UHLC faculty examine second round of recent U.S. Supreme Court rulings  

August 27, 2015 -- In the second “Supreme Court Update” hosted by the University of Houston Law Center this summer, UHLC faculty discussed cases involving environmental regulation, low-income housing, and redistricting.

The Continuing Legal Education program, held in a UHLC classroom and accessible via a live webinar, brought together three UHLC professors to discuss the backgrounds of the cases, the justices’ rulings and dissents, and their implications for the future.

Tracy Hester

Tracy Hester

First up was lecturer Tracy Hester of UHLC’s Environment, Energy & Natural Resources Center, who discussed Michigan v. EPA, perhaps the most important environmental case the Supreme Court weighed in on during the 2014-2015 term.

Hester explained that the case arose out of the Clean Air Act’s long-standing requirement that the U.S. Environmental Protection Agency must regulate mercury emissions from previously exempt power plants if it determined it was “appropriate and necessary” to control hazardous air pollutants from those plants.

After studying the issue for a decade, the EPA in 2000 made that determination. But, Hester said, the administration of President George W. Bush rescinded that finding and attempted to withdraw the regulation. It wasn’t until 2011, after the D.C. Circuit Court of Appeals overturned EPA’s action, that the EPA under President Barack Obama, again issued new rules for power plant mercury emissions.

Twenty-one states, including Mississippi, sued the EPA and argued essentially that the agency had failed to properly account for economic costs of the new rules.  They pointed out that EPA, by its own admission, only counted the health benefits of the rule when it decided to regulate mercury emissions, Hester said. In its finding, the EPA said it would consider the economic costs only after it had promulgated its endangerment finding and essentially compelled issuance of a final emission standard.

“By the way, that’s exactly how the other provisions work,” Hester said. ”The EPA decided that we would regulate power plants the same way we regulate other sources and pollutants.”

The D.C. Circuit Court of Appeals upheld the EPA’s new rule, and the case went to the Supreme Court. In a 5-4 decision written by Justice Antonin Scalia, the Court struck down the ruling and found that the EPA had not properly considered the costs of its finding. In his opinion, Scalia said the Clean Air Act mandated EPA to consider the costs of implementation under the Clean Air Act.

“As a result, there is a lot of concern, a lot of confusion whirling about as to what the implications of this ruling really are,” Hester said.

He said because the ruling applied only to power plants, which had a separate set of rules on emissions, the scope of the decision is “fairly narrow,” especially since much of the power sector had already begun to build or install new equipment to comply with the EPA regulations.

Perhaps more importantly for the long-term, Hester said, is the concept of “co-benefits” – the benefits derived by reducing other pollutants as a result of reducing mercury emissions. In the decision, the court said it was not ruling on the co-benefits issue at this time, electing instead to decide on that issue later.

“That is extremely interesting to the environmental legal community. Co-benefits being struck down will have a ripple effect on other EPA rules that rely on co-benefits for their justification,” Hester said.

Another key aspect of the ruling that will have implications for the future, he said, is a disagreement seen among the justices over a precedential concept called “Chevron deference,” which essentially means that when the language of a statute is ambiguous, the courts must defer to the interpretations of the agencies that implement them.

“Justice Scalia actually said that the court would defer to the agency’s interpretation. Justice (Clarence) Thomas, however, wrote a concurrence basically saying Chevron is wrong, (that) there are constitutional reasons we should not defer to agencies, because that’s the courts handing over judicial power to the agencies (and) that’s the courts’ sole domain. That Chevron divide is deep and it has a lot of aspects to it. It’s going to come up again,” Hester said.

“The debate is not just environmental, it’s on the nature of deference overall,” he said.

Zachary Bray

Zachary Bray

Professor Zachary Bray addressed the case Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., which dealt with the way the state agency was awarding tax credits for the development of low-income housing in Dallas.

The plaintiff nonprofit agency sued, alleging that the agency used criteria that discouraged such developments in suburban communities, which it said created a “disparate impact” on minorities in violation of the Fair Housing Act, since developments were being concentrated in blighted inner-city neighborhoods.

Although there have been lawsuits claiming “disparate impact” in low-income housing for decades, Bray said, the issue had never been ruled upon by the highest court in the land.

“The central question is whether the (Fair Housing Act) allows plaintiffs to make claims that are based on disparate impact. That there are certain policies that disproportionately affect racial and other minorities even if those policies are neutral on their face,” he said.

