Tag: state law

Wallach v. Town of Dryden and Local Control of Hydraulic Fracturing

By Carter Hall—November 20, 2014 at 11:03 a.m.

jay_easementOn June 30 of this year the Court of Appeals of New York issued its final ruling in Wallach v. Town of Dryden, holding that municipalities in New York State have the authority to exclude hydraulic fracturing from their borders through zoning.[1] Although the case hinged upon the interpretation of a New York statute with no reach beyond the state’s borders, the Town of Dryden decision has significance for supporters and opponents of hydraulic fracturing throughout the country as a sign that local governments may erect serious barriers to the controversial practice even in the absence of stringent Federal or state regulation.

Dryden, a town of less than 15,000 people located outside of Ithaca, New York, prohibits all “industrial” development within town borders through its zoning code.[2] In August 2011 the town amended its zoning ordinance to specify that all activities related to oil and gas extraction are included in this general prohibition on industrial development.[3] Anschutz Exploration Corporation, an energy company that held leases to oil and gas rights on several Dryden properties, sued the town in New York State court in September 2011, arguing that New York’s Oil, Gas and Solution Mining Law (“OGSL”)[4] preempted the amendment. Dryden prevailed on a motion for summary judgment, which was affirmed by state appellate court; the case reached New York’s highest court in summer 2014.[5]

The legal issue in the case was whether OGSL’s supersession clause, which states that the OGSL supersedes all “local laws or ordinances relating to the regulation of the oil, gas and solution mining industries,”[6] prevented towns like Dryden from passing zoning ordinances that exclude hydraulic fracturing. To answer this question, the Court of Appeals engaged in a straightforward exercise in statutory interpretation. Examining the plain language, statutory scheme, and legislative history of the law, the Court concluded that the supersession clause was intended to prevent municipalities from directly regulating oil and gas development—i.e., imposing specific technical and operational requirements on drillers.[7] Finding no indication that the OGSL was intended to curtail towns’ traditional home rule authority to enact zoning ordinances, the Court held that Dryden’s zoning amendment is not precluded under the supersession clause and affirmed the intermediate appellate court’s decision.[8]

The Court of Appeals decision vindicated hydraulic fracturing bans and moratoria enacted in Dryden and 179 other municipalities, with an additional 86 municipalities considering similar measures as of October 9, 2014. Many of these towns are underlain by the Marcellus Shale formation—estimated to be the largest natural gas reserves of any formation in the United States—and in the long run these ordinances could permanently place large quantities of natural gas beyond the reach of extractors. However, the Town of Dryden did not have the immediate effect of halting any ongoing hydraulic fracturing operations. New York State has had a de facto moratorium on the practice for six years, with Governor Andrew Cuomo’s administration refusing to permit any drilling until a study examining its health impacts is completed. Accordingly, no hydraulic fracturing was actually underway in New York State throughout the Town of Dryden litigation. Of course, if the moratorium is ever lifted, the decision will have real practical effect on the ability of energy companies to exploit New York’s natural gas reserves.

Because Town of Dryden was a state court decision hinging a narrow question of interpretation of a state statute, it has no legal effect beyond New York’s borders. However, the symbolic significance of Dryden’s victory reaches nationwide. Mary Anne Sumne, Dryden’s town supervisor, has expressed hopes for the decision’s impact beyond New York’s borders: “I hope our victory serves as an inspiration to people in Pennsylvania, Ohio, Texas, Colorado, New Mexico, Florida, North Carolina, California and elsewhere who are also trying to do what’s right for their own communities.”

The ability of towns in these states and others to restrict hydraulic fracturing will depend upon the interaction between state-specific home rule jurisprudence and natural resource laws, but Dryden’s high-profile victory has encouraged towns that have enacted similar ordinances from Hawaii to California to Texas. With the national politicians of both political parties largely in support of hydraulic fracturing and state-level governments varying dramatically in their oil and gas extraction regulations, local control efforts such as Dryden’s present one of the most formidable obstacles to the controversial practice.


