historic practice of issuing grazing leases at below market value and an increase in managing for long-term values, including conservation and preservation.

Preventing Coal Companies from Using Compliance Schedules to Loophole Around the Mountains

By

Jessica Morgan*

Surface coal mining causes significant environmental damage to West Virginia. Selenium, just one pollutant of surface mining, causes reproductive impairment and birth defects in aquatic species. Despite federal statutes to protect the waters of West Virginia from the harmful effects of selenium, the coal industry in West Virginia used compliance schedules in its NPDES permits to delay compliance with costly selenium effluent limitations. This Comment examines the coal mining industry’s abuse of compliance schedules to avoid costly selenium effluent treatment. This Comment argues that the Clean Water Act and its regulations still enable public citizens and the Environmental Protection Agency to enforce selenium effluent limitation despite the selenium compliance schedules.

I. Introduction

The purple mountain majesty of the Appalachian Mountains is turning black from environmentally destructive mountaintop removal mining. This method of mining discharges a considerable number of pollutants into the streams of the region.[1] The Clean Water Act (CWA)[2] requires the Environmental Protection Agency (EPA) to prevent coal mining point source discharges from negatively affecting water quality.[3] However, the rivers of Appalachia continue to decline and now “nine out of every 10 streams downstream of surface mining operations exhibit significant impacts to aquatic life.”[4] Some blame the coal industry for manipulating the system and EPA for failing to use its full statutory authority.[5]

For many, the golden-brown algae bloom in September 2009 in Dunkard Creek along the West Virginia and Pennsylvania border is just one example of how coal companies are exploiting the CWA and its regulations to their advantage.[6] The algae bloom killed nearly all of the aquatic life for a thirty-mile stretch of Dunkard Creek.[7] These toxic algae flourished because of high chloride levels in Dunkard Creek[8] suspected to have come from Consolidation Coal Company’s (Consol) mining operations.[9] Consol’s discharge points from these mines were subject to National Pollutant Discharge Elimination System (NPDES) permits.[10] However, the permits lacked an enforceable effluent limitation for chloride because chloride was subject to a compliance schedule.[11] A compliance schedule is “a schedule of remedial measures including an enforceable sequence of actions or operations leading to compliance with an effluent limitation, other limitation, prohibition, or standard.”[12] Permitting authorities use compliance schedules to allow an industry time to comply with newly adopted water quality standards.[13] Essentially, a compliance schedule allows a permittee to put an effluent limitation on layaway until a time certain in the future.[14] Simply put, the compliance schedules in Consol’s NPDES permits allowed Consol to legally discharge high levels of chloride creating an atmosphere ripe for an environmental disaster.[15]

Consol and other companies discharging pollutants into waters of the United States must apply for an NPDES permit to legally discharge the pollutants.[16] Typically, the permit contains immediately enforceable effluent limitations restricting the quantity, rate, and concentration of the discharges.[17] However, the inclusion of compliance schedules into NPDES permits delays the enforceability of the effluent limitations.[18] Citing a lack of technology and the necessity of discharging water for miner safety, the coal mining industry continually receives extensions on compliance schedules.[19] The coal companies continue to pollute without legal ramifications upon receiving an extension of the compliance schedule.[20] These continual extensions of compliance schedules in coal company NPDES permits present obstacles to preventing the further degradation of the Appalachian rivers.[21]

Coal companies in the Appalachian region are masters at using compliance schedules to avoid complying with effluent limitations for certain pollutants. This Comment analyzes ways to thwart the manipulation of compliance schedules by coal companies. In particular, this Comment examines the clash over selenium effluent limitations in West Virginia. The West Virginia Department of Environmental Protection (WVDEP) began including selenium compliance schedules in NPDES permits in 2004.[22] Many of the coal companies received extensions of the selenium compliance schedules in 2007 delaying the effective date for the selenium effluent limitation until April 6, 2010.[23] The coal companies sought a second extension of the compliance schedules, but the WVDEP denied the requests.[24]

The stage was set for the selenium effluent limitations to become effective on April 6, 2010 when the agency’s appeals board issued stays to prevent the compliance schedules from expiring.[25] The stays issued by the agency’s appeals board generated citizen suits seeking to enforce the selenium effluent limitations regardless of the stay.[26] The citizens challenged the authority of the agency’s appeals board to suspend the effluent limitations.[27] One federal district court in West Virginia agreed with the citizen groups and found the stays exceeded the appeals board’s authority.[28] This Comment examines the strength of this argument as a way to force the coal industry to comply with the selenium effluent limits.

The anti-backsliding provision of the CWA presents another avenue for EPA and the citizens of Appalachia to hold the coal industry responsible for toxic discharges of selenium.[29] Anti-backsliding prohibits the renewal, reissuance, or modification of a permit containing “effluent limitations which are less stringent than the comparable effluent limitations in the previous permit.”[30] Compliance schedules are effluent limitations, and case law supports the notion that issuing an extension of a compliance schedule about to come into effect is indeed less stringent.[31] Thus, the anti-backsliding provision is a potential means to force the coal mining industry to comply with selenium effluent limitations regardless of the state appeals board stays.

This Comment explores the coal industry’s abuse of compliance schedules, concluding that the CWA and its regulations leave the door open for enforcement of effluent limitations despite the coal industry’s abuse. Part II of this Comment discusses the CWA statutory and regulatory framework for issuing NPDES permits to coal companies. Part III explains the structure of compliance schedules and restrictions on the use of compliance schedules. Part IV provides background on coal mining NPDES permits, the history of selenium regulation in West Virginia, and the current status of the selenium effluent limitations. Part V examines the authority of a state to suspend the operation of a coal company’s NPDES permit. Part VI evaluates the legality of compliance schedules in considering the anti-backsliding provisions of the CWA.

II. The Clean Water Act

Knowing the role of NPDES permitting within the CWA helps in understanding how the coal giants of Appalachia continue to degrade the water quality of the region. The overarching purpose of the CWA is to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.”[32] This goal is achieved primarily by prohibiting the “discharge of any pollutant by any person” into waters of the United States.[33] One of the exceptions to the general prohibition of discharging pollutants is for discharge in compliance with an NPDES permit.[34]

To receive a permit, a discharger must apply to EPA or an authorized state.[35] EPA issues NPDES permits, but EPA may also grant authority to a state to administer its own NPDES program.[36] EPA’s authorization of a state NPDES program suspends EPA’s issuance of NPDES permits in the state.[37] The state becomes the primary administrator of the NPDES program in the state.[38] However, EPA retains a limited supervisory role.[39] EPA exercises supervisory authority over the state programs by vetoing individual state-issued permits or withdrawing the state’s authorization.[40] This Part describes the contents of the state-issued permits and the methods by which to change the contents of the state-issued permits.

A. Contents of an NPDES Permit

The NPDES permit regulates the discharge of pollutants through technology-based and water quality-based standards.[41] Water quality standards identify the water quality goals of a water body by designating certain uses of the water body and establishing criteria to protect those uses.[42] The water quality standards consist of 1) a classification system based upon expected beneficial use of the water, 2) water quality criteria necessary to support the designated uses, and 3) an antidegradation policy.[43] States develop water quality standards applicable to state waters, which EPA then reviews and approves as meeting CWA requirements.[44]

The CWA requires all NPDES permits to include effluent limitations necessary to comply with EPA-approved water quality standards.[45] Effluent limitations are the primary mechanism for ensuring compliance with water quality standards. Effluent limitations restrict the quantity, rate, and concentration of discharges.[46] If a technology-based effluent limitation fails to achieve the established water quality standards, then the state authority must develop water quality-based effluent limitations designed to ensure attainment of the water quality standards.[47] Thus, the NPDES permit contains water quality-based effluent limitations as an additional protection of water quality.

B. Changing the Permit Terms

The NPDES permit goes through a public notice and comment process before being issued.[48] The NPDES permit is final and effective after the state permitting authority addresses the public comments and makes a final permitting decision.[49] Because the permit has finality, compliance with the NPDES permit insulates permittees from enforcement actions.[50] If dissatisfied with certain effluent limitations included in the permit, the permittee can seek to change the permit terms by appealing the final permitting decision, seeking a modification, or violating the permit.

1. Appealing the Final Permitting Decision

Once the state permitting authority issues the final permit, the permittee has thirty days to challenge the permit’s terms.[51] The permittee appeals to the state agency’s appeals board.[52] If unsuccessful, the permittee may seek judicial review of the final NPDES permit.[53] The permittee must challenge the terms of the permit within the thirty days permitted by the state agency. Otherwise, the permit is final and any noncompliance with those terms is grounds for an enforcement action.[54]

2. Modification

The permittee may also seek to change the permit terms through modification procedures. CWA regulations allow modification in limited circumstances.[55] Specifically, the CWA regulations only allow modification of compliance schedules if good cause exists.[56] Good cause includes “an act of God, strike, flood, or materials shortage or other events over which the permittee has little or no control and for which there is no reasonably available remedy.”[57] Thus, a permittee must show good cause in seeking to modify a compliance schedule.

In modifying the permit, the permitting authority must also comply with specific procedures.[58] To modify the permit, the permitting authority must prepare a draft permit incorporating the modifications.[59] The permitting authority must make the draft permit available for public notice and comment before issuing a modified final permit.[60] The draft permit is submitted to EPA;[61] it may object to the permit modification within ninety days of receiving notification from the authorized state.[62] If the permitting authority fails to follow the modification procedures or EPA objects, the permit is not legally modified and an enforcement action may proceed on the basis of the original permit terms.[63] Additionally, the permittee must comply with all other requirements of the permit when seeking a modification.[64] The effluent limitations in the NPDES permit are final unless the permittee successfully modifies the permit. Otherwise, the permittee must comply with all terms in the permit until the permit expires.

3. Enforcement

The permittee must comply with all terms of the NPDES permit once issued.[65] Compliance with the permit constitutes compliance with the CWA, creating a permit shield.[66] The permit shield prevents EPA, the state agency, and citizens from claiming a violation of the CWA so long as the permittee is in compliance with the terms of its NPDES permit.[67] The permit shield benefits coal companies because they escape liability for any damages the pollutant discharges cause so long as they discharge pollutants in compliance with the terms of their NPDES permits.[68] Thus, it is imperative for the permitting authority to incorporate effective effluent limitations in the permit, which adequately protect water quality, because the permit shield protects the companies from liability.

However, a permittee’s failure to comply with the permit violates the CWA and subjects the permittee to enforcement actions.[69] EPA, the state permitting authority, and concerned citizens may bring enforcement actions against the permit violator.[70] In some instances, the permit terms may change through a settlement agreement of an enforcement claim.[71] However, to legally change the permit, the settlement terms must go through the CWA modification procedures.[72] Moreover, the permittee still faces substantial penalties for the violations occurring prior to the settlement.[73] The enforcement process is reflective of the purpose of the NPDES permitting process to eliminate discharges that violate water quality standards. And yet, even with all of the requirements of NPDES permits, the coal industry discovered a means by which to discharge pollutants that degrade the water quality in the Appalachian Mountains.

III. Compliance Schedules

NPDES permitting conditions become even more complicated when a permit includes a compliance schedule for a water quality-based effluent limitation rather than an immediately effective effluent limitation. A compliance schedule is “a schedule of remedial measures including an enforceable sequence of actions or operations leading to compliance with an effluent limitation, other limitation, prohibition, or standard.”[74] The permitting authority has the discretion to determine whether to include a compliance schedule, but must ensure that the compliance schedule leads to attainment of the final effluent limitation as soon as possible.[75] This discretion is not unlimited. The inclusion of the compliance schedule must properly modify the permit and must not violate the anti-backsliding provision of the CWA.[76]

A. What Is a Compliance Schedule?

Compliance schedules “allow the discharger to postpone immediate compliance with more stringent effluent limitations specifically tailored to meet the applicable State water quality standards.”[77] The compliance schedule comprises an enforceable final effluent limitation and a date for achieving the final effluent limitation.[78] The term final effluent limitation refers to the effluent limitation the permittee must achieve once the compliance schedule expires.[79] Interim limitations in the compliance schedule may include a less stringent effluent limitation or construction deadlines to assist in achieving the final effluent limitation by the compliance schedule’s expiration.[80] Customarily, permitting authorities used compliance schedules in enforcement orders.[81] NPDES permits may also include compliance schedules directly in the permit’s terms.[82] State water quality standards or a state’s CWA implementing regulations dictate whether NPDES permits may include a compliance schedule.[83]

If state law allows permits to include compliance schedules, the permitting authority must make several findings before inserting a compliance schedule into a permit.[84] The permitting authority must first find that the discharger cannot immediately comply and that the compliance schedule will lead to an effluent limitation meeting the state’s water quality standards.[85] The permitting authority must also find the compliance schedule appropriate based on the amount of time the discharger has already had to meet the effluent limitations, the discharger’s good faith efforts to comply, and the modifications needed at the facility to meet the effluent limitations.[86] The permit authority must also ensure that the compliance schedule requires compliance with the final effluent limitations as soon as possible.[87] The permittee must comply with the interim limitations and the final effluent limitation by the compliance schedule’s expiration date once the schedule is included in an NPDES permit.[88]

B. Restrictions on Compliance Schedule Extensions

A permittee may seek to extend the compliance schedule, but the permitting authority’s power to extend compliance schedules is not unlimited. The permitting authority possesses minimal control over extending compliance schedules because compliance schedules “implicitly sanction pollutant discharges that violate applicable State water quality standards.”[89] Compliance schedules, as part of an NPDES permit, must follow the procedures for modification and comply with the anti-backsliding provision of the CWA.[90] The federal regulations for modifications and the anti-backsliding provision operate as restrictions on the permitting authority’s power to extend compliance schedules.

Federal regulations for modifying NPDES permits apply to the modification of compliance schedules because compliance schedules are part of the NPDES permit.[91] Although the permitting authority possesses the ability to extend a compliance schedule, the extension must follow the federal and state procedures for modifications to extend the compliance schedule legally.[92] The modification procedures limit the discretion of the permitting authority because the process opens the door to public participation through notice and comment.[93]

The anti-backsliding provision of the CWA acts as another restriction on the permitting agency’s authority to extend a compliance schedule in the NPDES permit.[94] In 1987, Congress amended the CWA establishing an anti-backsliding provision to combat “the weakening of permits.”[95] Section 402(o) of the CWA prohibits the modification of a permit containing “effluent limitations which are less stringent than the comparable effluent limitations in the previous permit.”[96] Thus, the anti-backsliding provision acts as a restriction on the extension of a compliance schedule because the extension of the compliance schedule cannot constitute a less stringent effluent limitation.

However, the anti-backsliding provision allows for a less stringent effluent limit in six limited circumstances.[97] The permitting authority may issue a permit containing a less stringent effluent limitation if “material and substantial” changes occurred at the permitted facility after the permitting authority issued the permit.[98] The new permit may backslide on the prior permit if new information becomes available after permit issuance.[99] The permit can also contain a less stringent effluent limitation as made necessary by events over which the permittee had no control.[100] Finally, the new permit may backslide on the prior permit if the permittee installed treatment facilities, properly operated and maintained those treatment facilities, yet fails to achieve the permit’s effluent limitation.[101] Even with an exception, the less stringent effluent limitation must not result in the violation of a water quality standard.[102] The anti-backsliding provision ultimately restricts a permitting authority from extending a compliance schedule that backslides on a prior effluent limitation without qualifying for an exception.

IV. West Virginia’s Story

In West Virginia, the battle to rid the waters of toxic coal mining discharges largely involves combating dredge and fill permits under the CWA.[103] However, challenging coal mining NPDES permits presents another avenue for combating the water quality degradation caused by coal mining discharges. Coal companies must obtain NPDES permits for mine outfalls where pollutants discharge into the water.[104] WVDEP administers approximately 1300 coal mining NPDES permits.[105] NPDES permits for coal mining include effluent limits for iron, suspended solids, manganese, aluminum, selenium, and pH developed from both technology-based and water quality-based standards.[106] Current efforts to curb pollutant discharges from coal mining operations focus on the coal industry’s abuse of compliance schedules for selenium effluent limitations.[107]

A. Regulation of Selenium

Selenium occurs naturally, but is harmful to both aquatic species and humans in high concentrations.[108] Toxic levels of selenium result in reproductive impairment and birth defects in aquatic species.[109] Selenium occurs mostly in southern West Virginia coal seams.[110] Surface mining in these areas exposes rock and soil containing selenium, which allows the selenium to separate from the rock and run off into nearby waterways.[111] Sediment ponds, the traditional form of water treatment at mining sites, fail to effectively treat selenium before the effluent is discharged into the water.[112]

EPA first promulgated a water quality criterion for selenium in 1987 to protect wildlife threatened by selenium toxicity.[113] In 2003, EPA recognized the potential for coal mining discharges in West Virginia to cause violations of the water quality standard for selenium.[114] One year later, WVDEP, the NPDES permitting authority in West Virginia, recognized selenium had already impaired some of the waters in the state.[115] West Virginia began regulating selenium by including compliance schedules in NPDES permits, with water quality-based effluent limitations becoming effective in 2006.[116] These first compliance schedules only required the permittees to monitor and report selenium discharges for three years until the final effluent limits became effective upon expiration of the compliance schedule.[117] In April 2007, using administrative orders, the WVDEP extended the original compliance schedules for selenium until April 5, 2010.[118] The extended compliance schedules still required monitoring and reporting of selenium discharges.[119] However, the extended compliance schedules also required the coal industry to submit a treatment plan for selenium by April 5, 2008 and to begin construction of a pilot scale treatment system by October 5, 2008.[120]

In March and April 2010, coal companies began seeking modifications of their NPDES permits to extend the compliance schedules for selenium.[121] However, due to the high levels of selenium in coal mining discharges,[122] EPA began to pressure the WVDEP to cease extending the selenium compliance schedules.[123] In contrast, the West Virginia legislature authorized WVDEP to extend selenium compliance schedules until July 1, 2012.[124] Despite the ability to extend the compliance schedules, the WVDEP denied most of the requests for compliance schedule extensions.[125] The WVDEP based the modification denials on finding no good cause to issue the modifications.[126] Specifically, WVDEP found the limited efforts of the companies to comply with interim requirements in the compliance schedule failed to create a situation where events out of the control of the coal companies caused the lack of compliance.[127] EPA also objected to the few extensions approved by WVDEP.[128] Since WVDEP cannot issue an NPDES permit over EPA’s objection, all of the compliance schedules for selenium were set to expire April 5, 2010.[129]

B. How the Selenium Effluent Limits Arguably Disappeared

Once the coal companies realized the days of merely reporting selenium discharges were over, the docket at the Environmental Quality Board (EQB), WVDEP’s appeals board, filled with appeals seeking to reverse WVDEP’s denials of modifications to extend the final effluent limitations.[130] EQB hears all of the appeals to permitting decisions made by WVDEP.[131] The coal companies sought to stay the expiration of the compliance schedules during their appeals to EQB.[132] EQB granted the stays delaying the expiration of the selenium compliance schedules.[133]

With no definitive time requirements on when EQB must hold a hearing and subsequently issue a written order, the coal companies may continue to discharge toxic amounts of selenium—further degrading the water quality in the Appalachian region.[134] The coal companies claim the EQB’s stay relieves the companies of any requirements to comply with a final selenium limit.[135] Thus, EPA or environmental groups seeking to establish violations for the selenium discharges must challenge the EQB’s authority to stay the expiration of the compliance schedules.[136]

V. Challenging the West Virginia Environmental Quality Board’s Authority

The battle to prevent coal companies from continuing to use compliance schedules to legally discharge pollutants that degrade the water quality in Appalachia has come to a boiling point. Extended compliance schedules for selenium in West Virginia sparked a number of environmental lawsuits when EQB, the state agency’s appeals board, stayed the selenium effluent limitations in several NPDES permits from coming into effect on April 6, 2010.[137] Despite the stays, the environmental groups sued to enforce the excessive discharges of selenium as violations.[138]

The CWA imposes strict liability for exceeding effluent limitations in NPDES permits.[139] To prove a violation of the NPDES permit, the enforcing party must first prove the permit contains an enforceable effluent limitation.[140] Thus, EPA and environmental groups seeking to enforce violations of the selenium effluent limitations face an uphill climb in establishing that the selenium effluent limitations became enforceable despite EQB’s stays. However, the citizen groups successfully convinced one federal district court of the effluent limitations’ enforceability despite the EQB’s stays.[141] After explaining EQB’s procedures for issuing a stay, this Part analyzes the legality of the EQB’s stays with respect to state administrative procedures and the CWA.

A. Environmental Quality Board Procedures

The West Virginia Water Pollution Control Act[142] establishes the NPDES program for the State of West Virginia. The NPDES program includes the provisions for challenging state-issued NPDES permits and the process for appealing such decisions to EQB.[143] These provisions provide anyone adversely affected by the denial of a permit modification with the ability to appeal to EQB within thirty days of receiving a notice of denial.[144] At the time of requesting an appeal, the aggrieved party may also request a stay.[145] EQB has five days to grant or deny the request upon receipt of a stay request.[146] EQB may only grant a stay if the board finds “an unjust hardship” to the aggrieved party,[147] and then has thirty days to hold an evidentiary hearing unless the board grants a continuance.[148]

After a filing of a notice of appeal, EQB has the authority to grant a continuance on its own motion or at the request of the parties to the appeal.[149] The only limitation to the EQB’s authority to grant continuances is a showing of good cause for the continuance.[150] Following the hearing and consideration of the evidence, EQB issues a “written order affirming, modifying or vacating” the denial of the permit modifications.[151] The stays at issue in the current lawsuits brought by citizen groups in West Virginia followed all of the required procedures.[152] Thus, the battle to enforce selenium effluent limitations despite the EQB’s stays focuses on challenging the scope of EQB’s authority under state administrative law and the CWA.

B. Challenging the Environmental Quality Board’s Authority Under State Law

An effective stay of the selenium effluent limitations in the Coal Industry’s NPDES permits shields the companies from liability for the selenium discharges.[153] EPA and citizens can enforce violations of selenium effluent limitations by disputing the EQB’s authority to grant a stay of the selenium effluent limitations.[154] Challengers to EQB’s authority must allege that the board violated a procedural requirement or acted outside of the scope of authority granted by statute in issuing the stays of the selenium effluent limitations.[155] Once the party seeking an appeal of WVDEP’s decision requests a stay, EQB must grant or deny the stay within five days.[156] If EQB grants a stay after five days, then a court may reverse or vacate the stay for the EQB’s failure to follow the statutory procedures.[157] The EQB’s decisions to stay WVDEP’s denial of the modifications to extend the selenium compliance schedules occurred within the five-day requirement.[158] Thus, the ability to challenge EQB’s authority to grant the stays turns on whether the stays are outside the scope of authority granted by statute.

1. Environmental Quality Board’s Scope of Authority Determined Under State Law

Since EPA authorized West Virginia’s NPDES permitting program,[159] EPA only retains oversight authority while West Virginia administers the NPDES program.[160] An attack on WVDEP’s procedures and associated authority under state procedures becomes an issue settled by state law rather than federal law. The citizen group in ONRC Action v. Columbia Plywood, Inc.[161] challenged the authority of the Oregon Department of Environmental Quality, Oregon’s NPDES permitting agency, to accept a late permit renewal application.[162] The Ninth Circuit certified a question to the Supreme Court of Oregon to interpret the procedures required for renewing a permit under Oregon’s administrative rules.[163] Specifically, the Supreme Court of Oregon was to determine whether the state agency had the authority under the state statute to accept a late permit application.[164] Even though the question arose through a federal citizen lawsuit challenging a permittee’s compliance with the CWA rather than the Oregon Administrative Procedures Act,[165] the court’s analysis still interpreted the scope of authority of the state agency according to state law.[166] The citizens in West Virginia attempt the same argument as the citizens in Oregon by challenging the authority of EQB to stay the selenium effluent limitations.[167] Thus, if EPA and citizen groups argue the stays violated the EQB’s state statutory authority, EPA and citizens must show the stays violated state law.

2. Stays Outside the Scope of Authority

Challenges to the authority of EQB to stay the selenium effluent limitations may succeed in a West Virginia state court. The statutes grant EQB the authority to issue a stay in limited circumstances. EQB is an agency “created by statute and given specific powers including the power to make rules and to hear appeals of certain decisions.”[168] The statute creating EQB’s authority clearly provides the appeals board with the authority to stay an “order, permit or official action” of the WVDEP.[169] The only prerequisite to granting a stay is for the board to believe the appellant will suffer an “unjust hardship” from the implementation of WVDEP’s action.[170] EQB identifies both financial hardship and due process violations as unjust hardships to grant a stay.[171] Thus, challengers to EQB’s authority must argue EQB acted outside the scope of authority in determining whether financial hardship and due process qualify as unjust hardship.

a. Financial Hardship

EQB identifies financial hardship alone as enough to result in an unjust hardship.[172] The statute fails to define unjust hardship, EQB regulations neglect to define the term, and case law in the state has yet to address the issue, which leaves the meaning of unjust hardship to statutory interpretation. When interpreting a statute, a court gives a term its “common, ordinary and accepted meaning” if the legislature neglected to define it.[173] Hardship requires suffering or privation.[174] The great expense of investing in technology to prevent discharges of selenium diminishes coal companies’ expected profits,[175] and the financial impact of such an immediate investment is certainly a hardship.

However, this financial hardship is not unjust. Unjust commonly means “deficient in justice and fairness.”[176] Coal mining NPDES permits have included selenium effluent limitations since 2004.[177] Requiring coal mining operations to spend money to reduce selenium discharges during the appeals process would appear to be fair because coal mining NPDES permits have included requirements to reduce selenium discharges for the past six years.[178] In addition, any EQB decision will not eliminate selenium effluent limitations. EQB only possesses the authority to affirm, modify, or vacate WVDEP’s denial of the permit modification.[179] EQB lacks the authority to eliminate the selenium effluent limitations from the NPDES permits because the time to challenge the selenium limits has passed.[180] Thus, an EQB decision, at a minimum, must require the coal industry to install and maintain selenium treatment technology at some point in the future.[181] The industry will be required to spend the money on implementing treatment systems now or in the future to reduce the selenium in its discharges. The EQB’s stays, premised on financial hardship alone as unjust hardship, potentially fail to qualify as unjust hardships under the ordinary meaning of the term. Therefore, the stays issued as a result of financial hardship are outside the scope of authority granted to EQB by state law.

b. Due Process

EQB also identifies a violation of the aggrieved party’s due process rights as causing an unjust hardship.[182] The Due Process Clauses of the Fifth and Fourteenth Amendments prohibit federal and state governments from depriving a person of “life, liberty, or property, without due process of law.”[183] The first inquiry of due process is determining whether the deprived interest is a protected interest in life, liberty, or property.[184] A protected property interest arises when a law creates a reasonable expectation of a benefit in the future.[185] Neither the CWA nor West Virginia law guarantees a coal mining permit modification.[186] Thus, the coal companies cannot possess a justifiable expectation of the benefit of a permit modification.[187] The coal companies do possess a strong economic interest in the permitting decision.[188] However, an economic interest in the outcome of a permitting decision is not a protected liberty or property interest because the economic consequences to denying a stay during the appeal are indirect effects of the denial.[189] This suggests a lack of a protected interest in the modification of the compliance schedule for a constitutional violation of their due process rights if EQB fails to grant the stay.

However, it is within the realm of possibility that a court may find a protected due process interest. If so, then denying the stays requested by the coal companies might violate procedural due process. The Due Process Clauses impose both a procedural and substantive requirement on the government.[190] Procedural due process requires the government to provide for notice and hearing procedures prior to the deprivation of life, liberty, or property.[191] The NPDES permits provide the coal companies with the requisite notice of the expiration date of the compliance schedules.[192] However, procedural due process also requires a meaningful opportunity for some type of hearing prior to the deprivation.[193] Coal companies argue the expiration of the compliance schedules while the coal companies appeal the denial of the modifications renders the appeals process meaningless.[194] The expiration of the compliance schedule forces the coal companies to achieve the selenium effluent limitation, face enforcement actions with significant penalties, or stop discharging without a meaningful hearing to challenge the denial of the modifications.[195] This harm falls within the plain meaning of the term “unjust,” because the harm to procedural due process rights relates to overall justice.[196]

On the other hand, EPA or citizen groups may counter the coal mining industry’s arguments by asserting that procedural due process requirements are met through the CWA’s procedures for issuing a final NPDES permit. The CWA permitting procedures for issuing a permit provide for the permittees to challenge the contents of the permit before and after the permitting agency issues the permit.[197] Once issued, the NPDES permits are final and effective.[198] EPA and citizen groups can assert that the coal industry benefits from the finality of the NPDES permits under the permit shield, but the consequence of the procedure that leads to this finality precludes the coal industry from later claiming a violation of due process rights when attempting to change the final NPDES permit.[199] The coal permittee has notice of the compliance schedule’s expiration date from the date the permitting agency made the final permit decision. EPA and citizen groups can argue that allowing the compliance schedules to expire during the appeals process does not violate procedural due process because the permittees have the opportunity to challenge the permit terms before and after the permit is issued.[200] Thus, a court may find the procedural due process rights of the coal permittees protected by the CWA procedures for issuing and challenging the NPDES permit. EPA and citizen groups attempting to enforce selenium effluent limitations on the coal mining industry can attack the legality of EQB’s stays under state law.

C. Challenging Environmental Quality Board’s Authority Under the Clean Water Act

EPA and citizen groups may find better success proving enforceability of the selenium effluent limitations by asserting EQB acted outside the scope of authority granted by the CWA. EPA regulations implementing the CWA recognize the use of a stay during agency review of contested permit conditions.[201] However, the authority must not violate provisions of the CWA and EPA regulations.[202] EPA and environmental groups can challenge the scope of authority granted to EQB because the stays modify the permits in violation of the CWA and tromp on the spirit of the CWA.

1. Stays Violate the Clean Water Act

The EQB’s stays suspending the expiration of the selenium compliance schedules violate the CWA because the stays modify the terms of the permit without following the federally required modification procedures and render EPA’s objection power meaningless. The coal mining industry argues the EQB’s stays are narrow in scope, temporary in effect, and fail to substantively modify the permit terms.[203] In Ohio Valley Environmental Coalition, Inc. v. Coal-Mac, Inc.,[204] the federal district court agreed with the coal mining industry and found the EQB’s stays did not modify the permit terms.[205] The court defined stays as judicial tools that do not “purport to rewrite or fundamentally alter the underlying permits.”[206] The court determined the EQB’s stays only provided EQB with time to review the denial of the modification requests rather than modifying the permit terms.[207] However, the decision by the court misplaces the emphasis on the definition of a stay rather than focusing on the effect of the state agency’s stay.

