Attacks on the Antiquities’ Act (2019 National Preservation Law Conference)

Professor Mark Squillace Luncheon Keynote

Professor Mark Squillace

The 2019 National Preservation Law Conference was held on Tuesday, June 25 in Washington, D.C. The conference is put on by the National Trust for Historic Preservation in partnership with Georgetown University Law Center. This intense one-day summit provided a highly focused look into historic and cultural preservation law, highlighting recent and influential developments in the field. Attendees were able to gain knowledge and skills to effectively advocate and champion key preservation issues. This year’s speakers were all national legal experts on a wide variety of topics, including federal level regulations, legal tools for the built environment, religious properties, the Antiquities Act, and climate change.

Professor Mark Squillace from the University of Colorado Law School dove deep into attacks on the Antiquities Act from our past, present, and postulates on the future impacts on this important legal precedent.

Attacks on the Antiquity Act (Video)

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Advising the EPA: The Insidious Undoing of Expert Government By CU Law Professor Sharon B. Jacobs

This post originally appeared on the Harvard Law Review Blog

The modern administrative state was built on the promise of expertise. As James Landis argued in his New Deal-era defense of the bureaucracy, expert agencies are needed to effectively oversee the behavior of sophisticated industry actors. Consistent with Landis’s vision, government agencies today are populated by subject matter experts. Thus, the Environmental Protection Agency (EPA) employs biologists and chemists while the Nuclear Regulatory Commission employs physicists and reactor systems engineers. Increasingly, agencies have also sought the advice of outside experts. These outside experts form advisory committees, task forces, work groups, and boards that review agencies’ internal decisions and provide recommendations and advice.

The federal government now makes use of upwards of 1,000 such committees. Sheila Jasanoff has called them a “fifth branch” of government. In the 1970s, congressional concern about the proliferation of advisory committees produced the Federal Advisory Committee Act of 1972 (FACA). FACA imposes reporting and transparency requirements on federal advisory committees. In addition, the Act states that advisory committees should be “fairly balanced in terms of the points of view represented and the functions to be performed.”

On Halloween, EPA Administrator Scott Pruitt issued a new directive entitled “Strengthening and Improving Membership on EPA Federal Advisory Committees.” The directive states that no member of an EPA advisory committee shall “be currently in receipt of EPA grants” or be “in a position that otherwise would reap substantial direct benefit from an EPA grant.” A memorandum accompanying the directive explained that direct receipt of EPA grants “can create the appearance or reality of potential interference” with members’ abilities to “independently and objectively” serve.

That justification is superficially appealing. But the directive’s outward concern with impartiality masks an effort to rebalance advisory committee membership to favor industry representatives over academics. By preventing EPA grantees from serving on advisory committees, the agency is likely disqualifying some of the country’s ablest scientists. Those dismissed from the EPA’s advisory commissions in the wake of the directive include researchers from Harvard, Stanford, and the University of Southern California. In contrast to academics, industry scientists need not seek EPA grants because their research is funded by their employers. They are thus unaffected by the directive. Industry membership on advisory boards raises impartiality concerns of its own. But Administrator Pruitt’s directive ignores this source of potential bias completely.

Moreover, the insinuation that receiving a grant from the EPA renders an advisory board member impartial is misleading. The EPA estimates that in the past three years, members of its Science Advisory Board, Clean Air Scientific Advisory Committee, and Board of Scientific Counselors received a combined total of more than $77 million in direct EPA grant funding. But that figure, by itself, proves nothing. The EPA already employs a conflicts screening process. According to one former member of EPA’s Scientific Advisory Board, advisory commission members are given a conflict of interest form to fill out for each separate issue discussed. If a conflict is identified, the member is immediately recused.