After a district court ruled in favor of the nonprofit, Bray said, the state agency appealed. The conservative Fifth Circuit Court of Appeals upheld the decision of the district court. When the case finally reached the Supreme Court, the issues had been boiled down to one simple question:  was it permissible under the law for plaintiffs to sue based on disparate impact claims?

“A lot of people thought the Supreme Court was going to reverse the Fifth Circuit,” Bray said. Instead, in a 5-4 ruling authored by Justice Kennedy, the court upheld the decision allowing plaintiffs to make such claims. But the case was not necessarily an outright victory for the plaintiff.

“While Justice Kennedy said you can make a disparate impact claim under the FHA, this may not be the best example of a successful claim. It’s tough to say as a general matter that the decision to build low-income housing in a blighted inner-city neighborhood instead of a suburb is discriminatory, and vice versa. There’s a danger that the department might adopt racial quotas,” he said, which could later be found to be unconstitutional.

“I don’t think this decision is disastrous, or will change a lot going forward,” Bray said. “If anything, the cautionary notes Judge Kennedy struck at the end of his opinion suggests that the sphere of disparate impact liability might be less going forward than it was after this case. If the court had cut off the possibility of disparate impact suits altogether, that would have been a big, big change.”

D. Theodore Rave

D. Theodore Rave

Professor D. Theodore Rave discussed Arizona State Legislature v. Arizona Independent Redistricting Commission, which dealt with how congressional districts are drawn.

Rave gave an extensive overview of the phenomenon of “gerrymandering,” in which state legislators often draw those lines for individual or partisan benefit.

“Legislators are not shy about this. Most will readily admit this is what they do in redistricting. This system where legislators draw their own district creates a giant conflict of interest. It’s often described as letting the legislators pick the voters instead of the other way around. And nobody really thinks this is a good thing,” he said.

“Even though everyone agrees this is a bad thing, the problem has proven pretty intractable in the political process. The courts have basically thrown up their hands at the problem,” he said.

The few states where there has been the best success in ameliorating the effects of gerrymandering, Rave said, are those that have some form of “direct democracy” such as ballot initiatives or referendum. Among those states is Arizona, which as the result of a ballot initiative formed an independent commission to draw up legislative boundaries, which could not be overruled by the legislature. Some other states including California followed Arizona’s lead.

“There’s only one little problem. The Elections Clause of the U.S. Constitution gives the power to draw the districts to the legislatures of the states,” he said.

The Republican-led Arizona legislature sued the commission, saying its mandate violated the language of the Constitution.

“The narrow issue when it gets to the Supreme Court is ‘What does the word ‘legislature’ mean in the Election Clause?’” he said.

In a 5-4 opinion authored by Justice Ruth Bader Ginsberg, the court found for the independent commission, saying that for the purposes of the Election Clause, the word ‘legislature’ can refer to bodies formed through the legislative process.

“The bigger issue that I think is lurking in the case is the place of direct democracy in our constitutional order,” Rave said. “On one side of this debate is the idea of popular sovereignty (as well as) a pretty strong federalism argument, (that) states get to decide how state laws are made. “

On the other side, Rave said, was a “pretty strong textualist argument” from the dissent, which stood on a direct reading of the word ‘legislature’ in the Constitution.

“I think one thing underlying this argument is a deep suspicion of direct democracy,” Rave said, adding that that viewpoint was seen particularly in the dissenting opinion written by Justice Thomas. Rave pointed out that the framers of the Constitution, out of a fear of “mob rule,” made the United States a republic, not a direct democracy.

“We have a formalist approach versus a functionalist approach. And the court comes down on the functional side,” Rave said.

“The upshot is that this is a good day for direct democracy. The states really dodged a bullet here. If this case had come out the other way, it would have been tremendously disruptive, not just to Arizona and California, but (to) a whole host of other laws that have been passed by direct initiative,” he said.

Rave said that this is not the last word on redistricting in Arizona or elsewhere.  The commission survived, but the Court recently granted review in two more cases, another  out of Arizona and one out of Texas raising two important issues:  the relationship between race and party affiliation; and the concept of “one person, one vote,” especially in states like Texas that have districts with many residents who are ineligible to vote.

“This question goes to the core of what we mean by representation,” he said.

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