1113
Chapter 46
Environmental Law
See Separate Lecture Outline System
INTRODUCTION
Fifty years ago, there were only a handful of statutes and regulations, plus old common law concepts, governing the
environment. Regulation was initially aimed at cleaning up damage to the environment. At the end of the 1970s, there was a
shift toward preventive regulation, on the theory that preventing injury to the environment is less expensive than cleaning up
damage after it has occurred. Controlling waste is not without a price, however. For many businesses, the costs are high, and
for some they are too high. There is a constant tension between the desirability of increasing profits and productivity and the
need to attain quality in the environment. This chapter considers some of the major federal environmental laws.
ADDITIONAL RESOURCES—
VIDEO SUPPLEMENTS
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The following video supplements relate to topics discussed in this chapter—
PowerPoint Slides
To highlight some of this chapter’s key points, you might use the Lecture Review PowerPoint slides compiled for
Chapter 46.
Business Law Digital Video Library
The Business Law Digital Video Library at www.cengage.com/blaw/dvl offers a variety of videos for group or
individual review. Clips on topics covered in this chapter include the following.
• Drama of the Law
CHAPTER OUTLINE
I. Common Law Actions
Common law doctrines that were applied against polluters centuries ago may still be applied today.
A. NUISANCE
Persons may be liable if they use their property in a way that unreasonably interferes with others’ rights to use or
enjoy their property. Courts balance the equities between the harm caused and the cost of stopping it.
• Distinct harm separate from that affecting the general public is a private nuisance. Some states require this
to support standing for an individual plaintiff.
• A public authority can maintain an action to stop a public nuisance.
B. NEGLIGENCE AND STRICT LIABILITY
Businesses may be sued under these theories.
ADDITIONAL BACKGROUND—
Proof
The environment receives pollution from many sources. No one source by itself would produce the damage
caused by all the sources together. Because of the widespread effects of pollution, it may be impossible to provide
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twentieth century, the plaintiff was not able to sue all of the firms simultaneously. Consequently, specific proof of
damages in individual actions was often impossible.
Another difficulty concerning proof has been to relate specific diseases to particular pollution. There is not always
medical or scientific certainty that a particular source of pollution caused a specific disease. These difficulties in
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II. Federal, State, and Local Regulation
A. STATE AND LOCAL REGULATIONS
Many states regulate pollution (for example, by requiring changes in proposed developments). State laws restrict
discharge of chemicals into the water or air (including emissions from motor vehicles), and regulate disposal of
toxic wastes and disposal or recycling of other wastes (metal, plastic, paper). Local governments regulate waste
and garbage removal and disposal, the appearance of buildings and other structures, and noise.
ENHANCING YOUR LECTURE—
ENVIRONMENTAL TAKINGS
Environmental regulations and other legislation to control land use are prevalent throughout the United States.
Generally, these laws reflect the public’s interest in preserving natural resources and habitats for wildlife. At times,
their goal is to enable the public to have access to and enjoy limited natural resources, such as coastal areas. Although
few would disagree with the rationale underlying these laws, the owners of the private property directly affected by
the laws often feel that they should be compensated for the limitation imposed on their right to do as they wish with
their land.
environmental regulations that limit private property owners’ uses of their property constitute a “taking” of private
Fifth Amendment.
In some cases, the courts have held for the property owners on this issue. In others, however, the courts have
sided with government regulators. We consider here two significant cases concerning this issue, both of which
ultimately came before the United States Supreme Court.
THE DEL MONTE DUNES CASE
One case involved an owner of oceanfront property in Monterey, California. The owner had applied to the city of
Monterey on several occasions for a permit to build a residential development. Each time, the city denied the use of
more of the property until none of it remained available for any use. In effect, the entire property had to be left in its
natural state. The city claimed that it was seeking to protect various forms of wildlife that inhabit the coastal sand
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The city then appealed to the United States Supreme Court, arguing that the question of whether a taking had
occurred should have been decided by a judge, not a jury. The Supreme Court, however, held that whether a taking
has occurred is a predominantly factual question and, thus, was a question for a jury to decide.b
The Del Monte Dunes case was regarded as a victory for property rights advocates. For state and local
governments, however, the decision meant that they would find it more costly to preserve natural resources in their
communities.
THE TAHOE CASE
Most of the affected property owners were older couples who had purchased their lots decades earlier and had
planned to build their retirement homes along the lake. The moratorium, however, allowed no exceptions and forbade
any land use whatsoever. The regulations were so stringent that some owners were even forbidden to enter their own
land without the agency’s permission. Ultimately, the owners sued the agency, claiming that a regulatory taking had
occurred. Even if the taking was only temporary, the regulations had forced the owners to give up all reasonable use of
their land, economically and personally, for a period of time, and they deserved to be compensated for this
deprivation.