Disallowing advisory committee service by agency grant recipients will not necessarily lead to ideological “stacking” of committees. But the directive’s application has already resulted in more substantial industry membership on EPA advisory committees. There have also been committee leadership changes. Dr. Peter Thorne, whose University of Iowa webpage identifies him as a co-investigator on an EPA-funded study, was recently replaced as chair of the EPA’s Science Advisory Board by Dr. Michael Honeycutt, lead toxicologist for the Texas Commission on Environmental Quality. Dr. Honeycutt has broken with the scientific consensus by questioning the need to reduce smog levels. One of his arguments? Most people spend 90% of their time inside, where smog is less likely to affect them.

Administrator Pruitt’s directive is of concern to those who value advisory committees’ scientific integrity (and some lawmakers have already expressed their displeasure). But is it illegal? Any legal challenge must overcome several hurdles. The first, and most easily surmounted, is that the APA limits judicial review to “final agency action.” The EPA’s directive is likely final under Bennet v. Spear, which requires that the action “mark the ‘consummation’ of the agency’s decisionmaking process” and be one “from which ‘legal consequences will flow.’” As the D.C. Circuit has held, even informal guidance like this directive can be deemed final when it reflects a settled agency position. This directive is binding on its face and has immediate legal consequences for advisory committee members. While Administrator Pruitt was careful to note that he was “reserv[ing] the right to exercise my discretion to depart from the procedures set forth in this directive,” that statement is probably not enough to deprive the directive of finality.

The second hurdle is Article III standing. Under the governing test, plaintiffs must demonstrate to a court’s satisfaction that the directive has caused them a cognizable injury. They must also show that a verdict in their favor will redress that injury, at least in part. The most obvious candidates to challenge the directive are advisory board members who were dismissed due to their EPA grant funding or EPA grant recipients who were potential appointees prior to the directive’s issuance. As the 10th Circuit has explained, “Standing predicated upon denial of a fair opportunity to compete for a position or contract is well established.”. Alternatively, environmental groups like the NRDC and the Sierra Club may be able to invoke the ideas of organizational standing and procedural injury to challenge the directive on their members’ behalf. The Fifth Circuit has held that entities with an interest in the accuracy of particular agency decisions have standing to challenge advisory committee irregularities under FACA, although in that case the challenge came from regulated industry rather than from regulatory beneficiaries.

On the merits, one possible challenge to the directive is that it violates FACA’s requirement that advisory committees be “fairly balanced.” As one commentator has noted, the courts are divided on whether this requirement is justiciable. The Ninth Circuit observed that FACA does not “articulate what perspectives must be considered when determining if the advisory committee is fairly balanced,” and thus provides no meaningful standard for judicial review. However, the D.C. Circuit, Tenth Circuit, and Fifth Circuit have reached the opposite conclusion. In a case called Cargill v. United States, the Fifth Circuit not only found the “fairly balanced” requirement justiciable, but it also found that appointing agency grantees to serve on advisory boards at the Department of Health and Human Services (HHS) was not a violation of FACA. “Moreover,” the court concluded, “if HHS were required to exclude from peer review committees all scientists who somehow had been affiliated with the department, it would have to eliminate many of those most qualified to give advice.”

Per Cargill, therefore, status as a grant recipient is not disqualifying under FACA. But arguing that the EPA is not permitted to disqualify grant recipients is much harder. FACA’s “fairly balanced” edict is worded broadly enough to give agencies significant latitude in selecting advisory commission members. A facial challenge to EPA’s directive would likely fail, since there undoubtedly exist qualified members of academia not in receipt of EPA grants. More likely to succeed are as-applied challenges to the makeup of specific EPA advisory committees on the basis of industry over-representation. There is some evidence, however, that courts are inclined to defer to an agency’s selection of advisory committee members.

Plaintiffs might also challenge the directive as arbitrary and capricious under the Administrative Procedure Act (APA) or as a violation of FACA. Courts assessing agency action under the APA’s arbitrary and capricious standard ask, in part, whether an agency has articulated a rational connection between the facts found and the choice made. There is a powerful argument here that EPA’s focus on one version of independence (from the EPA itself) while ignoring another version of independence (from regulated industry) was arbitrary. It could also be argued that the equation of grant receipt with bias is itself an arbitrary conclusion, especially in light of the Fifth Circuit’s Cargill opinion.