Here, the EQB’s stays modify the permit terms in violation of the CWA. A modification is simply an “act or action changing something.”[208] EQB changes the provisions of the permits by delaying the effective date of the selenium effluent limitations.[209] The coal companies concede the stays change the permit terms by asserting their compliance with the permits on the basis the stays prevent the otherwise enforceable selenium effluent limitations from coming into effect.[210] Thus, the stays substantively modify the permit terms by changing the coal industry’s selenium effluent limitation from an enforceable effluent limitation to mere monitoring and reporting requirements.

The EQB’s stays are analogous to other state agency actions found to modify the permits without following the required modification procedures. In United States v. Smithfield Foods, Inc.,[211] the Fourth Circuit held a permittee could not rely on orders and letters issued by Virginia’s NPDES permitting authority as the enforceable effluent limitation because the orders failed to follow the permit modification procedures.[212] Similarly, a district court held that a memorandum of understanding to settle a state enforcement action failed to modify the NPDES permit.[213] As a result, the discharger’s compliance with the memorandum of understanding was not compliance with the CWA.[214] Likewise, a permittee, defending against liability for discharges exceeding permit limitations, could not escape liability by relying on orders issued to extend compliance schedules for zinc and copper when the orders did not go through notice and comment.[215] EQB’s stays are similar to the letters, orders, and memoranda of understanding in the case law in that the stays change the effluent limitations the coal mining operations must achieve by requiring less from the permittee. The stays do more than “give the deciding entity the time to properly decide [the] issue”[216] by allowing the coal industry to continue to pollute the Appalachian waters. Since the EQB’s stays modify the permits, EQB’s order granting the stay must go through the modification procedures of creating a draft permit and making the permit available for public comment.[217] However, EQB failed to follow these procedures in issuing the stays.

The EQB’s stays also violate the CWA by stripping EPA of its power to review permit modifications. The structure of the CWA establishes cooperative federalism where authorized states administer the NPDES program and EPA retains a limited supervisory role.[218] One supervisory role for EPA under the CWA is to review draft permits for modifications.[219] EPA has ninety days to object to the permit modification terms in the draft permits.[220] In the event EPA does make an objection, a permittee may seek a public hearing to appeal the objection.[221]

In West Virginia, the coal industry violated the CWA by using the state administrative appeals process rather than appealing EPA’s objections by public hearing. In 2009, EPA required West Virginia to submit draft permits related to coal mining for review.[222] EPA objected to the modifications for extending the selenium compliance schedules approved by WVDEP.[223] The coal mining industry appealed both the denials and objections to EQB rather than to EPA.[224] The federal district court in West Virginia found that the EQB’s stays rendered EPA’s objections meaningless by allowing the permittees to continue discharging selenium beyond the expiration of the compliance schedule.[225] The court determined that the EQB’s stays “resulted in a de facto extension of the compliance schedule in contravention of the EPA objections.”[226] Thus, the EQB’s stays violate the CWA because the stays remove EPA’s authority to object to the NPDES permits. Because the stayed selenium effluent limitations were not legally modified and strip EPA of federally mandated review authority, an enforcement action may proceed on the basis of seeking violations from the point when the permits expired.[227]

2. Tromping on the Spirit of the Clean Water Act

Not only do the EQB’s stays legally violate the provisions of the CWA and its implementing regulations, but also West Virginia’s procedural process undermines the spirit of the CWA. Congress drafted the CWA with the intention of completely eliminating the discharge of pollutants in a fairly short period of time.[228] To achieve this goal, Congress included ample opportunity for citizens to participate.[229] The EQB’s stays and delays to the evidentiary proceedings undercut the goals of the CWA by authorizing continued discharges of pollution and preventing public and EPA participation.

EQB stays of the selenium effluent limitations endorse the coal mining industry’s continued discharge of high levels of selenium. The structure of the CWA establishes a process for “moving the nation towards the expressed goal of eliminating all discharges of pollutants” by envisioning the inclusion of greater permitting controls each time the permitting authority reissues permits.[230] The CWA improves the permits by requiring permits to expire at least every five years.[231] The purpose for this periodic review is to improve the permit terms by requiring cleaner discharges for each reissued NPDES permit to achieve the goal of eliminating pollutant discharges.[232] The stays allow the companies to maintain the status quo rather than moving the Appalachian waters toward compliance with water quality standards for selenium.

The stays enable the coal companies to challenge WVDEP’s denials of their modifications requests. At the same time, the stays only exacerbate the problem of failing to move the region towards compliance with the CWA by allowing a disingenuous attempt to avoid compliance with an effluent limitation. Through the appeals process, the coal mining operations have effectively challenged the validity of their final permit terms years late, rather than having challenged the validity of the terms upon the permit’s issuance.[233] Considering the lofty goals of the CWA, EQB should practice restraint in these proceedings—the health of the water in Appalachia depends upon it.

While impeding progress towards eliminating pollutant discharges in West Virginia, the EQB’s actions also undercut public participation in achieving the reduction of pollutant discharges. In creating the CWA, Congress anticipated the assistance of an involved public to implement the goals of the CWA.[234] The public participates via comments during permitting and citizen suits to assist in the enforcement of the act.[235] Congress, recognizing the potential political and economic limitations on the state and federal governments, injected public participation into crucial parts of the permitting process in order to attain the goals of the CWA.[236] Yet the EQB’s actions in delaying the proceedings obstruct the ability of the public to adequately participate as Congress intended by possibly allowing the coal companies to avoid citizen suits.

The coal industry proclaims that no selenium effluent limitation applies as a result of the EQB’s stays.[237] This is problematic because to proceed in a citizen suit the citizens must allege an “ongoing violation.”[238] With no selenium effluent limitation to violate, citizens must await the EQB’s final decision before seeking to enforce the selenium effluent limitations.[239] Meanwhile, the coal mining companies continue to discharge selenium until EQB issues a final decision.[240] If the coal companies are correct that no selenium effluent limitation exists during the stay, the EQB stays effectively prevent citizen groups from initiating a citizen suit simply because the coal companies have no ongoing violations.

The EQB’s stays also render the EPA’s review of the state issued permits pointless. Thus, the participation of the public in the permitting process and enforcement is inhibited by the EQB’s stays of the selenium effluent limitations. Such stays are contrary to the spirit of the CWA.

VI. Relying on Anti-Backsliding to Address Selenium Discharges

Regardless of the effectiveness of the EQB’s stays, EPA and citizen groups may still enforce the selenium effluent limitations because an extension of the compliance schedules violates the anti-backsliding provision of the CWA. The anti-backsliding provision prohibits a permit modification that implements a less stringent effluent limitation.[241] An extension of the compliance schedules violates the anti-backsliding provision because the extension is a less stringent effluent limitation and the exceptions to the prohibition likely do not apply to the current issues in West Virginia.

A. Extended Compliance Schedule Equals a Less Stringent Effluent Limitation

The anti-backsliding provision, aside from a few narrow exceptions, prohibits the reissuance or modification of a permit that contains a less stringent effluent limitation than the previous permit.[242] When an NPDES permit contains an immediately effective effluent limitation for a particular pollutant, the anti-backsliding provision clearly prohibits the reissuance or modification of the NPDES permit to insert a compliance schedule for the pollutant.[243] Some coal mining operators failed to receive a stay from EQB prior to the compliance schedule expiring on April 5, 2010.[244] The final effluent limitations for selenium in these NPDES permits took effect and thus the CWA prohibits the WVDEP or EQB from issuing a permit omitting the effective selenium effluent limitation. Thus, in situations where the compliance schedule expired prior to the EQB’s stay, EPA and citizen groups may seek to enforce violations of the selenium effluent limitation.

A trickier issue occurs when the compliance schedule has yet to expire and thus the final effluent limitation is not yet in effect. For example, Jacks Branch Coal Company’s compliance schedule for selenium was set to expire April 5, 2010, but the company received a stay from EQB on April 1, 2010.[245] The selenium effluent limitation arguably never came into effect as a result of the stay.[246] In these cases, to mount a successful challenge, the party must establish that the anti-backsliding provision applies to compliance schedules and an extended compliance schedule is a less stringent effluent limitation.

1. Compliance Schedules Are Effluent Limitations

The prohibition against backsliding applies to compliance schedules in NPDES permits because compliance schedules are effluent limitations. As defined in the CWA, effluent limitation “means any restriction established by a State or the Administrator . . . including schedules of compliance.”[247] Further, EPA interprets the anti-backsliding provision as applying “to limits with a delayed implementation date.”[248]

Conversely, EQB concluded anti-backsliding does not apply to extensions of compliance schedules.[249] In May 2007, environmental groups appealed to EQB challenging the WVDEP’s extension of the selenium compliance schedules in April 2007.[250] EQB denied that the extension of unexpired selenium compliance schedules violated anti-backsliding because the effluent limitations were never “established.”[251] EQB’s conclusion misinterprets the use of the word “established” in the anti-backsliding provision. The anti-backsliding provision applies to “effluent limitations established on the basis of subsection (a)(1)(B).”[252] The statutory text uses “established” as a verb to describe how the effluent limitation became a term in the NPDES permit.[253] “Established” refers to the action of the permitting authority in deciding to include the effluent limitation, not the effectiveness of the effluent limitation.[254]

Even if the provision required an “established” effluent limitation, an effluent limitation subject to a compliance schedule is established.[255] A compliance schedule is “a schedule of remedial measures including an enforceable sequence of actions or operations leading to compliance with an effluent limitation.”[256] Nothing in the statutory definition suggests a compliance schedule lacks establishment when included in an NPDES permit. Thus, an effluent limitation subject to a compliance schedule is no less established in an NPDES permit than a traditional, immediately effective effluent limitation.[257] Despite the EQB’s conclusion, the anti-backsliding provision clearly applies to compliance schedules because the CWA defines compliance schedules as effluent limitations regardless of whether the schedule expired.

2. Less Stringent Effluent Limitation

The anti-backsliding provision prohibits the extension of compliance schedules because an extended compliance schedule is a less stringent effluent limitation.[258] According to EPA, “[a]n extension of the final compliance date clearly renders the permit less stringent.”[259] An effluent limitation contains both the details of the quantity of a discharge and the temporal element to achieve the specified limit.[260] Few cases address anti-backsliding and even fewer discuss how the extension of compliance schedules can violate the anti-backsliding provision. However, EPA and citizen groups may rely on case law in the Ninth Circuit to assert that the extension of a compliance schedule violates the anti-backsliding provision.

The Ninth Circuit specifically recognized that extension of a compliance schedule about to expire backslides on the prior effluent limitation in the permit.[261] The defendants, an oil refinery, possessed an NPDES permit modified by an order from the permitting authority to include a compliance schedule for selenium with a final effluent limitation to take effect in December 1993.[262] After unsuccessfully challenging the selenium discharge limits in 1992, the defendants petitioned a California state court to set aside the interim and final selenium limits.[263] In November 1993, the defendants reached a settlement agreement comprised of a cease and desist order adopted by the permitting authority extending the compliance schedule until July 1998.[264] The oil refinery asserted that no backsliding occurred by extending the compliance schedule because the final effluent limitations never took effect.[265] The Ninth Circuit disagreed, finding “that a modified NPDES permit that does not contain a strict effluent limitation that had been about to come into effect is, indeed, ‘less stringent’ than the previous, unmodified NPDES permit—regardless of whether the limitation had yet taken effect.”[266] Simply because a final effluent limitation is subject to a compliance schedule does not mean the effluent limitation is not effectively part of the NPDES permit.[267]

The Ninth Circuit decision paves the way for EPA and citizen groups to challenge the ability of the permitting authorities in the Appalachian region to extend compliance schedules. The WVDEP issued amended orders extending compliance schedules for selenium in 2007[268] similar to how the NPDES permits in the Ninth Circuit opinion implemented the compliance schedules through an administrative order. Both situations involved making a compliance schedule a component of the permit requirements.[269] Thus, the compliance schedules contained in the coal industry’s NPDES permits are not merely suggestions, but the compliance schedules are an “enforceable sequence of actions.”[270]

The Ninth Circuit case provides persuasive case law for a federal district court in West Virginia to decide whether extension of the compliance schedules for selenium violate the anti-backsliding provision. With this case as precedent, EPA and citizen groups can forcefully argue the extension of a compliance schedule is a less stringent effluent limit. If they succeed in arguing an extension of the compliance schedules violates the anti-backsliding provision, then EPA and citizen groups can seek to enforce the final effluent limitations for selenium, bringing the Appalachian region closer to attaining water quality standards. This all assumes, however, none of the exceptions apply.

B. No Exceptions Apply to Coal Companies

Although extending the compliance schedules for selenium in West Virginia violates the anti-backsliding provision of the CWA, WVDEP may extend the compliance schedules if a statutory exception to anti-backsliding applies.[271] The coal mining industries unequivocally fail to qualify for most of the exceptions.[272] Even if an exception applies, a less stringent selenium effluent limitation likely violates West Virginia’s water quality standards.[273]

1. Exceptions to Anti-Backsliding

NPDES permits in West Virginia include a selenium effluent limitation to meet the specific water quality standard for selenium,[274] thus the anti-backsliding exceptions for technical mistake and permit modifications or variances do not apply here, but only to technology-based standards.[275] The coal mining industry also fails to qualify for the exception allowing backsliding if the permittee, after installing, properly operating, and maintaining treatment facilities, still fails to achieve the effluent limitation.[276] The coal companies neglected to install any treatment technology for selenium to qualify for this exception.[277] The exception allowing backsliding when the permittee or permitting authority discovers new information or material alterations to the facility additionally does not apply to the coal mining permits at issue.[278] No new information about selenium exists, in part due to the coal industry’s failure to comply with the compliance schedules requiring the implementation of research and construction of treatment facilities.[279]

However, the coal mining operations possibly can still avail themselves of one exception. Backsliding is allowed where events occurred over which the coal mining facilities had no control.[280] The anti-backsliding provision enables a modified or reissued NPDES permit to backslide where “a less stringent effluent limitation is necessary because of events over which the permittee has no control and for which there is no reasonably available remedy.”[281] Coal companies bear the burden of proving that an exception to anti-backsliding applies.[282] The coal companies are likely to claim the circumstances surrounding the selenium discharges fall under this good cause exception because no practical technology currently exists to treat selenium at the outfalls.[283] However, EQB identified several technologies for selenium treatment when EQB upheld the first extension of selenium compliance schedules in 2007.[284] Thus, EPA and citizen groups in an enforcement action may combat this argument by pointing to the other remedies available to the coal companies prior to the compliance schedule expiring and WVDEP’s prior rejection of the good cause claim by the coal companies.

The coal companies had the opportunity to appeal the insertion of the compliance schedule when WVDEP initially inserted it into the permit.[285] Appealing the initial insertion of the selenium effluent limitation was the appropriate time to make the argument that no technology existed or was likely to exist within three years. Individual coal mining operations certainly had control over the decision of whether or not to appeal the inclusion of the compliance schedule in the NPDES permit.

Similarly, a court considering whether the coal companies in West Virginia qualify for the good cause exception can rely on the reasoning by the WVDEP for denying the compliance schedule extensions. The WVDEP denied the extensions because some companies failed to “take[] any on-the-ground action on [the] permit[s] to implement” the compliance schedule.[286] The WVDEP also rejected the good cause claim of other coal companies implementing pilot-scale treatment projects because the projects were short in duration and occurred well after the deadline for a pilot program in the compliance schedule.[287] The coal companies seek to gain the protection of an exception to the anti-backsliding provision in order to acquire even more time to address selenium discharges, but these companies can only show a need for a less stringent effluent limit as a result of their own actions. To qualify for the good cause exception to anti-backsliding, the necessity must arise through no fault of the permittee.[288] The coal companies played a role in the need for more time to comply and should be barred from its shelter.

2. Limitation to the Exceptions

Under no circumstances, even if an exception applies, can a reissued or modified permit contain a less stringent effluent limitation that leads to a violation of a water quality standard.[289] Even if coal mining permits qualify for an exception to anti-backsliding, the selenium discharges likely violate water quality standards.[290] West Virginia’s water quality standards, at a minimum, require the protection of existing uses.[291] Since selenium inhibits fish propagation,[292] the selenium discharges likely violate the existing uses of the water by fish.[293] Jacks Branch Coal Company and Coal-Mac, Inc., two of the coal companies seeking modification of their selenium compliance schedules, already discharge into waters impaired by selenium.[294] Thus, the amounts of selenium discharged by the coal mining industry into the waters of Appalachia already violate West Virginia’s water quality standards and make the coal mining permits ineligible for an exception to the anti-backsliding provision.

C. The Enforceable Effluent Limitation

Since an extension of the selenium compliance schedules violates the anti-backsliding provision and the surrounding circumstances fail to trigger an exception, the next step is determining the appropriate effluent limitation to apply to the coal mining operations in an enforcement action. Any attempt to insert less stringent effluent limitations into an NPDES permit will not alter the terms of the permit.[295] An extension of a compliance schedule, as a less stringent effluent limitation, fails to effectively modify the permit and the enforcing party may proceed on the original terms of the NPDES permit.

An invalid extension of a compliance schedule is essentially an ineffective modification. When the New Jersey permitting authority settled an enforcement action against an NPDES permittee through a Memorandum of Understanding (MOU), a court found the MOU failed to effectively modify the permit because the MOU violated the anti-backsliding provisions of the CWA.[296] The MOU violated the anti-backsliding provision because the agreement contained effluent limitations that “were less stringent than those in the permit.”[297] The court proceeded to determine the defendant’s compliance with the CWA according to the terms of the permit without consideration of the less stringent effluent limits of the MOU.[298] Based on this view, EPA and citizen groups may proceed with claims alleging violations of the final effluent limitations for selenium because any extension of the compliance schedule results in an ineffective modification for violating the anti-backsliding provision.

Likewise, the ineffectiveness of an extension of a compliance schedule for selenium is similar to an invalid NPDES permit modification where the permitting authority failed to provide for notice and comment before modifying the NPDES permit. Federal and state regulations require notice and comment before issuing a major modification.[299] When the permitting authority fails to follow the basic notice and comment procedures required to effectively modify the permit, the enforcing party can proceed on the original terms of the permit.[300] Thus, EPA and citizen groups may enforce the final selenium effluent limitations written into the NPDES permits because any extension of the compliance schedule is simply an invalid modification.

VII. Conclusion

The profits derived from America’s dependence upon cheap energy sources made several coal giants in Appalachia extremely wealthy.[301] To further increase profits, the coal companies artfully mastered the use of compliance schedules in NPDES permits to delay compliance with costly selenium effluent limitations. This use of compliance schedules in NPDES permits provides another hurdle for EPA and citizen groups to overcome in attempting to stop the degradation of the water quality in the region. Although the CWA allows the use of compliance schedules, the provisions of the CWA also provide the answers for combating the abusive use of compliance schedules by coal mining operations. The battle and potential victory for EPA and citizen groups comes down to adequately enforcing the CWA.

In West Virginia, the struggle to enforce final effluent limitations for selenium turns on the effectiveness of the compliance schedules included in the terms of the coal industry’s NPDES permits. With the state agency’s appeals board issuing a stay of the final effluent limitation for selenium, any party seeking to combat the discharge of selenium must either challenge the authority of EQB to issue the stays or challenge any extension of the compliance schedules as violating the anti-backsliding provision.

EQB likely possesses the legal authority to issue a stay to delay the effectiveness of selenium effluent limitations. Whether or not EQB issued the stay on a proper interpretation of what constitutes unjust hardship is a question of state law.[302] A West Virginia state court, aware of the vital role coal mining plays in the economy of the state, is likely to give EQB the necessary discretion to determine what qualifies as unjust hardship.[303] Regardless of whether the EQB’s stay falls within state statutory authority, the actions by EQB show the state’s process for dealing with appeals violates the CWA by modifying the NPDES permits without following the required procedure and stripping EPA of its permit review power.

EPA and citizens may also challenge an extension of the compliance schedules for violating the anti-backsliding provision. An extension of a compliance schedule is a less stringent effluent limitation backsliding upon the original permit terms. Parties seeking to enforce violations of the final effluent limitations may proceed on the original terms of the permits. Challenging any extension of the compliance schedules for selenium is the more successful manner to attack the use of compliance schedules. The purpose of the anti-backsliding provision is to combat just these types of situations where a state is failing to move NPDES permit requirements towards the goal of zero discharges.[304]

With several cases in federal court and pending state agency appeals, the coal mining industry’s abuse of compliance schedules is coming to an end. The precedent set in West Virginia for how to successfully combat the use of compliance schedules in a statutory framework that envisioned a complete elimination of pollutant discharges will have lasting impacts on how far any industry can go to delay compliance with significant effluent limitations. The compliance schedule is an incredible tool which, when coupled with the right intentions, encourages compliance where an industry is struggling to meet requirements and good faith efforts are being made to comply. The actions of the coal mining industry unfortunately illustrate how this powerful tool can be misused to blacken the beauty of the Appalachian region.

SETTING THE FOUNDATION: CLIMATE CHANGE ADAPTATION AT THE LOCAL LEVEL

By

Thomas M. Gremillion*

Climate change is here and with it a growing awareness of the need to adapt to impacts that are already occurring. At the same time, efforts to establish an international regulatory program to reduce or mitigate greenhouse gas (GHG) emissions have all but collapsed. This Article argues that climate change adaptation at the local level, particularly in urban areas, represents a logical step forward. In addition to managing risk, adaptation can stimulate a needed shift in emphasis towards a more pluralist or polycentric approach to climate regulation, laying the groundwork for future national and global regulatory regimes. Examining some of the strategies that local governments in the United States are undertaking to adapt to climate change, the Article identifies overlaps, as well as potential conflicts, between adaptation planning at the local level and broader environmental management objectives, including GHG mitigation. The United States could benefit greatly from national-level action to expand and strengthen local climate adaptation initiatives, and the Article concludes with a proposal for a national climate change adaptation fund.

I. Introduction

As the world grapples with the implications of rising temperatures for the next 100 years, the once taboo subject of climate change adaptation has taken center stage in environmental policy debate.[1] As of May 2011, developed countries had pledged several billion dollars to help developing countries adapt to climate change impacts, following through on pledges made in Copenhagen and formalized in Cancún.[2] National adaptation plans are assuming a central policy-making role in countries like the United Kingdom and the Netherlands.[3] And in the United States, local governments in places like New York City, Boston, and Seattle are refining metropolitan adaptation plans that date back several years or decades.[4] Policy makers hope that these plans will help to avoid wasted investment and pay ecological and economic dividends.

The stakes are high considering the projected costs of climate change, even under optimistic scenarios.[5] One recent United Nations Framework Convention on Climate Change study pegs adaptation expenses at $49 to $171 billion per year by 2030 across the globe,[6] while a recent World Bank report estimates that by 2050 a two degree Celsius temperature rise would require between $70 to $100 billion per year of adaptation investment.[7] This includes substantial capital investment. For example, California state officials have estimated that “coastal armoring” to protect against flooding on the Pacific Coast and San Francisco Bay would require an initial investment of $14 billion and recurring maintenance expenses of over $1 billion dollars annually.[8] But the greater burden of adaptation lies in directing government and private investment towards climate-resilient development. Often this is synonymous with better valuation of ecosystem services.[9] In New York City, for example, where temperature increases are expected to make heat waves an increasing threat to public health, the city has embarked on a major tree planting campaign—“Greening the Bronx”—to combat urban heat island effect and severe ozone pollution on hot summer days.[10] New York City also faces serious vulnerabilities to sea level rise, with conservative estimates indicating that a 1-in-100 year flood may become a 1-in-15 year event over the next few decades,[11] and so the city has begun updating flood insurance rate maps in order to better guide zoning and construction policy.[12]

Climate change presents a serious obstacle to development and poverty reduction, and adaptation costs will hit hardest among those least able to afford them.[13] In the words of Bangladeshi Prime Minister Begum Khaleda Zia, “[For some] the impacts might be lifestyle threatening, for others it is life threatening.”[14] In the United States, the experience of Hurricane Katrina has lent credence to this distinction.[15] Effective climate change adaptation, including better emergency preparedness, thus takes on an equitable dimension that should endear it to those concerned with the United States’ growing inequality and the sinking fortunes of its poorest citizens.

In addition to greater equality, adaptation should increase public awareness of climate change.[16] It should do so in a tangible way, because adaptation has an inherently local focus. Eventually, emerging adaptation institutions and policies may serve to re-orient climate regulation away from the top-down, unitary model of global regulation embodied in the Kyoto Protocol. This is critical, because at the local level, reducing greenhouse gas (GHG) emissions itself reaps no discernable local benefit.[17] To be sure, mitigation strategies may coincide with policy solutions to other problems of local character, such as air or water pollution, but in many cases—e.g., a municipality’s purchase of power from renewable sources rather than from downwind coal-fired plants—they will not. By contrast, adaptation policies inherently reap local benefits, and in many ways, align with climate change mitigation and help to build up the supporting governance structures for an effective mitigation regime.[18] And by integrating reforms across a broad range of policy areas, from water management to land use planning to public health, adaptation aid can play a critical role in regions where government is already struggling to cope with basic needs.

The next Part of this Article begins with a brief description of climate change adaptation policy. Part III introduces the notion of polycentric climate change regulation. Part IV considers the specific climate challenges facing urban development, and puts forth the case for directing resources for adaptation to cities. The experience of adaptation planning in various cities in the United States provides helpful guidance on effective policy responses to climate change, and Part V takes a look at these and proposes policy reforms for expanding this work and eventually setting the foundation for a national climate change mitigation program. The Article concludes with a proposal for a national climate change adaptation fund to work toward these objectives.

II. Adapting to a Warmer World

References to climate change adaptation bring to mind large-scale infrastructure projects such as the Thames Barrier in London,[19] or the relocation of entire villages threatened by melting permafrost and rising sea levels, as detailed in the Inuit Circumpolar Conference’s landmark petition before the Inter-American Commission on Human Rights.[20] For the most part, however, climate change will simply make existing social and environmental problems worse.[21] And the solutions to these problems consist in large part on building local government capacity. Specifically, local government capacity to address problems associated with water management, public health, and disaster response are paramount, including capabilities to identify climate change-related vulnerabilities, craft plans to address them, and implement those plans with adequate monitoring and enforcement.[22] These capabilities also promote broader economic and social goals.[23]

Adaptation presents the challenge of “mainstreaming” climate change planning into more general development goals.[24] In other words, plans and policies for confronting climate risks cannot be developed in isolation. Rather, effective adaptation policy needs to draw on authorities across a broad spectrum of policy areas—public works, energy, water, transportation, public health—collaborating to integrate adaptation plans into their respective regulatory jurisdictions. A climate change adaptation program should thus represent a bundle of parallel initiatives—water management, emergency preparedness, land use planning—to respond to climate vulnerabilities facing a particular locality, and better align local economies with the ecologies that support them.[25] Mainstreaming has proven difficult, however, precisely because it involves a broad range of actors, including community groups and private sector developers.[26] Information regarding the actual impact of climate change at the local level, where impacts matter most, can be highly uncertain. This uncertainty frustrates efforts to link individual decisions to relevant climate data and projections.[27]

Climate change poses an unprecedented challenge for human civilization. The projected speed and intensity of anticipated changes to the earth’s temperature and atmospheric makeup resulting from anthropogenic GHG emissions will surpass those of any other period that mankind has ever witnessed.[28] According to the Intergovernmental Panel on Climate Change, climate change is causing and will continue to cause more frequent heat waves, more extreme storms and cyclones, an increase in the areas affected by drought, and a rise in sea levels, including a higher frequency of extreme storm surges.[29] These phenomena will have overlapping effects, producing feedback cycles and confounding models based on assumptions rooted in historical, typically linear trends. This carries important implications for managing food security, public health, urban infrastructure, and other critical areas.[30] For example, rising sea levels and increased frequency of extreme storm surges will compromise water supplies as a result of salinity intrusion, increase the incidence of coastal flooding, and lead to permanent property loss in many areas.[31] Increased temperatures and more frequent heat waves will diminish crop yields, increase urban “heat island” effects, worsen ground-level ozone smog and other air pollution problems, and increase the incidence of vector-borne diseases.[32] The intensity of climate change impacts will vary from area to area, but adaptation policy may prove the most important determinant of which areas incur the greatest losses.[33]

Unlike efforts to mitigate GHG emissions, adaptation policy does not fall neatly within the domain of pollution control or even environmental law.[34] Because climate change impacts will affect so many different aspects of human welfare, adaptation will have to take place across a wide range of jurisdictions and policy areas. The success of projects will largely depend on local conditions. More generally, the uncertainty of climate change impacts[35] translates into policy uncertainty at the point of implementation. Thus, unlike mitigation projects that might proceed relatively independent of local institutions, adaptation requires first and foremost more responsive local institutions. On the other hand, since adaptation gains accrue primarily to local residents,[36] unlike the dispersed global benefit of GHG reductions, local support for adaptation efforts may be more forthcoming than for mitigation projects.

This Article argues that adaptation should serve as the foundation for broader climate change regulation. Local adaptation plans in the United States typically entail land use and energy conservation measures that serve mitigation as well as adaptation purposes.[37] But while local action plans for reducing GHG emissions have become ubiquitous, only a few cities have undertaken serious adaptation planning.[38] As discussed further in Part IV, climate change adaptation policies can fulfill a critical educational role, focusing residents’ attention to the problem of climate change and the consequences of inaction. But even ignoring the influence of adaptation work on voter preferences and broader norms, more resilient communities will also tend to be less carbon intensive. For example, water scarcity, intensified by climate change, suggests the need for more compact urban land-use patterns, which generate less storm water runoff pollution, and waste less on transporting water to far flung suburbs.[39] More generally, water scarcity supports better valuation of the ecosystem services provided by forests and wetlands.[40] These measures tend to promote higher density, fewer automobiles, less energy consumption, and a reduction of GHG emissions.[41]

This is not to say that adaptation initiatives should simply serve as a more politically palatable packaging for local mitigation efforts. Effective adaptation policies, such as providing poor residents with fans and air conditioning during a heat wave, may conflict with mitigation objectives.[42] Conflating adaptation and mitigation objectives can create confusion and divert attention from a local government’s most pressing adaptation needs, such as disaster preparedness.[43] But all adaptation policy should foster better understanding of climate change, better integration and coordination of local government services, and better long-term planning capacity. And these elements are conducive to pursuing GHG mitigation at the local level, and thus highlight a fundamental synchronicity between local climate change adaptation and mitigation.

