This is Bloomberg Law with June Bresso from Bloomberg Radio. The Supreme Court's new term began today and there are two high profile cases coming up this week, a case involving a challenge to the regulation of ghost guns tomorrow and a death penalty case on Wednesday. Next week, the Court will take up the first of three environmental law cases on the docket so far. Joining me is an expert in environmental law, Pat Parento, a professor at the
Vermont Law and Graduate School. Pat, I want to begin with a case the Supreme Court did not take on Friday. It refused to stop Biden administration crackdown on methane emissions. Were you surprised by that?
I wasn't really surprised. The course, we're always holding our breath on whether the Court will issue a stay of these rules that have major impacts even before there's been a court ruling. But the methane rule is so grounded in EPA's traditional authority to regulate pollution from the oil and gas industry that I would have been really depressed had they put a stay on that particular rule. But I wasn't surprised that they.
Did, and just explain the rule before we move on.
So you know, this is a rule that applies to the extraction primarily of gas, which is methane. About seventy plus percent of quote natural gas is actually methane, and in the process of drilling for it and extracting it and transporting it, of course you get a lot of emission. Sometimes the emissions they actually flare, you know, because gas and oil are oftentimes found in the same deposits. The gas off they just burn it off because they don't
want it, can't use it. But in any case, this is a regulation that's designed to reduce the amount of emissions that are coming off oil and gas production and transportation through the use of technology to capture the gas and not allow it to escape. So a pretty traditional technological approach to a pollution problem.
The Justices did take up another environmental case on Friday involving a nuclear waste storage site in Texas.
So this is an enormous problem. What is happening now is spent fuel rods, you know, once they've reached their useful life, are basically stored on site at all of the nuclear power plants all across the country. There's an estimated get this one hundred million tons well of spent nuclear waste sitting. Sometimes they're in casks, concrete casts. Sometimes
they're just in containers underground in water to keep them cool. Right, So this is not a good situation, right, So the idea is to try to move all of this stored waste on the site of these nuclear power plants to what NRC Nuclear Regulatory Commission calls temporary storage facilities. But of course we know that once that waste reaches these so called temporary facilities, that's where they're going to stay.
And one of these facilities is located in Texas, that's the subject of the case that the Supreme Court has just taken. There's another one proposed across the border in New Mexico, in a very rural, actually minority community in southeastern New Mexico. So there are two of these proposed interim storage facilities that are involved in this case that
the Supreme Court has taken. All of this, by the way, relates to the failure of the proposed Yucca Mountain facility that was going to be built in Nevada that was going to hold all of the nation's nuclear waste, right, and of course that never happened as a result of political opposition in Nevada which could never be overcome in Congress. So the situation we have is we have a lot of nuclear waste and no place to put it. And now the Supreme Court has decided to weigh in on the case in Texas.
So I can understand why a state wouldn't want to have a nuclear waste facility there. But what is the argument that Texas used.
It's a very complicated argument. There are two parts to it, and the Court has taken review at both of them. One has to do with whether Texas can actually challenge the NRC's approval of the waste disposal facility because Texas didn't participate in the very detailed and lengthy administrative proceeding. It's like a trial. It's a formal adjudication, but it's done by an administrative logidge right instead of a court.