Because Administrator Pruitt’s directive was announced on Halloween, it seems fitting to invoke the Celtic origins of that holiday, on which Celtic druids would make predictions about the future. My gloomy prediction is that this directive is not the last blow to agency expertise and unbiased science that we will see from the Pruitt EPA. Advocates should pursue judicial solutions where possible, but the surest remedy for such violations is political. Scott Pruitt is unfit to lead the EPA and should be replaced at the earliest possible opportunity.

Sharon B. Jacobs is a Professor at CU Law and a member of the GWC Board.

 

Saving Coal: A Tale of Two Agencies By CU Law Professor Sharon B. Jacobs

This post originally appeared on the Harvard Law Review Blog

Generating electricity from coal is a dirty business. Coal mining and power production release toxic heavy metals like mercury, respiratory irritants like sulfur dioxide and particulates, and large volumes of heat-trapping gases like carbon dioxide and methane. Nevertheless, the current administration has made no secret of its desire to “save” coal. Its latest effort involved a little-used statutory provision that allows an executive agency to dictate the focus of an independent regulator.

The effort began this past fall when Secretary Rick Perry’s Department of Energy (DOE) issued a Notice of Proposed Rulemaking (NOPR) that would provide guaranteed payments in wholesale energy markets to “fuel-secure” power plants. “Fuel-secure” plants were defined as those with a 90-day supply of fuel on-site, a requirement that only coal and nuclear power can satisfy. Troublingly, the DOE provided no legal justification for its proposed rule. Instead, it argued that the “resiliency” of the nation’s power grid was “threatened” by what it called the “premature retirement” of these power plants. Even that claim is vulnerable to critique. As the Rhodium Group has shown using the DOE’s own data, only 0.00007% of major electricity disruptions nation-wide from 2012–2016 were in fact caused by fuel supply problems.

Curiously, the DOE itself has no authority to finalize such a rule. Instead, its proposed rule directed the Federal Energy Regulatory Commission (FERC) — the ostensibly independent regulatory agency that oversees wholesale electricity markets — to finalize the proposal. So how can the DOE tell FERC what to do? It all goes back to the Department of Energy Organization Act of 1977. That Act created the DOE and transformed the Federal Power Commission into FERC. The Act placed FERC within the DOE but labeled it an “independent agency” and made its commissioners removable by the president only for “inefficiency, neglect of duty, or malfeasance in office.”

Section 403 of the Act, codified at 42 U.S.C. §7173(a), gave the Secretary of Energy authority “to propose rules, regulations, and statements of policy of general applicability with respect to any function within the jurisdiction of [Federal Energy Regulatory] Commission . . . .” The DOE first invoked this authority in 1979 during the nationwide fuel oil shortage, proposing a rule that would allow one-year authorizations to transport natural gas if the DOE certified the gas would be used to displace fuel oil. FERC issued a final rule based on this proposal. While the recent NOPR asserted that the DOE has “subsequently acted under section 403 on several occasions by publication of a NOPR in the federal register,” it did not elaborate. My search revealed only one additional invocation of the provision: in 1985, the DOE proposed a rule setting certain natural gas prices (which also resulted in publication of a final rule). Additionally, in 2000, the DOE considered invoking its authority to propose a rule imposing mandatory electric reliability standards. However, it did not ultimately propose such a rule.

According to 42 U.S.C. §7173(b), once the DOE proposes a rule, FERC must “consider and take final action” on the proposal “in an expeditious manner in accordance with such reasonable time limits as may be set by the Secretary for the completion of action. . . .” In this case, the DOE ordered FERC to take final action on the rule within 60 days. FERC subsequently sought, and the DOE granted, a one-month extension of the deadline.

