On April 1, 2009, the Supreme Court issued a split 5-1-3 decision that upholds what was the Bush Administration’s application of the Clean Water Act to allow regulators to perform a “cost-benefit analysis” before requiring compliance with technology requirements for so-called “cooling water intake structures” that kill millions of fish annually across the country. Entergy v. EPA, PSEG Fossil v. Riverkeeper, and Utility Water Group v. Riverkeeper, _ U.S. _, Nos. 07-588, 07-589 and 07-597.
Professor Jim May
wrote an amicus brief in support of Respondent Riverkeeper to the Supreme Court last fall on behalf of some of the nation’s top environmental law professors. In their ruling, however, the Supreme Court held that “The EPA permissibly relied on cost-benefit analysis in setting the national performance standards and in providing for cost-benefit variances from those standards.”
"Justice Scalia, writing for a majority, gets it exactly backward,” says Professor Jim May of the Supreme Court’s April 1st ruling in the case of Entergy Corp. v. Riverkeeper, Inc., et al
. “The Supreme Court has a long tradition of finding that formal cost-benefit analysis is only required when Congress expressly authorizes it. Here, the Court for the first time in four decades of modern environmental law reaches the opposite conclusion, holding that EPA may use a cost-benefit analysis as a means of diminishing technology based requirements when Congress is silent as to the role application of costs to environmental benefits. Consequently, the outcome of this case could have profoundly negative effects not only on the environmental concerns 316(b) was designed to protect, but also on the technology-based undergirding of the CWA and the rest of environmental law.”
May’s amicus brief examines the relevant language, structure and history of the CWA, including the role of costs in setting technology-based standards. First, he explains that the history of water pollution regulation before 1972 demonstrates that Congress wisely chose to meet water quality standards by adopting performance-based standards based on technological capabilities rather than balancing costs and benefits based on water quality impacts. Second, he shows how experience under the Clean Water Act vindicates Congress's choice: the technology-based standards adopted under the Clean Water Act have produced significant environmental benefits without causing economic disruption or absurd results.
"This decision is a crushing misapplication of federal law, as in it allows some of the world's largest fish killing facilities to continue to crush fish and other aquatic life with impunity,” notes May. He points out potential local impact of the ruling, citing the Salem Nuclear Generating Station and DuPont Chambers Works as the exact type of facilities covered by the ruling.
May explains four dimensions that will limit ruling’s adverse effect. First is that the ruling is narrow. While the Court held CBA is not "categorically forbidden" under Section 316(b), it did not hold that 316(b) requires it.
Second, the Obama Administration can fix it. The entire Phase II Rule is -- consistent with the Second Circuit's ruling the Court did not upend, which is all of it other than CBA -- headed back to EPA for reconsideration. On remand, EPA still must reconsider the Phase II Rule and, in doing so, will have the discretion to decide not to use CBA analysis or to use it more narrowly. Indeed, the Court expressly held that it would be "plausible" for EPA to decide not to use CBA analysis at all under Section 316(b), and that there are limits on the extent to which how it applies.
Third, the Court left intact the Second Circuit's remand to EPA on all the other grounds. This includes EPA's failure to explain the basis of its rules, and that mitigation is no substitute for technology.
Last, Phase II Rule's measurable and enforceable degree of reduction in impingement and entrainment for existing plants beats the status quo.