[1] Wallach v. Town of Dryden, 23 N.Y.3d 728, 739 (2014), reargument denied, No. 2014-867, 2014 WL 5366261 (N.Y. Oct. 16, 2014).
[2] Id. at 739-40.
[3] Id. at 740.
[4] Id.
[5] Wallach, 23 N.Y. at 741.
[6]N.Y. Envtl. Conserv. Law § 23-0303(2) (McKinney).
[7] SeeWallach, 23 N.Y. at 750.
[8] Id. at 753-54.

Upholding Clean Energy in Colorado—and Hopefully Beyond

McNishBy Samantha Caravello—November 17 at 7:26 a.m.

Acting as laboratories for energy policy, some states have been much more effective than the federal government in promoting renewable energy development, often through the enactment of Renewable Portfolio Standards (“RPS”). RPSs require electricity-selling companies to generate a minimum percentage of their electricity from renewable sources. These minimum targets generally increase over time, growing clean energy development and decreasing reliance on fossil fuels. RPSs are currently in place in 29 states and the District of Columbia, but a number of these state policies have been targeted by legal challenges.

Earlier this year, the pro-free market group Energy and Environment Legal Institute (“EELI”) filed a lawsuit challenging Colorado’s Renewable Energy Standard (“RES”), which was approved by Colorado voters in a 2004 ballot initiative and subsequently codified into state law. The RES creates a “Renewables Quota” for electricity retail utilities, requiring them to “generate, or cause to be generated, electricity from eligible energy resources” in specified amounts.[1]

In the lawsuit, Energy and Environment Legal Institute v. Epel (“EELI”),[2] EELI claimed that the Renewables Quota violates the dormant Commerce Clause, which is a doctrine that courts have implied from Constitution’s Commerce Clause. The dormant Commerce Clause prohibits states from unlawfully burdening or discriminating against interstate commerce. In the Tenth Circuit, there are three ways a statute may violate this doctrine: first, if it clearly discriminates against interstate commerce in favor of intrastate commerce; second, if it has the practical effect of regulating wholly outside the state; and third, if it imposes a burden on out-of-state commerce which is excessive in relation to the local benefits it creates.[3] Plaintiffs’ complaint focused on the second potential violation, alleging that the Renewables Quota improperly regulates wholly extraterritorial commerce.[4]

In May, the federal district court for the District of Colorado ruled in favor of state defendants and intervening environmental and renewable energy organizations and upheld the validity of the Colorado law. The court rejected plaintiffs’ extraterritoriality claims, concluding that the RES regulates only Colorado entities and those extraterritorial entities that choose to do business with Colorado entities.[5] The RES does not require out-of-state entities to do business in any particular manner, but simply determines whether energy purchased from an out-of-state generator will count towards a Colorado utility’s Renewables Quota.[6] Concluding that this did not amount to extraterritorial regulation, the court granted summary judgment in favor of defendant Colorado and intervening environmental and renewable energy organizations.[7]

This decision was a success for clean energy—Colorado’s renewable energy sector is growing, jobs are being created, and public opinion supports the RPS. Unsurprisingly, though, plaintiffs appealed the decision to the Tenth Circuit Court of Appeals. In briefs filed over the past few months, plaintiffs argued that the district court improperly relied on a “factually inapposite, nonbinding case” from the Ninth Circuit instead of a Minnesota federal district court case that would have been more favorable to the plaintiff-appellants. The state and nonprofit respondents in the EELI case argue—convincingly, in my opinion—that plaintiffs have this wrong. (Not to mention that neither the Minnesota nor the Ninth Circuit case is binding on the District of Colorado or the Tenth Circuit.)

