Category: Environmental Law

1

Agencies in the Cathedral?

AgenciesAreas of law dominated by government agencies haven’t taken advantage of the rich literature on property rules and liability rules, which are “workhorse concepts that permeate every corner of the economic analysis of law.” In their 1972 article Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, Calabresi and Melamed observed that there are fundamentally two types of remedies: (1) property rules, such as injunctions or disgorgement, which aim to deter, and (2) liability rules, like compensatory damages, which aim to compensate. This framework has paid rich dividends in areas like torts, property, IP, contracts, and conlaw — but seems to have bypassed areas of law dominated by agencies.

Government agencies’ remedies can be classified as either property rules or liability rules. For example, if a business has a permit from the EPA but violates the permit’s conditions, the remedy could be either taking away the permit (a property rule), or requiring proportional compensation (a liability rule). Similarly, if a broker has a license from the SEC and violates securities law, the remedy could be either yanking the license (a property rule), or requiring compensation for the harmed parties (a liability rule).

I apply the property rule and liability rule framework to my favorite agency — the IRS — in a forthcoming Virginia Law Review article. When a taxpayer violates a tax-law requirement, the remedy can be either yanking the taxpayer’s favorable tax status (a property rule), or requiring compensatory additional tax (a liability rule). Counterintuitively, anecdotal evidence shows that property-rule remedies may be less effective at deterring violations, because the threat of political and media blowback may make the IRS unwilling to impose a draconian property-rule remedy. As a result, when Congress protects a requirement with the property-rule remedy of yanking a favorable tax status, politically-powerful or sympathetic taxpayers are rarely deterred from violating the requirement. The IRS doesn’t dare impose it. Surely similar problems plague enforcement by other agencies.

Anyone working in any agency-dominated area of law could consider how the property-rule/liability-rule framework fits into their area.

1

Surveillance You Might Dig

NOAA’s video of green patterns earth shows how visualization helps show what data may indicate. The assertion that the visualization and data analysis helps understand weather, fire seasons, fertile areas, droughts, and more are tantalizing. If true at some level, this surveillance seems cool.

0

Double deference

I know that I am supposed to be caught up along with everyone else in the same-sex marriage cases, but I am still distracted by Decker v. Northwest Environmental Defense Center, decided last week at the Supreme Court. In a separate opinion designed to push the buttons of what Scotusblog’s John Elwood called Supreme Court nerderati, Justice Scalia again called for the reconsideration of the principle of Auer deference. Auer says that just as courts should defer to agencies’ reasonable interpretations of ambiguous provisions in their organic statutes, so should they defer to agencies’ reasonable interpretations of ambiguous provisions in regulations that they themselves promulgate. Chief Justice Roberts and Justice Alito suggested that they would also be open, in a different case, to reconsidering Auer.

Read More

0

Fossil Cycad National Monument: An Anniversary, of Sorts

Almost exactly fourteen years ago, around the time I began law school, I attended an informal presentation by an esteemed history professor at Yale, Robin Winks. The presentation was part of a series with the theme “Works in Progress.” Professor Winks told me and the dozen or so other attendees that his work in progress involved a book that would detail his visits to every single unit—more than 300 of them—within  the National Park system.

Professor Winks’ punctilious nature compelled him to visit not only currently recognized parks, monuments, and historic sites, but also those that had been decommissioned, transferred to another authority, or abolished outright. (National parks and monuments are creatures of statute and executive order, and therefore can of course be abolished by legislative act. Here is a list of parks and monuments that have met this fate.) In doing so, he tracked down and surveyed what remained of the one abolished monument that I knew well from my days as a seasonal ranger: Fossil Cycad National Monument, in South Dakota.

Fossil Cycad National Monument had a short, sad life. A prehistoric cycad resembled a modern palm tree, and served as Dinosaur Chow back in ancient times.  Discovery of a large bed of fossil cycads in the southern Black Hills in the late 1800s led to the designation of a monument there in 1922. (Then, as now, there were no strict criteria for qualification as a national park or monument, leading to dubious designations like the gone, and rarely remembered, Sully’s Hill National Park in North Dakota. A similar dynamic sometimes appears with sports halls of fame, where early selections for enshrinement sometimes seem ill-considered once time passes, and the criteria for inclusion become more settled. Fossil Cycad and Sully’s Hill represented, essentially, the Candy Cummings and Tommy McCarthy of the national park system.) As it turned out, however, no one really cared that much about a bunch of fossilized palm trees. No visitor center was ever built on the site, and no caretaker was appointed to ward off looters. Not that there was all that much to loot; as it turns out, all of the cycads visible from the surface were probably already gone by 1922, when President Harding created the monument.