III. Towards a Polycentric Model of Climate Regulation

A. Evolution of the Polycentric Model

An expanding body of commentary has taken to questioning the relevance of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the international negotiation framework that produced it.[44] Kyoto’s defenders point out that it is the “only game in town,”[45] but for proponents of a pluralist or polycentric model of climate regulation, that perception represents part of the problem. The conventional, state-centric model of international relations, and of climate change regulation in particular, is ill-suited to incorporate and to build upon the relative success of national, state, and local initiatives, nor does it foster horizontal networks, such as the Cities for Climate Protection (CCP) campaign sponsored by the International Council for Local Environmental Initiatives (ICLEI).[46] These lower level actions are important as both support and guidance for an eventual global regime that effectively mitigates GHG emissions.[47] In the words of Elinor Ostrom, policymakers should “self-consciously adopt a polycentric approach to the problem of climate change in order to gain the benefits at multiple scales as well as to encourage experimentation and learning from diverse policies adopted at multiple scales.”[48] The next Part takes a closer look at this idea and how climate change adaptation in United States cities could help to advance it, but the limitations in the predominant policy approach should not escape scrutiny.

The conventional conception of climate change and its regulatory prognosis go hand-in-hand. As a global problem, fitting into the tragedy of the commons archetype, climate change requires a global solution of “mutual coercion, mutually agreed upon.”[49] The need for a global solution implies the need for an international treaty among nation-states, and the Kyoto Protocol represents the most advanced expression of this in climate regulation, establishing a unitary regulatory structure among nations who have committed to limit emissions within their jurisdictions and comply with a set of trading and other rules agreed to under the Protocol.[50] This regulatory structure establishes a hierarchy, under which national, state, and local governments undertake the means to ensure compliance with the emissions reductions that the various political and industrial interests negotiate at the top. Increasingly, this structure and the associated conception of climate change regulation do not appear up to the task.[51]

Most would agree that climate change represents a huge collective action problem.[52] But recent literature questions the associated global prognosis.[53] For one, while the standard exposition of collective action problems does well to describe inaction on climate change, it struggles to account for the numerous success stories, in which cooperation has prevailed to remedy an environmental or other collective action problem.[54] Treating climate change solely as a global collective action problem also ignores the multiple scales of externalities involved in climate regulation, such as air pollution in traffic clogged cities.[55]

This is not to say that mutual coercion, mutually agreed upon, at the global level is not necessary to avert catastrophic climate change, but rather it is insufficient. Ostrom’s polycentric approach and similar calls for pluralist regimes argue that the ultimate success of global action will rest on a set of nested commitments and monitoring structures that go down to the household level.[56] In other words, an effective mitigation regime will require not just an international agreement but also national implementation legislation, sub-national monitoring and enforcement, local experimentation, community support, and most importantly, individual action.[57] A polycentric model of climate regulation seeks to broaden the analysis and assign a fuller role to actions at the sub-global level in climate regulation.[58] And to the extent that global action is bogged down in an ineffectual, largely dysfunctional regulatory regime, this shift of emphasis points to a way forward.

A key advantage of the overlapping, sometimes competing authority structure of a polycentric system lies in its ability to fit policy responses to scale.[59] Actors in a polycentric system do not simply operate in a hierarchy, implementing mandates from above which may be insensitive to local conditions. Rather, they “compete and cooperate, interact and learn from one another, and responsibilities at different governmental levels are tailored to match the scale of the public services they provide.”[60] A polycentric model thus helps to differentiate between the issues that require international negotiations and action at the global level versus those which more appropriately fall within the domain of lower levels of government. Traditional local government power over zoning and building codes, for example, can shape constituents’ preferences and behaviors, and curb underlying demand for carbon intensive development and activities, in ways that cap-and-trade regimes or carbon taxes imposed from above cannot.[61]

As with any regulatory design, a polycentric model must contend with inherent vulnerabilities as well. Perhaps most importantly, a decentralized authority structure runs the risk of regulatory fragmentation. Commentators have fingered a fragmented natural resources management structure in the United States as the culprit behind agency inaction, a lack of interagency learning, and neglect of climate change issues.[62] At the local level, overreliance on technical climate planning specialists and weak ties between these specialists and other government officials hampered early adaptation efforts in Boston.[63] These problems underscore the importance of institutional linkages and bidirectional feedback loops in a polycentric model.[64] These linkages and feedback help to ensure that different jurisdictions streamline processes and do not repeat the same errors, but rather incorporate lessons from local experimentation.[65] Networks such as the CCP campaign have created value through horizontal transfers of policy, and through a bi-directional learning process between local and higher level governments, as well as with private institutions like the ICLEI.[66]

Unfortunately, like Kyoto, action on climate change at the local level remains a largely nominal force in reducing GHGs,[67] despite some notable success stories. Ostrom argues that this results from the view of climate change as a global collective action quandary, for which individual- or community-level action is futile.[68] Shifting the emphasis to climate adaptation may therefore serve a critical function in reframing the popular conception of climate change, and what can be done about it at the local level. The experience of many United States cities’ efforts to reduce GHG emissions suggests that stimulating more widespread action at the local level could reap considerable gains.[69] In Portland, Oregon, per capita GHG emissions have fallen by 12.5% during a period in which the rest of the United States per capita emissions have grown.[70] Such success stories reflect the unique opportunities for local governments to reduce GHG emissions, and the potential for scaling policy responses down.

B. Adaptation in a Polycentric Model

The local character of climate change impacts should serve as an advantage in stimulating ground-level support for adaptation. There is no reason to wait for the United Nations to act before diversifying the local water supply or updating flood maps. By virtue of association, however, climate change adaptation and mitigation efforts have tended to share the same regulatory architecture, as evidenced by the presentation of local climate change adaptation plans within larger mitigation or “green” plans.[71]

While adaptation work remains in its infant stages, it is important to avoid a “lock-in” effect whereby a globalist mentality becomes an impediment not just to solving the climate change problem but to dealing with its impacts as well. Specific adaptation policies often carry significant mitigation co-benefits but, as noted above, a focus on adaptation at the national, state, and local level may prove most valuable by establishing institutions and procedural frameworks that facilitate local GHG reduction plans. This is all the more true considering that the nonlinear rates of change associated with climate change impacts may, as concern grows, prompt a similarly abrupt global policy response that seeks to draw on a broad support structure of capable local governments.

What legal designs will enable this support structure, install an effective system of regulatory checks and balances at multiple levels, create value through experimentation, identify and curb regulatory failures, transmit and adapt successful strategies, and provide adequate and predictable funding? An extensive body of literature seeks answers to these and other quandaries.[72] One promising approach, detailed by J.B. Ruhl, is to apply the same principles that guide the development of resilient ecosystems and adaptive built environments to envision the attributes of “resilient and adaptive climate change adaptation law.”[73]

Ruhl’s analysis favors flexibility and dynamism in adaptation policy, since the impacts of climate change at the local level are fraught with uncertainty.[74] Conventional environmental regulatory models, such as environmental assessments under the National Environmental Policy Act (NEPA),[75] tie an assessment of climate change and other environmental conditions to some discrete regulatory or permitting decision under what Ruhl terms “assumptions of stationarity.”[76] Such static decision frameworks serve as poor guides to climate change adaptation policy, however, because of the rapidly changing information, nonlinear feedback loops, and wide scope of impacts that characterize climate change.[77] Instead, adaptation should draw on an ongoing updating process that incorporates public input, monitoring of past project impacts, and newly available data and technology to inform policymakers.[78] In a similar vein, an overlapping, polycentric model of governance should rely on a breadth of policy instruments, from “hard” mandates to “soft” incentives and information sharing tools, in order to make progress on multiple fronts. Ruhl also endorses increased reliance on “transgovernmental networks” to share information and identify best practices without the need for going through formal hierarchies and with fewer institutional constraints.[79]

These policy prescriptions, while straightforward in theory, have proven elusive in practice. The few examples of national-level action to address climate change adaptation in the United States, such as the Climate Ready Estuaries Program of the United States Environmental Protection Agency, and the joint federal Climate Change Science Program, have been limited in scope and lacked a long-term presence around which to foster the linkages and information sharing critical to adaptation policy.[80] On the other hand, various local experiences suggest some possible avenues for designing a polycentric adaptation model and point to where some of the deficiencies may lie in the current regulatory structure.[81]

Adaptation to climate change cannot occur in a vacuum. It relates to specific places and contexts.[82] A country might build its resilience to climate change by improving its disaster preparedness, or establish technical capacity at the national level to guide adaptation planning,[83] but the actual drought, storms, flooding, forest fires, heat waves, coastal erosion and inundation, disease epidemics, and myriad other challenges will occur in particular places and contexts. Their resolution and management will depend to a great extent on local government. National policies in the United States have only weakly influenced critical land use and resource management decisions made at the local level.[84] And as local conditions become increasingly volatile, mirroring the uncertainty surrounding the earth’s climate, the federal government’s ability to craft flexible, context-sensitive policy responses will be subject to more strain.

This local character of climate adaptation may seem banal, but it implicates important policy considerations. Climate change will primarily exacerbate existing social and environmental problems. George W. Bush and the Federal Emergency Management Administration (FEMA) rightly received condemnation for their inept response to Hurricane Katrina.[85] But local officials in New Orleans, particularly local law enforcement, might have averted much of the tragedy.[86] Adaptation efforts should seek to identify these types of institutional vulnerabilities, and wherever possible, tap into local expertise for managing local problems that climate change exacerbates. National governments may take action in the event of an emergency, or partially regulate an area’s natural resources through air and water pollution statutes, or through the operation of specific resource management jurisdictions, but “[e]xperience . . . shows that local government is the key locus for action on adaptation.”[87]

IV. Adaptation and Urban Development

A. Focus on the Urban Setting

Climate change is both a symptom and an increasingly important cause of a broader disjunction between economic growth and the natural resources upon which economic activity depends. Urban development is the quintessential manifestation of this conventional economic growth,[88] and in order to adapt the economic growth process to the pressures of climate change, urbanization will need to adapt.[89] Hence, focusing adaptation resources on cities makes sense. It also makes sense because climate change will affect different places in different ways, and so the specific policies to manage impacts must respond to local conditions. These policies tend to fall within the gambit of traditional local government powers—zoning, water and waste management, emergency response—and so adaptation aid can help local governments, as well as non-governmental organizations, community groups, and local businesses,[90] to exercise these powers in a way that steers economic growth and urban development towards more sustainable practices. This is not to say that “cities alone can deliver” a solution to climate change and all of the other ecological problems that stem from conventional economic development.[91] But cities must figure prominently in the eventual solution, and action now at the local level can facilitate that solution.

Another reason that cities matter is that most people now live in a city,[92] and even more are projected to do so in the future. Some seventy-one percent of GHG emissions are attributable to urban areas, according to a recent World Bank estimate, and this share is expected to rise.[93] The global population is urbanizing rapidly, and while today just over half of the world lives in cities, at current rates, the global urban population is projected to come to represent three-quarters of the entire global population by 2050.[94] Perhaps more daunting, between 1990 and 2000, “the annual growth rate of urban land cover was twice that of the urban population,” meaning that “urban land cover will double in only 19 years” if trends persist.[95] Modern urbanization is thus a story of both mass migration to cities, and the expansion of cities to encompass once rural locations.

To be sure, the most rapid declines in urban density have occurred in the developing world,[96] and the authors of the Lincoln Land Use Institute study, cited above, are quick to point out that living conditions in ultra-high-density slums, such as those in the Kowloon Walled City in Hong Kong during the 1980s, or New York City’s lower east side in the late 1800s, pose public health hazards and implicate basic human rights that justify this trend in many areas of the world.[97] But the decline in urban density is occurring in almost every urban area on the planet, even in places like Europe that have comparatively restrictive urban growth laws.[98] What accounts for this “very powerful and sustained global tendency for urban densities to decline”?[99] So called “infill” development[100] must confront challenges that grow out of various property rights, place-based dependencies, and claims and preferences of the local community. These challenges “are a primary reason why the property development industry, and the financial industry that supports it, show preference for new-build or ‘greenfield’ projects which in turn result in the urban sprawl that is a worldwide urban growth phenomenon.”[101] Put simply, current regulatory structures make constructing new urban development cheaper, more predictable, and more profitable than investing in existing areas.

For various reasons, auto-centric urban sprawl performs poorly as a system in the face of climate change. In addition to its carbon intensive nature,[102] the sheer scale of the transportation and other infrastructure needed to sustain growth centered on ownership of private automobiles is already becoming an economic liability in places like Texas, where recent droughts have caused significant damage to roads and water infrastructure.[103] Projections of increasing heat and drought intensity, as a result of climate change, mean that the costs of expansive road and water line networks will go up along with the costs of repairing similar damages.[104] Moreover, the conventional pollution problems associated with these inefficiencies, such as stormwater runoff pollution, ozone and particulate matter pollution in the air, and habitat fragmentation, are intensified by climate change impacts like flooding, heat waves, and ecological stress.[105] Consequently, as climate change intensifies, many investments in sprawl growth development may be lost or require significant retrofits.

However disquieting, the global character of urban sprawl suggests that policy solutions for managing it in the United States, where the phenomenon largely originated,[106] could reverberate abroad. Current projections identify damage to urban infrastructure and associated crises as the single most costly impact of climate change.[107] Therefore, policies for both directing new urban growth and retrofitting existing urban areas to less carbon intensive uses in the United States can help to construct a sorely needed alternative model of urban growth.

Adapting cities and urban growth will require policymakers to view cities within the context of their specific ecologies, including food production systems and other local ecological services. The ICLEI’s definition of “resilience” turns on this systemic emphasis,[108] in the tradition of Jane Jacobs,[109] and “proposes a reframing of the adaptation challenge from its primary focus on risk reduction to a broader focus on increasing the performance of the area or system in which the investment is to take place.”[110] Toward this end, procedural reforms to mainstream climate considerations into the development decision-making process—updating flood plain maps and building regulations, for example—may prove more valuable than capital improvement projects, such as a seawall, simply because the level of private investment in urban infrastructure dwarfs that of public expenditures.[111] Directing this private investment towards better performance of the city as a system thus presents a valuable leveraging opportunity.

B. Strategies for Building the Resilient City

United States cities are taking important steps to adapt to climate change, from disaster planning to transit-oriented development to renewable electricity generation. As discussed below, these policies are mutually reinforcing, with many opportunities for “no regrets” policies that serve both economic and environmental interests.[112] For example, buildings less susceptible to hurricanes or typhoons are often more energy efficient and cost effective as well.[113] But conflicts are inevitable between adaptation strategies, and between adaptation and mitigation objectives.[114] The mix of strategies should reflect local conditions and priorities, taking into account the specific climate change vulnerabilities that a community faces. A closer look at some of the local-level adaptation strategies that are already being adopted across the United States gives an idea of this dynamic.

More frequent natural disasters may represent the most universal threat of climate change. And for many local governments, developing emergency response preparedness remains a top priority. The increased frequency of extreme weather events also requires more prospective loss avoidance strategies.[115] Local governments can use their authority to dictate how and where to construct buildings and infrastructure to undertake flood planning and control, strengthen buildings to withstand major storm events, and prevent ridgeline development susceptible to landslides.[116] The tools for undertaking this planning are the basic stuff of local government administration—”comprehensive plans, floodplain regulations, zoning, building codes, overlay zones, and stormwater regulations.”[117] These tools also play a fundamental role in broader environmental protection and GHG mitigation initiatives, such as wetlands preservation.[118]

Related to flood control, wetland preservation also ranks as an important urban climate change adaptation strategy. Wetlands provide a critical buffer against storm surges in coastal areas, and also help to control water quality and flood management in inland areas.[119] Section 404 of the Clean Water Act[120] gives the United States Army Corps of Engineers limited authority over activities to fill or otherwise destroy wetlands,[121] but in practice, local land use decisions largely determine wetlands preservation.[122] To respond to the need for wetlands preservation in the face of coastal erosion and rising sea levels, some local governments have instituted “rolling easements” that automatically adjust as sea levels advance, creating opportunities for new wetlands creation and accommodating coastal property owners, while encouraging them to plan on the basis of sea level rise projections.[123]

In many areas, climate change will stress already scarce freshwater supplies.[124] Local government can exercise authority over wetlands, stormwater runoff, solid waste management, and even the location of water supply facilities,[125] in order to build resilience to water supply disruptions. In the United States, state governments have traditionally retained a great deal of authority over water allocation decisions, and much debate surrounds the extent to which state and local officials are capable of making these allocation decisions, with many arguing for a larger federal role in arbitrating the various competing interests across jurisdictions.[126] Self-interested local government action, however, can also create positive spillover effects at the regional or basin-wide level. For example, urban forestry initiatives can help to bolster water supplies, and measures to reduce stormwater runoff can both ease the pressure on local wastewater treatment infrastructure and improve freshwater supplies for jurisdictions downstream.[127] Other measures, such as safeguarding sewage and water supply infrastructure against flooding,[128] may require external financing but nonetheless fall within the gambit of local authorities.[129] As the ICLEI points out in its adaptation planning guide for cities, such capital improvements should be undertaken with a long-term planning perspective in order to identify opportunities for adding value.[130] For example, a municipality may decide to “piggyback” a reclaimed water system onto a wastewater treatment facility expansion.[131] Some cities, such as Delray Beach, Florida, have even integrated their wastewater treatment operations with conservation efforts to create popular wildlife reserves.[132]

Water scarcity also implicates an overlap between climate change adaptation and mitigation in the area of energy policy.[133] As a recent analysis of adaptation in the New York City metropolitan area explains, climate change will impact energy supplies because of the “inextricable link between energy and water.”[134] It will also introduce scarcity, and favor less centralized power generation, because flooding and heat waves tend to stress energy transmission infrastructure.[135] This dynamic points to two quintessential local government functions—building regulation and transportation planning—as key drivers of resilience.

Improving the energy efficiency of buildings can help to avoid blackouts during heat waves and ease the impacts of energy shortages during emergencies. It also represents low-hanging fruit as a mitigation strategy, producing financial gains over the lifetime of a building in most cases, while achieving significant reductions in GHG emissions.[136] Obstacles to making buildings more energy efficient include poor information about existing mature technologies, a focus on short-term costs versus long-term energy savings, and agency problems arising out of landlord-tenant relationships.[137] Many local governments have overcome these obstacles through green building codes and policies. These include both mandates, such as requirements that municipal, or in some cases new commercial and residential buildings, meet LEED (Leadership in Energy and Environmental Design) standards, as well as less coercive incentives “including options such as fee waivers or reimbursements, subsidized LEED fees, discounted energy star appliances, property tax abatement, awards, green loan funding, training, and permit fee reductions.”[138] While local governments often rely on external standards to guide building codes and permitting, these functions are well-suited to smaller scale government because “construction design tends to be site-specific.”[139]

Simply removing some building and zoning codes would go a long way towards improving resilience in many cities. For example, zoning ordinances in most United States jurisdictions require developers to include a certain number of parking spaces based on the size of a planned structure.[140] Some municipal governments have offered relief from these ordinances as an incentive for green building plans.[141] Nevertheless, the enduring presence of parking and setback ordinances underscores the key role that local government has played in promoting sprawl growth in the United States through interconnected land use and transportation policies. By the same token, it points to local government’s potential for directing growth in a new direction.

Transit-oriented development or “Smart Growth” alternatives to conventional urban development are typically thought of as GHG mitigation strategies.[142] But the environmental and quality of life benefits that accrue from smart growth policies make these strategies an important climate adaptation strategy as well.[143] Smart growth aims to concentrate growth in developed city centers and to enable residents to access employment, schools, shopping, and other services by transit or alternatives to driving.[144] Successful smart growth strategies depend both on land use and transportation policies.[145] Land use includes issues such as the setback and parking requirements cited above and single-use versus multi-use zoning,[146] while transportation policies include decisions regarding how much to spend on transit versus highways (or repairs versus new capacity),[147] the design of the overall transportation network, the speed limits on central district streets, and the availability of sidewalks and pedestrian crossings.[148]

Many local governments are taking action to structure growth around transit and invest in city centers, while preserving valuable watersheds and agricultural production in city surroundings.[149] Urban containment strategies, such as in Portland, Oregon, have received a great deal of attention, but more modest policies can have a significant impact as well.[150] In the United States, “geographically and demographically diverse efforts” to implement zoning and land use codes based on smart growth principles have flourished in cities including “El Paso, Louisville, and Miami—not jurisdictions usually associated with Berkeley-style environmentalism.”[151] Similarly, “complete streets” policies have been widely adopted across the United States, forcing planners to design roads with the interests of pedestrians and other non-drivers in mind.[152]

Local government exercises many other important functions that can build resilience—developing renewable energy resources, managing the local electric grid, disposing of solid waste, cleaning up hazardous waste, and maintaining telecommunications infrastructure.[153] Part V offers just a few illustrative examples from the growing literature to illustrate the policy overlaps between adaptation and mitigation. Beyond specific policies, however, the most important tool for reducing GHG emissions may simply lie in the institutional capacity that adaptation efforts foster at the local level. Just as climate adaptation implicates a broad range of local government functions, so too do the challenges of mitigation and directing urban development that complements, rather than impedes, local ecological services. The following cases give an idea of how that capacity can evolve.

V. Climate Change Adaption in American Cities

In the United States, various studies have sought to shed light on climate change impacts at the national,[154] state,[155] and local[156] levels. At the local level, climate change initiatives have tended to focus on GHG mitigation and other sustainable development goals.[157] The scope of these efforts is substantial, with dozens of cities working through networks such as the ICLEI, the Mayors Climate Protection Center, and C40, to inventory emissions and develop climate action plans.[158] As of October 2011, more than 600 United States cities were members of ICLEI.[159] As with climate regulation in general, for climate adaptation, “the largest U.S. cities are among the most engaged,”[160] and New York City, Boston, and King County, Washington have a relatively long experience in honing adaptation policy.[161] This Part looks at these metropolitan areas’ plans and potential federal roles for expanding on their efforts.

A. Urban Adaptation Planning in New York, Boston, and King County

Several United States municipal governments have taken steps to identify and adapt to climate change, but New York, Boston, and King County have among the most advanced—and well-documented—adaptation initiatives in the United States.[162] A closer examination of how these programs evolved, and where they are now, offers some lessons for other local governments. In particular, they illustrate the importance of linkages between different branches of local government authority.

In many ways, King County exemplifies how mainstreaming climate change adaptation into urban policy can produce better outcomes across a wide range of measures. King County, which encompasses Seattle, began some of the earliest efforts to prepare for climate change at the local level.[163] In 1988, then King County Councilmember Ron Sims proposed an ordinance to establish a county office of global warming.[164] Sims later became the Executive for King County, and passed various executive orders aimed at reducing GHG emissions.[165] In 2005, the County held a conference, entitled “The Future Ain’t What It Used to Be,” in order to foster collaboration between city and regional officials from a broad range of regulatory areas.[166] Following the conference, a “Global Warming Team” was formed with representatives from all of the city’s major offices—budget, environmental services, parks, transportation, economic development, and others—to guide adaptation as well as mitigation efforts.[167]

These efforts have led to significant reforms. The County’s wastewater treatment, for example, now includes a program to make reclaimed water available for industrial and irrigation uses, thus relieving pressure to draw water from local rivers, where climate change impacts are stressing salmon and other wildlife.[168] The city has also undertaken a flood buyout and home elevation program to avoid property losses in flood zones.[169] The County revised its Comprehensive Plan and Shoreline Master program to integrate climate change projections, which included specific policies to raise awareness of climate change impacts,[170] assess and plan for flooding and sea level rise,[171] update disaster preparedness plans,[172] evaluate climate change impacts on biodiversity,[173] and reform salmon and other wildlife conservation plans to reflect climate change stresses on habitat.[174] These policies illustrate both the breadth of adaptation policy and its potential for realizing environmental and economic co-benefits.

New York City’s adaptation planning started early as well. In 1997, the federal government initiated a National Assessment of Climate Change Impacts on the United States, divided into eighteen regional assessments.[175] More than any other region, the Metropolitan East Coast (MEC) Assessment[176] focused on urban issues.[177] The MEC Assessment set the foundation for New York City’s climate change adaptation plan, and eventually, the establishment of a separate departmental adaptation program in the city’s Department of Environmental Protection.[178] Currently, New York’s PlaNYC includes a major adaptation project to shore up the city’s water supply in the face of expected drought, and a tree-planting program—“Greening the Bronx”—designed to reduce urban heat island effect.[179] These projects, however, represent the end results of an ongoing process to build awareness and educate policymakers, assess risks and identify vulnerabilities, and evaluate appropriate courses of action.[180] In its initial assessment, New York City planners identified six urban systems susceptible to climate change impacts: coasts, water, energy, infrastructure, transportation, and health.[181] They then held a series of workshops with midlevel officials from corresponding departments over a period of several years to encourage those agencies to mainstream climate change adaptation into their planning and operational decisions.[182] At the same time, the city has launched websites and other marketing efforts to win public support for the program.[183]

The greater Boston area illustrates some of the obstacles to adaptation planning. Compared to King County and New York City, technical specialists took a greater role at the assessment stage and established weaker ongoing ties with a wide variety of stakeholders.[184] As a result, the Boston initiative, which spent more money than most other jurisdictions on a highly technical and comprehensive adaptation assessment report, did not develop the same level of institutional mechanisms for incorporating adaptation options into broader policies for transportation, water management, and other affected areas.[185] This is not to say that Boston area officials are ignoring climate change. Future sea level rise projections led the Massachusetts Water Resources Authority, for example, to change the site of a sewage treatment plant built in 1998, and the city has undertaken a major forestry initiative, a prime example of a “no regret” adaptation policy.[186] But while King County and New York City appear to have moved beyond the assessment and policy evaluation stages of adaptation planning to more concrete actions, including major infrastructure projects, the 2011 update to Boston’s Climate Action Plan identifies the need to “[d]evelop an adaptation plan” and “[r]equire every municipal department and agency to undertake a formal review of consequences of climate change,” suggesting that the city has some catching up to do.[187]

The experiences of Boston, New York City, and King County reflect unique local contexts, but they provide some insights into how climate change adaptation can succeed. The experiences underscore the importance of linkages between climate and environmental specialists on the one hand, with officials from other areas of local and regional government, such as transportation or solid waste management. The studies also underscore the importance of raising public awareness, and fostering public support. In this respect, King County’s focused attention to salmon fisheries is unsurprising. Perhaps most importantly, the cities’ experiences attest to a common process for mainstreaming climate considerations into municipal operations, which begins with identifying climate change impacts and disseminating that information broadly in a way that stimulates communication flows in both directions, then building on those linkages to craft policy strategies, and eventually, undertaking coordinated action to build resilience.[188]

B. Top-Down Adaptation Planning: The Federal Role

Federal initiatives on climate change adaptation should provide an important source of finance, expertise, and political incentives for local policymakers. By bringing climate change adaptation into the limelight, moreover, the federal government can boost public awareness and educate individuals regarding climate change. A highly visible, national climate change adaptation fund could serve these purposes well, and help to make up for lost ground. For now, the federal government’s climate change adaptation work is neither very visible nor very effective.[189]

Federal action on climate change adaptation has proceeded slowly. On October 5, 2009, President Obama issued Executive Order 13514[190] requiring federal agencies to undertake various measures to reduce GHG emissions and to identify adaptation strategies in conjunction with the interagency Climate Change Adaptation Task Force.[191] Pursuant to the Order, all federal agencies were required to issue “an agency-wide climate change adaptation policy statement . . . that commits the agency to adaptation planning to address challenges posed by climate change to the agency’s mission, programs, and operations,” by June 2011.[192] This process has highlighted important deficiencies. For example, the United States Department of Transportation (DOT) report concedes that “[c]osts and benefits resulting from climate change impacts are currently not addressed or quantified in DOT evaluation processes.”[193] DOT has pledged to incorporate consideration of climate adaptation into planning processes and investment decisions,[194] but its success in doing so will depend in no small part on state and local transportation partners’ policy. Unfortunately, thus far federal initiatives have done little to stimulate adaptation planning in American cities.[195]

This lack of coordination poses a clear challenge to establishing an effective polycentric governance structure for dealing with climate change. On the one hand, the weak federal policy fails to encourage, or even inhibits, the horizontal transmission of policy successes and best practices established in jurisdictions like King County and New York City. At the same time, where federal agencies have developed policies to incorporate climate change considerations into their operations and planning, disengaged local policymakers are largely free to override these considerations. For example, under NEPA, agencies are increasingly documenting climate change impacts in Environmental Impact Statements (EISs), but because the NEPA process does not inform so much as authorize decisions after the fact,[196] even dramatic evidence of climate change vulnerabilities may be ignored or rationalized in environmental assessments.[197]

In order to support climate adaptation planning at the national level, federal government should play a larger role in fostering local adaptation efforts and engaging local policymakers. The National Oceanic and Atmospheric Administration (NOAA) has proposed a reorganization to create a national Climate Service, which is a good first step, filling an important coordinating role by centralizing federal sources of information on climate change adaptation and mitigation strategies.[198] This type of information sharing role is one of the least intrusive possible relationships between federal and local governments on climate change adaptation.[199] That has not stopped congressional Republicans from targeting NOAA’s revenue-neutral reorganization in recent spending bills and cutting off funding to the Climate Service through September of 2011.[200] Other NOAA initiatives, however, such as the Coastal Services Center Coastal Climate Adaptation website and information clearinghouse, continue to operate and in the past have provided substantial support for local initiatives such as the Boston, New York City, and King County initiatives discussed above.[201]

Increased federal financial support for state and local efforts to compile their own information and planning processes could be helpful, too. The means of structuring such financial assistance could take the form of grant or loan programs specifically aimed at adaptation planning, or at financing infrastructure improvements linked to adaptation planning. The federal finance program for sewage treatment plants has been offered as one template for such a program.[202] Another proposal would seek to condition federal transportation, energy, and other funding on compliance with prescribed adaptation planning objectives, following the example of Dutch lawmakers.[203]

As a first step, reducing the role of federal funding as a driver of poorly adaptive urban development could have a significant impact. Some tentative steps have been taken in this direction. For example, as part of the federal stimulus bill in 2009, DOT’s Transportation Investment Generating Economic Recovery (TIGER) grant program targeted funding on the basis of performance measures, including the environmental impacts and GHG emissions associated with proposed transportation infrastructure projects.[204] These criteria have since been largely incorporated into the ongoing Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program,[205] and could help to shift its investment mix away from its current focus on highways and toll roads.[206]The criteria fall short of any hard and fast requirements for sustainability, nor do they even mention climate change adaptation, but they move closer to a system in which federal transportation and other funding is awarded on the basis of performance. Eventually, such a performance-based system could provide important incentives to local governments.

C. A National Climate Change Adaptation Fund

A sizable population in the United States continues to believe that climate change is not an important problem, and that its impacts and the need for an aggressive policy response remain far in the future.[207] So messaging is important. This gives appeal to the creation of a national climate change adaptation fund to finance adaptation planning at the local level.