The statute does not require FERC to adopt the Secretary’s proposal–only to take “final action.” This “final action” could be the adoption of the proposed rule without modification, adoption of a modified form of the proposal, or a decision not to adopt the proposed rule in any form. The DOE has limited recourse if FERC elects not to finalize its proposed rule. Pursuant to another section of the statute, “[t]he decision of the Commission involving any function within its jurisdiction . . . shall not be subject to further review by the Secretary or any officer or employee of the Department [of Energy].” On January 8th, two days before its deadline, FERC respectfully declined to finalize the DOE NOPR. There was no way FERC could have adopted this proposed rule with a straight face. FERC needs a reason to intervene in competitive power markets. Under the Federal Power Act, it must find that the existing market rules are unjust, unreasonable, discriminatory or preferential in order to invalidate them. Not only did the DOE fail to invoke any part of this triggering language, the defenses it did offer of its proposal rang hollow. Commissioner Richard Glick, in his concurrence, noted that the DOE’s “own staff Grid Study concluded that changes in the generation mix, including the retirement of coal and nuclear generators, have not diminished the grid’s reliability or otherwise posed a significant and immediate threat to the resilience of the electric grid.”

Importantly, however, FERC did not frame its response as a loss for the DOE. While it declined to adopt the DOE’s proposed rule, it simultaneously initiated a new proceeding to look at resilience in wholesale power markets. In fact, the Commission seemed to go out of its way to placate the DOE. It stressed in the decision’s first paragraph that “we appreciate the Secretary reinforcing the resilience of the bulk power system as an important issue that warrants further attention.” Only a few sentences later, it assured the DOE that “[t]he resilience of the bulk power system will remain a priority of this Commission.” Commissioner Neil Chatterjee went further in his concurrence, “applaud[ing] Secretary Perry’s bold leadership in jump-starting a national conversation on this urgent challenge.”

What was FERC’s strategy in responding to the NOPR? Perhaps the Commission’s Republican majority, all of whom are recent appointees of President Trump, share Secretary Perry’s concerns about coal and nuclear retirements (or at least about wholesale market “resiliency”). While this particular proposal was indefensible, they might ultimately seek to adopt a better-considered, better-defended rule that identifies an actual problem with wholesale market pricing mechanisms and seeks to remedy it.

A second possibility is that none of the five FERC commissioners (with the possible exception of Commissioner Chatterjee) wish to adopt a rule pricing the “resiliency” attributes of power plants in wholesale markets. Despite this, they may want to keep on the DOE’s good side. FERC must have been aware that the media would characterize its failure to adopt the DOE’s proposal as a loss for the administration. Here are just a few of the headlines that followed FERC’s denial: “Perry says NOPR; FERC Says Nope (To Propping Up Coal) (Forbes); “Rick Perry’s Proposed Coal Bailout Just Died an Unceremonious Death: FERC says “nope” to the NOPR” (Vox); “Critics slam Perry after FERC blocks his ‘crazy Hail Mary’” (Greenwire). FERC may have softened its denial in an effort to mitigate this negative coverage. As I have written elsewhere, even independent regulatory commissions must conserve political capital. FERC may be exercising what Alexander Bickel called the “passive virtues” — placating the DOE in order to shield itself from greater scrutiny and interference.

Secretary Perry has already threatened to pursue other options under the Department of Energy Organization Act, the Federal Power Act and other authorities to support coal plants. Consider this scenario: nothing technically prevents the DOE from invoking Section 403(a) over and over again, monopolizing FERC’s agenda and preventing it from getting any other work done. Although the provision has been invoked infrequently in the past, this is an administration that seems determined to buck convention. The prospect of the provision’s more regular use, coupled with DOE’s abuse of its 403(a) authority in issuing this legally indefensible proposal, suggests that 403(a) has outlived its usefulness. While it may have been helpful as the fledgling agencies sought to understand and clarify their respective powers in the aftermath of reorganization, today its risks outweigh its benefits. It permits an executive agency headed by a member of the president’s cabinet (DOE) to set the agenda for an independent, expert regulator (FERC). Let us hope this is the last we will see of it.

Sharon B. Jacobs is a Professor at CU Law and a member of the GWC Board.