In the Ninth Circuit case, Rocky Mountain Farmers Union v. Corey,[8] that court upheld California’s Low Carbon Fuel Standard (LCFS). Although the LCFS encouraged out-of-state entities to offer low carbon ethanol that would allow them access to the California market, the court determined that because there was no requirement for an out-of-state entity to meet particular standards, there was no extraterritorial regulation. In the District of Minnesota case, North Dakota v. Heydinger,[9] that court considered a Minnesota statute prohibiting the importation of electric power that would increase statewide carbon dioxide emissions, and it concluded that the statute did impermissibly regulate wholly out-of-state commerce. As the court held in EELI, the Colorado RES regulates only the Colorado market and affects out-of-state entities only insofar as they choose to respond to RES-created incentives. This feature makes the Colorado RES more similar to the California LCFS than to the Minnesota prohibition.

Both EELI and Heydinger are currently on appeal, and the outcome of these cases may impact similar challenges in other states and determine the likelihood of Supreme Court review on this issue. In June, the Supreme Court declined to hear Rocky Mountain Farmers Union,[10] leaving California’s LCFS in place, and perhaps indicating an unwillingness to decide whether state renewable energy incentives violate the dormant commerce clause. Or perhaps the Court, flooded with petitions warning of economic disaster due to environmental regulations, is just waiting until more circuit courts have spoken—and split—on the issue. Depending on how EELI and Heydinger turn out, these cases could provide sufficient reason for the Supreme Court to get involved. Given the states’ innovative leadership in this arena and Congress’s inability to take comprehensive action on climate and energy policy, the fate of Colorado’s RES may have significant implications for clean energy in this country.

UPDATE: The Tenth Circuit has scheduled oral argument for EELI v. Epel for January 21, 2015.

Harvard Law School’s Environmental Policy Initiative is tracking these cases and more at the State Power Project. The author relied on the State Power Project website to find some of the case briefs cited in this blog.


[1] Colo. Rev. Stat. Ann. § 40-2-124 (West 2013).
[2] No. 11–cv–00859–WJM–BNB, 2014 WL 1874977 (D. Colo. May 9, 2014).
[3] Id. at *3.
[4] Id.
[5] Id. at *6.
[6] Id.
[7] See id. at *7. The court also granted summary judgment for defendants on their claims that the RES does not discriminate against interstate commerce, id. at *5, and does not improperly burden interstate commerce relative to local benefits, id. at 9. The court concluded that plaintiffs had failed to show any burden imposed by the RES on interstate commerce. Id.
[8] Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013), reh’g en banc denied, 740 F.3d 507 (9th Cir. 2014), and cert. denied, 134 S. Ct. 2875 (2014).
[9] No. 11–cv–3232 (SRN/SER), 2014 WL 1612331 (D. Minn. Apr. 18, 2014).
[10] Rocky Mountain Farmers Union v. Corey, 134 S. Ct. 2875 (2014).

Ten Ways States Can Combat Ocean Acidification (and Why They Should)

By Ryan P. Kelly and Margaret R. Caldwell

The ocean is becoming more acidic worldwide as a result of increasing atmospheric concentrations of carbon dioxide (“CO2”) and other pollutants. This fundamental change is likely to have substantial ecological and economic consequences globally. In this Article, we provide a toolbox for understanding and addressing the drivers of ocean acidification. We begin with an overview of the relevant science, highlighting known causes of chemical change in the coastal ocean. Because of the difficulties associated with controlling diffuse atmospheric pollutants such as CO2, we then focus on controlling smaller-scale agents of acidification, discussing ten legal and policy tools that state government agencies can use to mitigate the problem. This bottom-up approach does not solve the global CO2 problem, but instead offers a more immediate means of addressing the challenges of a rapidly changing ocean. States have ample legal authority to address many of the causes of ocean acidification; what remains is to implement that authority to safeguard our iconic coastal resources.

Cite as: Ryan P. Kelly and Margaret R. Caldwell, Ten Ways States Can Combat Ocean Acidification (and Why They Should), 37 Harv. Envtl. L. Rev. 57 (2013).