A “national climate change adaptation fund,” under that name, could serve a variety of purposes. Simply conveying meaning could be the most important. There are some Americans who believe that climate change is a hoax.[208] But the more powerful force against reducing GHG emissions is neither so extreme nor unreasonable.[209] Most American policymakers, whether they care to admit it, are concerned about climate change, but remain unpersuaded that it represents a very immediate threat.[210] This sentiment is encouraged by classical economic analysis. For example, Steven Levitt’s Superfreakonomics claims that bioengineering provides a more economically efficient means of addressing climate change than reducing emissions now.[211] In a similar vein, Bjorn Lomborg’s Cool It argues that the money required for a major climate change mitigation program would be better spent on priorities like reducing malaria.[212] Unfortunately, the scientific literature on climate change discredits these economic arguments and paints an increasingly dire picture of what will be needed to avoid catastrophic global tipping points, such as the melting of the Greenland ice sheet.[213] Conventional economic analyses of climate change also tend to understate more immediate costs, such as soaring food prices, that have resulted from climate change triggering dispersed, localized tipping points of ecological degradation.[214]

As the reality of the science sinks in, concern in the United States and abroad may force political tipping points[215] accompanied by more aggressive policy at the global[216] and national level on mitigation and adaptation. But as Ostrom and others point out, such aggressive policy at the top cannot be implemented without a support structure of local and ultimately individual action.[217] Simply familiarizing residents of many American cities with the fact that climate change already requires an adaptive response could go a long way towards building that support structure. And, of course, a national adaptation fund would provide incentives for the local planning and policies that ease the transition to a world of climate disruptions and carbon constraints.

Consistent with the principles of adaptive law, discussed above, a national adaptation fund should rely on a broad range of policy instruments, some more coercive than others. In the context of transportation, for example, the fund could award grants for projects to better integrate transportation, land use and natural resource planning, helping local governments to phase out antiquated travel demand models and make realistic assessments of how planned development will affect the local water supply and air shed as the climate changes.[218] It could also fund capital improvement projects, or federal reinsurance. Conditions on funding might include reform of local governance structures, such as consolidating multiple Metropolitan Planning Organizations in a single metropolitan area,[219] or revising zoning codes to relax requirements such as parking setbacks. Such reforms are often difficult for local policymakers to undertake because of local opposition, and so the enticement of federal funding could provide political cover. The prospect of creating jobs could also win support from local partners, with an adaptation fund possibly financing new staff positions in local government, and boosting employment through capital improvement and other projects as well.

Clearly, creating a new federal spending program with “climate change” in the title will encounter opposition.[220] But compared to the challenges of cap-and-trade, a climate change adaptation fund poses a less direct threat to powerful special interests, and has a common sense, better-safe-than-sorry appeal. The various efforts at the agency level to craft climate adaptation plans demonstrate that such a fund aligns with existing federal policy. But local adaptation planning, which can identify and address specific vulnerabilities to climate change, should not depend on federal expertise to trickle down. It should receive a direct stimulus now.

VI. Conclusion

Ultimately, adapting to climate change must include a stop to its underlying cause. Avoiding more than a two degree Celsius rise in average world temperature will require a Herculean effort at every level of action, from international negotiating bodies to neighborhood coalitions. It will require linkages between climate specialists and a diverse body of policymakers and stakeholders, and it will require public awareness and the assumption of individual responsibility. Unfortunately, few policymakers appear inclined to embark upon this Herculean effort anytime soon. Local climate adaptation initiatives, with support from above, can help to set the stage for action when the political winds change. As the value of local initiatives like those of King County and New York City become more evident, other cities are sure to follow with their own assessments of vulnerabilities and action plans. Federal policy should encourage cities to undertake these initiatives and to continue developing those already in progress, setting the institutional foundation for tackling climate change head on.

The Real Story Behind the Columbia Basin Salmon Debacle: Dam Preservation Under the Endangered Species Act

BOOK REVIEW

By

Michael Blumm*

This review of Steven Hawley’s provocative book, Recovering a Lost River: Removing Dams, Rewilding Salmon, Revitalizing Communities, examines Hawley’s claim that the best way to recover endangered Snake River salmon is by removing the four Lower Snake River dams. These dams, managed by the United States Army Corps of Engineers, impede access to more than 5300 miles of prime salmon habitat and operate with enormous public subsidies, largely to maintain a seaport 465 miles inland at Lewiston, Idaho. Hawley’s book shows not only that additional public subsidies in the form of river dredging and new levees will be necessary to maintain the port, but also that local residents are beginning to question the sustainability of relying on the port for their economic future. The book explains how Endangered Species Act procedures have resulted in only minor changes to dam operations and discusses the benefits of a restored Snake River by examining salmon runs in undammed Alaska as well as in California and Maine, where dams have been removed. Although the removal of the Lower Snake Dams faces long political odds, Hawley’s book is a reminder that both economically and ecologically it is the best means of restoring Snake River salmon, which has been federal and regional policy for more than three decades.

The salmon wars in the Columbia Basin have been ongoing for decades.[1] Astonishingly, since the Northwest Power Act[2] ordered salmon and hydropower to be coequals in 1980,[3] Columbia Basin salmon runs have declined to about one-half of what they were thirty years ago, despite the expenditure of more than $600 million annually, nearly $10 billion cumulatively.[4] Worse, the listing of Columbia salmon under the Endangered Species Act (ESA)[5] twenty years ago has not only failed to restore wild salmon runs, but also apparently lowered the policy bar from restoring healthy runs to merely preventing their extinction.[6]

This sorry saga is the subject of Steven Hawley’s engrossing book, Recovering a Lost River: Removing Dams, Rewilding Salmon, Revitalizing Communities.[7] The startling expenses and miserable results are, according to Hawley, the result of “a skillfully directed symphony of public-relations scams, filthy politics, and crooked science.”[8] The book backs up this allegation through a number of interviews with veterans of the salmon wars and a careful perusal of relevant government reports. Included are depictions of an attempt to defund the only independent source of salmon science,[9] the purchase of scientists who tell federal water agencies what they want to hear,[10] and the co-option of a federal agency, the National Marine Fisheries Service (NMFS)—once a salmon advocate—by power and water agencies like the Bonneville Power Administration (BPA) and the United States Army Corps of Engineers (Corps), which seek to preserve dams and current hydropower operations.[11]

The Obama Administration, whose call for use of unbiased science might have signaled a reversal of decades of failure, has instead chartered a status quo course, attempting to avoid major changes to the dams and their operations by promising to offset the harm they inflict on salmon populations by rehabilitating salmon habitat elsewhere in the basin.[12] This “bait and switch” approach to salmon recovery has repeatedly failed to convince a federal judge that it was consistent with the ESA.[13]

According to Hawley, the somewhat surprising conversion of the Obama Administration to maintain the status quo was the result of the work of a cabal of Washington state politicians, including Secretary of Commerce Gary Locke, Senators Patty Murray and Maria Cantwell, and Governor Christine Gregoire, who accepted a $40.5 million check from BPA to realign the state’s position in the ESA lawsuit.[14] These politicians have become status quo defenders through the efforts of lobbying groups like the Pacific Northwest Waterways Association and Northwest River Partners, coalitions of ports, utilities, and businesses wedded to the current system of dam operations.[15] Hawley alleges that non-scientists like Jeff Stier (at BPA) and Bob Lohn (at several agencies) rewrote scientific findings to coincide with their agencies’ positions that the status quo was sufficient to satisfy federal law.[16]

In addition to manipulating the science of salmon recovery, the federal agencies controlling the Columbia hydrosystem have misappropriated the economics. As Hawley points out, one of the basic premises of the Northwest Power Act was that the conservation measures it authorized would redound to the benefit of fish and wildlife, especially the salmon runs.[17] The Act not only aimed to put fish and wildlife and hydroelectric generation on an equal footing,[18] it promised “equitable treatment” for fish and wildlife from federal water managers.[19] One would have thought that, at a minimum, these promises would have produced changes in the way the hydrosystem operates to provide river flows and spills to facilitate salmon migration as more than 3600 megawatts of new conservation measures came on line.[20] But the federal water managers have never offered those changes; the only significant operational changes that have occurred have been the summer spills ordered by federal district judge James Redden.[21]

For Hawley and for several salmon war veterans he interviewed, like Reed Burkholder and Ed Chaney,[22] the obvious solution to significantly restoring the salmon runs is to remove the four federal dams on the Lower Snake River. Some studies suggest this solution not only is economically affordable, but also actually might end up saving money by eliminating the need to maintain the dams and for costly mitigation measures like barging salmon and hatcheries, which only serve to damage wild salmon.[23] However economically and scientifically supportable dam removal may be,[24] it would require an unlikely political transformation. The book suggests that the beginning of such a transformation may be evident in Lewiston, Idaho, the seaport the dams created, some 465 miles inland.[25]

One of the great contributions of Hawley’s book is a consequence of a trip to Lewiston where he interviews several individuals interested in the condition of the Snake River. For he shows that, contrary to legend, not everyone in Lewiston is happy with the status quo. The city, located at the confluence of the Snake and Clearwater Rivers, faces a flood threat due to massive siltation of the Snake accumulating behind Lower Granite Dam, twenty miles downriver.[26] The Corps has constructed levees to protect the city from flooding, but with more than a million cubic yards of silt accumulating per year,[27] the levees are not adequate to protect the city from even a ten-year flood.[28] Raising the levees would cost $95 million, but most residents oppose this option because it would destroy a popular greenway.[29] Dredging the silt could cost up to $36 million annually.[30] All this to save an inland port that employs no more than twenty-five people, and whose operation requires an annual local subsidy in the form of a “temporary” tax now in its fifty-third year.[31] The Corps’s promise that the port would be self-financing has never been fulfilled. Some of the locals believe that the only economically sound way out of this Byzantine mess of federal subsides (and accompanying federal control) is to forsake the dredging and the levees and return the river to its natural state.[32] Returning to a natural river would enable Lewiston to become the gateway to a recreational mecca in northern Idaho that would attract salmon fishers (and, no doubt, businesses) from all over the world.[33]

The book adds useful context to the Lower Snake Dam removal argument by discussing some relevant history, including the removal of the Sunbeam Dam on the Yankee Fork of the Salmon River (tributary to the Snake) in 1934 by surreptitious means[34] and the blocking of the High Mountain Sheep Dam in the 1960s which, with an important assist from the United States Supreme Court,[35] saved northern Idaho’s salmon runs.[36] Hawley also contrasts the endangered status of Columbia Basin salmon with the abundance of salmon in Alaska, which has refused both dams and the accompanying salmon hatcheries.[37]

Hawley discusses at length several significant ancillary issues, including 1) the critical importance of Columbia Basin chinook salmon to the diet of endangered killer whales residing in Puget Sound,[38] 2) the virtues of dam removal to salmon restoration in Butte Creek in northern California,[39] and 3) the remarkable ecosystem recovery that took place after the removal of the Edwards Dam on the Kennebec River in 1999.[40] All of these vignettes add weight to the argument for removal of the Lower Snake Dams.[41]

This is a powerful, yet immensely readable book that brings together a good deal of information never collected before in one volume.[42] Hawley manages, in an accessible and often amusing way,[43] to make the immense tragedy of the decline of Columbia Basin salmon hit home to his readers. The book might rekindle interest in the removal of the uneconomical and environmentally disastrous Lower Snake Dams,[44] once the subject of serious consideration in the 1990s.[45] If so, Hawley’s vivid and provocative account will help keep the promise of a restored, free-flowing Snake River alive, a significant contribution to wild salmon and those who care about them.[46]

The Answer Lies in Admiralty: Justifying Oil Spill Punitive Damages Recovery Through Admiralty Law

By

Brittan J. Bush*

Oil spills, unlike other environmental disasters, often cue a certain immediacy among society for not only increased regulation but also punishment exerted against the parties responsible for a spill. Within the American tort system, society’s call for punishment is most clearly embodied within the realm of punitive damages recovery. Although society may desire punitive damages in causes of action arising out of an oil spill, the current federal oil spill liability regime, the Oil Pollution Act of 1990 (OPA), and its accompanying jurisprudence stifle the possibility of oil spill punitive damages recovery.

This Article posits legal and normative justifications in favor of punitive damages recovery for OPA as well as general maritime law causes of action arising out of an oil spill. The Article first refutes the reliability of the prior jurisprudence regarding the OPA’s effect on punitive damages recovery. It then argues that the Clean Water Act preemption analysis from Exxon Shipping Co. v. Baker as well as the Court’s criticism of Miles v. Apex in Atlantic Sounding Co. v. Townsend form a complementary argument supporting oil spill punitive damages recovery. The Article then applies these arguments to causes of action under general maritime law as well as the OPA. The conclusion argues that punitive damages’ goals of punishment and deterrence require an extension of punitive damages recovery to post OPA oil spills.

I. Introduction

On April 20, 2010, the Deepwater Horizon oil spill struck the Gulf of Mexico and not only took the ecology and citizens of the Gulf Coast hostage, but courts along the Gulf as well.[1] The Deepwater Horizon oil spill is the largest marine pollution disaster in history and may result in the most complex and drawn out litigation in United States history.[2] While the spill’s grasp on the Gulf Coast’s ecology and citizens lasted only eighty-seven days, when the well was eventually sealed,[3] Deepwater Horizon’s grasp on the judicial system remains until the final Deepwater Horizon case is adjudicated.

Deepwater Horizon likely poses the most complex questions of liability ever presented to the United States judicial system. The ongoing litigation will likely involve numerous responsible parties and independent oil exploration contractors, thousands of plaintiffs, and state and local governments across the Gulf Coast. If history serves as any indicator, the Deepwater Horizon litigation could easily result in decades of litigation over the spill’s liability similar to the twenty-year litigation involving the Exxon Valdez spill.[4] At the heart of the litigation lies a web of comprehensive statutes and liability regimes that muddy the already oil-soiled waters of the Deepwater Horizon controversy. Included in this web are the liability provisions of the Oil Pollution Act of 1990 (OPA),[5] the Federal Water Pollution Control Act (Clean Water Act or CWA),[6] Resource Conservation and Recovery Act of 1976 (RCRA),[7] Merchant Marine Act of 1920 (Jones Act),[8] Death on the High Seas Act (DOHSA),[9] as well as general maritime law.[10] This Article, however, turns its focus away from the specific compensatory remedies available under these statutory regimes and maritime law. Instead, this Article examines admiralty law’s role in formulating an oil spill punitive damages regime for causes of action asserted under the OPA and maritime law.

Until recently, many regarded the recovery of punitive damages in oil spill causes of action as a closed question. In the wake of the Exxon Valdez spill, Congress enacted the OPA in order to establish a comprehensive liability scheme for oil spills.[11] Congress, however, did not include any language regarding punitive damages within the OPA’s provisions. The OPA’s silence on punitive damages recovery required the judiciary to determine if the OPA’s provisions barred punitive damages recovery for OPA claims and general maritime causes of action. While the Supreme Court has not directly addressed this question, the United States First Circuit Court of Appeals, in South Port Marine, L.L.C. v. Gulf Oil Ltd. Partnership (South Port),[12] held that punitive damages were not recoverable under the OPA and in dicta extended the exclusion of punitive damages recovery to general maritime claims as well.[13] The First Circuit’s decision relied heavily on the Supreme Court’s decision in Miles v. Apex Marine Corp.[14] Now, the First Circuit’s decision in South Port must be reconsidered in light of the Supreme Court’s recent holdings in Exxon Shipping Co. v. Baker (Exxon)[15] and Atlantic Sounding Co. v. Townsend,[16] which criticize Miles.[17]

This Article argues that South Port’s reliance on Miles as well as congressional silence on punitive damages under the OPA leaves the question of punitive damages recovery open for future interpretation.[18] In addition, it argues that the Supreme Court’s holdings in Exxon and Townsend provide arguments that justify punitive damages recovery for OPA claims and general maritime law causes of action arising from oil spills. It also provides normative justifications arguing that punitive damages are a necessary punishment and deterrence mechanism that may prevent future oil spills.

This Article proceeds in five parts. Part II sheds greater light on the history of punitive damages recovery for oil spills. First, it provides a brief sketch of oil spill liability prior to the OPA’s enactment in 1990.[19] It proceeds by applying the OPA’s liability provisions specifically to the Deepwater Horizon oil spill.[20] Part II then examines the lower court decisions holding that punitive damages are not recoverable in OPA and general maritime law causes of action.[21] Part II concludes by presenting the Supreme Court’s decisions in Miles, Exxon, and Townsend and ultimately questions the reliability of the lower court decisions barring punitive damages under the OPA and general maritime law.[22]

Part III discusses the potential for maritime law to play a role in causes of action that may result in punitive damages. Part III begins by noting that oil spills resulting from offshore oil exploration on semi-submersible movable drilling rigs, like the Deepwater Horizon, come under federal maritime jurisdiction due to the status of these rigs as vessels.[23] Part III then argues that the First Circuit’s decision in South Port must be reevaluated in light of the Court’s commentary on Miles in Townsend and Exxon.[24] After re-opening the punitive damages debate through a refutation of South Port, Part III presents the Supreme Court’s punitive damages preemption analysis of the CWA from Exxon.[25] Part III concludes that Exxon and Townsend form a complementary argument justifying punitive damages under the OPA and general maritime law causes of action.[26]

Part IV applies the arguments from Exxon and Townsend to three types of claims that may be asserted in the wake of an oil spill.[27] It first argues that Exxon and Townsend mandate punitive damages recovery for general maritime claims outside of the OPA, including claims against non-responsible parties.[28] It next argues that Exxon and Townsend present a strong normative justification for punitive damages recovery in OPA claims that overlap with a general maritime law cause of action in which a preexisting punitive damages remedy exists.[29] It also argues that the goal of uniformity within the OPA’s remedial scheme mandates that punitive damages recovery be extended to OPA claims without an overlapping general maritime law cause of action.[30] Part IV concludes by arguing that punitive damages’ goals of punishment and deterrence require a punitive damages remedy for wrongful death and personal injury claims arising out of an oil spill.[31]

Part V presents normative arguments in favor of oil spill punitive damages recovery.[32] It first argues that oil spill punitive damages recovery aligns with the punishment and retributive justice functions of punitive damages.[33] Part V also argues that oil spill punitive damages awards would function as a deterrence mechanism.[34] It ultimately advocates that punitive damages, because of their deterring effect, are necessary to prevent future marine oil spill disasters.

Part VI concludes by urging the judiciary to allow punitive damages recovery for causes of action asserted under the OPA as well as general maritime law.[35]

II. Deepwater Horizon, the Oil Pollution Act, and Maritime Law Punitive Damages

A. The Oil Pollution Act of 1990

Prior to Congress’s enactment of the OPA, liability for oil spills went through several phases. Until 1970, state law governed liability for damages and cleanup costs resulting from oil spills.[36] The rise of international transportation of petroleum and offshore oil exploration in the 1960s, however, limited the strength of state-enacted oil spill liability regimes.[37] In 1970, the federal government responded to the changes in the oil industry and established the first federal liability scheme for oil spills under the Water Quality Improvement Act of 1970.[38] In 1972, Congress incorporated the oil spill provisions from the Water Quality Improvement Act into the CWA.[39] Finally, Congress enacted the OPA, the current federal liability regime for oil spills, in response to the Exxon Valdez spill.[40] Congress’s goal in enacting the OPA was to “streamline federal law to provide quick and efficient cleanup of oil spills, compensate victims of such spills, and internalize the costs of spills within the petroleum industry.”[41]

The OPA provides an extensive liability scheme for oil spills from vessels, offshore oil facilities, and land-based oil production facilities.[42] When oil is discharged into navigable waters of the United States, adjacent shorelines, or exclusive economic zones, the OPA states that each “responsible party” is liable for “removal costs” and “damages.”[43] Removal costs are defined as the costs associated with removal measures that are “necessary to minimize or mitigate damage to the public health or welfare, including, but not limited to, fish, shellfish, wildlife, and public and private property, shorelines, and beaches.”[44] Damages under the OPA are provided for 1) injury to, destruction of, loss of, or loss of use of natural resources, 2) injury to, or economic losses from, destruction of property, 3) loss of subsistence of natural resources, 4) net loss of taxes and other revenue from injury or loss of property, 5) loss of profits from damage to property or natural resources, and 6) net costs of governments providing increased or additional public services.[45]

The OPA establishes a strict liability regime, and responsible parties are deemed to be jointly and severally liable for removal costs and damages.[46] Under the OPA, damages for an offshore facility, like the Deepwater Horizon rig, are capped at $75 million exclusive of removal costs.[47] The damages cap, however, does not apply in two instances. First, when the spill was “proximately caused by” the “gross negligence or willful misconduct of” or “violation of an applicable Federal safety, construction, or operating regulation by” a responsible party, a responsible party’s agent, or a responsible party’s contractor.[48] Second, the damages cap does not apply when the responsible party fails or refuses to report the incident, provide reasonable cooperation or assistance, or without sufficient cause fails to comply with a cleanup order.[49]

The OPA also preserves a plaintiff’s right to file suit under applicable state-enacted oil spill liability statutes.[50] Section 2718 does not preempt the authority of states and local governments to impose additional liability for “discharge of oil or other pollution by oil within such State” or “any removal activities in connection with such a discharge.”[51] In response to the OPA’s preservation of state law claims, many states adopted comprehensive oil spill compensation legislation.[52] Numerous state statutes also provide unlimited damages for spills in state navigable waters.[53] In addition to its preservation of state law claims, the OPA also included a maritime law savings clause within the Act’s provisions, which states:

Except as otherwise provided in this Act, [the OPA] does not affect—(1) admiralty and maritime law; or (2) the jurisdiction of the district courts of the United States with respect to civil actions under admiralty and maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.[54]

Although the OPA does provide for extensive compensatory recovery, the recovery of punitive damages is not addressed within the language of the OPA’s general liability provisions. The Act’s provisions preserving additional liability under state and maritime law causes of action also do not expressly address punitive damages recovery. In light of the extreme devastation and public outcry after Deepwater Horizon, it is necessary to articulate and formulate a theoretical justification for punitive damages recovery in oil spill causes of action in order to adequately exact justice against those responsible for Deepwater Horizon and future oil spills. Although several lower court decisions address the issue of punitive damages and their preemption by the OPA, one must look at each court’s decision in light of the Supreme Court’s recent affirmation of punitive damages in Exxon and Townsend.

B. The Deepwater Horizon Spill

The Deepwater Horizon oil spill occurred forty-nine miles off the Louisiana Coast in the Gulf of Mexico.[55] The spill resulted from a blowout on the Deepwater Horizon rig after a methane gas kick caused a marine riser to collide with the rig’s platform.[56] Although policymakers blamed federal regulators as well as the oil industry as a whole for the spill and its dire consequences,[57] the effects of the spill and the recovery for those affected by it ultimately rests on the corporate parties responsible for the Deepwater Horizon disaster. Therefore, it is necessary to ascertain the damage caused by Deepwater Horizon as well as the potential claims that may arise under the OPA and maritime law. This Part proceeds by examining the potential claims under the OPA as well as maritime law causes of action.

The Deepwater Horizon spill leaked more than 4.9 million barrels of oil into the Gulf Coast and caused unprecedented environmental and economic damage to the Gulf of Mexico and its adjacent states.[58] The discharged oil from Deepwater Horizon damaged the Barataria-Terrebonne estuary, on which 98% of Louisiana’s fish, crab, shrimp, and oyster habitats rely.[59] Shortly after the spill, residents reported dead fish and oil-filled oysters in the Gulf.[60] The damage to the Gulf negatively impacted not only its flora and fauna, but also numerous residents who depended on the estuary for their own economic livelihood.[61] Deepwater Horizon’s effects, however, did not stop at the Louisiana wetlands. The spill’s harm soon reached the beaches of Alabama, Mississippi, and Florida causing a drop in tourism revenue throughout the summer of 2010.[62] Finally, Deepwater Horizon’s damage also affected state and local governments along the Gulf that exhausted valuable manpower and monetary resources in response to the spill.[63]

Many of Deepwater Horizon’s harms to the Gulf Coast community likely fall within one of the six causes of action enumerated in the OPA.[64] For example, commercial fishermen or harvesters of fish or shrimp along the Gulf Coast may assert claims under the OPA’s provision providing damages for loss of profits from damage to property or natural resources.[65] These same claimants may also seek recovery for the loss of use of natural resources.[66] In addition, businesses that rely on the tourism industry along Gulf Coast beaches may also file claims under these same remedies.[67]

The potential list of claimants asserting causes of action related to Deepwater Horizon, however, does not end with private parties. State and local governments often depend on the viability of private parties’ enjoyment of the Gulf’s natural resources to provide revenue from recreation areas as well as tax revenue from business ventures.[68] Government entities will also likely seek recovery for their public service expenditures following Deepwater Horizon.[69] Finally, governments may also seek damages for destruction to the aesthetic features of the Gulf Coast under the OPA’s provision granting recovery for injury to, destruction of, or loss of natural resources.[70]

While the OPA provides widespread recovery for most of the parties affected by Deepwater Horizon, it is not the sole liability avenue for Deepwater Horizon’s affected plaintiffs. State law regimes provide an additional recovery mechanism for claimants. In addition, the OPA’s lack of a recovery scheme for personal injury and wrongful death damages necessitates the use of maritime law for certain claimants. Deepwater Horizon demonstrated that oil spills not only can injure but also can claim the lives of offshore oil employees.[71] Therefore, injured seamen as well as the families of deceased seamen may assert causes of action based in maritime law for personal injury and wrongful death under the Jones Act and DOHSA.[72] In addition, the OPA does not grant a right of action against entities that do not constitute a responsible party under the OPA. Therefore, plaintiffs will likely rely on maritime law to assert causes of action against non-responsible parties.

Although the OPA has been characterized as a comprehensive liability regime for oil spills,[73] Deepwater Horizon shows that the OPA presents a complex web of different liability concerns inside and outside of its provisions. Because the OPA only addresses compensatory remedies, the question of punitive damages recovery further hinders the OPA’s ability to adequately resolve oil spill causes of action. Therefore, it is essential to understand punitive damages recovery’s place within not only oil spill causes of action asserted under the OPA but also maritime law. Most importantly, it is vital to determine if maritime law may serve as a mechanism to break the silence on oil spill punitive damages recovery.

C. The Case Against Punitive Damages Under the Oil Pollution Act

The issue of the OPA’s effect on punitive damages recovery, until recently, has not garnered a great deal of discussion among academics and the judiciary. In the wake of Deepwater Horizon, however, punitive damages recovery is a subject of vast importance to all parties involved in the Deepwater Horizon and future oil spill litigation.[74] Thus, it is necessary to examine courts’ previous treatment of oil spill punitive damages recovery with a critical eye towards their rulings’ legal and policy justifications.

In South Port, the United States First Circuit Court of Appeals specifically addressed punitive damages recovery under the OPA.[75] In South Port, a marina owner filed suit against a petroleum distributor and barge owner for damages arising from a gasoline spill.[76] In addition to claims for compensatory damages, the marina owner also sought punitive damages under the OPA and Maine common law.[77] The marina owner, however, did not assert any causes of action under general maritime law.[78] The petroleum distributor and barge owner conceded liability for the spill under the OPA.[79] The trial court, however, refused to award punitive damages under the OPA and dismissed the marina owner’s claims under Maine common law.[80]

The First Circuit affirmed the trial court’s rulings and held that Congress intended the OPA to prohibit the recovery of punitive damages and supplanted general maritime law, which allowed the recovery of punitive damages in causes of action arising out of oil spills.[81] In its decision, the court relied heavily on the Supreme Court’s decision in Miles to justify its refusal to award punitive damages under the OPA.[82] The court reasoned that Congress intended for the OPA to be the sole federal law in cases involving oil spills and that the OPA provided a comprehensive liability scheme under its statutory language.[83]

The court also rejected the marina owner’s argument that the OPA’s marine savings clause allowed for additional claims and damages not enumerated within the OPA.[84] Finally, the court rejected the marina owner’s policy arguments and noted that the OPA “imposes strict liability for oil discharges, provides both civil and criminal penalties for violations of the statute, and even removes the traditional limitation of liability in cases of gross negligence or willful conduct.”[85] Relying on this justification, the court ultimately reasoned that the policy concern of punishing defendants in oil spill cases was properly taken into account under the provisions of the OPA.[86]

Two months later, the District Court of Oregon, in Clausen v. M/V New Carissa,[87] followed the South Port decision.[88] In Clausen, oyster bed owners filed suit against a vessel owner, the vessel, its captain, and others to recover compensatory and punitive damages resulting from the death of several million oysters following an oil spill.[89] Although the court initially held that the oyster bed owners could seek punitive damages under the OPA, the court, on reconsideration, held that punitive damages were not recoverable under the OPA.[90] The court reasoned that the OPA’s strict liability regime along with the plaintiff’s ability to overcome liability caps by showing a defendant’s gross negligence formed a statutory interplay that prohibited the recovery of punitive damages.[91] In addition, the court stated that the oyster bed owners presented no evidence showing reckless and outrageous indifference by the defendants that would allow for punitive damages recovery.[92]

The South Port and Clausen decisions show the judiciary’s hesitancy towards allowing punitive damages recovery under the OPA and general maritime law. It is important to note, however, that each case is limited in its reach, and other circuits and the Supreme Court have yet to rule on the issue of punitive damages recovery in oil spill causes of action. The remainder of this Article will formulate judicial as well as normative justifications for the rejection of the South Port and Clausen decisions. It will also provide judges and practitioners with persuasive and justifiable arguments in favor of punitive damages recovery in OPA and general maritime law causes of action.

D. Maritime Law and Punitive Damages

Although the court in South Port examined the OPA’s effect on punitive damages recovery for OPA claims and general maritime law causes of action, the Supreme Court’s recent admiralty jurisprudence reinvigorates the debate over oil spill punitive damages recovery. This Part will examine the modern history of maritime law punitive damages as well as present the current status of punitive damages under maritime law. It will first examine the Supreme Court’s decision in Miles, which did not address punitive damages recovery, and its progenies’ dismantling of maritime punitive damages. This Part then examines the Supreme Court’s reaffirmation of punitive damages in Exxon and Townsend.