Texas didn't become a party to that process, and so the government is arguing Texas doesn't have standing, if you want to put it that way. But in any event, they don't have the right to challenge a decision when they didn't participate in the administrative proceeding. Texas's response, Attorney General packs and responses, Yeah, we didn't because it was real complicated and difficult to do. And in any case, you know, NRC never had the authority to approve this
facility anyway. It's what we call an ultra bery's decision, a decision on which they have no authority. And there is at least theoretically an exception to the requirement that you participate in these administrative proceedings if the agency never had the authority to do it in the first place. Right, So that's argument number one. It's under what's called the Hobbs Act, and it's an exception to the requirement of participation in that process. So that's argument number one. Can
Texas actually bring this challenge? But argument number two is the big one, and that is that NRC does not have the authority at all to approve these so called temporary or interim storage facilities. The only authoritiesas Texas that NRC has is to authorize storage on site at these individual nuclear power plants. They can do whatever they want with regard to how the waste is stored on site or storage at Yucka Mountain, which, as I've just said,
has never been approved and is actually not available. Texas's argument is NRC can't create these sort of satellite you know, nuclear waste facilities all over the country, moving this waste thousands of miles, you know, away from the way it's being generated. And that's their big argument. And guess what, no surprise, the Fifth Circuit agreed with Texas. Now, two other circuit courts have considered this question of whether NRC
has this authority and reached the opposite conclusion. One of them was the Tenth Circuit in the West, and one of them was the DC Circuit of course, in Washington, d C. And so what you have is a split in the circuits. Another reason, of course, why the court would take a case like this. But what the Fifth Circuit did in agreeing with Texas is it invoked here
it comes the major question doctrine. So is relying on the West Virginia versus EPA decision, the very controversial decision which struck down EPA's clean Power plan for greenhouse gas emissions, of course, and so the oil and gas industry in Texas is jumping on board because where this waste disposal facility would be located is in the Peance basin of Texas where all the oil and gas is and they're
afraid that if anything were to go wrong. Of course, what could go wrong with a nuclear waste disposal facility, It would screw up their oil and gas development. So this case has all kinds of layers, but at the core of it legally is is the Supreme Court once again going to strike down an agency's authority under this major question doctrine.
Pat though that they took this to overturn the Fifth Circuit.
I think so, and in fact, on the merits, I think Texas is overreaching here. I think the Court is going to be persuaded that because NRC has been approving these facilities before, there are some factual distinctions between what NRC has done before. But legally NRC has invoked this authority,
two other circuits have upheld it. And the truth is that letting all of this waste remain in all of these locations, many of these plants, like the one here in Vermont, the Vermont Yankee Plant has been closed for eight years now, you know, so many of these plants are closed. Just leaving the waste at these plant locations is not a good idea. So actually, I think on the merits, the Supreme Court may be persuaded. The Fifth
Circuit has myth applied our major question doctor. Remember Roberts said it was an extraordinary doctor, meaning the once in a blue moon doctrine, not an everyday doctor. So maybe the Supreme Court is going to put some limit on the major question doctrine. Conversely, the Supreme Court might stay at Texas book. When there's an administrative process and you choose not to participate, you're out of court. So I think Texas has a tough case.
Coming up next. More about the Supreme Court's environmental dock at this term. This is Bloomberg. The Supreme Court has three environmental cases on the dock at this term so far. I've been talking to environmental law professor Pat Parento of the Vermont Lawn Graduate School. Let's move from Texas to San Francisco. Now, this is surprising because you think of San Francisco in California as being one of the cities and states that are on the cutting edge of environmental regulations.
At least that's the way I think of them anyway.
So it's one of the most liberal cities in the country.
Yeah, So San franci le Go is suing the EPA.
So it's a reflection of San Francisco's terrible financial situation because what they're dealing with or what are called combined sewer overflows, and of course these are the combination of sewage and stormwater facilities in a major city like San Francisco, and they were built at a time when they didn't separate the sewage from the storm water, so they were combined. So when it rains really heavily, all of that untreated waste goes into the river or in San Francisco's case,
into the ocean. So it's a huge problem. Many different cities have dealt with it in different ways. I was actually involved at one time in a lawsuit against the City of Portland, which didn't have a solution to its combined sewer overflow problems. Now it does, in part, I think,
because of our lawsuit. But our lawsuit actually established the precedent that that issue in the San Francisco case, and it has to do with what are called narrative standards that are contained in the wastewater discharge permits under the Clean Water Act. And what it basically says is because combined sewer overflows contain basically a soup of pollutants, a
toxic soup of plutiness. If you think about everything on a city's streets, parking lots, if you think about all the industrial sites that might be within an urban boundary, and when it rains really heavily, all of that crap comes off of all of those impervious is that a technical term, that's a technical term, that's legal term, is not defined in the Clean Water Act. But all the junk and crap and yick it comes off a city street,
all that goes through these CSOs into the water. Okay, So you can't come up with a single technology, is the point. You can't come up with a numerical standard that says, reduce this pollutant by x part per million or whatever the standard is, right, So what you have to do is say you have to manage that effluent by whatever means you can, best management practices, building detention facilities to hold some of the rain water before it has to be treated so that it doesn't run right
off into the ocean and so forth. So you have to come up with a more sophisticated control program, very expensive though you can separate the sewage from the storm water, but that means tearing up the existing system, and that's incredibly disruptive and expensive, and why San Francisco doesn't really want to do it right. But the point is that these narrative standards that you must comply with water quality standards.