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Perpetuity Is Forever, Almost Always: Why It Is Wrong To Promote Amendment and Termination of Perpetual Conservation Easements

By Ann T. Schwing

When a landowner makes a charitable gift of a conservation easement to a nonprofit organization or government entity and elects to seek a federal tax deduction, both landowner and easement holder are subject to federal tax laws and regulations governing the creation, monitoring, amendment, and extinguishment of the easement. A nonprofit easement holder is subject to federal laws governing nonprofit operations. The nonprofit and government holders are also subject to state laws governing the operations of nonprofit organizations and the administration of charitable and other public assets on behalf of the public. All of these laws affect and restrict the ability of nonprofit and government holders to amend and terminate perpetual conservation easements. Contrary to representations made in When Perpetual Is Not Forever: The Challenge of Changing Conditions, Amendment, and Termination of Conservation Easements, 36 Harv. Envtl. L. Rev. 1 (2012), none of these laws can be ignored.

Cite as: Ann T. Schwing, Perpetuity Is Forever, Almost Always: Why It Is Wrong To Promote Amendment and Termination of Perpetual Conservation Easements, 37 Harv. Envtl. L. Rev. 217 (2013).

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Understanding When Perpetual Is Not Forever: An Update to The Challenge and Response to Ann Taylor Schwing

By Jessica E. Jay

Rarely in the legal discourse is an author afforded the opportunity to revisit and update a recently published law review article and to correct misunderstandings of a response thereto. When Perpetual Is Not Forever: The Challenge of Changing Conditions, Amendment, and Termination of Perpetual Conservation Easements explores the area of law surrounding the amendment and termination of perpetual conservation easements, with specific focus on the existing legal framework, legal regimes, emerging statutory and common law, and states’ approaches to self-guidance. The Challenge identifies next steps and options for perpetual easement modification and termination guidance, including revisions of the Treasury Regulations § 1.170A-14. The Challenge posits that providing clear, consistent guidance through existing or new legal frameworks ensures that perpetual conservation easements and the purposes they protect will endure over time. This Article informs about developments since the publication of The Challenge and corrects misunderstandings asserted in Ann Taylor Schwing’s Perpetuity Is Forever, Almost Always: Why It Is Wrong To Promote Amendment and Termination of Perpetual Conservation Easements in this issue of the Harvard Environmental Law Review.

Cite as: Jessica E. Jay, Understanding When Perpetual Is Not Forever : An Update to the Challenge of Changing Conditions, Amendment, and Termination of Perpetual Conservation Easements, and Response to Ann Taylor Schwing, 37 Harv. Envtl. L. Rev. 247 (2013).

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In re: Oil Spill by the Oil Rig “Deepwater Horizon”

By Brendan Selby

This Comment discusses the ongoing litigation arising from the oil spill around the Deepwater Horizon rig. In particular, it analyzed the causation standard for claims for pure economic loss against the background of maritime common law and OPA’s economic loss provision, which most courts have found to eschew the common law pure economic loss rule. Following the lead of this existing case law, the August 26, 2011 In re: Oil Spill order held that, under maritime common law, pure economic loss claimants in the Deepwater Horizon litigation (excepting fishermen) have no available remedy. However, the order found that OPA expanded the scope of compensable claims beyond the pure economic loss rule. The question is how far, and specifically, what kind of causal relationship must be shown between economic injury and physical damage or loss. Case law suggests that the courts should not blindly import a full-fledged proximate cause analysis into the economic loss provision, but neither should they abdicate their traditional role in formulating fair and reasonable limitations on liability.

This Comment then evaluates competing interpretations of the causation standard contained in OPA’s economic loss provision. The use-right requirement would prohibit recovery for economic loss unless the claimant has “a right physically to obtain or use property or resources that are damaged or lost because of an oil spill.” This requirement provides a (relatively) simple and categorical test, but it is overly inflexible and inconsistent with the best plain language reading of the statutory provision. A factual cause requirement — in the heightened form proposed by Professor Robertson — would make recovery for economic loss dependent on showing that the injury would still have occurred in an imagined world where the spill caused no physical damage. Professor Robertson’s reading departs both from the everyday usage of causation language and from the presumption that Congress would have given a clearer indication had it intended to completely overrule the traditional discretion judges have to define the “harm within the risk” contemplated by the statute. Moreover, it is not reasonable to suppose that Congress intended to create a strange counterfactual that asks fact-finders to speculate whether the economic damages would have occurred under completely different and unrealistic circumstances, i.e., an equally massive spill that somehow causes no physical loss or damage. His test would be exceptionally hard to apply, and would produce strange and, in some cases, unfair results.