The modern story of punitive damages’ relationship with maritime law begins with the Supreme Court’s decision in Miles and its progenies’ holdings regarding punitive damages under maritime law. Prior to Miles, the majority of courts recognized punitive damages among the remedies afforded under maritime law to plaintiffs suffering from property damage, personal injury, or mistreatment as seamen or vessel passengers because of a defendant’s reckless or intentional conduct.[93] Miles featured a suit by a seaman’s mother for the death of her son, who had been stabbed to death by a crewmember, against a vessel’s operators, charterer, and owner both for negligence under the Jones Act and for unseaworthiness under general maritime law.[94] Although the Court held that a general maritime cause of action for the wrongful death of a seaman existed, the Court also held that wrongful death damages in a general maritime law wrongful death action for the death of seamen as a result of an unseaworthy condition did not include loss of society.[95] In denying Miles’s loss of society claim, the Court held that the Jones Act’s preclusion of loss of society damages also precluded loss of society damages for the judicially created claim of wrongful death as a result of unseaworthiness.[96] The Court reasoned that it would be inconsistent with the Court’s place in the constitutional scheme to grant more expansive remedies in a general maritime law cause of action than Congress allowed in cases of death resulting from negligence under the Jones Act.[97]

This begs the question: How did Miles, which addressed compensatory damages for loss of society, affect maritime punitive damages recovery? The answer lies in the Court’s reasoning behind its denial of loss of society damages and its interpretation by lower courts in future cases. Although the Court’s opinion in Miles only mentioned the subject of punitive damages recovery twice, lower courts found a justification within the Court’s reasoning for the denial of punitive damages recovery in other maritime causes of action.[98] In Guevara v. Maritime Overseas Corp.,[99] the Fifth Circuit interpreted the Miles decision to preclude punitive damages for the failure to pay maintenance and cure.[100] The Ninth Circuit, in Glynn v. Roy Al Boat Management Corp.,[101] also utilized the Miles rationale to deny punitive damages for the failure of an employer to investigate or pay a claim for maintenance and cure.[102] The First Circuit, using the Miles decision, extended the preclusion of punitive damages to unseaworthiness causes of action for non-fatal injuries in Horsley v. Mobil Oil Corp.[103] The Sixth Circuit also denied punitive damages in wrongful death unseaworthiness claims.[104] Using the Supreme Court’s rationale in Miles, the Second Circuit held that “plaintiffs who are not allowed by general maritime law to seek nonpecuniary damages for loss of society should also be barred from seeking nonpecuniary punitive damages.”[105]

The lower courts’ widespread extension of Miles significantly limited the availability of punitive damages under maritime law. Scholars proclaimed, in light of Miles’s expansion, that maritime punitive damages were on the brink of death.[106] The Court, however, revived maritime punitive damages recovery with its decisions in Exxon and Townsend.[107] Therefore, to truly ascertain the applicability of punitive damages to oil spill liability under maritime law and the OPA, it is necessary to understand the interplay between the judiciary’s prior and current jurisprudence regarding punitive damages in maritime law.

Exxon is the Supreme Court’s seminal decision regarding oil spill punitive damages under maritime law. Exxon was the culmination of nearly twenty years of litigation that arose out of the Exxon Valdez oil spill. In Exxon, the Court vacated a $2.5 billion punitive damages award against Exxon and remanded the case to the lower courts with instructions that punitive damages should not exceed $507.5 million.[108] In doing so, the Court held that maritime punitive damages could not exceed a ratio of 1:1 to the total compensatory damages awarded in a particular case.[109]

In Exxon, the Court addressed whether punitive damages awards in Exxon Valdez causes of action were preempted by the CWA, the statute that governed liability for oil spills prior to the OPA.[110] The Court held that the CWA did not preempt the recovery of punitive damages arising out of an oil spill.[111] The Court reasoned that because the CWA was silent on the issue of punitive damages, the Court could not assume that Congress intended to preempt punitive damages recovery under general maritime law.[112]

After concluding that the CWA did not preempt the recovery of punitive damages under general maritime law, the Court addressed the reasonableness of the Ninth Circuit’s punitive damages calculation.[113] The Court determined that punitive damages have historically served as a method of deterrence and retribution, unlike compensatory damages awards.[114] The Court also found that, although American juries grant punitive damages more frequently than juries in other nations, American juries did not mass-produce runaway punitive damages awards.[115] In response to concerns regarding deference to Congress on the issue of punitive damages, the Court noted that the judiciary has traditionally taken the lead in formulating flexible and fair remedies in maritime law.[116] Although the Court recognized that the authority of Congress gave it superior power over the Court in establishing statutory guidance, the Court also stated that the absence of legislation constraining punitive damages does not imply a congressional intention that there should be no rule or remedy.[117] Thus, the Court reasoned that when there was a need for a maritime remedy, past precedent argued in favor of the Court’s ability to promulgate a judicially derived standard.[118]

Justices Stevens, Ginsburg, and Breyer each dissented from the majority’s opinion regarding punitive damages recovery.[119] Justice Stevens argued that a judicially created limit on maritime punitive damages overstepped the boundaries imposed by federal legislation.[120] In addition, he argued that the absence of a limitation provision regarding punitive damages suggested that Congress did not wish for the Court to restrict punitive damages awards.[121] Justice Stevens also noted that maritime punitive damages may serve as a compensatory measure for intangible admiralty injuries considering that general maritime law often limits compensatory damages and precludes recovery for certain causes of action, including negligent infliction of emotional distress and pure economic loss.[122] Because these damages, normally excluded under general maritime law, are compensable in general tort law, Justice Stevens concluded that general maritime law should not further limit recovery in maritime law cases with a bright line 1:1 ratio.[123] Justice Ginsburg and Justice Breyer argued that the 1:1 ratio imposed by the majority did not properly punish Exxon.[124] Justice Ginsburg also specifically echoed Justice Stevens’s view that Congress was better equipped to make the necessary determinations for imposing maritime punitive damages recovery limits.[125]

The most recent Supreme Court pronouncement involving maritime punitive damages came in Townsend. In Townsend, the Court held that a seaman may recover punitive damages from his or her employer for a failure to maintenance and cure.[126] More importantly, Townsend abrogated lower court decisions that extended the Court’s Miles decision to the realm of maritime punitive damages.[127] The Court justified its affirmation of punitive damages on several grounds. First, the Court reasoned that punitive damages recovery has long been a part of general maritime law.[128] Second, the Court stated that although the Jones Act created a statutory cause of action for negligence, it did not eliminate preexisting remedies available to seamen for separate causes of action under the common law.[129]

Most importantly, the Court clarified its decision in Miles on the issue of punitive damages recovery.[130] The Court noted that Miles did not address the subject of punitive damages.[131] The Court further argued that allowing punitive damages in maintenance and cure actions was acceptable, considering that Congress had not directly spoken on the issue.[132] In addition, the Court reasoned that the Jones Act evinced no general hostility toward general maritime law recovery.[133] Finally, the Court reasoned that Congress was aware of the general maritime law when passing the Jones Act and that the Court would not impute congressional intent to exclude punitive damages recovery where congressional intent to do so is absent.[134]

The Court’s decisions in Exxon and Townsend require a reexamination of the status of punitive damages recovery for OPA claims and general maritime causes of action arising out of an oil spill. Primarily, the court in South Port relied heavily on the Miles decision to determine that punitive damages awards were not an available remedy for OPA claims and general maritime causes of action.[135] The Court’s clarification in Townsend of the Miles decision as a justification for limiting punitive damages recovery indicates an apprehension by the Court of the use of Miles in the debate over punitive damages recovery. The Court’s apprehension is reinforced by its specific abrogation of Guevara, which used Miles as a basis for excluding maritime punitive damages recovery. When one views the Court’s unwillingness to apply Miles on the issue of punitive damages recovery along with the Exxon decision, which establishes punitive damages recovery as a preexisting remedy for oil spill causes of action arising prior to the OPA, the question of punitive damages recovery under the OPA and general maritime law claims remains open due to the First Circuit’s reliance on Miles in South Port. Part III discusses this issue further and presents jurisprudential and normative arguments that advocate the recovery of punitive damages under the OPA and general maritime law.[136]

III. Reinvigorating Oil Spill Punitive Damages

A. Offshore Oil Exploration and Maritime Jurisdiction

Before general maritime law can serve as a mechanism justifying punitive damages recovery under the OPA and general maritime law, it is necessary to determine if oil spills from offshore rigs come under maritime jurisdiction. This determination, however, is difficult given that certain offshore oil exploration facilities come under admiralty jurisdiction while some do not. Semi-submersible movable drilling rigs, like the Deepwater Horizon, are considered vessels because they are “capable of being used[] as a means of transportation on water.”[137] Because the Deepwater Horizon rig and other semi-submersibles fit within the definition of a vessel, certain causes of action arising from their activities come under admiralty jurisdiction.[138] Therefore, federal admiralty law may serve as a mechanism that justifies punitive damages recovery under the OPA and general maritime law.

B. The Supreme Court’s Affirmation of Punitive Damages in Maritime Law

The Supreme Court’s recent punitive damages jurisprudence ultimately serves as a legal basis for allowing punitive damages recovery for OPA claims as well as general maritime causes of action. This Part proceeds by examining the Court’s jurisprudence and extracting from it a theory that justifies oil spill punitive damages. This Part argues that South Port’s refusal to allow punitive damages recovery rests on unsound ground because it relies on Miles and therefore requires a reexamination of the question of oil spill punitive damages recovery. After showing the need for this reexamination, this Part argues that punitive damages recovery for OPA and general maritime causes of action is justified by two primary arguments. First, the Court’s holding, in Exxon, that the CWA’s oil spill liability provisions do not preempt maritime punitive damages recovery should also apply to the OPA. Second, the Court’s holdings in Townsend, when combined with the Court’s affirmation of oil spill punitive damages recovery in Exxon, present a viable argument in favor of punitive damages in light of the OPA’s silence on punitive damages recovery. Although courts may examine these arguments independently of one another, if viewed together both arguments formulate a comprehensive and workable legal framework that justifies punitive damages recovery under the OPA and general maritime law.

1. South Port: A Modern Reexamination

The First Circuit’s decision in South Port made some commentators proclaim that punitive damages were not recoverable for OPA and general maritime law claims arising from an oil spill.[139] Their pronouncements, however, must be reexamined and scrutinized in light of South Port’s reliance on Miles after the Supreme Court’s decision in Townsend. In South Port, the First Circuit stated that the question of punitive damages “ha[d] largely been decided . . . by the Supreme Court in Miles.”[140] Relying on Miles, the First Circuit proceeded to apply it in the same manner as the court in Guevara and held that Miles justified the preclusion of punitive damages recovery under the OPA.[141]

For South Port to remain as a sound justification for not allowing oil spill punitive damages, its reliance on Miles must be reconciled with the Supreme Court’s clarification of Miles in Townsend. In Townsend, the Court stated that “[h]istorically, punitive damages have been available and awarded in general maritime actions . . . [and] nothing in Miles . . . eliminates that availability.”[142] The Court also found that Miles did not even address the availability of punitive damages recovery.[143] In addition, the Court criticized Guevara’s extension of Miles into the punitive damages arena and abrogated its holdings.[144] With such clear and strong statements by the Court on Miles’s applicability to punitive damages, how can South Port’s reliance on Miles allow it to close the door on punitive damages recovery for oil spill claims under the OPA as well as general maritime law? The simplest answer to this question is that South Port can no longer serve as controlling jurisprudence for OPA and general maritime punitive damages recovery given Townsend’s admonishment of Guevara’s extension of Miles.

Although Guevara addressed punitive damages recovery in maintenance and cure actions, the rationale in South Port nonetheless tracks the Fifth Circuit’s reasoning in Guevara. The First Circuit, in South Port, argued that the interplay between maritime law and the OPA, like the DOHSA in Miles, created “an overlap between statutory and decisional law.”[145] Because of this overlap, the court found that Miles dictated deference to congressional judgment regarding punitive damages recovery under the OPA.[146] The First Circuit specifically utilized the language in Miles stating that “in an ‘area covered by the statute, it would be no more appropriate to prescribe a different measure of damages than to prescribe a different statute of limitations, or a different class of beneficiaries.’”[147] This rationale led to the First Circuit’s ultimate conclusion that the OPA supplanted general maritime law and precluded punitive damages recovery.[148]

The South Port line of reasoning does track the Fifth Circuit’s reasoning in Guevara. Like South Port’s finding of a statutory overlap between maritime law and the OPA, the court in Guevara found an overlap between the traditional general maritime maintenance and cure cause of action and the Jones Act.[149] Based on this statutory overlap, the Fifth Circuit opined that the Miles uniformity principle, also used in South Port, could be used to bar punitive damages recovery.[150] The Fifth Circuit reasoned that awarding punitive damages would upset the harmony between general maritime law and statutory law and would fragment the damages regime within admiralty law for maintenance and cure actions.[151] The Fifth Circuit’s concern of harmonization between general maritime law and statutory law echoes the First Circuit’s concern regarding the use of general maritime law to justify punitive damages under the OPA[152] given South Port’s pronouncement that the OPA is a comprehensive liability scheme for oil spills.[153]

Although South Port and Guevara addressed different causes of action, both decisions affected the status of a preexisting punitive damages remedy under general maritime law.[154] Prior to Guevara, admiralty courts recognized the remedy of punitive damages for a failure to pay maintenance and cure.[155] In addition, prior to the OPA’s enactment and the South Port ruling, courts recognized punitive damages recovery for oil spills under maritime law.[156] The Court continued to recognize the pre-OPA right to oil spill punitive damages in cases arising prior to the OPA in the years following the South Port decision as well.[157] This similarity is of vital importance primarily because the courts in South Port and Guevara each found that statutes, which contained no specific provisions on punitive damages, justified the preclusion of a preexisting maritime punitive damages remedy. Given the similarities between the courts’ respective questions and reasoning in South Port and Guevara, the Court’s abrogation of Guevara in Townsend must call into question South Port’s rationale as well.

Finally, it must be noted that South Port only represents the interpretation of the OPA’s effect on punitive damages recovery in one federal circuit court. Since the enactment of the OPA in 1990, no other federal court of appeals has issued a ruling regarding the OPA’s effect on punitive damages recovery. Within the context of the Deepwater Horizon and future oil spill litigation, this fact is important for two reasons. First, general maritime law is only binding on all circuits when pronounced by the United States Supreme Court. Second, the First Circuit’s holding in South Port is not binding on the United States Fifth Circuit, the court in which the majority of Deepwater Horizon claims will likely be heard. Since South Port is not binding on the courts adjudicating Deepwater Horizon claims, its preclusion of OPA punitive damages recovery is only persuasive jurisprudence at best.

Because South Port rests on an outmoded interpretation of Miles and is only persuasive jurisprudence in the vast majority of federal courts, including the Fifth Circuit, the question of the OPA’s effect on punitive damages in claims asserted under it and general maritime law should not follow the South Port reasoning. The Supreme Court’s jurisprudence in the years following South Port indicates the Court’s willingness to allow oil spill punitive damages recovery. Therefore, judges must re-examine the rationale of South Port in conjunction with the Court’s recent punitive damages jurisprudence as well as the language of the OPA. The next two Parts present two plausible arguments using the Court’s recent jurisprudence and the OPA’s provisions that justify punitive damages recovery in causes of action arising out of the Deepwater Horizon spill and future oil pollution disasters.

2. The Clean Water Act Preemption Argument

In Exxon, the Supreme Court addressed oil spill punitive damages recovery under the liability provisions of the OPA’s predecessor, the CWA.[158] The Court found that the CWA’s liability provisions for oil spills did not preempt punitive damages awards.[159] The Court reasoned that the CWA did not preempt punitive damages recovery because the CWA’s liability provisions did not speak directly to the question of punitive damages.[160] The Court also noted that punitive damages recovery would not have a frustrating effect on the CWA’s remedial scheme.[161] Finally, the Court noted that nothing in the CWA advocated for a fragmentation of compensatory and punitive damages remedies from the same cause of action or indicated congressional intent to occupy the entire field of pollution remedies.[162]

The Court’s analysis of the CWA’s liability scheme in Exxon presents a rationale that is useful for determining the OPA’s effect on punitive damages. The OPA, like the CWA, does not contain any provisions specifically addressing punitive damages recovery.[163] Both statutes, however, do lay out liability regimes for compensating individuals affected by oil spills. Although the CWA, similar to the current version of the OPA, was the preeminent federal oil spill legislation during its enactment, differences do exist within their liability regimes. The OPA prescribes distinct causes of action for oil spills exclusive of removal costs.[164] The CWA, however, lacks specified causes of action and instead includes a savings provision preserving the right of private parties to file suit for damage to property arising from an oil spill.[165]

Although some differences exist between the OPA’s and the CWA’s provisions regarding oil spill liability, this does not undermine the significance that each statute is silent on punitive damages recovery. Given the strength of this contention in the Court’s analysis of the CWA liability provisions in Exxon, it seems that statutory silence on the issue of punitive damages by the OPA could result in punitive damages recovery in causes of action under general maritime law and possibly OPA claims. In addition, admiralty courts have long held that Congress is aware of the state of the law when passing new legislation.[166] When Congress enacted the OPA in 1990, courts had already recognized punitive damages recovery for oil spill causes of action under general maritime law.[167] Although Congress was aware of this practice, it did not include any language that discouraged punitive damages recovery for causes of action arising from oil spills after the OPA’s enactment. In addition, Congress did not respond to the Court’s affirmation of punitive damages recovery in Exxon by amending the OPA’s liability provisions. With this in mind, one can only assume that Congress did not see the practice of punitive damages recovery as a remedy worthy of exclusion under its new oil spill liability regime.

The Court also noted that punitive damages for private harms would not have a disruptive effect on the remedial scheme of the CWA.[168] The same is likely true under the OPA. The OPA was enacted in response to the call for greater liability for damages caused by oil spills in the wake of Exxon Valdez.[169] Although the OPA does establish liability caps for private causes of action arising under the Act,[170] the statute also removes the compensatory damages caps in cases where a spill was proximately caused by gross negligence or willful misconduct.[171] When one considers that punitive damages are normally reserved only for culpability rising to a level of gross negligence or willful misconduct, the abrogation of liability caps in such situations seems to indicate that the remedial role of the OPA favors greater liability for reckless parties. With this in mind, punitive damages recovery may not disrupt the remedial scheme of the OPA.

Although the OPA does not expressly provide the right to recover punitive damages, it contains no language that gives any indication that Congress intended to sever punitive damages from the remedies available to claimants asserting causes of action under the OPA or general maritime law. Congress’s failure to include such language further suggests no such intent when one considers that the OPA’s liability caps do not apply for spills caused by responsible parties’ reckless actions. Because punitive damages are meant to punish reckless and intentional actions,[172] Congress’s affirmation of unlimited liability seems to endorse punitive damages recovery instead of prohibiting such recovery. In addition, Congress did not likely intend to control the entire field of oil spill remedies through the OPA. Although the OPA does establish greater liability for specific causes of action arising from oil spills, the statute also contains savings provisions that specifically recognize causes of action arising out of state liability regimes[173] as well as general maritime law.[174] While the savings clauses preserve causes of action under state and maritime law, there is nothing within those provisions showing an intent to exclude punitive damages recovery from such causes of action. Therefore, the savings provisions show a lack of congressional intent to occupy the entire field of oil spill causes of action as well as that of remedies.

The similarities among the liability provisions of the CWA and the OPA make the Court’s CWA preemption analysis from Exxon a viable evaluation tool for determining the OPA’s effect on oil spill punitive damages recovery. It is likely that, under the Court’s CWA preemption analysis, the OPA does not “preempt” punitive damages recovery for causes of action arising from an oil spill that results from a responsible party’s reckless or intentional conduct. Oil spills, similar to Deepwater Horizon, present the prime circumstances where punitive damages recovery is not only allowed but also needed. Courts must, therefore, utilize the Supreme Court’s preemption analysis from Exxon and allow it to serve as a justifiable argument allowing punitive damages recovery for OPA and general maritime law causes of action.

3. The Exxon and Townsend Argument

In addition to the CWA preemption argument, oil spill punitive damages recovery is justifiable under the argument that Exxon establishes oil spill punitive damages recovery as a preexisting maritime remedy, which under Townsend cannot be denied in the absence of statutory or congressional intent. The Supreme Court’s decision in Exxon recognized punitive damages as a legitimate remedy for causes of action arising out of oil spills.[175] The Court’s recognition of this remedy is fundamental to establishing a post-OPA punitive damages regime after Townsend. In Townsend, the Court affirmed punitive damages recovery for an employer’s failure to pay maintenance and cure.[176] The Court reasoned that punitive damages were a preexisting remedy in maintenance and cure actions that could not be restricted absent congressional intent to the contrary.[177] With this fact in mind, it is crucial to determine whether the Court’s jurisprudence in Townsend and Exxon can justify oil spill punitive damages recovery in light of the OPA’s silence regarding punitive damages recovery.

The oil spill punitive damages remedy is similar to the punitive damages remedy that the Court in Townsend recognized as being a preexisting maritime remedy in maintenance and cure actions. Several courts have recognized that punitive damages were available prior to the Jones Act amendments at issue in Townsend.[178] Similarly, the Court in Exxon recognized that punitive damages were available in oil spill causes of action arising prior to the passage of the OPA.[179] Thus, the punitive damages remedy available for oil spill causes of action is likely also preexisting as with maintenance and cure punitive damages.

In Townsend, the Court reasoned that the Jones Act’s silence on punitive damages as well as other factors indicated that Congress did not intend to prohibit punitive damages recovery for a failure to pay maintenance and cure under general maritime law.[180] The OPA’s language regarding damages also tracks with the language of the Jones Act’s amendments in that each statute contains no language regarding punitive damages.[181] Thus, the Townsend rationale, which held that punitive damages are available when Congress has not directly spoken on the issue,[182] is likely applicable to the OPA as well. In addition, the Jones Act amendments from Townsend showed no hostility towards general maritime law recovery.[183] The same is likely true for the OPA considering that the only language within the statute that addresses maritime law is the maritime savings provision, which contains no language that could be construed as hostile to maritime punitive damages recovery.[184]

The only prong of the Townsend analysis that may serve as a barrier to OPA punitive damages recovery is the Court’s statement regarding Congress’s knowledge of punitive damages recovery at the time of the Jones Act’s amendments’ enactment.[185] Courts had already affirmed the institution of punitive damages recovery for a failure to pay maintenance and cure at the time of the amendments’ enactment.[186] The Court’s affirmation of oil spill punitive damages recovery in Exxon, however, occurred nearly twenty years after the passage of the OPA on causes of action arising prior to the OPA’s passage.[187] Therefore, some may argue that Congress did not, in fact, know that oil spill punitive damages were recoverable at the time of the OPA’s passage. Although there is some merit in this argument, one must ponder why Congress did not choose to respond to Exxon’s affirmation of oil spill punitive damages recovery by amending the OPA. If oil spill punitive damages recovery posed concern for future oil spill liability, Congress could have certainly chosen to amend the OPA to preclude punitive damages recovery. Congress’s failure to respond to Exxon, therefore, suggests that Congress accepted maritime law’s punitive damages stance whole hog, as it existed and as it would develop, in addition to Exxon’s recognition of a preexisting general right to recover punitive damages in maritime law.

The Court in Townsend also stated that they would not impute congressional intent to exclude punitive damages recovery where congressional intent to do so is absent.[188] Congressional silence on punitive damages recovery in the wake of Exxon shows an absence of this intent. Therefore, the OPA, like the Jones Act amendments from Townsend, does not preclude oil spill punitive damages recovery.

Because oil spill punitive damages are a preexisting general maritime remedy after Exxon, the lack of congressional intent to preclude such damages paves an avenue for punitive damages recovery in causes of action arising from an oil spill. Therefore, courts must use the maintenance and cure punitive damages analysis from Townsend to justify punitive damages recovery in oil spill causes of action under general maritime law and the OPA. If courts are willing to utilize this argument in conjunction with the CWA preemption analysis in Exxon, oil spill punitive damages recovery may soon become reality. With this in mind, Part IV examines the applicability of these arguments to causes of action under the OPA and general maritime law.

IV. Applying the Arguments

Oil spills, like Deepwater Horizon, present complex liability questions that go far beyond the parameters of the OPA.[189] Therefore, the applicability of the arguments in favor of punitive damages recovery from Exxon and Townsend must be analyzed for causes of action arising within and outside of the OPA’s provisions. This Part proceeds by arguing that punitive damages recovery for general maritime causes of action, outside of the OPA’s provisions, for which a preexisting punitive damages remedy exists should not be affected by the OPA’s liability provisions. Next, this Part argues that a compelling normative justification exists for punitive damages recovery in OPA claims that overlap with a general maritime cause of action with a preexisting punitive damages remedy. Finally, this Part argues that punitive damages’ functions of punishment and deterrence mandate punitive damages recovery for maritime personal injury and wrongful death actions.

A. General Maritime Causes of Action

The potential for suits, outside of the OPA’s liability provisions, does exist for oil spills. While the OPA grants widespread recovery, the Act is limited to suits against responsible parties.[190] Responsible parties for offshore facilities, like Deepwater Horizon, are limited to “the lessee or permittee of the area in which the facility is located or the holder of a right of use and easement.”[191] This raises a potential problem when one considers that the work of a deepwater oil exploration facility is not limited to actions by “responsible parties.” For example, British Petroleum (BP) employed numerous independent contractors to perform specific tasks at the Deepwater Horizon rig.[192] Many independent oil contractors, however, possess no ownership status or general operating power over a rig’s day-to-day work. Thus, a potential problem arises when one considers a scenario where an independent contractor’s reckless or intentional actions cause an oil spill.

In such a situation, what is a plaintiff to do? The independent contractor is not likely a responsible party under the OPA, but this fact does not mean that independent contractors are not subject to liability for their reckless or intentional actions. Because the OPA does not grant a right of action against these parties, it is likely that plaintiffs will be left to assert general maritime law causes of action, similar to the claims asserted in Exxon, to garner recovery from such entities.[193]

The arguments from Exxon and Townsend likely support a finding of punitive damages recovery in causes of action against non-responsible parties. After Exxon, punitive damages recovery in oil spill causes of action under general maritime law is likely a preexisting remedy, which under Townsend cannot be denied without congressional intent to do so. The OPA, however, does not contain any language that restricts punitive damages recovery in general maritime causes of action. In addition, the OPA’s maritime savings clause specifically saves “all other remedies” for plaintiffs asserting causes of action under general maritime law.[194]

The combination of the OPA’s silence and the OPA’s maritime savings clause’s preservation of maritime remedies likely allows for punitive damages recovery in certain general maritime causes of action. Therefore, it is likely that punitive damages are available in causes of action under general maritime law asserted against non-responsible parties. In addition, punitive damages recovery is also likely available in general maritime causes of action that do not fall within the OPA’s enumerated causes of action.

B. Claims Under the Oil Pollution Act

Although punitive damages recovery is likely available for certain general maritime causes of action, it is necessary to examine how the Exxon and Townsend arguments may apply to causes of action under the OPA. The OPA enumerates six specific causes of action within its liability provisions.[195] Because the OPA creates its causes of action outside of admiralty law, numerous courts have held that the OPA’s liability provisions preempt general maritime law’s applicability to causes of action against responsible parties.[196] Although courts have ruled that the OPA preempts general maritime law, general maritime law still may serve a normative function by showing how courts should treat punitive damages recovery for OPA claims. Because the Court in Exxon recognized punitive damages recovery for general maritime causes of action arising from an oil spill, there is likely a strong normative justification for allowing OPA punitive damages recovery when an OPA claim overlaps with a general maritime law cause of action in which punitive damages recovery is available. Keeping this in mind, it is necessary to determine which OPA claims overlap with a general maritime law cause of action and with a preexisting punitive damages remedy.

Exxon recognized that punitive damages were available in certain general maritime causes of action arising out of an oil spill. In Exxon, the Court upheld punitive damages recovery under general maritime law for commercial and subsistence fishermen for their lost income and lower harvests resulting from the Exxon Valdez spill.[197] The claims asserted by the fisherman in the Exxon case likely parallel certain OPA claims as well. The OPA grants a cause of action for the loss of use of natural resources as well as loss of profits due to the injury, destruction, or loss of property or natural resources.[198] These claims mirror the same general maritime cause of action that allowed commercial fisherman to recover punitive damages after Exxon. In addition, Exxon’s approval of punitive damages recovery for subsistence fisherman also likely mirrors the OPA provision that recognizes a cause of action for loss of subsistence of natural resources. Therefore, courts should allow punitive damages recovery for such claims given the Court’s acceptance of punitive damages in their general maritime law counterparts and the OPA silence on punitive damages.

Two potential problems arise, however, when one examines the overlap of general maritime causes of action and the remaining OPA causes of action. First, government-asserted claims, which are available under the OPA, have not been recognized under general maritime law since the passage of the CWA’s oil spill liability provisions.[199] Prior to the enactment of the CWA’s liability provisions, the Oil Pollution Act of 1924[200] provided the federal government’s statutory remedy to recover its cleanup costs.[201] Government entities could still assert claims to recover their cleanup costs under general maritime law.[202] These government-asserted causes of action arising from oil spills, however, were soon preempted after the passage of the CWA’s oil spill liability provisions in 1970.

Because the predecessor to the OPA liability provisions regarding government asserted causes of action comes from the CWA as opposed to general maritime law, it is unlikely that an overlap between such claims and general maritime law causes of action exists. Therefore, the normative justification provided by Exxon and Townsend in favor of punitive damages recovery is weaker for OPA claims asserted by government entities.

Second, the Exxon and Townsend arguments rest on the availability of a preexisting maritime remedy. This fact raises a problem when one considers that the OPA breaks from the traditional rule from Robins Dry Dock & Repair Co. v. Flint (Robins Dry Dock)[203] barring pure economic loss recovery in maritime suits.[204] In Robins Dry Dock, the Supreme Court held that plaintiffs cannot recover damages for economic harm, such as loss of income or profits, unless there has been an injury to the claimant or his property.[205] The OPA breaks from this bright line rule and allows damages by permitting claimants to recover “[d]amages equal to the loss of profits or impairment of earning capacity due to the injury, destruction, or loss of real property, personal property, or natural resources, which shall be recoverable by any claimant.”[206] Several lower courts addressed the OPA’s preemption of the Robins Dry Dock rule, and the majority of their opinions held that the OPA allows claimants to recover economic damages that result from damage to another’s property.[207]

The OPA’s break from Robins Dry Dock and the lack of an overlap between government asserted OPA claims and a general maritime law cause of action present a particular problem when one considers that the Exxon and Townsend arguments rely on the proposition that a preexisting maritime law remedy exists. Because compensatory damages for economic loss for damages to another’s property were not available for causes of action arising prior to the OPA, it likely follows that punitive damages for such claims are not a preexisting maritime remedy. In addition, the lack of an overlap between OPA claims asserted by government entities and general maritime law likely defeats the argument of a preexisting punitive damages remedy’s existence for such claims. Thus, if courts choose to allow punitive damages recovery for the OPA’s other causes of action, they are left in a precarious situation. Do the courts exclude punitive damages recovery for government-asserted claims and causes of action for pure economic loss and risk creating a fragmented punitive damages scheme under the OPA, or do they allow punitive damages recovery for such claims in order to unify an OPA punitive damages regime although a preexisting remedy does not exist?