We can't give you a specific number. We can tell you you're going to have to have a system that maintains and doesn't violate water quality standards, which are based on uses of water, swimming, fishing, drinking fish, and wildlife whatever. There's lots of different beneficial uses of water that we
put into these so called water quality standards. Every one of the national permits that are administered by the state, but their EPA derived permits, every one of them has to have a condition requiring compliance with water quality standards. That's what was being enforced by EPA in the San Francisco case. And San Francisco is basically arguing EPA has no authority to require compliance with anything other than numerical standards that are subject to technological controls.
Is there Supreme Court precedent in this area?
The Supreme Court in two different cases, one of which was written by the late Justice O'Connor in a case in Washington. We call it PUD number one of Jefferson County versus the State of Washington's Environmental Board. And in that case, Justice O'Connor very explicitly said, narrative standards are fine,
and you must comply with water quality standards. And that means controlling anything that's going into the water that you can control, whether or not it's through technology or land juice, means whether it means maintaining certain flows of water you know that will dilute some of the pollutants and maintain these uses and so forth. So that was one of
the decisions. Then there was a later one, the name of which escaped me at the moment, But there was another case in which the Supreme Court upheld narrative standards under the Clean Water Act. There's a provision in the Act, it's section thirteen eleven that explicitly authorizes EPA to set other limitations, not just technology effluent limitations, but quote other
limitations necessary to protect water quality and water quality standards. So, frankly, if the Supreme follows its textualist approach to interpreting the statute, it should uphold the Ninth Circuit. Now, we know the Supreme Court rarely upholds the Ninth Circuit, right, so probably, if you're a betting person, you would have to say EPA is probably going to lose. It seems like EPA,
you know, oftentimes loses in this court. So we won't know exactly why or how the Supreme Court might decide this case, but I think it could if it really looks at the language of the statue and the way it's been interpreted by the Court in previous cases, it may in the end uphold the Ninth Circuit.
Do you think though, that the Supreme Court's continuing attempt to limit agency power and low or bride, you know, throwing away the Chevron doctrine, do you think that would play in this case?
Well, they're not relying in this case. EPA is not relying on Chevron. That would be foolies, wouldn't it. They're basically saying this is the best reading of the statute. In fact, what EBA is arguing is it's the only reading of the statue. Now, if the Supreme Court can find a way around the plain text of the statue, then we know we're in serious trouble, right. But I'm just saying, my course, I have a bias here because I argued this issue many years ago in the Ninth
Circuit and won it. But my view is that the text is clear and unmistakable, and the only thing that I thought would be vulnerable is the fact that because these are not specific numerical standards, an argument that we don't know what we have to do to comply might have been a good argument.
Right.
But according to the briefing that I've just read, the United States the Solicitor General is saying San Francisco abandoned that argument. They didn't make that argument in the Supreme Court. They did make that argument in the Ninth Circuit, but they didn't preserve it and maintain it in the Supreme Court.
I'll be very interested to listen to the oral argument on this case and see if the court, the Supreme Court agrees that San Francisco has waived that argument, because to me, that would have been a stronger argument.
Okay, let's move on to a case with a sort of strange name. Seven Court Infrastructure Coalition versus Eagle County, Colorado's say.
About well this, Unfortunately, I have to say is another NEPA case, National Environmental Policy that case, and we all know what nipa's track record is in the Supreme Court, which is zero and fifteen, zero and fifteen.
I knew it was bad, but I didn't know it was that bad.
It's that bad. There have been fifteen different cases petitions for a review involving NEPA, and NEPA has never won in the Supreme Court. So they're going in with a turm.
We know where the betting money.
