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Courts Find Standing Key Barrier to Pre-Enforcement Review of Federal Actions

Over the last week, pre-enforcement challenges to two separate federal government actions have been dismissed for lack of standing.  In Commonwealth of Kentucky et al. v. EPA, et al., No 3:23-cv-00007-GFVT, 2023 WL 2733383 (E.D. Ky. March 31, 2023), the Honorable Gregory F. Van Tatenhove of the United States District Court for the Eastern District of Kentucky dismissed without prejudice claims brought by the Commonwealth of Kentucky (the “Commonwealth”) and private-sector plaintiffs challenging the United States Environmental Protection Agency’s (“EPA”) and Army Corps of Engineers’ rule redefining “waters of the United States” under the Clean Water Act.  Five days later, in The State of Louisiana, et al. v. Joseph R. Biden, Jr., et al., No. 22-30087, 2023 WL 2780821 (5th Cir. April 5, 2023), the Honorable Jacques L. Wiener, Jr. of the United States Court of Appeals for the Fifth Circuit dismissed states’ challenges to President Biden’s social cost of greenhouse gases established pursuant to Executive Order No. 13990 (the “Executive Order”).  Both cases demonstrate the importance of alleging sufficient harm to confer federal court jurisdiction.

Commonwealth of Kentucky

The Clean Water Act grants EPA and the Army Corps of Engineers jurisdiction over “navigable waters,” which it defines as “the waters of the United States.”  33 U.S.C. § 1362(7).  Since the passing of the Clean Water Act in 1972, EPA, the Army Corps of Engineers, and courts have attempted to define what constitutes “waters of the United States.”  On January 18, 2023, EPA and the Army Corps of Engineers issued a final rule revising the definition of “waters of the United States.”  88 Fed. Reg. 3004 (Jan. 18, 2023).  The Commonwealth and private-sector plaintiffs filed separate complaints and the cases were consolidated.  The plaintiffs filed Motions for Preliminary Injunction asking the court to enjoin the agencies from enforcing the rule.  Defendants alleged that the plaintiffs did not have standing. 

Article III of the United States Constitution confers Federal courts jurisdiction over “cases and controversies.”  U.S. Const. art. III § 2.  In evaluating whether the plaintiffs established an irreparable injury sufficient to confer jurisdiction, Judge Van Tatenhove evaluated whether the plaintiffs had standing and whether the matter was ripe for review.  Commonwealth of Kentucky, at *3.  “Standing requires (1) an injury-in-fact that is (2) traceable and (3) redressable.”  Id., citing Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016).  “Ripeness asks whether the alleged injury-in-fact is ‘certainly impending.’”  Commonwealth of Kentucky, at *3, citing Nat’l Rifle Assoc. of Am. v. Magaw, 132 F.3d 272, 280 (6th Cir. 1997). 

First, Judge Van Tatenhove evaluated whether the private-sector plaintiffs had standing to challenge the rule.  The private-sector plaintiffs’ alleged injuries fell into two categories:  (1) increased costs from more waters being subject to Clean Water Act jurisdiction than before, and (2) increased costs due to having to conduct new surveys to determine whether waters are now subject to federal jurisdiction.  Judge Van Tatenhove found both categories too speculative to confer organizational and associational standing, as the private-sector plaintiffs “do not identify any specific water feature or related project and explain how the [revised rule] will affect it.”  Commonwealth of Kentucky at *5.  While one private-sector plaintiff identified three permit projects that it was currently working on with the Army Corps of Engineers involving ephemeral streams or isolated wetlands, which are all likely to be impacted by the rule, Judge Van Tatenhove found that this too fell short of conferring standing, as the plaintiff did not explain why or how the rule change impacts these projects.  Id. at *6.  Judge Van Tatenhove also dismissed arguments that the increased costs to conduct new surveys constituted an injury.  While Judge Van Tatenhove acknowledged that compliance costs may constitute injury, he found that the costs of permitting and jurisdictional assessments of future projects are not enough, as this assessment and costs would be required regardless of the revised rule. 

Next, Judge Van Tatenhove evaluated the Commonwealth’s alleged injuries.  The Commonwealth argued that (1) the rule infringed upon its sovereignty by expanding Clean Water Act jurisdiction to encompass more waters and (2) it faced economic injury because of the increased costs to incorporate the rule into its regulations.  Judge Van Tatenhove held that the rule did not infringe upon the Commonwealth’s sovereignty but found that an infringement could exist if the Commonwealth identified a water that should be in its exclusive control which now fell within federal jurisdiction.  Judge Van Tatenhove also found that the alleged economic injury was insufficient to confer standing, as the Commonwealth did not identify the amount of costs that would allegedly occur.  While the plaintiffs may be able to establish injury once the agencies enforce the rule, “judges are not librarians wandering around the reading rooms looking for a topic that catches their fancy.  The Constitution limits their reading list… [and] [t]his dispute is not yet a ‘case or controversy’… . [T]he Court… must dismiss the action.”  Id. at *10. 

State of Louisiana

On January 20, 2021, the Biden Administration issued the Executive Order re-establishing an interagency working group to formulate guidance on the social cost of greenhouse gases to be considered by federal agencies when policymaking.  On February 21, 2021, the working group published a technical support document identifying interim estimates of the social cost of carbon, methane, and nitrous oxide.  Ten states filed a challenge to the Executive Order and the interim estimates as procedurally invalid, arbitrary and capricious, inconsistent with statutes, and ultra vires.  The district court granted a preliminary injunction preventing defendants from adopting, employing, treating as binding, or relying on work product of the working group, using estimates based on certain assumptions, and relying on or implementing the Executive Order in any manner.  Defendants appealed the preliminary injunction. 

Judge Wiener evaluated whether the plaintiffs had standing, i.e., whether plaintiffs (1) suffered an alleged injury in fact (2) that is fairly traceable to the challenged conduct and (3) that is likely to be redressed by a favorable judicial decision.  Plaintiffs alleged direct fiscal and economic harms because the resulting regulations would burden the states and result in more heavily regulated goods, services, and industries, procedural injury, since they could not comment on the interim estimates, and an infringement on their sovereignty.  Judge Wiener found that plaintiffs failed to demonstrate an injury in fact because plaintiffs’ alleged harms “rely on a highly attenuated chain of possibilities.  Id. at *4.  First, Judge Wiener held that the plaintiffs failed to establish sufficient economic injury, as nothing in the Executive Order requires states to implement the interim estimates and, while federal agencies must factor the interim estimates into its deliberations, no final federal action has relied on the interim estimates.  Second, Judge Wiener dismissed the states’ procedural injury arguments, as “[m]erely being ‘denied the ability to file comments’ is ‘insufficient to create Article III standing’” because the interim estimates alone, without further agency action, will not cause concrete harm.  Id. at *5.  Lastly, Judge Wiener dismissed plaintiffs’ sovereignty arguments, as the interim estimates have no direct effect on the states’ law or policies.  In dismissing the action for lack of jurisdiction, Judge Wiener opined that “[t]he states cannot do away with their alleged parade of horribles in a single swipe at the duly elected executive.  Although the ‘case-by-case approach that this requires is understandably frustrating [to plaintiffs],’ this remains ‘the traditional, and remains the normal, mode of operation of the courts.’”  Id. at *6.