The lack of a maritime overlap with certain OPA claims weakens the justification for punitive damages recovery in OPA claims. Although courts could simply only allow punitive damages recovery for OPA claims with a maritime overlap, this would cause a fragmentation of the remedies available for OPA claims and risk fracturing the OPA’s remedial scheme. Although a maritime overlap does not exist for certain claims, punitive damages recovery is still needed for such claims for several reasons.

First, the Supreme Court has never faced the question of punitive damages recovery for the OPA claims that lack a general maritime law counterpart. In addition, neither Congress nor the Court has given any guidance regarding the availability of punitive damages recovery for such claims. Thus, courts, when presented with the question of OPA punitive damages recovery, are left without any guidance for OPA claims without a maritime overlap. Although some may argue that South Port could serve as a guide, its reliance on Miles hinders its reliability as controlling jurisprudence.[208] Therefore, courts must look at the guidance and reasoning provided in the cases that allow punitive damages recovery in general maritime causes of action that overlap with OPA claims. Although the applicability of these cases is weaker for OPA claims without a maritime overlap, the cases still speak to the general principle that oil spills proximately caused by reckless or intentional conduct should result in punitive damages recovery.

Second, the need for uniformity within the OPA’s remedial scheme mandates an extension of punitive damages recovery for OPA claims without a maritime overlap. While there is an argument that the OPA’s liability regime should continue to exclude punitive damages for all OPA claims to achieve this uniformity, this assertion fails to recognize that the Court has affirmed punitive damages recovery for the general maritime causes of action that mirror certain OPA claims. Therefore, following such a rationale results in a situation where remedial uniformity takes precedence over existing law and limits recovery for claims that previously allowed punitive damages. In addition, it places greater emphasis on remedial uniformity for the sake of maintaining an exclusion of punitive damages in OPA claims for which the question of punitive damages recovery has never been asserted under their statutory and common law predecessors.

Therefore, courts should utilize the normative justification provided by Exxon and Townsend to not only allow punitive damages recovery for OPA claims with a maritime overlap but also extend punitive damages recovery to OPA claims lacking a maritime overlap. By extending punitive damages recovery to all OPA causes of action, courts can ensure that the OPA maintains a uniform remedial scheme that also recognizes the Court’s affirmation of punitive damages recovery for general maritime causes of action that mirror OPA claims.

C. Maritime Wrongful Death and Personal Injury Causes of Action

Wrongful death and personal injury claims under maritime law also present a unique problem in the wake of Deepwater Horizon. Although it is not far-fetched to imagine that an oil spill could result in personal injury or death, the OPA does not establish causes of action for these injuries. Plaintiffs affected by wrongful death and personal injury must assert their claims under general maritime law and its accompanying statutory regimes. Therefore, it is necessary to determine if punitive damages may apply to wrongful death and personal injury claims under the justifications from Exxon and Townsend.

Thomas Galligan, Jr., in a recent article, noted the risks that plaintiffs may encounter from inadequate recovery for wrongful death and personal injury claims stemming from oil spills and how those problems affect punitive damages regimes’ goals of punishment and deterrence.[209] Because semi-submersible rigs, like the Deepwater Horizon, are considered vessels under maritime law, the survivors of seamen killed on the high seas due to employer negligence or unseaworthiness must assert their claims under the Jones Act and DOHSA respectively.[210] The Jones Act and DOHSA only provide recovery for pecuniary losses stemming from the personal injury or wrongful death of a seaman.[211] In addition, punitive damages recovery is not generally available for Jones Act personal injury and DOHSA wrongful death claims.[212]

The lack of punitive damages recovery in maritime wrongful death claims is of grave concern in the wake of Deepwater Horizon. The OPA, whose liability provisions do not address wrongful death actions, will likely not play a role in determining if punitive damages are awarded in such cases in the future. While the OPA’s provisions may not be determinative, if courts are willing to allow punitive damages for OPA claims and other general maritime law causes of action, a startling policy concern arises when one considers the functions of punitive damages.

As this Article will further argue, oil spill punitive damages are rooted within the functions of all punitive damages awards—punishment and deterrence. If courts accept the justifications provided in this Article and allow punitive damages recovery for OPA claims and other general maritime law causes of action, they will be impliedly communicating messages of punishment and deterrence in regard to tortfeasors’ damage to economic and environmental resources. Because the OPA, however, does not address or affect wrongful death and personal injury claims, there is a risk that the same messages of punishment and deterrence will not be communicated for such causes of action because their punitive damages prohibition falls outside the OPA’s confines. One cannot honestly argue, however, that there is a greater moral justification to emphasize punishment and deterrence for causes of action arising out of economic and environmental damages and not personal injury and human life.

Thus, the justification for wrongful death and personal injury punitive damages recovery does not lie within the current legal environment for such injuries. Instead, it lies in the possible acceptance of punitive damages for OPA and other general maritime law claims and the negative policy ramifications that may arise from oil spill punitive damages recovery. The current recovery scheme for wrongful death and personal injury actions may inadequately deter and punish those who engage in conduct that leads to such claims.[213] This fact “can result in an undervaluing of human life and tragic ramifications when it is lost” or affected by injury.[214] The risk of this inadequacy is not only real, but also imminent if punitive damages recovery is extended to OPA claims. Therefore, legislators and the judicial system must preemptively recognize this possibility and institute judicial as well as statutory measures that recognize punitive damages for wrongful death and personal injury claims arising out of oil spills.

V. Oil Spill Punitive Damages: A Normative and Moral Justification

The ultimate question of whether maritime law may serve as a mechanism instituting punitive damages under the OPA exists not only in a legal dimension but also in a moral dimension. Because punitive damages are intended to serve as a punishment and deterrence mechanism, an oil spill punitive damages regime should reflect these goals as well. This Part proceeds by presenting a brief sketch of specific normative justifications that supplement the judicial arguments in favor of oil spill punitive damages. It continues by arguing that punitive damages recovery is necessary to punish and deter parties responsible for marine oil spills. Ultimately, it advocates that punitive damages recovery is essential to the prevention of future oil spills through retributive justice and deterrence.

A. Punitive Damages as a Mechanism of Retributive Justice

In Exxon, the Supreme Court noted that punitive damages, historically, served as a punishment mechanism against tortfeasors engaging in reckless or intentional tortious conduct.[215] The function of punitive damages as a retributive mechanism cannot be understated within the context of oil spills. Unlike other environmental disasters, oil spills generate a larger amount of scrutiny among legislators, regulators, and society at large.[216] In their wake, spills prompt a response of increased regulation and compensation, as well as punishment.[217] To respond to calls for punishment by government and society, punitive damages should serve as a mechanism instituting increased damages and retribution. Scholars have characterized modern retributive justice as a communicative experience between society and the wrongdoer with a focus on three specific ideals: 1) responsibility for choices of unlawful actions, 2) equality under the law, and 3) a mode of democratic self-defense.[218] Therefore, a brief sketch of these goals is needed.

The goal of communicating responsibility for unlawful actions rests on the foundation that without communication to the unlawful actor, the actor may continue unlawful conduct with only a burden of compensatory liability.[219] By only instituting compensatory damages, society sends a message to wrongdoers that communicates “do whatever you want, just make sure you pay those who you hurt.” Such a message fails to communicate any sense of moral reprehensibility which in turn does not trigger the needed recognition from the wrongdoer that his acts were not only unlawful, but also morally repugnant to society at large. Thus, punitive damages must accomplish their communicative effect through the implementation of damages that exceed compensatory limits.

Retributive justice must also foster equality among actors within a legal regime.[220] When a wrongdoer undertakes actions in derogation of the law, he places himself in a position above the rest of society that conforms to the norms and rules established through statutory and tort law.[221] It is important to note, however, that such actions do not show an unwillingness to conform to the particular laws broken, but a rejection of a society’s entire legal regime that requires uniform compliance by all of its members. Compensatory damages focus on remedying the status of the victim, and thus fail to properly address the wrongdoer’s choice to place himself above the rest of society.[222] Punitive damages, however, shift their focus away from this remedial measure and instead focus on punishing the wrongdoer for his own repugnancy as opposed to his effect on victims.[223] Thus, punitive damages, as a method of punishing repugnancy, must serve the purpose of correcting the wrongdoer’s belief that he is above the law. If the state and society establish no institution to punish wrongdoers, a tortfeasor’s implicit or explicit claim to superiority goes unchecked and could be deemed nearly acceptable by society. Therefore, society must use punitive damages to continue an equal and uniform system of justice.

Finally, punitive damages carried out in a judicial setting reinforce our societal notion of democratic self-defense.[224] At the heart of our justice system lies a social contract where society is ensured protection from wrongdoers by vesting its own power to punish within a formal judicial system.[225] Through this contract, it is imperative that the state and its judicial enforcers institute mechanisms illuminating society’s desire for punishment. By deemphasizing the enforcement of our legal regime by private citizens, the judicial system ensures that punitive damages awards can serve their retributive effect without the prejudices and violence that can arise through uncontrolled justice administered outside of a structured regime.[226] Because of the need for an impartial entity to adjudicate disputes requiring punishment in addition to compensatory damages, the state must recognize its role within our democratic society and institute a system of retributive justice through punitive damages that recognizes the need for equality under the law for all actors and communication of moral repugnancy.

To serve as a retributive mechanism, oil spill punitive damages awards should embody the three aforementioned goals of retributive justice. Oil spills, like Deepwater Horizon, present a prime example of a situation where there is a need to communicate the reprehensibility of the tortfeasor’s conduct. Unlike spills resulting from mere negligence, Deepwater Horizon presents a situation where an entity engaged in willful and wanton disregard in order to increase its own financial viability.[227] To hold actors, such as BP, to the same damages standards as entities causing oil spills by mere negligence, fails to communicate the reprehensibility of reckless conduct one performs in pursuit of financial gain. Therefore, courts must institute punitive damages in oil spills where reckless conduct is undertaken under the guise of financial benefit. By instituting such a scheme, society and the state can properly communicate the repugnancy of financially driven recklessness to tortfeasors.

Second, punitive damages can reinforce the state of equality among actors in society. Through their actions, Deepwater Horizon’s responsible parties communicated to society that their drive for profit trumped their responsibility to conduct their operations in a reasonable and legally compliant manner. By doing so, BP and its partners placed themselves in a position above their oil industry competitors and would have likely garnered greater financial gain if the blowout never occurred. More disturbing than BP’s heightened status among its oil industry competitors is its lack of recognition over its place in the grand interplay between the environment and its individual and corporate inhabitants. Although such an assertion trends towards an environmental ethics perspective, it is nonetheless vital to not only recognize but also promote a homeostatic balance with respect to corporate endeavors that affect the environment.[228]

The responsible parties’ actions before and after the Deepwater Horizon spill require a response that reestablishes equality among oil industry actors as well as society as a whole. Thus, the puzzling question is: Does a system of only compensatory actions properly achieve this end? Compensatory damages, at their root, are meant to remedy the suffering of a victim who has been displaced of their equal status among unaffected members of society.[229] Such an approach, however, fails to equalize a tortfeasor’s elevated status among the rest of society. Therefore, punitive damages, within their goal of punishment, serve as a mechanism that places the tortfeasor into its equal status among these entities.[230] In order to reestablish an equilibrium among all of society, courts must institute a punitive damages regime that adequately places tortfeasors on equal footing with entities affected and unaffected by their wrongful actions.

Finally, the state, as the extension of society, must utilize its judicial system to institute punitive damages recovery for oil spills. In a perfect world, society could adequately punish parties whose reckless conduct resulted in an oil spill through peaceful and effective mechanisms such as boycotting. Oil spills, however, generate intense antagonism among society,[231] which could result in violent and unwarranted punishment at the hands of society. In addition, society’s mindset can be fickle, which can erode the long-term viability of punishment inflicted by society. Unlike society, however, the state can efficiently institute society’s desire for punishment through its judicial power. The state’s judicial power provides a method for administering punitive damages that ensures constitutional safeguards that society may not respect. In addition, the state can ensure that punishment is fully carried out through judicial enforcement. Given the state’s ability to efficiently and peacefully execute punitive damages recovery, retributive justice commands that the state accept this role and implement a regime allowing punitive damages recovery for oil spill causes of action under the OPA and general maritime law.

Oil spill punitive damages recovery can achieve the goals of retributive justice. Deepwater Horizon provides a prime example of a situation where a punitive damages regime, administered through the state, is needed to communicate moral repugnancy and restore societal equilibrium. Because retributive justice is based on the concept of punishment, the fulfillment of retributive justice’s goals under a punitive damages regime makes their recovery an acceptable avenue for punishment in the wake of oil spills.

B. Punitive Damages as a Deterrence Mechanism

Another normative justification for punitive damages lies within the concept of deterrence. In Exxon, the Supreme Court affirmed this position by stating that punitive damages historically served a deterrence function.[232] In order to grasp the concept of deterrence within an oil spill punitive damages regime, it is necessary to evaluate deterrence within the confines of oil exploration and transport. While scholars have offered numerous theoretical arguments for punitive damages as a deterrence mechanism,[233] this Part adopts a theory of punitive damages deterrence that focuses on compensating societal harm and removing the benefits tortfeasors acquire through reckless and intentional conduct.[234] This Part proceeds by applying this theory to the Deepwater Horizon spill and discussing how its adoption may possibly prevent future spills. It ultimately concludes that an oil spill punitive damages regime effectively advances the concept of deterrence in maritime oil exploration and shipping.

Deterrence cannot properly serve as a normative justification unless viewed within a mindset that is somewhat irrespective of the goals of retributive justice. Punitive damages, as a deterrence mechanism, do not focus on the goals of communicating moral repugnancy or necessarily punishment. Instead, deterrence should focus on the advancement of efficiency among the various actors within a society.[235] Punitive damages, within the deterrence context, must function in a manner that makes actors consider the costs of their actions prior to undertaking them.[236] With this goal in mind, this Article advocates that oil spill punitive damages, as a deterrence mechanism, must complement the goals of retributive justice by serving as an instrument that influences behavior through the institution of damages eliminating the benefits gained through reckless behavior.

In order to achieve this end, oil spill punitive damages regimes must rid oil industry actors of the benefits of reckless behavior. To remove such benefits, however, courts must recognize that these benefits are two-fold. First, reckless behavior may allow actors to derive increased revenue in a shorter period of time.[237] Second, actors derive benefit, by refusing to implement best practices and safety technology, in order to widen profit margins.[238] Thus, actors not only can derive greater benefits but also can lessen the cost of obtaining those benefits through reckless behavior. Courts must, therefore, recognize this fact and institute oil spill punitive damages awards that eliminate the incentive to pursue such benefits.

Punitive damages can remove the benefits of reckless conduct through a modified theory of risk-utility. Risk-utility is based on the assumption that rational actors will not engage in tortious behavior if the costs outweigh the derived benefit.[239] Mathematically, risk-utility is represented by PL > B with P, representing the likelihood for loss, L, the loss, and B, the burden of avoiding the loss.[240] Although risk-utility is normally used to determine if a defendant owes a duty to a potential plaintiff,[241] it is also useful within the deterrence function of punitive damages, albeit with some modifications. In the punitive damages context, the mathematical risk-utility formula would function as follows: PL + PP > B. Within this context, PL would continue to represent the total compensatory damages multiplied by the potential for those damages. PP would represent the total amount of a potential punitive damages award multiplied by the chance of such an award being implemented. B, as opposed to representing the burden of undertaking nonreckless action, would represent the benefits derived from reckless behavior. Under this modified risk-utility theory, rational actors would not engage in reckless activity if the benefit derived from such activity would be outweighed by the potential of mass punitive damages awards combined with compensatory liability.

The deterrence function of punitive damages is especially significant within the context of marine oil pollution, with Deepwater Horizon providing a unique example of the need for a deterrence function. When the Deepwater Horizon spill occurred, BP and the other financiers were six weeks behind schedule and $58 million over budget.[242] The time and financial difficulties eventually led to numerous decisions and shortcuts that led to the rig’s eventual blowout.[243] In the wake of the blowout, further reckless behavior on the part of BP was exposed as regulators learned that the company’s spill response plan did not even address the potential for spills similar to Deepwater Horizon.[244] If the oil spill had not occurred, it is likely that BP and the other rig financiers would have reaped extensive benefits from their reckless actions. Sadly, the current state of oil spill liability does not properly deter such behavior with its limited liability caps and admonition of punitive damages in South Port. If a punitive damages regime were to recognize and implement awards that removed the benefits of such behavior, future spills, like Deepwater Horizon, might be prevented because rig officials would recognize that the costs of reckless actions outweigh any benefits that are derivable from reckless conduct.[245]

The need for deterrence is clear in the wake of Deepwater Horizon. Punitive damages recovery provides an avenue that could remove the incentives that actors garner from reckless behavior. Although the potential for punitive damages awards may not prevent all future oil spills, they certainly can impact oil industry decision making and possibly push industry actors to adopt less reckless courses of action in the future. Thus, juries and judges must institute punitive damages awards that not only punish but also deter reckless conduct.

VI. Conclusion

Oil spills will always prompt mass public outcry from legislators, regulators, and society. Large-scale environmental disasters often cue a call for greater punishment enacted against those who are their cause. The Deepwater Horizon disaster must, therefore, stimulate response by society. Ideally, this response should not come in the form of lackluster policy statements by politicians and interest groups. Instead, the executive, legislative, and judicial branches must communicate society’s outcry by imposing more stringent regulatory requirements and larger damages awards on actors responsible for oil spill disasters.

Although the recommended calls to action from the legislative and executive branches remain outside of this Article, the needed judicial response is clear in the wake of Exxon and Townsend. Currently, our judicial system fails to recognize the need for greater punishment for oil spills, and in doing so does not communicate the concepts of deterrence and retribution to reckless members of the oil industry. The judiciary’s failure to institute punitive damages recovery, thus far, stems from misconceived notions regarding oil spill punitive damages beginning with Miles and culminating in South Port. Exxon and Townsend, however, provide an avenue that remedies the problems created by Miles and South Port. Therefore, the judiciary must proceed down this avenue and institute punitive damages recovery for causes of action under the OPA and general maritime law. The judiciary’s role, however, does not end with allowing punitive damages in OPA and general maritime law causes of action. They must also recognize the policy implications that may arise from punitive damages recovery and reform their view of punitive damages recovery in wrongful death and personal injury causes of action under maritime law.

In conclusion, Deepwater Horizon presents an opportunity to remedy the judicial inequities that have arisen in the punitive damages arena. With this in mind, the judiciary must recognize and adopt the arguments outlined within this Article and implement a liability regime that adequately punishes and deters reckless conduct. Hopefully, courts will recognize this necessity and begin the arduous task of reforming punitive damages recovery in OPA and maritime law causes of action arising out of offshore oil spills.

Mastering the Evidence: Improving Fact Finding by International Courts

By

Cymie Payne*

Although international courts increasingly must resolve transboundary conflicts over natural resources and environmental pollution, international judges have limited assistance to adequately review voluminous and complex scientific evidence that is often submitted with these disputes, potentially constraining their assessment of the factual record, and consequently undermining confidence in their judgments and the development of their jurisprudence. Special masters have been used successfully by the United States Supreme Court to manage the portion of its docket where it, like the international courts, acts as a trial court whose judgments are final and without appeal. This Article explains the master’s role and how masters might provide a solution for international courts, particularly but not exclusively the International Court of Justice. It also draws on international experience to suggest a variation on the standard scope of a master. It concludes that special masters will be particularly useful and flexible aids when international courts and tribunals face extensive or highly specialized evidence and resolution of the dispute rests on resolving the parties’ factual differences.

I. Introduction

Increasingly, international courts must resolve transboundary conflicts over natural resources and environmental pollution. International judges have limited assistance to adequately review voluminous and complex scientific evidence that is often submitted with these disputes, potentially constraining their assessment of the factual record, and consequently undermining confidence in their judgments and the development of their jurisprudence. It is a curious fact that they have not fully used their existing authority to acquire expert assistance. The proposition that they should obtain scientific and technical expertise is based on the assumption that there is a value to the best possible fact finding; where legal principles or political motives are more relevant to a decision, a different approach would be called for.[1]

Special masters have been used successfully by the United States Supreme Court to manage its original jurisdiction docket where it, like the international courts, is a trial court whose judgments are final and without appeal.[2] Both the United States Supreme Court and the international courts optimize their procedures to address questions of law. To review and digest questions of fact in disputes between states of the United States over boundaries and allocation of shared watercourses, the United States Supreme Court often appoints an expert, mandating that he collect and evaluate evidence, and submit a report with conclusions to the Court.[3] The international courts could obtain the same efficient and economical assistance from special masters in many cases. This Article explains the master’s role and how masters might provide a solution for international courts, particularly but not exclusively the International Court of Justice. It also draws on international experience to suggest a variation on the standard scope of a master.

The International Court of Justice, the chief court of general jurisdiction for disputes between nations, has failed to heed past calls for reform in its evidentiary practice. As a result, it is not keeping pace with its jurisprudence or its current docket of contentious cases, which includes disputes over Japanese whaling, Columbia’s aerial pesticide spraying, and boundary disputes.[4] It is sure to be presented with climate change and water resource conflicts in the future. In April 2010, the International Court of Justice was censured by its own judges for incompetence in handling technical and scientific information in the Pulp Mills case.[5] Pulp Mills presented a dispute between Argentina and Uruguay over industrial development on a shared river.[6] Thorough and informed review of factual evidence is of particular importance for disputes that involve natural resources and environmental quality, although the problem is not exclusive to this subject matter.[7]

The question is how judges should deal with complex and voluminous scientific or technical evidence that plays a dispositive role in the final judgment. This is quite distinct from a court’s gatekeeper role in allowing scientific evidence to be submitted to juries, which has been heavily studied in conjunction with the famous United States Supreme Court Daubert rules of admissibility.[8]

Hinting at the difficulty of addressing the problem, another judge in the Pulp Mills case observed that too much emphasis on scientific evidence is misplaced.[9] This response ignores the repeated calls for reform that have been made by informed observers and practitioners since the International Court of Justice began to hear environmental disputes.[10]

Courts do have practical concerns about delaying a case or lacking sufficient funds to obtain expert advice; or a court may have overlooked options available to it.[11] Cost is an important consideration for any court, and will be addressed in the discussion that follows. However, given the financial resources that are devoted to these disputes, cost is not likely the chief barrier to bringing in outside expertise. While much has been written about the difference between the civil law and common law training of international judges, attempting to explain judicial preferences for production of evidence by the court or by the parties, other reasons may better explain the international courts’ infrequent recourse to assistance with technically and scientifically complex information.[12]

Judges may be concerned that by bringing in experts to assist their analyses they will relinquish their mandate to decide cases.[13] Judge Yusuf raises and then dismisses this point in his Pulp Mills Declaration: “[T]he question arises as to whether there is a risk that the resort to an expert opinion may take away the role of the judge as the arbiter of fact and therefore undermine the Court’s judicial function? My answer is in the negative.”[14]

However, scrutiny of other cases and judges’ frank comments in extra-curial writing suggests that for some, concerns about erosion of judicial authority are a central factor.[15] These concerns may recede if a deeper analysis of the appropriate roles of judges and experts in the examination of scientific and technological evidence leads to effective guidelines that would direct the efforts of the expert.

Alternatively, if the court’s own expert advisor appears to master the evidence too forcefully, the parties may resent the loss of control of their case. If the court’s expert provides yet another equally plausible opinion, it may merely re-situate the “battle of the experts” from the parties to the court itself. Further, if the court rules contrary to the opinion of its own expert, it may seem to have built its judgment on a weak foundation. Thus, there may be several reasons why courts may prefer to leave explanation of the evidence to the parties.[16]

Undoubtedly, judges should not hand over their authority to experts. However, they can seek assistance in understanding and assessing the evidence. Judges can also sharpen their focus on the nature of judging technical and scientific evidence. The excess authority of an expert that is feared might be avoided by clearly distinguishing the nature of the questions that scientific and technical experts are asked from the ultimate questions before the court.

This Article first summarizes the problem as it was presented in the Pulp Mills case and provides a brief perspective on the past use of experts in International Court of Justice cases and prospects for the future docket. It then looks at the appointment, powers, and mandate of special masters used by the United States Supreme Court. Next, the authority of the International Court of Justice to appoint a special master is considered and recommendations are made. Finally, this Article concludes that special masters will be particularly useful and flexible aids when international courts and tribunals face extensive or highly specialized evidence and resolution of the dispute rests on resolving the parties’ factual differences.

II. The Past and Prospects for the Future

A. The Past: Working with Experts

In the past, the International Court of Justice has rarely invoked its authority to use experts. It appointed its own experts in its first case, Corfu Channel,[17] and later in the dispute between the United States and Canada over their mutual boundary in the rich fishing grounds of the Gulf of Maine (where, not incidentally, both Canada and the United States issued oil and gas permits).[18] In these cases, the experts’ tasks were narrow in scope: collecting evidence, viewing the site of the dispute, interviewing witnesses, and assisting the Court in producing the documentation of its work.[19] While more limited than the role of a special master, they performed some aspects of the master’s job.

In Corfu Channel, the Court appointed a committee of three Naval officers, of nationalities different from the disputants, to resolve certain disputed issues of fact.[20] It used its authority under Articles 48 and 50 of the Statute of the Court and Article 57 of the Rules.[21] Among the eight questions experts were asked to resolve were whether mines that damaged British ships had been laid in the Corfu Channel recently, and the location and type of mines that caused the damage.[22] Their answers allowed the Court to conclude that the ships were damaged by newly laid mines in Albanian territorial waters.[23] As their initial report was inconclusive, the Court asked the committee to make a visit to the site of the incident for the purpose of “verifying, completing, and, if necessary, modifying the answers given in their report.”[24] This entailed interviewing witnesses and making site inspections to determine whether Albanian coastguards could have observed surreptitious mine laying, and even included an experiment with a boat at night.[25] Both reports, and the mission to Yugoslavia and Albania, were accomplished between December 17, 1948 and February 8, 1949,[26] fairly promptly. The judges questioned the experts, and the parties commented, orally and in writing, on their reports and responses to the Court’s questions.[27] The Court concluded that it could not “fail to give great weight to the opinion of the Experts who examined the locality in a manner giving every guarantee of correct and impartial information.”[28] This allowed the Court to determine that the mines could not have been laid without the knowledge and consent of the Albanian government.[29]

In Delimitation of the Maritime Boundary in the Gulf of Maine Area (Gulf of Maine) case,[30] the parties requested that the International Court of Justice Chamber appoint a technical expert to assist it in preparing the description and charts of the boundary.[31] Rather than asking the International Court of Justice to provide delimitation rules for the parties to apply, they wanted a specific line determined by the court to put an end to a longstanding and contentious history.[32] Their request outlined the parameters of the appointment: the parties would jointly nominate the expert; the Registrar would provide the pleadings to the expert as they were distributed to the other party; the expert would attend the oral proceedings; and the expert would consult with the Chamber at its discretion.[33] The Chamber duly appointed a technical expert, noting its authority under Articles 48 and 50 of the Statute of the Court.[34] He made a solemn declaration as to his impartiality and the confidentiality of documents he might see.[35] His technical report was attached to the judgment; it seems clear that he provided the expertise to apply the rules chosen by the Chamber to the land in question, and to describe the boundary line in accurate technical language.[36] It may be noted that counsel for the United States in the case later observed that it was “disappointing that the Chamber did not address many of the disputed factual issues[] . . . [and avoided] becoming embroiled in the historic, environmental, or geological issues;” the Chamber based its delimitation of the boundary on geographic features.[37]

These two examples demonstrate that the International Court of Justice has used experts to assist with limited, specific tasks. It has not asked for assistance to interpret, summarize, or critique scientific or technical evidence. The next example illustrates circumstances where a broader mandate could help the court.

B. The Pulp Mills Evidence: Voluminous, Complex, Scientific, and Technical

On April 20, 2010, the International Court of Justice announced its judgment in the dispute between Argentina and Uruguay (the parties) concerning Uruguay’s authorization of industrial development on the banks of the Uruguay River, which forms the international boundary between the two countries.[38] The Court rejected Argentina’s claim that Uruguay breached substantive treaty obligations to monitor and prevent pollution of the water and riverbed, basing this part of its judgment on the evidence submitted to it by the parties.[39]

In evaluating Uruguay’s compliance with its obligations to prevent pollution of the river under the 1975 Statute of the River Uruguay (1975 Statute),[40] the Court considered a straightforward question of conduct (failure to notify and consult with Argentina) and a more complex question of result (actual pollution of the river water).[41] The review of “a vast amount of factual and scientific material”[42] submitted by the parties to demonstrate pollution or lack thereof became a matter of controversy between judges on the Court. As some of those judges recalled, this was not the first time the Court’s fact finding was questioned.[43]

An easy issue for the Court was the determination of what standards were required by the 1975 Statute for pollution prevention. The Court found that Article 41 of the 1975 Statute requires the parties to adopt domestic pollution prevention regulations and measures “in keeping, where relevant, with the guidelines and recommendations of international technical bodies.”[44] It was able to compare such international guidelines and recommendations with standards jointly adopted by the parties;[45] and regulations adopted by each party in its domestic law to determine the applicable standards.[46]

A more difficult issue lay in determining whether Uruguay had satisfied its obligation “[t]o protect and preserve the aquatic environment and, in particular, to prevent its pollution,” as required by Article 41 of the 1975 Statute.[47] Specifically, the Court determined that the parties had an obligation to prevent pollution by adopting appropriate rules and measures in their domestic legal systems, then acting to enforce them and exercise administrative control with due diligence.[48] “Pollution” was defined in the 1975 Statute as “the direct or indirect introduction by man into the aquatic environment of substances or energy which have harmful effects,” while “harmful effects” was defined in the Administrative Commission of the River Uruguay (CARU) Digest as “any alteration of the water quality that prevents or hinders any legitimate use of the water, that causes deleterious effects or harm to living resources, risks to human health, or a threat to water activities including fishing or reduction of recreational activities.”[49]

In consequence, the Court decided it had to determine whether the concentrations of pollutants discharged by the mill were within regulatory limits established by the parties and whether their impact on the river’s water quality was deleterious.[50] Over the years, from the first filing of Argentina’s application in 2006 to the final judgment in 2010, the Botnia pulp mill was constructed and began to operate.[51] Evidence was submitted at different phases, ultimately including several studies on six months of pulp mill operations carried out by Argentina, Uruguay, Botnia, and an environmental consulting firm hired by the International Finance Corporation (which guaranteed part of the financing for the pulp mill).[52]

The Court’s judgment included a compound-by-compound discussion of the impact of discharges on levels of dissolved oxygen, total phosphorus, phenolic substances, nonylphenols and nonylphenolethoxylates, dioxins, and furans.[53] The parties had differed sharply on how the data was to be interpreted.[54] The Court took upon itself the task of weighing and evaluating the data, “rather than the conflicting interpretations given to it by the Parties or their experts and consultants.”[55] This is the point at which the Court might have benefited from assistance.