Court said no categorical rule could be stated; the answer always depends on “the facts presented.”c
FOR CRITICAL ANALYSIS
Even though the Supreme Court sided with the regulators in the Tahoe case, the debate over environmental
takings continues. On the one hand, states, cities, and other local governments want to preserve their natural
resources and need some authority to regulate land use to achieve this goal. On the other hand, private property
owners complain that they alone should not have to bear the costs of environmental preservation, given that all
members of the public reap the benefits. Should private landowners be compensated when their land is
essentially “taken” for public use by environmental regulations? Should landowners be compensated even
when a taking is temporary?
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B. FEDERAL REGULATION
1. Environmental Regulatory Agencies
2. Environmental Impact Statements
• An action qualifies as major if it involves a substantial commitment of resources (monetary or other).
An action is federal if a federal agency has the power to control it.
• An EIS must analyze (1) the impact on the environment that the action will have, (2) any adverse
III. Air Pollution
Federal law provides a basis for regulations of pollution emitted from mobile and stationary sources.
A. MOBILE SOURCES
Federal regulations specify standards and timetables for mobile sources (cars, trucks, and other motor vehicles).
The EPA updates these and other standards to reduce emissions further when new scientific evidence is available.
In 2009, the EPA concluded that greenhouse gases, including carbon dioxide, are a public danger.
ADDITIONAL BACKGROUND—
Ensuring Compliance with
Mobile Source Regulations under the Clean Air Act
Some of the most recent mobile source regulations are discussed in the text. Other provisions amending the
Clean Air Act cover the introduction of alternative-fuel vehicles in California. To ensure compliance with emission
regulations, the EPA certifies a prototype of a new car whose emission controls are effective up to 50,000 miles. The
EPA may inspect production models. If a car does not meet the standards in actual driving, the EPA can order a recall
B. STATIONARY SOURCES
Under the Clean Air Act, the primary responsibility for controlling and preventing pollution from stationary
sources (manufacturing plants and so on) rests with the states. The focus is on hazardous air pollutants (HAPs),
which are likely to cause death or serious illness such as cancer.
1. Listing of Hazardous Air Pollutants
The EPA lists about 200 HAPs.
CASE SYNOPSIS—
Case 46.1: State of New Jersey v. Environmental Protection Agency
The Environmental Protection Agency (EPA) published a rule—the “Delisting Rule”—that had the effect of
removing from its regulation the emissions of mercury from steam generating electricity plants that used coal or oil as
their energy sources. This rule ran counter to the EPA’s previous conclusion that it was “appropriate and necessary” to
regulate mercury emissions. Mercury was also on the EPA’s list of hazardous air pollutants (HAPs) to be monitored at
electricity-generating sites. New Jersey and other states filed a suit to challenge the Delisting Rule.
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Notes and Questions
What are the toxic effects of mercury on human health? Among other things, mercury poisoning can lead to
insanity. At one time, before this effect was widely known, mercury was used in haberdashery—the making of hats.
Haberdashers, or hatters, were noted for a high occupational incidence of insanity. This was the basis for the phrase
“mad as a hatter” and for the character of the Mad Hatter in Lewis Carroll’s Alice in Wonderland.
ANSWER TO “WHAT IF THE FACTS WERE DIFFERENT” IN CASE 46.1
Suppose that the EPA had carried out scientific tests that showed mercury was relatively harmless as a
byproduct of electricity generation. How might this have affected the court’s ruling? If the assumption in this
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ANSWER TO “THE GLOBAL DIMENSION” QUESTION IN CASE 46.1
Because air pollution knows no borders, how did this ruling affect our neighboring countries? If the ruling in
this case resulted in a reduction in mercury emissions that had been crossing international borders, “our neighboring
countries” undoubtedly benefited. If there were no such reduction, however, “our neighboring countries” would
realize no benefit or suffer any injury.
ADDITIONAL CASES ADDRESSING THIS ISSUE —
Recent cases concerning claims under the Clean Air Act include the following.
• American Trucking Associations, Inc. v. Environmental Protection Agency, 283 F.3d 355 (D.C.Cir. 2002) (the
Environmental Protection Agency is not required to identify perfectly safe levels of pollutants, to rely on specific risk
estimates, or to specify threshold amounts of scientific information prior to setting primary national ambient air quality
standards.
2. Air Pollution Control Standards
Different standards apply to sources in clean areas and sources in polluted areas, and to existing sources
and major new sources. Performance standards for major sources require the use of maximum achievable
control technology (MACT), which is subject to EPA guidelines.