And so, precisely 55 years ago–on September 1, 1957–Fossil Cycad National Monument was officially abolished by an act of Congress. Today, what was once Fossil Cycad National Monument is indistinguishable from the surrounding ranch land.  And unfortunately, we’ll probably never get to read Professor Winks’ impressions of the site. He died in 2003, before he published his book. I’ve often wondered what became of Professor Winks’ notes relating his journeys; I would love to read them, if they still exist.

War on Disclosure: Recent Fronts in Health Care

Corporations are fighting disclosure requirements in many fields.  Two notable fronts have recently opened in health care:

1) Fracking has been controversial in part because secret chemicals may end up compromising water supplies.  Pennsylvania has now limited doctors’ ability to speak about their concerns:

Under a new law, doctors in Pennsylvania can access information about chemicals used in natural gas extraction—but they won’t be able to share it with their patients. . . .Pennsylvania law states that companies must disclose the identity and amount of any chemicals used in fracking fluids to any health professional that requests that information in order to diagnosis or treat a patient that may have been exposed to a hazardous chemical. But the provision in the new bill requires those health professionals to sign a confidentiality agreement stating that they will not disclose that information to anyone else—not even the person they’re trying to treat.

Protection of property rights uber alles appears to be the guiding principle here.  If only the doctors wanted to market drugs, maybe their free speech rights would trump the frackers’ trade secrecy privileges.

2) FDA User-Fee Bills recently approved by the House and Senate could seriously limit access to data about drugs.  The House bill is particularly worrisome:

The Food and Drug Administration Reform Act of 2012, H.R.5651 . . . would keep potentially important health and safety information away from the public. Section 812 would, according to a letter to leaders of the House Oversight and Government Reform Committee penned by several [advocacy] groups, deny the public access to information relating to drugs obtained by the U.S. Food and Drug Administration (FDA) from any government agency — local, state, federal, or foreign — if that agency has requested that the information be kept confidential.

If that House provision survives the conference committee, there will be troubling implications for US patients and research subjects abroad.

0

The Yale Law Journal Online: Preventing Policy Default: Fallbacks and Fail-safes in the Modern Administrative State

The Yale Law Journal Online has published the third in a series of responses to Benjamin Ewing and Douglas A. Kysar’s recent article, Prods and Pleas: Limited Government in an Era of Unlimited Harm, which appeared in the November issue of The Yale Law Journal. In their article, Ewing and Kysar argue that the traditional constitutional model of “checks and balances” could be improved by incorporating “prods and pleas,” through which different government branches incentivize action from other branches. To set forth their argument, Ewing and Kysar explore federal climate nuisance litigation as an example and analyze how prods and pleas function in that arena.

In Preventing Policy Default: Fallbacks and Fail-safes in the Modern Administrative State, Daniel A. Farber argues that Ewing and Kysar place too much focus on common law. He writes that, with respect to climate change, “[t]he common law is simply not where the action is in today’s world.” Instead, he suggests that public law litigation and state legislative activity are more useful mechanisms for “fill[ing] the gaps created by congressional or presidential policy defaults.”

Preferred Citation: Daniel A. Farber, Preventing Policy Default: Fallbacks and Fail-safes in the Modern Administrative State, 121 YALE L.J. ONLINE 499 (2012), http://yalelawjournal.org/2012/02/21/farber.html.

Previous responses in this series:

Richard A. Epstein, Beware of Prods and Pleas: A Defense of the Conventional Views on Tort and Administrative Law in the Context of Global Warming, 121 YALE L.J. ONLINE 317 (2011), http://yalelawjournal.org/2011/12/06/epstein.html.

Jonathan Zasloff, Courts in the Age of Dysfunction, 121 YALE L.J. ONLINE 479 (2012), http://yalelawjournal.org/2012/02/14/zasloff/html.

0

A Commons Comedy Fueled by Data

Imagine you are a fisherman and haul in a catch with fish that are protected and that would get you in trouble. Quick! Hide it! Deny it! etc., right? Nope. The Times reports that a partnership among fishermen and the Nature Conservancy meant that this fisherman reported the catch so the overall area could thrive.

The story starts in the usual eco-group takes on industry way with the NC buying “out area fishing boats and licenses in a fairly extreme deal — forged with the local fishing industry — to protect millions of acres of fish habitat.” But the NC put the fleet back to work using a commons model.