The parties’ differences over levels of dissolved oxygen seem to have depended entirely on the possible misreading of a report. Argentina claimed that a Uruguayan report showed a level of dissolved oxygen, which is beneficial to aquatic life, lower than the CARU standard.[56] Uruguay replied that Argentina misread the report, which stated figures for the “demand for oxygen” (“oxidabilidad”) and not its opposite, “dissolved oxygen” (“oxígeno disuelto”).[57] The Court found that Argentina’s allegation “remains unproven.”[58] An expert reviewing the evidence would have been able to resolve this question by either examining the documents, advising the court to request further information, or given the authority, requesting additional information herself.

The Court’s review of the submissions on dioxin and furan levels provides another example, in this case highlighting the lack of data available and the difficulty for Argentina in carrying its burden of proof. Argentina alleged that, in the six months the pulp mill had been operational, studies showed increasing levels of these two toxic byproducts of the process.[59] Uruguay responded that the increase could not be linked to Botnia’s mill, given the multitude of industries operating nearby.[60] Uruguay also stated that the levels detected in the mill effluent were not measurably higher than the baseline levels in the river.[61] The Court concluded the evidence was not sufficient to link the increase in dioxins and furans to the pulp mill operation.[62]

The phosphorus levels were also the subject of conflicting claims about the effect of the pulp mill’s discharges on the overall water quality of the river.[63] The Court had before it data already collected, generally by Uruguay, for a project that had been in operation for six months, while Argentina pointed to the occurrence of an algal bloom that it claimed contradicted Uruguay’s conclusions.[64]

In addition to their strong views that the Court should have retained outside experts to assist it in evaluating the competing claims of the parties, dissenting Judges Al-Khasawneh and Simma thought the Court should have carried out a comprehensive risk assessment to resolve whether the project in question would result in significant impairment of navigation, the regime of the river, or its water quality, as required by Article 12 of the 1975 Statute.[65] They stated that the Court should have evaluated the risk with “a preventive rather than compensatory logic” because of the “often irreversible character of damage to the environment.”[66] A special master, with expertise in industrial water pollution, would be well suited to conduct the further analysis and risk assessment that Al-Khasawneh and Simma proposed.

III. The Special Master

The special master who will be most helpful in clarifying complex scientific and technical evidence for international courts will have expertise in the subject matter as well as a good understanding of the courts’ legal function and procedures. The United States Supreme Court has used masters with subject matter expertise primarily in water disputes and boundary cases.[67] In other matters, the United States Supreme Court’s masters are more typically retired or senior judges, whose tasks include mastering voluminous evidence to improve the efficiency of the proceedings.[68] For an international court’s purposes, the primary reason to use a special master is not to save the court time, but to provide a skilled and impartial guide to the evidence submitted.[69] Accordingly, the master will have specialized expertise relevant to the issues for which he has been engaged.

The special master’s ability to perform some of the fact-finding functions of a trial court led the United States Supreme Court to appoint a master in almost every case where it had original jurisdiction in the period between 1961 and 1992.[70] The Supreme Court observed that although “auditors” had long been used for post-trial proceedings in English and colonial common law courts, they had not been used for pre-trial review in law until the Massachusetts legislature introduced the practice in 1818.[71] Masters are now authorized by the Federal Rules of Civil Procedure and some comparable state measures.[72] The United States Supreme Court establishes the scope of a master’s functions in the order appointing him. Federal Rule 53 indicates the parameters of the position.[73]

A master takes on some of the authority of the judge, but acts under a very particular mandate. Where there is an “exceptional condition,” “the need to perform an accounting or resolve a difficult computation of damages,” or pre- or post-trial matters must be resolved, the master may actually hold trial proceedings and either make or recommend findings of fact to the judge.[74] While the court may direct otherwise, the master’s basic authorities include the ability to “regulate all proceedings; take all appropriate measures to perform the assigned duties fairly and efficiently;” and exercise the same authority possessed by the appointing court “to compel, take, and record evidence.”[75]

Although the master possesses potentially extensive powers, she is always subordinate to the court.[76] Accordingly, the court may “adopt or affirm, modify, wholly or partly reject or reverse, or resubmit . . . with instructions” the master’s orders, reports, and recommendations.[77] Moreover, the court must give the parties notice and a chance to be heard before the court acts on a master’s “order, report, or recommendations.”[78]

While the courts typically give special masters a great deal of deference,[79] the court reviews objections to the master’s findings of fact and conclusion of law de novo.[80] However, the parties may stipulate that review of factual findings will be for clear error only or that the master’s findings will be final.[81] The master’s rulings on procedural matters are reviewable for abuse of discretion, unless the appointing order dictates otherwise.[82]

The order appointing the master defines the parameters within which she will work. The court must specify the master’s duties, when ex parte communications are permitted, what documentation of the master’s activities must be kept, specific procedures including those for time limits, filings, and review of the master’s orders, findings, and recommendations, and the method of compensation for the master.[83] The interests of the parties must be considered in the appointment of a special master. Before an appointment order is issued, the court must give notice to the parties and provide them with the opportunity to express their views.[84] The parties must consent to the scope of the master’s duties.[85]

The Federal Rules recognize that the appointment of a master is likely to cause additional financial expense to the parties, a factor which must also be considered by the court when it decides whether to appoint the master.[86] This is because the parties may be required to pay the master’s compensation themselves, unless there is a “fund or subject matter of the action within the court’s control.”[87] The Supreme Court’s decision in Ex parte Peterson[88] accepts that it is possible for the court to charge expenses of an auditor to the parties without their consent, just as the court may charge other costs to the parties, following “usage long continued and confirmed by implication from provisions in many statutes.”[89]

A party may suggest candidates for the position.[90] The same conflict of interest standards that would require disqualification of a judge apply to the special master.[91]

IV. Finding the Authority to Use Masters in International Courts

A. Finding Authority to Appoint a Special Master

Special masters are a kind of court-appointed expert, and most international courts have the authority to appoint experts independently although there are variations in the relationship between the court-appointed expert, the judges, and the parties. For example, the World Trade Organization’s Dispute Settlement Body pioneered a worthy example of fact finding with court-appointed experts that addresses many of the concerns shared by parties and judges.[92] The following summarizes the authorities already existing in three examples of courts and commissions that could be used to appoint a master.

1. International Court of Justice

Article 50 of the Statute of the International Court of Justice provides broad appointment authority that would encompass the role of a special master: “The Court may, at any time, entrust any individual, body, bureau, commission, or other organization that it may select, with the task of carrying out an enquiry or giving an expert opinion.”[93] “Carrying out an enquiry” might encompass a range of activities, from directing a team of subject matter experts to review evidence submitted by parties to undertaking site visits, and even conducting experiments like the test used by the Corfu Channel expert committee to determine whether a boat could lay mines at night undetected by the Albanian coastguards. If the Court had decided that it needed more evidence of contamination of the Rio Uruguay, Article 50 of the Statute would have allowed the appointment of a master to review the evidence or to visit the site.

This apparently broad authority to engage assistance is constrained by Article 67 of the Rules of the Court, which provides the procedural rule.[94] The interests of the parties are protected by the Rules, which require the Court to listen to their comments on the proposed enquiry or expert opinion, and ensure that, “[e]very report or record of an enquiry and every expert opinion shall be communicated to the parties, which shall be given the opportunity of commenting upon it.”[95]

2. Permanent Court of Arbitration Rules of Procedure

In arbitration, the parties set their own rules; often they use standard rules such as those provided by the Permanent Court of Arbitration (PCA).[96] The standard procedural rules for state-to-state arbitrations and the environmental alternative rules provide a means for the arbitral tribunal to appoint its own experts.[97] The expert is endowed with broad powers to request information, documents, or goods of the parties, subject to the tribunal’s decision in case of dispute.[98] The parties have the right to inspect the expert’s terms of reference, reports, and documents on which the expert has relied. Parties are also entitled to comment on the report and to examine the expert in a hearing.[99] While these rules would authorize appointment of a special master, it would be helpful to arbitrating parties to have a model rule they could incorporate that would define the scope and powers of the master.

3. Commissions: United Nations Compensation Commission

Commissions established to deal with liability for disasters or postwar damage have a great deal of flexibility in establishing their procedural rules, although they are likely to follow templates established by the International Court of Justice, the Permanent Court of International Arbitration, the Iran-United States Claims Tribunal, or the United Nations Compensation Commission (UNCC). The UNCC made extensive use of experts to assist the review of more than 2.6 million claims for losses resulting from Iraq’s invasion and occupation of Kuwait, including humanitarian claims for the millions of displaced people and the extensive damage to the environment of Kuwait and neighboring countries.[100] The UNCC rules provided that panels of commissioners could “request additional information from any other source, including expert advice, as necessary.”[101] Expert assistance in many fields was essential to this program and outside consultants were used extensively.[102] However, the UNCC was not structured to allow for the use of special masters. Nonetheless, in other contexts a special master would be well-served by following the approach used to organize the team of expert consultants retained by the environmental claims section.

Claimants for environmental restoration submitted massive amounts of scientific and technical data and analysis in many different subject matter areas—coastal contamination, loss of fisheries and seabed resources from oil spills, public health damage from oil fire pollution, and heavy contamination of the desert with “tarcrete” from oil well fires. To complement the legal expert staff, the UNCC hired a consulting firm that in turn sought out and retained independent experts in the necessary scientific and technical disciplines.[103] The leadership of the consulting firm chose external scientific, engineering, and economic experts from academic and research institutions around the globe who were “able to appreciate cultural differences and communicate across cultural boundaries, who were unbiased and fair-minded.”[104]

While the UNCC did not use special masters, the leaders of the expert teams for the environmental claims worked in some respects as a master might: coordinating the activities of specialists, reviewing technical evidence submitted by both parties, conducting literature reviews, and reporting to the panel of commissioners. However, they did not have the authorities that many special masters are granted, for example, to hold mini-trials or to directly communicate with the parties. In establishing the rules of procedure for any commission anticipating complex scientific and technical submissions, provision should be made to allow for appointment of special masters.

B. Balancing the Roles of Judge and Special Master

It was noted at the outset that many judges are concerned that court-appointed experts may intrude on their prerogatives. A similar concern would apply to a special master. Judges are appointed to apply law to disputes, make findings of fact, and render a decision.[105] Judge Keith observed that a central function of courts is to resolve “those disputes of facts which the court must decide as it determines whether a party before it is in breach of its legal obligations.”[106] This is no easy task—Judge Mosk frankly said that as an arbitrator, he was not certain of the facts, but had to rely on “presumptions, burdens of proof and intuition.”[107]

Stemming from this is a constant concern—how a judge can keep a firm hand on the exercise of judicial authority while making good use of a specialist’s professional judgment.[108] The responsibility to judge cannot be delegated to a master; for example, Gillian White suggested that improper delegation of the judicial function could nullify the award in arbitration.[109]

The fact that international judges must make factual determinations as a central part of their mandate is incontrovertible. For example, the Statute of the International Court of Justice, Article 36(2) refers to “the jurisdiction of the Court in all legal disputes concerning . . . the existence of any fact which, if established, would constitute a breach of an international obligation.”[110] Again, Article 53 refers to the Court’s obligations; when one party does not defend its case, “[t]he Court must, before doing so, satisfy itself, not only that it has jurisdiction in accordance with Articles 36 and 37, but also that the claim is well founded in fact and law.”[111] Finally, under Article 61, revisions of judgments can only be made when based on “the discovery of some fact of such a nature as to be a decisive factor, which fact was, when the judgment was given, unknown to the Court and also to the party claiming revision, always provided that such ignorance was not due to negligence.”[112]

This is notwithstanding Judge Cançado Trindade’s remark, criticizing both the majority and dissenting judges with respect to the Pulp Mills case, that the Court’s role was “to dwell to a greater extent on legal principles than on chemical substances.”[113] While legal principles may suffice in assessing obligations of conduct such as whether an international standard was integrated into a domestic legal system, a close reading of evidence reporting and analyzing chemical data is necessary to determine whether a disputant has breached a measurable obligation such as preventing actual contamination of a river by an industrial waste product.[114]

Faced with complex data and competing expert interpretations, the court must focus on its job “to evaluate the claims of parties before it and whether such claims are sufficiently well-founded so as to constitute evidence of a breach of a legal obligation” by assessing “the relevance and the weight of the evidence produced in so far as is necessary for the determination of the issues which it finds it essential to resolve.”[115] Legal standards such as a “reasonable threshold” or “significance” of damage to the environment implicate both scientific information and legal and policy judgments that challenge the judge and expert to maintain their proper roles.[116] However, with a clear understanding of the judge’s role and well-tailored guidance to the experts, even these difficult duties can benefit from specialist advisors.

By obtaining assistance, the court does not take the place of a party in satisfying its burden of proof. The Oscar Chinn case[117] from the Permanent Court of International Justice (PCIJ) reveals the complexity of even this point in the context of an international tribunal—a dissenting judge stated that the court had an obligation to exercise its Article 50 authority to appoint an expert, in part because “the facts to be established all transpired outside the territory of the Party adducing them.”[118] In that case, the PCIJ refused the United Kingdom’s request for the court to order an expert inquiry to resolve factual questions, which would have been dispositive of Belgium’s possible breach of its international responsibility.[119] The court ruled that there was sufficient evidence to reach this decision.

Let us turn to the role of the expert special master. An expert, in one definition, “is only a person specially experienced, skilled, or learned in some art or science; or, as some would have it, in any department of knowledge or skill, wherein the formation of a sound opinion necessitates a previous course of study and experience beyond the lines followed by the average man.”[120] An expert master can review, weigh, and report to the court on fact or opinion evidence, and can also provide explanations of terms, theories, and other information that is not controversial but which may be important for the court to understand.[121] Yet, the master should not be asked to determine the ultimate questions that have been put to the court by the parties; this is the same limitation that is applied to court-appointed experts.[122]

The type of assistance that subject matter experts can offer is varied. Examples from United States federal courts are illustrative:

- Commenting on the acceptability of scientific methods that underlie expert opinions proffered by the parties;[123]

- “[D]ismantling the intricacies [of a technical field] so that the court could formulate and apply an appropriate rule of law;”[124] and

- Assisting with “problems of unusual difficulty, sophistication, and complexity, involving something well beyond the regular questions of fact and law with which judges must routinely grapple.”[125]

Possibly, a judge’s worst nightmare is to misstate facts in a judgment. Courts have, in fact, sought final review of a draft judgment by an expert to provide some assurance that technical terms are correctly used, references are properly cited, and judicial conclusions do not fly in the face of fact or theory.[126]

When an expert is asked to provide a professional judgment, there is a risk that her advice may exceed the technical boundary to which it is properly confined and may instead incorporate legal and policy judgments that are properly left for the judge.[127] Judge Yusuf distinguished the role of the judge from the role of the expert in several points:

First, it is not for the expert to weigh the probative value of the facts, but to elucidate them and to clarify the scientific validity of the methods used to establish certain facts or to collect data. Secondly, the elucidation of facts by the experts is always subject to the assessment of such expertise and the determination of the facts underlying it by the Court. Thirdly, the Court need not entrust the clarification of all the facts submitted to it to experts in a wholesale manner. Rather, it should, in the first instance, identify the areas in which further fact-finding or elucidation of facts is necessary before resorting to the assistance of experts.[128]

Professors Holly Doremus and A. Dan Tarlock recommend guidelines for outside scientific review committees in a domestic regulatory context that comprise an appropriate mandate for special masters. The strength of their approach is that it asks the expert to identify the components from which an expert opinion is constructed. Adapting their suggestions to international courts, a special master could be asked, as part of her report, to:

- “[E]valuate the degree of scientific support” for a particular position presented by each party;

- “[I]dentify gaps or weaknesses” in the data provided and recommend to the court whether relevant data is available, has been omitted by the parties, and should be obtained;

- “[H]ighlight what interpretive judgments were made” and how the proponent of the evidence “dealt with uncertainty”;

- “[Q]uantify, at least roughly, the likelihood of errors associated with” accepting or rejecting evidence; and

- “[C]onsider what value additional data would carry” for the judicial decision. [129]

The special master can assist the court in evaluating the experts presented by the parties, cutting through the confusions of a “battle of the experts.”[130] For the purposes of this discussion, it is assumed that witnesses are “completely honest and sincere in their views and that the expert witnesses arrived at their conclusions as the integral result of their high technical skill,” however, “[i]t must not be overlooked that witnesses who give opinion evidence are sometimes unconsciously influenced by their environment, and their evidence colored, if not determined, by their point of view.”[131]

There are a number of ways to ensure that an expert witness’s biases are exposed, such as qualification of the witness and examination by the bench and the opposing party. The International Court of Justice in the Pulp Mills case censured the parties for presenting their technical experts to the Court as counsel, in an effort to avoid being subject to examination.[132] Judge Greenwood said:

For a person who is going to speak of facts within his own knowledge or to offer his expert opinion on scientific data to address the Court as counsel is to circumvent these provisions of the Rules and, in the words of the late Sir Arthur Watts, unacceptably to blur the distinction between evidence and advocacy.[133]

There are no rules of admissibility of evidence in international courts; the practice is deferential to the sovereign States that are the disputants before these courts.[134] As a result, although admissibility of expert opinion is an important and controversial question in the United States, it has very little relevance to international courts. Thus, the United States Supreme Court guidelines for admissibility of scientific evidence stated in the Daubert case[135] do not have direct relevance. However, they suggest several factors that international judges might bear in mind in determining “whether the reasoning or methodology underlying the testimony [of the expert] is scientifically valid and of whether [it] properly can be applied to the facts in issue.”[136] The Daubert factors include whether the evidence is the result of sound scientific methodology; whether it has been tested, subjected to peer review, and published; whether it has a known or potential error rate; and whether it has attracted widespread acceptance within a relevant scientific community.[137]

As courts were wrestling with the Daubert factors, Professor Beecher-Monas argued that “even nonscientists” can learn to critique science if they are willing to learn about the probabilistic and analogy-based reasoning that underlies all scientific disciplines.[138] She recommended five requirements that she argued should be applied by judges to determine the admissibility of scientific evidence:

- Identify and understand the underlying theory and hypothesis;

- Examine all available information in concert;

- Fill information gaps with scientifically justifiable default assumptions;

- Assess whether the methodology—laboratory, observational, and statistical methods—conform to generally acceptable practices in the field; and

- Make a probabilistic assessment of the strength of the links between theory, assumptions, methodology, and the conclusion proposed.[139]

This would certainly be a challenging task for legal specialists, but it would be well within the capability of an expert special master. Beecher-Monas relies on the adversarial process to develop and challenge the evidence.[140] For example, she suggests that in one case it was acceptable for the court to fail to test a plaintiff expert’s methodology because there is an extensive literature on causation relating to a different form of the same chemical and because the discovery and cross-examination processes available to the opponent should have surfaced methodological flaws.[141] Similarly, in the International Court of Justice Continental Shelf (Libya/Malta) case “cross-examination of an expert witness established the inaccuracy of the reproduction of a scientific article filed by the adverse party.”[142]

Beecher-Monas purports to be talking about how judges should look at scientific evidence, but in fact her thesis relies heavily on the behavior of the parties to clarify (or not) technical or scientific complexity.[143] Professor Scott Brewer’s theory of “intellectual due process” places even more stringent demands on the judge to have “epistemic competence.”[144] This is precisely the role that a master can fill, relieving the bench of unrealistic demands.

C. Transparency to the Parties and to the Public

Practicing attorneys, when confronted with international courts that obtain expert advice using methods that exclude party examination of the expert, universally decry the practice as lacking in appropriate transparency and parties’ control over their dispute.[145] Similar concerns apply to special masters.

As a matter of institutional practice, in domestic courts, parties have a role in appointing special masters.[146] By comparison, we have seen that international courts’ rules generally provide for parties to review the court-appointed expert’s qualifications, receive the expert’s written report and comment on it, be present at the expert’s oral statements, and even provide for the possibility of examining the expert.[147]

Often these guarantees of party access are not present, and experts may deliberate with the court in camera; may be retained against the parties’ preferences; and in some cases their written and oral communications may be entirely confidential as between the expert and the judge.[148] The International Court of Justice, for example, has hired experts in the past to assist in its maritime delimitation cases as Registry staff.[149] At least in some cases:

[A]dopting such a practice would deprive the Court of the above-mentioned advantages of transparency, openness, procedural fairness, and the ability for the Parties to comment upon or otherwise assist the Court in understanding the evidence before it. These are concerns based not purely on abstract principle, but on the good administration of justice.[150]

The World Trade Organization’s use of experts is exemplary in some respects.[151] World Trade Organization panels have made use of non-party experts in four disputes.[152] The procedure adopted by the World Trade Organization in its first experience with appointing experts was intended to “respect general principles of law” and to ensure that the process of selecting experts would be “transparent, avoid conflicts of interest, affirm the integrity of the dispute settlement process and aid public confidence in the outcome of the dispute.”[153] The parties participated in each stage, retaining significant control over the process.

Under Article 13 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), a World Trade Organization panel has a “right to seek information and technical advice from any individual or body which it deems appropriate[] . . . and may consult experts to obtain their opinion.”[154] When a panel wishes to request information or advice from an individual or body within the jurisdiction of a World Trade Organization Member State, that State’s rights and interests are protected by the Article 13 requirement that the panel inform the Member before initiating such contacts, and confidential information is to be released only with the Member’s permission.[155] Specific rules in Appendix 4 of the DSU are provided for the panel to establish an expert review group and to request an advisory report from it.[156]

The World Trade Organization Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) provides for the use of experts in case of a dispute. SPS Agreement Article 11.2 states that, “[i]n a dispute under this Agreement involving scientific or technical issues, a panel should seek advice from experts chosen by the panel in consultation with the parties to the dispute.”[157] The panel can act on its own initiative or at the request of either party. It can consult international organizations or it can appoint experts to an advisory group.

When the World Trade Organization Dispute Settlement Body actually appointed experts for the first time, it used a variation of these procedures, developed in consultation with the parties to a long-running dispute in which the European Community has defended its trade restrictions on the import of meat containing certain animal growth hormones from the United States and Canada.[158] This procedure has been followed in subsequent disputes. The so-called “Hormones Dispute” turned on the question of whether the EC ban was “based on scientific principles and on a risk assessment” and whether there was sufficient scientific evidence that the presence of the hormones poses a risk to human, animal, or plant health to support the ban, as required by the SPS Agreement.[159] The panel did not follow the rules and procedures set out in the DSU Appendix 4, but created its own ad hoc rules.[160]

The panel consulted with the parties and decided to appoint experts to assist in its determination of whether there was a scientific basis for the EC ban.[161] It retained the experts as individuals, rather than as an advisory group as indicated in the SPS Agreement.[162] The Codex Commission secretariat was also consulted by the panel, as provided in SPS Agreement Article 11.2.[163] The panel sought referrals of experts from two international organizations, the Codex Commission and the International Agency for Research on Cancer.[164] The panel selected three of the recommended experts, taking into account the parties’ comments on their curricula vitae, and each party nominated an expert of its own choosing.[165]

The five experts served in their personal capacities as advisers to the panel.[166] The panel underscored that it had chosen to diverge from SPS Agreement Article 11 and use individual experts because it was not looking for a consensus position, but welcomed multiple views.[167] Although the European Commission had requested that the experts nominated by the panel not be nationals of the parties to ensure impartiality, the individual experts were in fact from the European Commission (France and Germany), the United States, Australia, and Canada.[168] The European Commission also requested that the experts be “scientists with proven expertise in the use of hormones in general and for animal growth promotion” but without conflicts of interest from significant past or present ties with the industry.[169] The European Commission was concerned that the Codex secretariat’s small pool of recommendations ignored a large international community of experts.[170] The appointment of the fifth expert by the panel was intended to address this.[171]

The scope of the expert work was limited to specific questions that the panel prepared in consultation with the parties.[172] The European Commission again indicated its views that it was important to distinguish the role of the expert from that of the panel members and the parties.[173] The information sought from the experts was “to further the Panel’s understanding of the scientific facts relevant to the dispute” and had to relate directly to the scientific issues.[174] They were not to address legal issues or interpretation of the World Trade Organization agreements, which was the purview of the panel;[175] or purely factual information, which the parties were obligated to supply.[176]

The parties’ written and oral submissions to the panel were provided to the experts and the written responses of the experts and the Codex secretariat were distributed to the parties.[177] An oral proceeding with the panel, parties, and experts followed the exchange of written materials to discuss the responses and provide additional information.[178] The transparency of the process extended to the reproduction of the panel’s questions and the experts’ responses in the panel report.[179]

D. Committee of Experts, to Work After the Judgment Is Issued

Two recent cases have tried the innovative approach of directing the parties to establish a committee of experts to work through difficult, fact-intensive technical issues after the proceedings are completed.[180] The tribunal’s judgment set the parameters of the committee’s work.[181]

1. International Tribunal for the Law of the Sea

A dispute over land reclamation by Singapore in the Straits of Johor resulted in the Tribunal deciding that the work posed a risk to the marine environment in and around the Straits. The Tribunal ordered Singapore and Malaysia to establish a group of independent experts with the mandate to conduct a study and to propose measures to deal with any adverse effects of the land reclamation, and to prepare an interim report on the work in a particular area of concern.[182]

2. Iron Rhine Railway Arbitration

An arbitral tribunal was established for a dispute between the Netherlands and Belgium over the reactivation of the Iron Rhine Railway.[183] The questions put to the arbitrators were primarily of a legal nature based on interpretation of 1839 and 1873 treaties, which gave Belgium certain rights of access via rail to pass through the Netherlands.[184] Technical and scientific issues were raised by the need for the tribunal to allocate costs for service upgrades and the cost of mitigating harm to nature reserves under Dutch, European Union, and international law. The award was notable for stating that, “where development may cause significant harm to the environment there is a duty to prevent, or at least mitigate, such harm” as a matter of general international law.[185] Belgium disputed the environmental protection measures that the Netherlands required; rejected responsibility to pay for them; and argued that, if it were obligated to pay, the Netherlands could “require only the least costly and/or onerous” measures.[186]

As the tribunal notes, “[t]he mere invocation of such matters does not, of course, provide the answers in this arbitration to what may or may not be done, where, by whom and at whose costs.”[187] So, questions of fact and a sound understanding of the environmental considerations at issue enter into the legal proceeding. Specifically, the Netherlands “sought to identify objectively, through expert reports,” appropriate measures to protect the environment from impacts of the work to bring the railway line into service.[188]

However, the arbitral tribunal was able to determine a set of principles to guide the allocation of costs without needing to “investigate questions of considerable scientific complexity” as to the specific measures required for appropriate environmental protection.[189] Instead, it directed the parties to establish a committee of independent experts to determine the relevant costs, and set a strict time frame for the committee to make its findings.[190] The arbitral tribunal did not make use of its authority to appoint experts or to ask for special briefing from the parties.[191]

V. Implementation

As we have seen, the International Court of Justice and the World Trade Organization are examples of dispute settlement bodies that have existing authority to appoint an expert who can function as a special master, while arbitral and ad hoc tribunals can choose to include a provision for a master when they elaborate their rules. The questions remaining are what kinds of cases are best suited to the use of a master; who is best suited to the role; and what authorities should they be assigned?

After a case is filed, the court should consider its needs for assistance with technical and scientific information at the same time it prepares its order fixing time limits for the filing of initial written pleadings. As Judge Yusuf advised the International Court of Justice, an international court seized of a case that presents potentially complex technical or scientific evidence should “develop . . . a clear strategy which would enable it to assess the need for an expert opinion at an early stage of its deliberations on a case.”[192] This comment emphasizes the need to take account of timing in such appointments. A study of United States federal court judges also recommends a pretrial assessment of the need for expert assistance; the judge can then work with the parties to narrow the scientific or technical issues actually in dispute and select the appropriate type of assistance to avoid delays in the proceedings. The authors of this study found that “[o]ne of the major impediments to the appointment of experts . . . is that judges are too often unaware of a trial’s difficulty until it is too late to make an appointment.”[193]

Whether expert assistance is needed may not always be apparent at the time an application or special agreement is first submitted to a court, but certain signs are indicative. So, if the subject of the dispute is an obligation of conduct—did a state have a duty to provide notice of an activity to a neighboring state and did it do so; or did the state adopt certain measures in its domestic legal framework?—the court’s decision is more likely to turn on legal analysis than complex scientific questions and a master would not be needed. The ease of the International Court of Justice in deciding that Uruguay breached its obligation to notify Argentina of the pulp mill project exemplifies this type of issue. Or, it may be immediately obvious that it would be helpful for the court to have a qualified expert available to consult informally on questions of terminology or other background information. Where the subject matter is narrow, an individual expert appointed by court order could be helpful and sufficient, but here again a master would not be needed.

A special master appointment should be considered when a dispute involves obligations of result, such as the effectiveness of pollution prevention measures. These cases are likely to involve extensive scientific evidence and techniques, such as modeling and statistics, that require scientific training to evaluate. Similar complex factual issues and compendious evidentiary submissions are likely to be involved in cases that require the assessment of costs, like the UNCC’s valuation of environmental damage from the Gulf War;[194] or appraisal of the likelihood that claimed harms were caused by a particular actor or activity, such as Argentina’s argument that the Rio Uruguay’s pollution was caused by the pulp mill in Uruguay.[195]

For these cases, an international court, tribunal, or commission can appoint a master with special expertise of both the legal process and the subject matter of the dispute. The special master might work alone, requesting documents from the parties, visiting sites and seeking information from other sources as needed. Or, he might retain and oversee a group of specialized experts on behalf of the court and in consultation with the parties. This role requires skill in coordinating communications between the court, the parties and any experts appointed by the court.

Once a court is in the midst of review, it will be more difficult to add the time and costs of a court-appointed expert to the process if evidence submitted is seen to be too complex for the judges to analyze without assistance. If the court can rule on the legal issues, it may be able to refer the technical evidence to a special master. The court can decide to retain the matter on its docket if necessary, until the experts complete their work. So, a special master could be used to manage a case like Gabčíkovo-Nagymaros Project (Hungary/Slovakia)[196] (involving industrial uses of the Danube River), which the Court has kept on its docket since its 1997 Judgment.[197] The committee appointed by the Iron Rhine Railway tribunal is another variation of this kind of procedure.[198]

VI. Conclusion

When the facts of an international dispute are contested, are dispositive of the issue, and either require specialized knowledge or are unusually voluminous, the court or tribunal should consider appointing a special master. The United States Supreme Court’s long experience shows that the relationship between the court, the master, and the parties can work effectively.