C. VIOLATIONS OF THE CLEAN AIR ACT
IV. Water Pollution
Laws and regulations govern the pollution of navigable waters, drinking water, and ocean water.
A. NAVIGABLE WATERS
Federal regulations governing water pollution date from the turn of the last century.
1. The Clean Water Act (CWA)
The 1972 amendments to the Federal Water Pollution Control Act (FWPCA) of 1948 laid out specific time
schedules and limits. The goals of these amendments (the CWA) are—
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2. Focus on Point-Source Emissions
Under the CWA and a National Pollutant Discharge Elimination System (NPDES), any point source of
pollution emitted into water must have a permit. Permits can be obtained from the EPA and authorized
state agencies and Indian tribes, and must be reissued every five years. The NPDES includes—
3. Standards for Equipment
Regulations specify the use of the best available control technology (BACT) for new sources. Existing sources
must first install the best practical control technology (BPCT).
CASE SYNOPSIS—
Case 46.2: Entergy Corp. v. Riverkeeper, Inc.
The EPA adopted “Phase I” and “Phase II” rules for power plants. Phase I requires new plants to restrict their inflow
of water “to a level commensurate with that which can be attained by a closed-cycle recirculating cooling water
system.” Phase II applies “national performance standards” to more than 500 existing plants, but do not require closed–
cycle cooling systems. The EPA found that to convert these facilities to closed-cycle operations would cost $3.5 billion
per year. The facilities would then produce less power while burning the same amount of coal. And other technologies
can attain nearly the same results as closed-cycle systems. Phase II also allows a variance from the standards if a
facility’s cost of compliance “would be significantly greater than the benefits.” Environmental organizations, including
Riverkeeper, Inc., challenged Phase II, arguing that existing plants should be required to convert to closed-cycle
systems. The U.S Court of Appeals for the Second Circuit issued a ruling in the plaintiffs’ favor. Power-generating
companies, including Entergy Corp., appealed.
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Notes and Questions
Why would Congress intend to forbid comparisons of costs and benefits when determining the “best
available technology”? Preparing and reviewing formal cost-benefit analyses takes time, which can delay making and
implementing rules. Such analyses might emphasize quantity over quality—for example, in the context of this case, the
value of a species of fish that is marketable versus one that is not. Forbidding cost-benefit comparisons might spur the
quicker development of cheaper “best available” technologies. Costs are often more obvious and easier to quantify
than benefits. And cost-benefit analysis can yield a result that does not maximize environmental protection.
ANSWER TO “THE ETHICAL DIMENSION” QUESTION IN CASE 46.2
In this case, aquatic organisms were most directly at risk. Is it acceptable to apply cost-benefit analyses to
situations in which the lives of people are directly affected? Explain. Yes, because funds are limited and costs can
ANSWER TO “THE GLOBAL DIMENSION” QUESTION IN CASE 46.2
In analyzing the costs and benefits of an action that affects the environment, should a line be drawn at a
4. Wetlands
The EPA defines wetlands to include “those areas that are inundated or saturated by surface or ground
water at a frequency and duration sufficient to support, and that under normal circumstances do support, a
prevalence off vegetation typically adapted for life in saturated soil conditions.”
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CASE SYNOPSIS—
Case 46.3: United States v. Lucas
Robert Lucas sold mobile-home lots in Mississippi, installing a septic system on each lot. The U.S. Army Corps of
Engineers, the Mississippi Department of Environmental Quality, the U.S. Environmental Protection Agency, and the
Mississippi Department of Health determined that the systems were being installed on wetlands and issued cease-and-
desist orders. Eventually, Lucas and others were indicted in a federal district court on criminal charges of filling
wetlands without a permit. The jury was instructed that wetlands are “waters of the United States” if they are adjacent
Water Act, there must be a “significant” connection between the wetlands and navigable–in-fact water. In this case, the
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Notes and Questions
Would the result in this case have been different if the quality of the water flowing from the land improved
before running into navigable waters? Probably not, because the applicable standards and definitions relating to
“wetlands” do not rely on the actual quality of the water before and after its flowing or drainage. It was the run-off and
the risk that it might result in pollution that established the need for a permit or certification and initiated the orders
and indictments in this case.
Would the court have ruled differently if the drainage or flowing had been into international or foreign
waters rather than into the waters of the United States? Probably not, although that fact might have added more
law to consider. The land in this case was subject to the U.S. federal permit and Mississippi state certification regimes.
If those facts remained the same, the court would still have had to review and apply those laws.
Does it seem appropriate to put businessmen and women in jail when they violate the Clean Water Act?