Jarkesy’s Potential Implications for EPA Administrative Proceedings

On June 27, 2024, the U.S. Supreme Court decided SEC v. Jarkesy,[1] holding that when the Securities and Exchange Commission (SEC) alleges a defendant has violated securities antifraud provisions and seeks civil penalties, the defendant is entitled to a jury trial in federal court under the Seventh Amendment. The ruling restricts the SEC’s use of its own in-house administrative tribunal with its own administrative law judges (ALJs), which the SEC has historically used to pursue antifraud claims. While the Court’s ruling focuses on the SEC, the principles underlying the decision may be applied more broadly to restrict the ability of other federal agencies, including the Environmental Protection Agency (EPA), to pursue civil penalties via their own administrative proceedings.

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Upcoming Decision From U.S. Supreme Court Could Further Restrain Authority of Administrative Law Judges

Two cases recently argued before the U.S. Supreme Court address the question of whether federal agencies have authority to mandate proceedings before administrative law judges (ALJs). The plaintiffs in these cases have challenged the constitutionality of ALJ proceedings and, depending on how broadly the resulting opinion is written, the Court’s decision could limit the authority of ALJs across the federal government including within the Environmental Protection Agency (EPA).

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Energy Companies Petition U.S. Supreme Court to Review Remand of Climate Change Litigation to State Court

On October 14, 2022, BP, Chevron, ExxonMobil, and other major energy companies petitioned the U.S. Supreme Court to review a decision by the Fourth Circuit Court of Appeals to send a climate change lawsuit back to state court (the Petition). In the underlying lawsuit, the City of Baltimore is seeking climate-change-related infrastructure damages for the defendants’ alleged deception of consumers and the public about climate change. The defendants previously removed the case to federal court, but the District Court for the District of Maryland remanded the case to state court—a decision the Fourth Circuit later upheld. (more…)

Texas Supreme Court Holds Texas Commission on Environmental Quality Definition of “Operator” Controls Over Judicial Interpretation

On February 11, 2022, the Supreme Court of Texas issued its opinion in Texas Environmental Quality et al. v. Maverick County, et al., a case that addressed the meaning of the term “operator” in the context of the application for an issuance of Texas Pollution Discharge Elimination System (TPDES) permits. Maverick County provides clarity about who must apply for a TPDES permit, particularly in the context of facilities owned by one entity but operated day-to-day by another. The decision also provides a helpful analysis of what definitions govern when a judicial interpretation differs from the language provided by an agency pursuant to its statutory authority. (more…)