The special master’s role is a flexible position that can be tailored to the needs of the case and the desires of the parties. An appointment order can grant the master broad authority to seek evidence from parties and from other sources, to make site visits, and to conduct other activities that will help the master answer the question put to her by the court. Alternatively, the master’s mandate can be as narrow as reviewing evidence submitted by the parties, without the option of requesting further documents or clarifications. The master may be appointed at any point in the process, and the appointment may be for a few weeks or for years, giving the court and the parties great latitude in managing the settlement of the dispute.

Knowledge is not complete or perfect, but it can asymptotically approach that ideal. For courts of general jurisdiction or specialized courts, although the murkiness of factual and scientific uncertainty cannot be entirely avoided, the special master can clear a great deal of it away for the judge.

Water, Work, Wildlife, and Wilderness: the Collaborative Federal Public Lands Planning Framework for Utility-Scale Solar Energy Development in the Desert Southwest

By

Siobhan McIntyre* & Timothy P. Duane**   ***

Federal and state energy policies have recently emphasized increased renewable energy development, including large utility-scale solar energy projects in the desert southwest. Many of the prime solar development sites in the region are on public land, which is administered primarily by the United States Bureau of Land Management (BLM). Federal public lands policy has therefore been confronted with a rush of project development proposals seeking federal Rights-of-Way (ROWs) from BLM. State permits and licenses, together with compliance with other federal regulatory requirements (especially under the National Environmental Policy Act and the Endangered Species Act) must be coordinated with the BLM ROW grant process. This Article describes the BLM ROW process; describes and evaluates the BLM review for three utility-scale solar energy projects undergoing fast-track permitting under the American Recovery and Reinvestment Act of 2009 in Nevada, Arizona, and California; and evaluates how the BLM’s Draft Programmatic Environmental Impact Statement (PEIS) for solar development in the six-state region of Utah, Colorado, New Mexico, Arizona, Nevada, and California could improve the BLM ROW process in order to reduce conflicts between renewable energy development goals and policy concerns about water, work, wildlife, and wilderness in the desert southwest. The Article concludes with recommendations for improving the collaborative federal public lands planning framework for utility-scale solar energy development in the desert southwest. In particular, we recommend policy changes for the PEIS and all BLM ROW grant reviews that will incorporate the best practices of the fast-tracked projects we have analyzed.

I. Introduction

The Plan recognizes that the public lands of the California Desert belong to all of the United States, that these lands are not isolated but are spread out among or are adjacent to lands managed by other agencies of Federal, State, and local government . . . . The Plan is based on a “good neighbor” concept and will treat considerately the needs and concerns of other landowners and jurisdictions in the Desert.[1]

Overall, United States citizens support developing renewable energy and “[f]ully 87% favor including a provision in comprehensive energy legislation to require utilities to produce more energy from wind, solar or other renewable sources.”[2] In fact, current legislation, enacted by both federal and state governments, already reflects this national consensus. Furthermore, this overwhelming statistical majority represents a broad base of constituent support and suggests that renewable energy development presents diverse opportunities, appealing to a wide array of stakeholders. For example, Arizona’s Renewable Energy Standard and Tariff (RES&T)[3] requires in-state utilities to generate 15% of total energy from renewable technologies by 2025.[4] This measure garnered support from groups with dissimilar missions, ranging from industry interests, represented by firms, including the Southwest Gas Corporation and supermarket megalith, Kroger Co.; federal executive agencies, including the United States Department of Agriculture Forest Service; numerous land trusts; public interest and education groups, including the Arizona Public Interest Research Group Education Fund and the Union of Concerned Scientists; and traditional environmental advocacy groups, such as the Grand Canyon Chapter of the Sierra Club and Arizona Trout Unlimited.[5] Renewable energy’s broad appeal arises from a synthesis between two equally compelling, but often competing, goals—fostering a healthy, pollutant-free environment and spurring economic growth and security. Thus, for many nontraditional allies, renewable energy development has become a shared enthusiasm and a unique source of common ground.

Siting renewable energy projects not only inspires, but also requires, a similar collaborative spirit.[6] In response to the national desire to increase renewable energy development, the Energy Policy Act of 2005 (EPAct)[7] provides that the Secretary of the Department of the Interior (DOI) should seek to approve renewable energy projects located on federal, public lands before the end of 2015.[8] Although federal lands occupy a separate legal jurisdiction, the corporeal terra firma itself remains physically interconnected across federal, state, regional, and local geographic bounds. Accordingly, effects arising from siting decisions on federal land impact the natural ecosystems, human populous, and economies throughout these jurisdictions. Moreover, although federal land management agencies possess experience siting transmission towers on public lands,[9] traditionally, state public utility commissions have exercised primary jurisdiction to site and regulate transmission and electric generation facilities.[10]

DOI’s Bureau of Land Management (BLM) is currently conducting two, parallel tracked efforts to site renewable energy generation facilities on federal lands, predominantly in the desert southwest. These efforts are driven by the EPAct, executive orders, and secretarial orders intended to expedite environmentally sound energy development, and loan incentives and grants authorized for renewable development by the American Recovery and Reinvestment Act of 2009 (ARRA).[11] First, BLM is attempting to permit a select group of “fast-track” projects in order to facilitate numerous renewable generation project groundbreakings before the statutory deadline expires for receipt of incentivizing loans from the Department of Energy (DOE).[12] Second, BLM intends to develop a systematic program to permit and authorize future, ongoing renewable development on public lands.[13] Under both initiatives, proposed projects must comply with applicable public land management laws and must complete environmental impact statements (EISs) according to the National Environmental Policy Act of 1969 (NEPA).[14] Specifically, DOI, in coordination with the DOE, is conducting a Solar Programmatic Environmental Impact Statement (Solar PEIS) to support a “Bureau-wide solar energy development program” and to consider whether “to amend land use plans in the six-state study area to adopt the new program.”[15] In addition, state public utility agencies must approve individual projects based on state siting regulations and associated environmental review processes, as well as any additional state or local permits necessary to begin construction.[16]

This Article explores collaborative relationships between federal and state agencies in the solar facility siting process. Part II provides an overview of federal and state programs, mandates, and incentives to develop renewable energy. We review specific examples of collaborative efforts by comparing the individual fast-track EIS from one solar energy utility project permitted on public lands in each of three states: Nevada, California, and Arizona. The Article frames this comparison by focusing on two case studies which reflect the impact and scope of these relationships. The first will examine an issue of pressing concern for the southwest region: water resource allocation. The second will consider the national, economic interest in renewable energy development’s impact on labor and employment. Part III describes currently available utility-scale solar technologies and provides an overview of water resource and labor concerns regarding renewable energy generation. Part IV outlines applicable federal statutes governing electrical facility siting and environmental review, and Part V outlines applicable state statutes. Part VI then examines and compares the individual, fast-track projects in Nevada, Arizona, and California. Finally, Part VII explores these relationships and planning mechanisms in an alternative context by analyzing the recently completed Solar PEIS. Part VIII offers conclusions and policy recommendations from our analysis of both the permitting system and the case studies in the three states.

II. A Consensus on Renewable Energy Development

A. A National Priority

President George W. Bush signed Executive Order 13212 in 2001, compelling “[t]he increased production and transmission of energy in a safe and environmentally sound manner.”[17] The order does not explicitly mandate an increase in renewable energy development, but the order does require federal agencies to “expedite their review of permits or take other actions as necessary to accelerate the completion of such projects.”[18] “Fast-track” EIS and Solar PEIS efforts cite this order as a national directive to efficiently promulgate renewable energy development.[19]

Subsequently, Congress explicitly underscored the national need for reliable, renewable energy sources in the EPAct. Specifically, the Act aims “[t]o ensure jobs for our future with secure, affordable, and reliable energy.”[20] To achieve this goal, the Act states that DOI should seek to approve renewable energy projects located on public lands before the end of 2015.[21] In addition, appropriations under the Act total more than $50 billion for DOE authorized loan guarantees, intended to “pave[] the way for federal support of clean energy projects that use innovative technologies, and spur[] further investment in these advanced technologies.”[22] Guarantees may equal as much as 80% of the project cost of a facility.[23] However, the Act only provided for loan grants to “early commercial use of innovative technologies,” which do not necessarily include utility-scale facilities that opt to employ traditional renewable technologies.[24]

ARRA extended these loan guarantees to traditional renewable energy systems, including utility-scale electrical facilities.[25] These credit subsidies also complemented the $50 billion appropriations authorized by the EPAct by authorizing an additional $6 billion to support loan guarantees and approximately $21 billion in tax incentives.[26] In addition to extending and increasing loan grants, ARRA places one critical restriction on loan grants: a looming deadline. To qualify for grants, companies pursuing renewable energy projects must break ground before September 30, 2011 (extended in late 2010 to December 31, 2011).[27] As of July 2010, BLM held 188 applications pending for solar energy projects on federal lands.[28] The rush is on to strike it rich by mining federal dollars and translating golden sunrays into major profits.

B. Nevada’s Electric Restructuring Legislation and Renewable Portfolio Standard

In 2001, the Nevada state legislature enacted regulations to require each state electricity provider to “generate, acquire or save electricity from portfolio energy systems or efficiency measures.”[29] Nevada’s Renewable Portfolio Standard (RPS) mandates a gradual increase in contributed renewable power from 6% in 2005 and 2006 to the statute’s ultimate goal, 25% by 2025.[30] In addition, the RPS insists that providers “generate, acquire or save” 5% of electricity between 2009 and 2015 exclusively by employing solar energy systems.[31] After 2016, providers must demonstrate an additional 6% of electrical gains from solar energy systems.[32] If a provider does not meet portfolio standards for any calendar year, the Public Utilities Commission of Nevada (PUCN) requires the provider to carry forward the deficiency to future years and may also impose an administrative fine based on each kilowatt-hour the provider failed to contribute to the required renewable standard.[33]

C. Arizona’s Renewable Energy Standard and Tariff

On November 14, 2006, the Arizona Corporation Commission (ACC) approved Arizona’s RES&T Rules.[34] ACC requires utilities to “satisfy an Annual Renewable Energy Requirement by obtaining Renewable Energy Credits from Eligible Renewable Energy Resources.”[35] Statutes define “Eligible Renewable Energy Resource” as an identified renewable technology generator that displaces “Conventional Energy Resources” which would otherwise be used.[36] Solar electric generators qualify as an “Eligible Renewable Energy Resource.”[37] A provider obtains one Renewable Energy Credit for each kilowatt-hour derived from an Eligible Renewable Energy Resource.[38] Similar to Nevada’s gradual increase in required portfolio standards, Arizona mandates that a utility’s annual renewable energy quotient increase by a certain percentage each calendar year.[39] In 2006, the portfolio standard required utilities to derive 1.25% of production from renewables.[40] By 2025, the state aims to mandate an RPS that demonstrates 15% renewable production.[41] Since July 1, 2007, the Commission has required each utility to file an approval plan describing how the utility intends to comply with the portfolio standard for the upcoming year.[42]

D. California’s Renewables Portfolio Standard

In 2002, California enacted legislation to increase California’s reliance on renewable energy resources to “promote stable electricity prices, protect public health, improve environmental quality, stimulate sustainable economic development, create new employment opportunities, and reduce reliance on imported fuels.”[43] The California Public Utilities Commission (CPUC) implements annual procurement targets for each retail electricity provider (the 2002 legislation applied only to Investor-Owned Utilities (IOUs); Publicly Owned Utilities (POUs) are not regulated by the CPUC).[44] Generally, the CPUC has required each provider to increase its total procurement by 1% of retail sales per year “so that 20 percent of its retail sales are procured from eligible renewable energy resources no later than December 31, 2017.”[45] Each electrical corporation must prepare periodic renewable portfolio plans to satisfy obligations under the state standard.[46] California’s IOUs reported that they met 17.9% of their load from RPS-eligible generation in 2010, which was an increase from 15.4% in 2009.[47] Overall, California utilities (including POUs not under CPUC jurisdiction) met 11.6% of their needs from renewables in 2009 while large hydropower plants (which do not qualify under the RPS standard) met 9.2% of the state’s annual demand.[48]

Governor Arnold Schwarzenegger issued an executive order in November 2008 increasing this target to 33% by 2020.[49] This higher target—the highest in the United States—was then reinforced and given new legal authority through the adoption of a 33% Renewable Electricity Standard (RES) by the California Air Resources Board (CARB) in its Scoping Plan and implementing regulations for AB 32, the California Global Warming Solutions Act of 2006.[50] Finally, the California legislature codified the 33% RES target by 2020 with the passage of SB 2×1, which was signed into law in April 2011 by Governor Jerry Brown, Jr.[51] The higher California standard is therefore not subject to rescission by a new executive order by a future Governor. “Instead of just taking oil from thousands of miles away,” said the Governor, “we’re taking the sun and converting it.”[52] United States Secretary of Energy Steven Chu, who attended the signing ceremony, said that the bill “would be a game-changer for us” by increasing demand for renewable power technologies that DOE is simultaneously encouraging through loan guarantees and direct investment in research and development.[53] The new 33% RES goal also applies to the state’s POUs (including the Los Angeles Department of Water and Power, the Sacramento Municipal Utility District, and many smaller POUs).[54] California’s game-changing increase in its renewable portfolio standard ensures that there will be continuing demand for solar-generated power throughout the rest of this decade in the desert southwest.[55]

III. Solar Technologies: Environmental and Social Concerns

A. Commercially Available Solar Technologies

Solar energy can be captured and converted to useful work through a wide range of technologies. The simplest technologies, which take solar insolation and convert it to thermal energy, have been adopted for domestic hot water heating, residential and commercial pool heating, and building heating through passive solar input and storage through local mass.[56] Electric generating technologies are more complex and can be through either photoelectrical means or through the conversion of thermal energy to electrical energy via some kind of turbine process.[57]

Photovoltaic (PV) cells directly convert solar insolation into electrical current by exploiting the photoelectrical properties of materials.[58] These cells have a wide range of efficiencies and costs, as different companies emphasize different underlying materials and manufacturing techniques.[59] The least-efficient PV cells are also generally the least expensive; more efficient concentrating technologies generally cost more.[60] Without concentration, efficiency is directly correlated with the total area of solar insolation required to be collected in order to yield a given level of electrical output: if a technology is three times as efficient, for example, it will generally require only one-third the total area of PV cells to achieve the same electrical output.[61] The cost per kilowatt-hour of electrical generation—in both direct economic and environmental terms—is therefore a function of technology choice, efficiency, and production costs. Costs of PV technology have generally been decreasing rapidly through dramatic increases in the scale of PV manufacturing and through international competition from lower-cost suppliers.[62] PV cells can be deployed either through “distributed generation” strategies (e.g., on residential, commercial, and industrial rooftops or over parking lots) or through centralized, utility-scale generation projects.[63] This Article focuses on the latter.[64]

The other class of utility-scale solar generation projects is described as either Concentrating Solar Power (CSP) or Concentrating Solar Thermal (CST) projects.[65] CSP/CST projects concentrate the solar insolation onto a tube, tower, or external combustion engine through a parabolic trough, parabolic dish, or collection of mirrors with a focal point that increases the temperature of the receiver to very high temperatures.[66] The receiver has a fluid in it that then transfers the solar energy to a turbine—either through direct thermomechanical means or by heating water through a heat exchanger to generate steam.[67] The steam then turns a turbine as in fossil-fired or nuclear generation, which produces electricity for the grid.[68] These CSP/CST projects generally require larger-scale mirror fields to generate the high temperatures necessary for the most efficient generation of electricity.[69] They are therefore typically utility-scale and are not readily amenable to siting in a distributed generation mode.[70]

Both PV and CSP/CST technologies are evolving rapidly: there is fierce competition now among solar technology companies to demonstrate their technologies, drive costs per kilowatt-hour down, and gain market share by deploying large-scale projects to meet the RPS goals of the states.[71] High levels of solar insolation, coupled with high demand due to California’s RPS requirements, have focused this frontier battle for solar technology market dominance in the desert southwest.[72] Much (but certainly not all) of the most desirable (and potentially least expensive) land on which such projects can be located is publicly owned and managed by the federal BLM. Our focus here is therefore on utility-scale solar projects proposed for federal BLM lands in the desert southwestern states of Arizona, Nevada, and California.

B. Environmental Concerns: Water Resources in the Desert Southwest

Situated in a region that is characterized by arid landscapes, dry air, sunshine, and high evaporation rates,[73] the western United States has long grappled with water supply constraints.[74] Statewide average annual precipitation rates from 1971 to 2000 equaled 13.59 inches in Arizona, 22.18 inches in California, and 9.50 in Nevada.[75] Of course, there is enormous variation between the redwood forests of the northwestern California coast—38.10 inches per year in Eureka—and the deserts of southeastern California—4.33 inches per year in Barstow.[76] In comparison, the Boston metro area from 1949 to 2006 averaged 43.13 inches of precipitation a year.[77] Despite these natural limitations, Americans have been “big water users, profligate users even” and westerners are “the biggest by far.”[78] For example:

In 1900, the total amount of water used across the country for all purposes was 40 billion gallons a day; by 1975, the amount was 393 billion gallons, tens times more, though the population had only tripled in size. . . . Beyond the hundredth meridian, per capita rates of withdrawal and consumption much exceeded even those extravagant American levels. . . . [In 1975, t]he national average for direct personal use was 90 gallons a day, but in Tucson, it was 140 gallons, in Denver, 230, and in Sacramento, 280.[79]

Reflective of the nation’s excessive water use, surface waters and groundwater basins are overcommitted throughout the southwestern states.[80] Accordingly, the negative impacts from dwindling water resources can be seen in land subsidence, loss of species habitat, detriment to riparian ecosystems, and increased strains on community resources.[81]

Energy production accounts for a significant amount of water consumption in the southwest. To generate electricity, conventional energy facilities may utilize as much as 200 gallons (coal and natural gas) to 720 gallons (nuclear) to 1400 gallons (geothermal) of water per megawatt-hour generated.[82] Solar energy may place a similar strain on water resources. CSP systems, including solar trough and solar tower technology, may utilize as much as 750 to 920 gallons of water per megawatt-hour generated.[83] Although less water intensive solar technologies exist, including dish engine and photovoltaic technologies, these technologies are not currently as efficient at generating energy, and therefore are not as cost effective as more water intensive, CSP technologies.[84] Thus, “[w]ater management by the majority of solar developers is largely focused on securing access to greater supplies of water rather than looking at more water-efficient ways to produce energy.”[85]

Furthermore, the University of Arizona and a federal legislator, Senator Jon Kyl, have recently produced publications that draw attention to the “water–energy nexus,” a title for the cyclical use of energy to pump water to make energy.[86] Senator Kyl’s report, Deploying Solar Power in the State of Arizona: A Brief Overview of the Solar–Water Nexus, describes the Sisyphean nature of this problem: “The more groundwater that is depleted, the more electricity is needed to obtain the supply and deliver the water.”[87]

A congressional research report, Water Issues of Concentrating Solar Power (CSP) Electricity in the U.S. Southwest, highlights the conflict between solar energy development and water conservation by citing the susceptibility of United States counties to the Water Constraint Index developed by the Electric Power Research Institute (EPRI).[88] The EPRI notes significant overlap between areas projected for CSP deployment by 2050 and counties highly susceptible to water constraint, particularly in Arizona and California.[89] The report identifies that federal, state, and local governments, as well as businesses and private individuals, are trying to wring each and every drop into often mutually exclusive uses. Indeed, “agricultural water needs can be in direct conflict with urban needs, as well as with water for thermoelectric cooling, threatened and endangered species, recreation, and scenic enjoyment . . . [and d]eployment of CSP would add an additional demand to existing freshwater competition in the Southwest.”[90]

Accordingly, the question arises as to how this scarce resource will be divided and to whom it shall be allocated. States traditionally oversee water resource allocation and can often be jealous guards of the limited supplies within their borders. For example, Arizona has expressed concerns that “a considerable amount of the power produced . . . in Arizona would be exported to other states, effectively resulting in the exportation of Arizona’s limited water supply to the rest of the country.”[91] California has implemented a policy to reject solar facility projects that do not employ water efficient, dry-cooled technology,[92] and Arizona has urged its lawmakers to follow in California’s footsteps.[93] The debate not only raises questions regarding state versus federal policy making, but also creates tensions between government departments and divisions. For example, the United States National Park Service has raised concerns that solar energy production in Nevada could detract from limited water resources that are needed to maintain the iconic landscapes found in Death Valley and other national monuments.[94]

C. Socioeconomic Concerns: Green Jobs and Solar Employment Projections

“Green jobs” are defined as “employment that contributes to protecting the environment and reducing humanity’s carbon footprint.”[95] Alongside investing in renewable energy development, the shared keystone featured in both the EPAct and ARRA is the creation and preservation of employment for the American workforce.[96] By itself, electricity generation does not account for a large percentage of jobs in the overall world labor market.[97] However, green jobs span across diverse occupations and employ a wide array of skills and educational backgrounds.[98] In addition, green jobs have the potential to “radiate” substantial environmental and employment benefits across many labor fields and geographic reaches.[99] For example, operation, construction, and maintenance efforts for renewable facilities provide mostly localized positions, while “induced jobs,” supported by consumer spending directly or indirectly related to renewables, may develop locally, regionally, or globally.[100] The United Nations Environment Programme (UNEP) forecasts that direct employment from the manufacture and installation of PV modules alone may grow from a $15.6 billion industry in 2006 to a $69.3 billion industry by 2016.[101] Moreover, renewables may employ greater workforces than conventional sources.[102] In addition, labor employment by conventional energy sources may disappear as these non-renewable resources deplete.[103]

In this manner, the shift to green jobs provides an excellent opportunity for workers, governments, and communities to consider the labor practices and policies that they envision as part of a sustainable future. Conventional construction, manufacturing, and traditional blue collar labor has traditionally been divided between “low road” non-union employers and “high road” high salary union employers, and has historically tended to overlook women and minorities as potential employees.[104] Indeed, fair labor practices can often become mired in a “complex labyrinth of legal and contractual requirements, customs, practices, entities, politics and interpersonal relationships that characterize the high road unionized construction trades.”[105]

UNEP advocates that green jobs “also need to be good jobs that meet longstanding demands and goals of the labor movement, i.e., adequate wages, safe working conditions, and worker rights, including the right to organize labor unions.”[106] To this end, current legal structures establish thresholds for fair labor practices on federal and state funded projects. For example, the Davis-Bacon Act[107] requires employers to pay prevailing wages to workers employed by federally funded projects, and California imposes a similar standard for state-funded efforts.[108] In addition, labor unions are keenly aware of the prospective transition from the conventional labor market to a green economy. For example, in 2006, the United Steelworkers partnered with the Sierra Club to form the BlueGreen Alliance, “a national, strategic partnership between labor unions and environmental organizations dedicated to expanding the number and quality of jobs in the green economy.”[109] Additional working models have been developed and implemented in Los Angeles and Oakland, California, by community members, labor organizations, construction employers, and local officials.[110] These programs utilize traditional project labor agreements to combat local unemployment by requiring publicly funded projects to employ a certain percentage of workers from the area directly impacted by these projects.[111]

Scholars, international policy organizations, fair labor advocates, and environmental coalitions agree that the labor rights perspective must be incorporated into future policies related to the green economy and climate change transitions.[112] Ultimately, this perspective will provide indispensible insight because “[p]eople’s livelihoods, rights, and sense of dignity are bound up tightly with their jobs; jobs need to provide equal hope for the environment and the jobholder.”[113]

IV. Siting Solar Facilities on Federal Lands

Prospective solar energy providers must receive approval from BLM to site solar energy facilities on federal lands.[114] To grant a permit, BLM must comply with the multistepped, time-consuming statutory and regulatory processes mandated by federal law.[115] Applicable statutes and regulations establish a legal framework that layers agency review of proposed land uses.[116] This framework narrows the agency’s scope of review by increments, from broad guidance principles ensuring adherence to national, multiple-use mandates to detailed analyses, identifying and assessing project specific impacts.[117] Moreover, this framework not only accounts for diverse environmental concerns by employing a vertical analysis of federal land use priorities, but also applies a horizontal reach to address regional concerns.[118] To this end, federal statutes and regulations consistently mandate coordination with state, local, and tribal governments throughout the permit process.[119] In addition, public participation provisions create avenues to assess the public’s land use concerns.[120]

A. BLM Process for Siting Solar Facilities

To site an electrical generation facility on BLM managed public lands, a service provider must receive BLM’s approval for a right-of-way (ROW) pursuant to the guidelines and requirements mandated by the Federal Land Policy and Management Act of 1976 (FLPMA).[121] In addition, the use proposed by an applicant must be permissible under BLM’s most recent resource management plan or land use planning document (RMP/LUP).[122] Lastly, if granting the ROW for the proposed use constitutes a “major Federal action[] significantly affecting the quality of the human environment” under NEPA, BLM must complete an EIS before granting the proposed ROW.[123] The following Part discusses this federal statutory and regulatory framework and outlines the interlocking legal schemes that facilitate the collaborative process introduced above.

B. The Federal Land Policy and Management Act of 1976 and Rights-of-Way

FLPMA’s statutory mandates and attendant ROW regulations strive to balance use and conservation of federal, BLM-managed public lands. In 1976, Congress enacted FLPMA to ensure that “goals and objectives be established by law as guidelines for public land use planning, and that management be on the basis of multiple use and sustained yield.”[124] However, FLPMA requires that BLM manage public lands to ensure that this use is tempered, in order to “protect the quality of scientific, scenic, historical, ecological, environmental, air and atmospheric, water resource, and archeological values.”[125] For example, when authorizing an ROW, FLPMA requires BLM to include terms and conditions in the final permit that ensure environmental protection by “minimiz[ing] damage to scenic and esthetic values and fish and wildlife habitat and otherwise protect the environment.”[126] Regulations also emphasize that protecting natural resources and preventing undue degradation to public lands are paramount objectives of BLM’s ROW program.[127] Thus, FLPMA’s statutory mandates and pursuant regulations seek to facilitate projects that will embody this multi-faceted mission by harmonizing multiple-use and conservation-oriented objectives.

When determining whether or not a particular use fits this balance, FLPMA requires BLM to honor state laws and to coordinate with state authorities. BLM must guarantee that uses meet state standards by publishing terms and conditions that “require compliance with applicable air and water quality standards established by or pursuant to applicable Federal or State law . . . [and] with State standards for . . . siting, construction, operation, and maintenance of or for [ROWs] for similar purposes if those standards are more stringent than applicable Federal standards.”[128] In addition, BLM must consult with other governmental entities to process an application.[129] Furthermore, regulations enacted pursuant to FLPMA emphasize that BLM’s duty to coordinate extends beyond simply respecting a state’s strictly mandatory legal standards.[130] In fact, BLM lists coordinating “to the fullest extent possible” with state and local government as a principle guiding goal when authorizing ROWs.[131] To this end, FLPMA regulations provide mechanisms to facilitate this collaborative policy. For example, regulations state that BLM should encourage ROW applicants to conduct pre-application meetings with BLM field officers in order to discern potential routes and constraints for projects.[132] BLM may share pre-application information with state or local government agencies “to ensure . . . effective coordinated planning as soon as possible.”[133]

FLPMA and implementing regulations also mandate opportunities for public participation, which allow additional opportunity for diverse parties to voice regional and local land management concerns and contribute to BLM’s ROW decision-making process. FLPMA expressly enumerates that, “in administering public land statutes and exercising discretionary authority granted by them,” BLM must “establish comprehensive rules and regulations after considering the views of the general public . . . assur[ing] adequate third party participation.”[134] If sufficient public interest exists, BLM must hold a public meeting.[135]

Therefore, to the extent necessary to comply with state laws, FLPMA mandates that BLM coordinate with state and local governments when authorizing ROW grants on public lands. In addition, besides mandating coordinated legal compliance among jurisdictions, FLPMA encourages collaboration and cooperation with state and local government, as well as the general public.

C. BLM Resource Management Plans/Land Use Plans

The RMP/LUP serves as the primary mechanism to ensure BLM acts according to the mission set forth in FLPMA: to balance multiple-use and conservation goals when managing public lands.[136] An RMP/LUP reflects an inventory of public lands within certain geographic areas and assesses the resources and other values within these geographic bounds.[137] These plans should reflect changes in conditions and should seek to identify new and emerging resources or other values.[138] An RMP/LUP functions by identifying primary issues within a specific BLM region and dictating objectives and directives necessary to provide sustained resource use, while ensuring long-term conservation.[139] BLM officials must conduct both public and internal “scoping” to brainstorm regional planning issues.[140] Planning issues are “disputes or controversies about existing and potential land and resource allocations, levels of resource use, production, and related management practices” and may stem from new or changed circumstances or uses, such as renewable energy development.[141] For each selected issue, BLM then promulgates “goals,” broad statements that express desired outcomes, and directives that specify authorized or prohibited uses and actions to achieve these goals.[142]

The RMP/LUP drafting process encourages coordination between BLM and state and local government. Criteria for developing RMP/LUPs require compliance with applicable state pollution laws and insist, “to the extent consistent with the laws governing the administration of the public lands,” that BLM coordinate with “the States and local governments within which the lands are located” and consider approved state resource management programs.[143] BLM must identify issues at the outset of the planning process to give state and local governments “an opportunity to suggest concerns, needs, and resource use, development, and protection opportunities.”[144] Moreover, BLM should draft RMP/LUPs to be consistent with state and local plans to the “maximum extent” possible within federal law and the purposes of FLPMA.[145] To this end, BLM should stay apprised of state and local land use plans and should assist to resolve inconsistencies between federal and non-federal government plans.[146] The BLM Land Use Planning Handbook, a document which recommends best practices to BLM employees for establishing and implementing RMP/LUPs, impresses on BLM managers that “[c]ooperation goes beyond the coordination requirement of FLPMA,” and suggests BLM invite state and local governments to be involved as formal cooperating agencies.[147] Some states possess federal lands or policy liaisons, and best practices recommend that these “officials should be actively engaged from the beginning of the planning effort.”[148] These relationships and related roles should be clearly described and formalized through an agreement or Memorandum of Understanding (MOU).[149] When effective, a desirable division of knowledge and labor hopefully arises between governmental entities:

While the ultimate responsibility regarding land use plan decisions on BLM-administered lands rests with BLM officials, it is recognized that individuals, communities, and governments working together toward commonly understood objectives yields a significant improvement in the stewardship of public lands. Benefits of building collaborative partnerships include improving communication, developing a greater understanding of different perspectives, and finding solutions to issues and problems.

A collaborative approach to planning entails BLM working with [] state, and local governments . . . from the earliest stages and continuing throughout the planning process, to address common needs and goals within the planning area.[150]