July 15 was a busy day at the U.S. Court of Appeals for the District of Columbia Circuit, as five important decisions were
issued. What was remarkable and worth noting is that Judge Judith Rogers, a member of the court since 1994, was the author of unanimous opinions in three very important administrative cases:
Recently the U.S. Court of Appeals for the Fifth Circuit issued an important decision regarding the Clean Air Act (CAA) and the interactions between EPA and the states. On July 15, Fifth Circuit, in a unanimous ruling, granted a stay of the U.S. Environmental Protection Agency’s (EPA) Final Rule promulgated in 2016 (81 Fed. Reg. 296 (Jan. 5, 2016)). The Final Rule partially approved and partially disapproved the regional haze plans developed and submitted to EPA as a state implementation plan (SIP) by Texas and Oklahoma and replaced the disapproved SIP provisions with a Federal Implementation Plan. The EPA promulgated the Final Rule nearly seven years after Texas submitted its SIP and nearly six years after Oklahoma submitted its SIP. This decision, written by Judge Elrod, is a long and complex journey through the CAA, and is quite critical of EPA handling of these issues. The case is State of Texas, et al. v. EPA.
Bi-partisan legislation has been introduced in the House of Representatives (H.R. 5685), known as the 
“Farm Regulatory Certainty Act,” a bill that would amend Resource Conservation and Recovery Act’s (RCRA) definition of “solid waste” (42 U.S.C. § 6903 (27)) to exclude “animal waste, manure, fertilizer, or constituents derived from such sources.” A recent U.S. District Court ruling in Washington State, Community Association for the Restoration of the Environment v. Cow Palace, LLC, held that manure qualifies as a solid waste under RCRA, triggering RCRA’s imminent hazard provisions. The Cow Palace decision alarmed members of the agricultural community. The proposed legislation states that Congress never intended RCRA to govern such waste. The legislation would also amend RCRA’s Citizen Suit provisions to explicitly exclude diligent enforcement actions, whether administrative or judicial, taken by state and federal officials. It appears that alleged violations of approved State Plans approved under RCRA Section 4007 would also be excluded.
Public development and infrastructure projects are on the rise in California. This is a good thing for the economy. 
But it also means that private property will often be needed to complete these projects. Public agencies may acquire private property upon payment of just compensation, without the owner’s consent, through an eminent domain action. Property near highways, railroads, public utilities, government buildings and other public facilities are frequent acquisition targets for expansion of these facilities, as are those properties in the path of development of growing cities. But virtually any property may be subject to public acquisition, either through condemnation of the entire property or of easements in the property.
Recently, my colleagues Brian Blum and Jim Chudy published an interesting piece titled Five Things about the IRS’s Proposed Regulations on the Spinoff Device and Active Business Tests discussing the IRS’ recent proposal of long-anticipated regulations tightening the “device” and “active trade or business” tests that are necessary for a corporation to distribute a subsidiary in a tax-free spinoff under Section 355 of the Internal Revenue Code. The proposed rules are in response to widely publicized spinoffs in which tiny businesses were matched with large minority equity interests or pools of
investment assets.
On July 7, the U.S. District Court for Alaska decided the case of Castle Mountain Coalition, et al., v. Office of Surface Mining Reclamation and Enforcement, 
holding that a mining permit issued under the Surface Mining Control and Reclamation Act (SMCRA) is terminated by operation of law if the mining activities authorized by the permit have not commenced within three years of the date of issuance, unless an authorized extension has been granted pursuant to the SMCRA. In this case, since no extension was granted after the first extension, the Court concluded that mining operations on the Wishbone Hill Coal Project that finally commenced many years later are not permitted. In so ruling, the Court rejected the argument of Office of Surface Mining Reclamation and Enforcement (OSM), an agency of the Department of the Interior, that SMCRA does not require the permit to be terminated if no special termination proceedings have been initiated, and vacated the OSM determination.
On July 8, the Illinois Supreme Court, in Hampton, et al., v. Metropolitan Water Reclamation District of Greater Chicago, 
held that temporary flooding of the plaintiffs’ residential properties located in the Chicago area can be the subject of a “taking” for which they may be entitled to just compensation under the Illinois Constitution. Following very heavy rains in July 2010, the Metropolitan Water Reclamation District of Greater Chicago allegedly diverted storm water to nearby creeks and took other actions which exacerbated local flooding conditions. The lower court, relying on Illinois case law, held that Illinois does not recognize a takings claim based on temporary flooding. However, the plaintiffs argued that the United States Supreme Court’s 2012 decision in Arkansas Game and Fish Commission v. United States, which held that temporary flooding can constitute a “taking” under the federal constitution must be acknowledged.
Anyone doing international construction work knows that the U.S. Securities and Exchange Commission’s (SEC) has been continually increasing its Foreign Corrupt Practices Act (FCPA) focus on U.S. companies doing business overseas. Here’s the latest: Recently my colleagues William Sullivan and Reza Zarghamee wrote an interesting piece
, New SEC Payment Disclosure Rules Raise FCPA Concerns for Energy Companies, on the SEC June 27, 2016 announcement that it had adopted final rules requiring public disclosure, among other things, of certain payments made to foreign governments by resource extraction issuers in connection with the commercial development of oil, gas and mineral rights. These disclosure requirements are expected to raise FCPA enforcement concerns for energy companies, as both the SEC and the U.S. Department of Justice will scrutinize this information for cause to open parallel investigations and potentially pursue issuers for alleged FCPA violations.
Photo: Sean MacEntee, energy, Taken May 19, 2010 – Creative Commons
The issue of the relentless growth and penetration of administrative law remains a compelling topic for those operating in heavily regulated industries like the construction industry. Chris DeMuth, a Fellow at the Hudson Institute, recently wrote Can the Administrative State be Tamed?, an interesting essay in which Demuth provides his perspective on this topic. The administrative state has continued its inexorable growth regardless of whether the President is a Democrat or a Republican. Demuth’s essay was recently published in the Journal of Legal Analysis. It does not address last year’s King v. Burwell decision of the U.S. Supreme Court, which held that some legislation is too fundamentally important to give an agency “Chevron Deference” when it interprets the law it is implementing, but it does mention a Department of Agriculture regulation requiring magicians using rabbits in their acts to prepare and submit to the appropriate authorities a disaster response and contingency plan.
Additional Source: Complexities of Administrative State Lead to Win for Regulated Community
On July 5, the U.S. Court of Appeals for the DC Circuit, in Public Employees for Environmental Responsibility v. Hopper, Acting Director of the U.S. Bureau of Ocean Energy Management, reviewed the District Court’s dismissal of a lawsuit alleging that the Government’s approval of a Cape Cod offshore wind energy project violated several environmental statutes. The Court of Appeals held that the National Environmental Policy Act (NEPA) finding made by the primary permitting agency, the U.S. Bureau of Ocean Energy Management (Bureau), did not take a sufficiently “hard look” at the proffered geophysical evidence, and that an Endangered Species Act (ESA) “incidental take” determination must be set aside because the U.S. Fish and Wildlife Service should have considered the submissions of the plaintiffs. Otherwise, the Court of Appeals was satisfied with the project’s compliance with the other permitting and development requirements. The Court of Appeals notes that “[o]ffshore energy providers like Cape Wind must comply with a slew of federal statutes designed to protect the environment, promote public safety, and preserve historic and archeological resources on the outer continental shelf.”