Yeah, we know where the betting money is on that one. But here's what the issue is. And I also have some history with this thing too. This is the Surface Transportation Board decision. And the STB is the reincarnation of the old Interstate Commerce Commission, and so the law that the STB administers is as old as the ICC, which is the early nineteen hundreds right. Anyway, what the STB
does is license new rail line. And the rail line here is I think eighty five miles long in Utah, and it's moving oil, which they call something I'd never heard of before, waxy crude oil. It's oil by any other name from one place to another in the Uinta Basin of Utah. And then from there it gets you know, shipped all over the place. It gets shipped to Louisiana, it gets shipped to Mobile, Alabama, it might even go
to the Fugit Sound. It gets into a huge network of rail lines that take oil all over the country to be refined and made into a variety of products, some of which I'm sure would be burned in power plants, some of which burned in homes, whatever, whatever products you make out of this waxy crude oil. This rail line simply puts it into interstate commerce and then it goes
wherever it goes. So the question in this case is what responsibility does STB have to consider what we call the upstream effects of this rail line, which means the pumping and extraction of this oil product and all of the intended environmental consequences of that, plus the downstream effects which means where is the oil going, what is it
going to be used for? And of course, because oil is a fossil fuel, how much carbon emissions are going to be produced as a result of all of this oil coming out of Utah and so ultimately being burned in one way or another.
So where's the law right now on this.
The SDB has been subject to earlier lawsuits or refusing to consider these upstream and downstream effects and specifically climate change effects of moving oil, mostly oil, in some cases coal.
They also, of course move a hell of a lot of coal by rail, and SDB lost actually a series of cases, one of which I argued years ago, in which you know, the course ruled no, SDB, you do have to consider these upstream downstream effects, and you have to make a reasonable effort to quantify the emissions that would be generated by, you know, the fact that you're allowing this oil to be moved by rail. Here's what's changed in the Fiscal Responsibility Act of twenty twenty three.
Congress actually, for the first time since nineteen seventy amended NIFA, and it did so in a way that required that agencies, in trying to consider these sort of i'll call them indirect effects of their agency actions, could only consider reasonably foreseeable consequences. So the case that the Supreme Court has taken ultimately boils down to that question, what are the reasonably foreseeable consequences of StB's approval of this eighty five mile rail line, and has.
The Biden administration.
Weighed in here here's where things get interesting. So the government, you know, the Justice Department, a solicitor General has weighed in both in support of STB but also in support of the petitioners in the case and against the respondents, against the environmental groups that brought the case, right, And what the Solicitor General's brief is saying is as a consequence in part of the twenty twenty three Amendment of NEPA, but also arguing even more fundamentally that there has to
be a limit on an agency's responsibility to consider effects over which it really has no control. That's what this comes down to. I mean STB can't tell whoever's going to get this oil what to do with it or not do with it, right, so their authority really is quite limited to approving or not this rail line. And STB did actually consider some of the upstream and some
of the downstream effects. They didn't go into the detail that the challengers wanted or that the DC Circuit, which is the court that heard this case and the petition for review comes from the DC Circuit. The DC Circuit found a lot of fault with the way SDB did it's analysis. It's a six hundred page environmental impact statement, so it's not a small thing, right, And there's another something like several thousand pages of comments that were delivered. So it's a huge record, is my point. It's a
huge administrative record. It's not a case where the agency did nothing. It's a case where the DC Circuit said you didn't do enough. So my bet is the Supreme Court is going to overrule the DC Circuit, uphold the STB, and allow this line to be built.
And just for a moment, talk about the Supreme Court's relationship with environmental laws over the last let's say ten or fifteen years.
Well, it has not been a healthy relationship. Frankly, my dear friend, my mentor, Oliver Howse, professor now retired Emeritus Professor of Law Tulane University, has just written a book that's just out, in fact, called the Most Dangerous Branch of All. He goes through at least a dozen Supreme Court decisions on the environment and just takes them apart and says, as a matter of law, logic, and certainly consequence, they have been terrible decisions for protection of the natural environment,
the human environment, public health across the board. So this is I think the most definitive analysis by a very very well respected scholar. I mean, he is in the pantheon of environmental scholarship, and for someone like him to reach a conclusion like that, it's pretty startling.