Finally, this Comment suggests that a fair and workable alternative to these positions supported by OPA’s language would require that economic loss claimants show that the spill deprived them of the benefit of real property, personal property, or a natural resource that was reasonably necessary for claimant’s commercial activity, including production or sale. Looking beyond the context of the oil spill, if a commercial needs requirement were to succeed in producing equitable outcomes in a litigation as diverse as the Deepwater Horizon MDL, it should lead courts to consider abandoning the strict requirement that pure economic loss claimants (except commercial fishermen) show a proprietary interest. In at least some cases not currently recognized by the common law, courts should protect reasonable investment-backed interests in property or resources needed for commercial activity, regardless of who owns them.

Cite as: Brendan Selby, Comment, In Re: Oil Spill by the Oil Rig “Deepwater Horizon” on the Gulf of Mexico, on April 20, 2010, Order, Aug. 26, 2011, 36 Harv. Envtl. L. Rev. 533 (2012).

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When Perpetual is Not Forever: The Challenge of Changing Conditions, Amendment, and Termination of Perpetual Conservation Easements

By Jessica E. Jay

As the use of perpetual conservation easements to protect private property for the public’s benefit grows in popularity, so grow the challenges associated with these perpetually binding promises. Today’s conservation community faces significant challenges to amending and terminating perpetual conservation easements in the face of changing conditions, landscapes, climate, and public interests. Because of variations among different legal regimes’ guidance for perpetual conservation easements, much remains unsettled regarding perpetual conservation easement amendment and termination. This Article examines inconsistencies in the legal regimes and explores current and emerging common law, legislation, and policies addressing perpetual easement amendment and termination. This Article posits that the conservation community can protect the integrity of perpetual conservation easements by providing clear, consistent guidance through existing or new legal frameworks for state legislatures, courts, landowners, and easement holders, and suggests the means to achieve or craft such guidance.

Cite as: Jessica E. Jay, When Perpetual is Not Forever: The Challenge of Changing Conditions, Amendment, and Termination of Perpetual Conservation Easements, 36 Harv. Envtl. L. Rev. 1 (2012).

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The Dormant Commerce Clause and Water Export: Toward a New Analytical Paradigm

By Christine A. Klein

Facing water shortages, states struggle with competing impulses, desiring to restrict water exports to other states while simultaneously importing water from neighboring jurisdictions. In 1982, the Supreme Court weighed in on this issue through its seminal decision, Sporhase v. Nebraska ex rel. Douglas. Determining that groundwater is an article of commerce, the Court held invalid under the dormant Commerce Clause a provision of a Nebraska statute limiting water export. The issue has again come into the national spotlight, as the Tarrant Regional Water District of Texas has challenged Oklahoma legislation limiting water exports, and as Wind River L.L.C of Nevada has contested the denial of its application for a permit to acquire water from Arizona.

This Article examines the dormant Commerce Clause as it applies to water export. It argues that Sporhase asked the wrong question, transplanting a relevant issue from the context of the affirmative Commerce Clause — whether water is an article of commerce — into the context of the Clause’s dormant aspect. Observing that the U.S. Supreme Court has not addressed the issue of water export regulation directly for more than twenty-five years, this paper suggests three ways in which the Court can bring its water cases into doctrinal harmony with its modern dormant Commerce Clause jurisprudence. In so doing, this Article develops a new analytical paradigm, the “water continuum,” that respects the nuances of state water law and recognizes that not all water has the same constitutional status.

Cite as: Christine A. Klein, The Dormant Commerce Clause and Water Export: Toward a New Analytical Paradigm, 35 Harv. Envtl. L. Rev. 131 (2011).

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