Bringing information technology and better data collection to such an old-world industry is part of the plan. So is working with the fishermen it licenses to control overfishing by expanding closed areas and converting trawlers — boats that drag weighted nets across the ocean floor — to engage in more gentle and less ecologically damaging techniques like using traps, hooks and line, and seine netting.

The conservancy’s model is designed to take advantage of radical new changes in government regulation that allow fishermen in the region both more control and more responsibility for their operating choices. The new rules have led to better conservation practices across all fleets, government monitors say.

The challenges here were that “There wasn’t scientific information at that level that could match the fisherman knowledge.” Fisherman did not trust the NC, but when the NC bought some of the boats or permits from those who wanted to leave the industry, “The fishermen soon divulged which nurseries and rock formations needed to be protected and which areas where mature fish congregated should be left open. What resulted was a proposal that included large areas of closings — nearly 4 million acres — that most fishermen thought was fair. It was adopted easily by the fishery council in 2006.”

Now let’s look at the data magic. The NC uses a system called eCatch. According to the Times, fisherman were not sure about this reporting requirement “But fishermen have come to believe that the data will show patterns — for example, high catch rates of certain species after full moons along the edge of the shallow water shelf in July — that will help them all predict the danger zones. Independent fisherman have joined the risk pool and eCatch system because they see benefits. By handing out free iPads, the conservancy made the posting of real-time results almost effortless.”

And, it seems other areas are emulating this approach. “In Massachusetts, scallop fishermen, with the help of the University of Massachusetts, have developed a similar reporting program to avoid pulling in endangered yellowtail flounder.” Could lobster fishermen be far off from this method? Afterall at least with other seafood efforts the new method “yields profits and hardly any bycatch” (the term for catching sensitive species which can lead to market problems). And in what looks like another aspect of this commons comedy, in one case a family that sold its permit and leases it back at fair market value as long as the method “continues to use Scottish seining, which is far gentler to the ocean bottom than trawling is.”

Rather than the fight between nature groups and industry the fisherman offered a different picture: “The Nature Conservancy had identified that the small family boats were sustainable, and they wanted to help,” Mr. Fitz said. “We recognized that we needed help negotiating this increasingly confusing path into the future.”

1

Recommended Reading: The People’s Agents and the Battle to Protect the American Public

My colleague Rena Steinzor and Sidney Shapiro recently published The People’s Agents and the Battle to Protect the American Public: Special Interests, Government, and Threats to Health, Safety, and the Environment (University of Chicago Press).  The book analyzes the performance of five agencies they call the “protector agencies:”  the Consumer Product Safety Commission, Environmental Protection Agency, Food and Drug Administration, National Highway Traffic Safety Administration, and Occupational Safety and Health Administration.  Its findings are grim.  Using case studies, the book shows how the protector agencies are malfunctioning and explores the sources of the trouble.  It attributes the disappointing performance of the agencies to external pressures, including the President’s requirement that agencies engage in cost-benefit analysis before issuing a major rule and other forms of Presidential interference as well as the weakening of the civil service and inadequate funding and staffing of agencies.  The book offers thoughtful solutions that are carefully tailored to the problems that the authors identify.

Richard Pierce reviewed the book in the George Washington Law Review, and he writes that this “excellent book is compulsory reading for anyone who is interested in the performance of regulatory agencies.”  For Pierce, the “book is so well researched and well written that I learned a lot even from the chapters with which I disagree.”  He explains that, for instance, while he continues to believe in agency cost-benefit analysis for major rules, the authors “do such a good job of criticizing the cost-benefit analysis requirement and of documenting its bad effects that I am forced at least to acknowledge the need for major changes in the ways in which agencies and the White House implement” it.  The authors also “provide an accurate and persuasive account of the many adverse effects of the hard look doctrine,” that is, the judicial requirement that an agency must take a hard look at a problem and its potential solutions before issuing a rule, and prescribe a new approach that would be less intrusive and more determinate.  Pierce ends the review with this:

Justice Scalia once said that ‘Administrative law is not for sissies –so you should lean back, clutch the sides of your chairs, and steel yourselves for a pretty dull lecture’  I highly recommend that anyone who is interested in the future of administrative law and government regulation read Steinzor and Shapiro’s important book.  But to paraphrase Justice Scalia, you should not read the Steinzor and Shapiro book in conjunction with this review unless you are prepared to “lean back, clutch the sides of your chairs, and steel yourselves for” a serious encounter with depression.  Oh, and you should make sure there are no sharp objects in the vicinity if you take seriously both the points Steinzor and Shapiro make in their book and the points I make in this review.”