The Roberts Court certainly has not been a friend of environmental laws or the EPA. Thanks so much, Pat for your insights as professor. Pat Parento of the Vermont Law and Graduate School. Broker Christine O'Reilly has sued City Group along with her employer TPIICAP and a UK based supervisor, alleging i CAAP encouraged her to go along with a
City trader's advances in order to keep orders flowing. In court filings last week, both defendants denied O'Reilly's allegations and also contended that legal deficiencies would require dismissal of many of her claims. Citygroup denied it knew of any inappropriate conduct and also said it couldn't be held responsible for the alleged harassment, joining me as Bloomberg Legal reporter AVA Benny Morrison AVA tell us about the lawsuit.
Sure, so, Christine O'Reilly was a broker at ICAP, and she alleges that she was forced to put up with harassment by a trader at City Group in return for keeping a lot of flow coming into ICAP. She says that I created a hostile work environment and encouraged her to put up with the trader's unwanted sexual advances relentless harassment over many years. And she says that she was forced to do that because City Group was such a big client for IKAT. She's also suing City for failing
to essentially protect her from this trader's behavior. And she's also suing a supervisor at ICAP for telling her to go along with it and to play the game.
Why is she suing City Group.
She's suing City because the trader worked at City and she says that they failed to stop him. And she alleges that she spoke to one of the trader's supervisors and alerted him to the kind of things that the trader was doing and the messages that he was sending her at all hours of the day and night, the constant FaceTime requests, asking for photographs of her, and just essentially making her feel comfortable. We heard from City last week.
They filed their response in court and said, you know, they do their best to create a safe and comfortable environment, particularly the women, but they will be asking the judge to dismiss the broker's claims against the bank, saying that they didn't owe a duty to her because she didn't work the city and they had no idea about some of the behavior that the trader engaged in.
And how have the other defendants responded.
One of the other defendants is a woman named Janie mccathey who was a supervisor at i CAP. We heard from her lawyers last week and they said they would also seek for dismissal of the claims against mccathy for lack of jurisdiction. They said that mccafy was not Irailey's supervisor and didn't even work for the same company. So I think that the latter argument is based on a technicality.
You have ie Cap and then the parent company, but then you have consideraries, and Janie McAthey is based in London and the broker, Christine O'Reilly, is based in New York. In i caaps very detailed response to all of the broker's allegations. It denied most of them, but it did admit to some of the allegations that are backed up
by documents. So that includes Jennie mccathey using an expletive when she was talking to Christine O'Reilly at work and in front of others, and using internal messages to essentially call her useless, among other things. So we expect to see motions from all three defendants City I, CAP and Jennie mccafey asking the judge too throughout this case.
And O'Reilly is not suing the trader who allegedly harassed her.
You know, the trader actually alleges subjected her to relentless harassment and unwanted sexual advances is named in her lawsuit, but isn't identified as a defendant. We understand that he no longer works at City but he was a trader on City groups high profile Delta one desk.
And this isn't the first time there have been complaints about City Group's Equities Trading division.
That's right, This lawsuit and these allegations come at a pretty interesting time for Citygroup. The Equities Trading Division has already been targeted by a series of complaints about the toxic culture there about how women are treated inside that
particular division. Last year, there was a lawsuit filed by a woman who was a managing director, and we rarely hear from women who are that senior who are calling out this kind of behavior, and that managing director said that she was coerced into an abusive relationship and threatened
by another colleague. So that lawsuit is still ongoing. Bloomberg has also done some reporting talking to other women who spent time in that division and got a bit of an insight into what it's like there, and it seems like it was a pretty tough environment for women to work in. They were leader and raise it on their
looks and subject to other kind of gendered harassment. City says that it's trying to get on top of this, but this latest law suit by thecap broker Christine O'Reilly certainly doesn't do anything turk crall concerns around that particular trading division.
We'll have to see how the judge rules in those expected motions to dismiss. Thanks so much, Ava. That's Bloomberg Legal reporter Eva Benny Morrison, and that's it for this edition of the Bloomberg Law Podcast. Remember you've can always get the latest legal news by subscribing and listening to the show on Apple Podcasts, Spotify, and at bloomberg dot com, slash podcast, slash Law. I'm June Grasso, and this is Bloomberg